Economic Development Experts: Detroit’s Reinvention Must Extend to Neighborhoods

With development showing no signs of slowing, engaging Detroiters in thoughtful dialogue on the city’s long-term vision and building up neighborhoods is necessary to continue Detroit’s momentum panelists said in the session, “Strengthening Detroit: Partners in Economic Development.”

Citing the recently announced plans to create more public parkland on the city’s east riverfront development, Maurice Cox, planning director for the city of Detroit, said the decision to forego building more high-end apartments and condos followed extensive conversations with the public.

“The riverfront is home to an enormous diversity of people who use it. Our thought was that we need to give the riverfront back to the people. Private development will shape it, but the people will have an impact,” Cox said.

The topic kicked off a conversation on thoughtful inclusion and shared opportunity as projects come online across the city.
Detroit City Council President Brenda Jones said she would like to see more jobs for longtime residents who weathered the city’s economic collapse.

“We need to get our young people involved in the development taking place. It’s a great opportunity for those who want to do something downtown but in the communities as well,” Jones said, calling for more apprenticeship programs.

Moddie Turay, executive vice president of real estate and financial services for the Detroit Economic Growth Corp., added that the city’s economic progress must go beyond downtown and Midtown to truly be considered a renaissance.

32394390513_e732d2e104_o“There’s a lot that’s happening here. We’re just not there yet,” Turay said. “We have another five or so years to go.”

Cox said leaders should consider development taking place downtown as a “both and” scenario, suggesting that catalytic projects such as The District Detroit and the riverfront can be leveraged to positively impact downtown and the neighborhoods.

“The soul of this city is its neighborhoods. The heart of a city inadvertently always happens at its core and grows out. The challenge is a lot of American cities forget about the soul and forget about the neighborhoods.”


MORE: Read more about the innovative work that is being done to ensure Detroit’s comeback continues. 


That is not the case in the Motor City, Cox said, pointing to development taking place at anchor institutions like University of Detroit Mercy and Marygrove College that is helping create full-scale neighborhood recovery north of Six Mile Road.

In answering a question on the importance of talent, Justin Robinson, vice president of business attraction for the Detroit Regional Chamber, said it is the No. 1 asset investors from other states and countries look for when deciding to relocate.

“The availability, volume and quality of talent is a key part in attracting business. To do that, you have to have the neighborhoods that talent wants to live in,” he said. “When we have that, we’ll see the economic development flow in as a result.”

“There’s tremendous progress being made in Southeast Michigan and it’s important to understand that companies are looking at the labor of not just one community; they are looking at an entire region. We need to be better at communicating how Detroit and the region are collaborating around creating that workforce,” Robinson added.

Panelists also acknowledged that the business climate, including taxes and regulation, still is not as attractive as it could be, with Cox and Jones addressing the impact of the community benefits agreement (CBA) ordinance Detroiters passed in November of last year.

Still, Cox said: “We need to give it time to play out.”

Read more from the 2017 Detroit Policy Conference:

Christopher Ilitch: Teamwork, Collaboration Will Guide Detroit’s Bright Future

Chamber PAC Endorsements Victorious in National, State Election

Last week, the Detroit Regional Chamber’s Political Action Committee (PAC) continued its record of successfully endorsing strong, pro-business candidates at the local, state and federal level. With the Chamber PAC’s support, more than 92 percent of endorsed candidates won their respective races in the Nov. 8 election, including:

  • Nine candidates for U.S. Congress, including the highly contested District 8 race, where Congressman Mike Bishop (R-Rochester) won re-election.
  • 51 of 53 candidates for the Michigan House of Representatives, which includes 25 Democrats and 26 Republicans. Of note, highly contested candidate races such as Klint Kesto (R-Commerce Twp.) in the 39th District and Diana Farrington (R-Utica) in the 30th District won their respective election bid.
  • Congresswoman Candice Miller was elected Macomb County Public Works Commissioner.
  • Janeé Ayers was re-elected to the Detroit City Council.
  • Iris Taylor, Misha Stallworth and Sonya Mays were elected to the Detroit School Board.

“The 2016 election furthers the Chamber’s bipartisan efforts to elect public officials who will positively contribute to the success of Southeast Michigan businesses,” said Brad Williams, vice president of government relations for the Chamber. “All officials elected in this cycle will play a crucial role in deciding the future for the Southeast Michigan economy and will support policies that help Detroit continue to grow.”

Regional Transit Authority (RTA) Millage Proposal

The Regional Transit Authority of Southeast Michigan’s millage proposal to connect Macomb, Oakland, Washtenaw and Wayne counties with safe, reliable infrastructure did not pass. The Chamber was a chief proponent of the proposal’s passage. Chamber President and CEO Sandy Baruah issued the following statement:

“To say we’re disappointed is an understatement. However, we respect the will of the voters and will continue to seek solutions to connect our region and provide mobility to those without access to personal vehicles.”

Community Benefits Agreement (CBA) Ordinances

Detroit voters decided how to best regulate and control community development projects with a “no” vote on Proposal A and a “yes” vote on Proposal B. Chamber President and CEO Sandy Baruah issued the following statement on the passing of Proposal B regarding the Community Benefits Agreement (CBA) ordinances:

“We thought Proposal B was better and we’re glad the citizens of Detroit agreed. Proposal B strikes a balance between economic realities and the needs of our citizens.”

For more information on the Chamber’s government relations activity, contact Jason Puscas at 248.709.4866 or jpuscas@detroitchamber.com.

 

Saving Detroit: New Manager Targets ‘Greatest Turnaround’ in U.S. History

By Mark Guarino

March 14, 2013

From The Christian Science Monitor

The man slated to guide Detroit to fiscal solvency in the largest state takeover of a city in United States history described his new job Thursday as “the Olympics of restructuring.”

That could be an understatement.

Michigan Gov. Rick Snyder (R) has stepped in to appoint Kevyn Orr, a restructuring specialist who represented Chrysler during its 2009 bankruptcy, as emergency financial manager for the Motor City.

Mr. Orr comes to a city that is drowning under nearly $15 billion in long-term debt and undergoing major population loss. Moreover, the state’s decision to intervene has been fraught with racial undertones, and the Detroit City Council has made it clear that it wants the governor to butt out. Some of the more than 40 unions currently under contract with the city are expected to take legal action if they’re asked to take too large a cut.

Orr spoke to the difficulties ahead when he told reporters at his introduction Thursday: “If we can do this, I will have participated in the greatest turnaround in the history of this country and something I can tell my grandkids about. It is very inviting and exciting.”

Earlier this month, Governor Snyder declared the city is suffering a financial emergency. A state review found Detroit has been dealing with annual deficits since 2005, and that it has unsuccessfully sought to fix them through long-term borrowing.

While Mayor Dave Bing says he intends to cooperate with Snyder and Orr, the city council has opposed state intervention since last summer, when members launched a legal challenge to the consent agreement that gave the state a larger role in overseeing the city’s finances.

“Whoever is picked, they will make that person’s life is extremely difficult, professionally and personally,” says Ken Sikkema, a senior policy fellow at Public Sector Consultants, a public policy think tank in Lansing, Mich, and a former Republican majority leader in the state Senate.

That resentment has festered over decades. As the population of Detroit has dwindled – due to a suffering auto industry and other economic hardships – the city has become more isolated, both politically and racially, from the rest of the state.

Today, Detroit stands in stark contrast with the rest of Michigan: While Republicans control state politics, Detroit is Michigan’s largest Democratic stronghold. Its leadership and population are overwhelmingly black, also in contrast to the rest of the state.

“You’ve got the racial undertones, the union issues, the loss of political power, all of these things are intertwined; you can’t really sort them all out,” says Mr. Sikkema.

The time frame for the emergency financial manager to make a turnaround is 18 months, which “is not enough time” to make a full recovery, although certain things are achievable, says Eric Scorsone, an economist at Michigan State University in East Lansing, who is also on Mayor Bing’s restructuring team.

What can Orr do?

Business leaders say they are anxious for an emergency financial manager to address glaring inefficiencies in the city’s bureaucracy.

“The billing for [property] taxes has been sporadic at best,” says Sandy Baruah, president and CEO of the Detroit Regional Chamber of Commerce and a former US assistant secretary of Commerce under President George W. Bush. “Companies may be getting bills from the tax department that are legitimately owed, but it was news to them, or bills they haven’t received for years. This goes to a competency issue. ”

“The percentage of taxes owed but not collected by the city government, both by residents and companies, is phenomenally large,” he adds. “Just the competency and efficiency in tax collection would go a long way to resolving at least some of the financial challenges.”

To be sure, the city needs cash, since it is expected to have only about $3 million by the end of June. Immediate options include cutting payroll, cutting vendor contracts, and privatizing unessential services. The idea would be to make the city government do less, but more effectively.

“The emergency financial manager has to figure out what are core services and what are non-core services and how do we balance these things,” says Mr. Scorsone of the restructuring team.

“I’d be looking at where can I show some success in terms of reconciling some level of service to the people of Detroit,” such as more street lights, expedited garbage pickup, and additional police on the streets,” says public policy analyst Sikkema. “Something that effects people everyday and makes them say, ‘Wait a minute, life is better than it was.’ ”

Any plan could face opposition from the city’s union leadership, leading to delays.

Another option would be bankruptcy, which could be used as leverage against the unions if they refuse to concede to certain changes, Scorsone says.

On Thursday, Orr said “everything is on the table,” and his expertise is in bankruptcy.

“It’s too early to say bankruptcy is likely, it’s certainly a possibility. We’ll see over the next few months if the situation gets bogged down in lawsuits and nobody wants to agree to anything,” Scorsone says.

Perhaps the greatest challenge is time. With 18 months to steer the city toward a path of financial recovery, Orr needs to show his merit, especially after a year or more of legal wrangling and insider deadlock at city hall.

The problem, after all, was more than a few years in the making, said Mayor Bing Thursday. “The financial crisis didn’t start four years ago, it was out of neglect over the last 40 and 50 years, and people who were in key positions did not make the tough decisions.”