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Business-oriented style has marked Duggan’s tenure as mayor

Crain’s Detroit Business

By Chad Livengood & Kirk Pinho

February 5, 2017

Mayor Mike Duggan’s CEO-style approach to governing Detroit has been evident since he took the reins at City Hall following a long period of political and economic turmoil.

The former CEO of the Detroit Medical Center, who was the business community’s favorite in the 2013 mayoral election, launched his re-election bid Saturday.

Detroit emerged from bankruptcy in December 2014, and Duggan is credited with starting to change the culture of doing business in Detroit and setting a new tone for the city’s revitalization.

“I think there’s a mindset now among city government of ‘How can I help?’ That’s not everywhere, but it’s getting to be everywhere. And that’s driven from the mayor’s office,” said Bill Nowling, who was former Detroit Emergency Manager Kevyn Orr’s communications director and now runs the Detroit office of Finn Partners, a global public relations firm.

Here’s a progress report on how Duggan’s agenda has impacted business in Detroit:

Attracting talent to City Hall: Duggan has filled some top city leadership roles with hires from outside of Detroit.

Louisville, Ky., native Beth Niblock left her hometown to become Detroit’s chief information officer. City Planning Director Maurice Cox came to Detroit from New Orleans, where he was associate dean for community engagement at the Tulane University School of Architecture.

Duggan recently hired veteran transportation and engineering executive Mark de la Vergne of Chicago to be the city’s first mobility chief.

The mayor also recruited three people with Detroit roots to come back to Michigan: Health Director Abdul El-Sayed, Housing and Revitalization Director James Arthur Jemison and Jed Howbert, executive director of the mayor’s jobs and economy team.

The mayor kept Orr’s chief financial officer, John Hill, who came to Detroit from Washington, D.C., where he ran a civic improvement organization and the capital city’s financial control board.

Sonya Mays, CEO of Develop Detroit, a nonprofit housing developer, credits Duggan with putting in place a “high-capacity, very technically capable” team at City Hall that has made it easier for real estate developers to pursue projects in the city.

“The mayor’s very talented,” Mays said. “But the mayor has to delegate a fair bit. And he’s got some really good people in place.”

Tax collections: Since Detroit exited bankruptcy, Duggan has emphasized the need to go after tax revenue the city is legally owed from residents, nonresidents who work in the city, and businesses.

During Detroit’s bankruptcy, just 68 percent of property owners were paying their tax bills. After a citywide reassessment that resulted in the taxable value of half of the residential properties being reduced, the tax-paying compliance has risen to 82 percent. “It turns out, when people feel they’re being assessed fairly, they pay their taxes,” the mayor said.

The Duggan administration also has stepped up efforts to force businesses and nonresident workers to pay the city’s income tax.

In December, a Michigan Tax Tribunal judge sided with Detroit in ruling that the Honigman Miller Schwartz and Cohn LLP law firm owed $941,955 in corporate taxes and penalties based on profits the downtown firm made from work within the city limits. That ruling, which Honigman is appealing, prompted an unnamed company to come forward and voluntarily pay $1.2 million in back taxes, Duggan spokesman John Roach said.

Motor City Match: A Detroit Economic Growth Corp. program that connects aspiring business owners with technical support, real estate locations and grant funding to leverage loans and private investments, it deploys $500,000 in funding each quarter to small businesses.

New streetlights, fewer blighted buildings: In a $185 million effort approved by the state Legislature in 2012 and the city council in 2013, before Duggan took office Jan. 1, 2014, the Public Lighting Authority in the last three years has installed 65,000 streetlights. Not only was a poorly functioning streetlight system a serious safety issue for residents, it also was detrimental to city businesses. The project was paid for with bonds issued by the PLA.

Since Duggan took office, more than 10,700 blighted homes have been torn down in the city and about 2,500 more are in the pipeline. But Detroit’s blight removal program has been under scrutiny of city and state auditors as well as federal investigators over escalating costs. A state review found Detroit’s blight program was wrongly reimbursed for $7.3 million from federal blight-removal funds. The Detroit Land Bank agreed to pay back $1.3 million, but the rest remains in dispute.

Economic development: Several major companies, ranging from Adient Ltd. to Sakthi Automotive Group USA to Flex-N-Gate to Linc, have invested hundreds of millions of dollars in the city in new manufacturing facilities or relocations of corporate headquarters. In 2014, Duggan helped bring the American Lightweight and Modern Metals Manufacturing Innovation Institute to Corktown, a $148 million investment.

Project Green Light: A public safety effort geared toward businesses like gas stations, liquor stores and others, Duggan and Police Chief James Craig announced last week that the 100th business started participating in the program. It involves business installing high-definition security cameras whose feeds are patched directly to the Detroit Police Department. Duggan and Craig said crime at the participating businesses has decreased, with a nearly 40 percent drop for the original eight participants and a nearly 20 percent drop at others.

Sandy Baruah, president and CEO of the Detroit Regional Chamber, said Duggan’s focus on neighborhood crime, fixing bus routes and getting streets relit has been good for businesses and residents.

“I think the Green Light program is a great example of holistically addressing community needs,” Baruah said.

Schools, regional transit, auto insurance: Duggan’s victories in Detroit’s revitalization come as he has suffered some political losses outside the city limits.

In 2015, Duggan became heavily involved in an effort to turn around Detroit’s long-failing public schools. He backed a plan crafted by business, philanthropic, civic and religious leaders to relieve Detroit Public Schools of $617 million in debt and create a citywide commission to decide where schools are located in the city and by whom.

But the Republican-controlled Legislature rejected the proposed Detroit Education Commission, siding with charter school advocates that the panel would give the mayor too much power to favor DPS over charter schools.

Duggan’s efforts to get the Legislature to allow insurers to sell a lower-cost auto insurance in Detroit without the unlimited lifetime medical benefits died in last year’s legislative session.

Detroit’s highest-in-the-nation auto insurance rates are seen as a major deterrent to attracting new residents to the city, one of Duggan’s biggest goals to stem decades of population loss and neighborhood abandonment.

Duggan and other regional leaders also were handed a defeat in the November election on a four-county millage to fund the Regional Transit Authority.

View the original article here: http://www.crainsdetroit.com/article/20170205/NEWS/170209898/business-oriented-style-has-marked-duggans-tenure-as-mayor