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The odd couple: Snyder and Duggan transcend labels to turn around Detroit

From: Crain’s Detroit Business

By Chris Gautz

October 19, 2014

All the work Gov. Rick Snyder has done in his first term to turn around Detroit — from the bankruptcy filing, to sending in state financial assistance, to protecting the art and pensions — was never going to win him votes in a city known as a Democratic stronghold.

In 2010, Snyder received 5 percent of votes cast in the city; most analysts expect it to be about the same on Nov. 4.

“He could cure cancer, walk on water and do a back flip, but the fact that he has an ‘R’ next to his name keeps him from getting support in a meaningful way from the city,” said Sandy Baruah, president and CEO of the Detroit Regional Chamber. “In three years, Gov. Snyder did more for Detroit than his predecessor did in eight years.”

But what Snyder has done, say many business leaders from around the state, is improve the perception of Detroit inside and outside Michigan. And in doing so, he has improved his own image, too.

“The business community thinks it (Detroit’s image) is a critical issue for the perception of the state,” said Michael Jandernoa, founder and chairman of 42 North Partners LLC, a Grand Rapids-based investment management firm.

Snyder’s unlikely partner in this effort? Detroit Mayor Mike Duggan, a Democrat who has worked with Snyder incredibly well, Baruah said.

“These are two very pragmatic, get-it-done kind of leaders,” Baruah said.

While Snyder and Duggan may seem like political opposites, they are two “grownups” who know that big problems sometimes require tough decisions and calculated risks, said Rich Studley, president and CEO of the Michigan Chamber of Commerce.

Said Matthew Haworth, chairman of Holland-based Haworth Inc.: “I think that’s one of the wonderful things about Gov. Snyder. He’s taken on some difficult issues and been always principled, but also with a good touch of pragmatism. I think that comes from his accounting background.”

Studley said Duggan, too, from his time as a deputy Wayne County executive, and as CEO of the Detroit Medical Center, learned to set aside disagreements and make tough decisions to encourage change.

Statewide impact

While Snyder’s actions aren’t likely to win him many votes from Democrats in Detroit, it could also lose him some support from conservative Republicans, said Eric Foster, senior consultant and chief strategist for West Bloomfield Township-based LB3 Management, a management and consulting firm.

Tea Party conservatives and Libertarians don’t like his investments in Detroit with state money, and see other actions like taking over Belle Isle and making it a state park as an expansion of state government, he said.

Foster said he thinks those voters will still go to the polls but will likely skip voting for governor and vote for other candidates on the ballot in other races that fit their ideology

Add to that Snyder’s pushing of Medicaid expansion, the tax on some pensions, support for the New International Trade Crossing and wanting to raise taxes for roads, and it can be too much for some, he said.

“That’s a lot of sins in that wing of the Republican Party,” Foster said. “There’s a possibility that he may see some voter backlash from that wing of the party.”

But business leaders outside of metro Detroit support Snyder’s efforts in Detroit.

“So often we hear from outsiders that their perception is that Detroit is Michigan,” said Jackie Krawczak, executive director of the Alpena Area Chamber of Commerce. “We need Detroit to be the best it can be.” For cities like Alpena, she said, it’s not just about perception; it’s tangible.

When the auto industry went through the downturn, many from the Detroit area with second homes in Alpena couldn’t afford to keep them and had to sell, and real estate prices in the city went down, she said.

Fewer tourists back then, she said, also meant fewer dollars being pumped into the local economy.

“We rely on the people of Detroit to visit our community,” she said.

Communities that might have once felt that Detroit was a drag now realize that when Detroit gets momentum, “it is really able to drive the whole state,” said Doug Rothwell, president and CEO of the Business Leaders for Michigan.

Rothwell said people attribute much of that to the work Snyder has done not just in his policies but in his travels around the state, always talking positively about the city and why it is important.

“I think he’s getting recognized for it, and I think it matters a great deal,” Rothwell said. “The divides between east and west Michigan that maybe were there a decade or more ago have really faded away. People realize all over the state that when Detroit does well, the whole state does well.”

That doesn’t mean they like everything about it, Krawczak said, especially the $195 million that was part of the “grand bargain” package of legislation Snyder signed this year to create a fund to support Detroit pensions and immunize from bankruptcy the sale of works in the collection at the Detroit Institute of Arts.

“Nobody wants to see their money go anywhere else. We can think of plenty of things to do with that money,” Krawczak said. “But in the business community, most people understand that what happened, had to happen.”

Others applauded the move. Jandernoa, of 42 North Partners, said Snyder’s combining of state funds and private sector donations to support both the DIA and pensions was a “stroke of genius … . The governor’s leadership was absolutely brilliant,” he said.

Election Day effects

As a member of the board of directors for the U.S. Chamber of Commerce, Studley said his colleagues across the country often ask him about Detroit and what the governor is doing.

“We are proving that Democrats and Republicans can work together and rescue a city that was careening toward a devastating bankruptcy,” he said. “People can choose to focus on differences, or leaders can choose to focus on what they have in common.”

Baruah added that Snyder and Duggan deserve credit for creating an environment that encourages nonpartisan alignment.

“The governor, the mayor, the emergency manager, the City Council, the philanthropic and business community, all the key players for a society are now aligned,” Baruah said. “This is what’s making fundamental change possible. I think that’s incredible. If any one of those elements wasn’t there … we wouldn’t be where we are.”