By Peter Cummings
Detroit, MI, USA
Almost
three years ago, at the request of Dusty Sang, I wrote my first Detroit article
for Stay Thirsty Magazine. At the
time, Donald Trump had not yet declared his candidacy for the Republican
nomination for President. Brexit was not yet a term in common coinage. Mark
Zuckerberg and Facebook could still do little wrong. The changes since have
been profound and dizzying.
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| Peter Cummings |
From
the local perspective, the past three years have also brought great change to
the City of Detroit. At the end of 2016, we could actually claim 3,000 more residential connections with DTE
(Detroit Edison) than existed at the beginning of the year, starting to reverse
two full generations of population decline. National publications were hailing
the city as a food mecca and a tourist’s delight. Just months ago, Quicken Loans
chairman and real estate mogul Dan Gilbert broke ground on a 70-story tower on
the site of the old Hudson’s department store, some 20 years after the hulking
brick structure was imploded. All these changes were unimaginable in December
of 2014, when the city emerged from bankruptcy.
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| Gilbert Tower (credit: SHoP Architects) |
The
world has changed, the City of Detroit has changed and, admittedly, so has my
perspective on the city’s resurgence. I closed my first article with the
following statement:
“There is only one Dan Gilbert, but
there are thousands of young, creative millennials for whom Detroit is becoming
a mecca. Our challenge in the city is to continue to attract them, to make sure
the jobs are there, the housing is there and that a sense of security and a
widening range of services will keep them there.”
For
those not in the know, today Dan Gilbert is Mr. Detroit. The founder and CEO of
Quicken Loans, he also owns the Cleveland Cavaliers, dozens of other companies
and has purchased 100 buildings in Detroit’s Central Business District (CBD). He
has brought 17,000 jobs into the city. His appetite for Detroit real estate
appears to be insatiable. Almost single-handedly he has rebuilt the city’s
core. For all this he deserves high praise.
Since
writing my earlier article, though, I have learned that the successful
rebuilding of Detroit is a lot more complicated than simply attracting and
retaining millennials (not to mention aging boomers such as myself). Of course
bringing them to the city is a good thing. Opening stores such as Bonobos,
Warby Parker and Lululemon is also a good thing. Opening 100 new restaurants in
a three-year stretch is another good thing.
And all these good things are
happening in Detroit.
So
where is the problem? What is so complicated?
The
answer is that Detroit remains the most segregated city in the country, with
African-American residents comprising more than 80 percent of the city’s
population. And for the most part, the lives of the 80 percent are not touched
by these stores and restaurants and rehabbed office buildings and new office
towers. This graphic, provided by Detroit Future City, demonstrates
starkly the extent of segregation in the region.
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| (Graphic courtesy of Detroit Future City) |
What
would it take to touch the lives of the 80 percent?
First,
we have to acknowledge that close to half of those people live in poverty, many
struggling on a daily basis to get themselves to work and their children to
school. In a city where the auto is the prince and public transportation the
pauper, many of our citizens do not own cars. A recently completed light rail
system connects the CBD to the New Center area in a straight line up Woodward Avenue,
Detroit’s main street. As far as it goes this is good, but it doesn’t go very
far—about 3.5 miles. The people most in need of public transportation benefit
not at all from this spur of light rail. Detroit, at 139 square miles in size,
could accommodate the geography of Boston, San Francisco and Manhattan, with
room to spare. Within such boundaries no one expected a 3.5-mile light rail
spur to make a difference to the neighborhoods where most of the residents
live.
In
November of 2016, the voters in a four-county region narrowly voted down a
Regional Transit Authority (RTA) that would have brought, among other features,
rapid transit to the major spokes that radiate from the center of Detroit out
to the less fortunate neighborhoods. The residents of Wayne County, where
Detroit is situated, approved the measure. So did the voters in Washtenaw
County, home of Ann Arbor. The suburban counties of Macomb and Oakland, on the
other hand, voted it down. It is not clear when and if the measure will again
appear on the ballot.
One
of the many benefits of the RTA would have been enhanced rail service between
Ann Arbor, home of the University of Michigan and Detroit. One could well
question the impact of such a transportation improvement on the poor of
Detroit. What is beyond doubt, however, is that Motown failed to make the
finals in the current Amazon HQ2 sweepstakes at least in part because of an
inadequate regional transportation strategy.
On
top of transportation woes, the poor of Detroit suffer from a near total lack
of goods and services within walkable distance. A recent study by Street Sense,
a Maryland-based consulting firm, estimated $2.6 billion of retail sales
leakage—sales that drain away into the surrounding suburbs. Commissioned by the
Detroit Economic Growth Corporation, the study suggested that a full $1.6
billion could and should be recaptured by the city.
In
November of last year Mayor Mike Duggan won re-election with 72 percent of the
vote. Mike is a great politician and a great manager—an unusual combination. His
career highlights include a tour of duty as the Wayne County Prosecutor and a
successful 9-year stint running the Detroit Medical Center. He is honest, hard-working
and tough.
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| Mayor Mike Duggan |
Assuming
office at the beginning of 2014, he embraced quite logically the city center. Private
investment from Dan Gilbert in the CBD and the Ilitch Family in the Sports
& Entertainment District ensured that massive and rapid transformation
would occur—as long as a fractious city council and a city bureaucracy in
transition did not stand in the way. The Mayor made sure they did not.
Now,
in the early months of his second term, he is clearly focused on affordable housing
and the neighborhoods. In March, he announced an ambitious objective to build
and preserve 12,000 affordable housing units within the next five years: 10,000
of these residences to be rehabs of existing structures and the balance to be
new construction. The principles driving the affordable housing program reveal
that the mayor is sensitive to the issues that matter to the people in the
neighborhoods. “Blight removal is critical,” he says, “but we must save every
house we can.” He goes on to emphasize the importance of building
“neighborhoods of density where daily needs can be met within walking distance
of home.”
Mayor
Duggan’s principles are designed to avoid the downside of gentrification—the
process by which new construction, higher costs and thus higher prices force
the residents who stuck it out during the toughest times to leave once things
get better. He is backing up these principles with a $50 million City
investment and collaboration with foundations and financial institutions to increase
the total to $250 million. If he succeeds, somewhere close to $1.5 billion of
new affordable housing will emerge in the 10 targeted neighborhoods.
To
date, more than 95 percent of the reinvestment dollars that have found their
way into Detroit have landed on less than 5 percent of the city’s footprint. Should
the mayor’s new program for the neighborhoods succeed, that balance will shift, however slightly, in favor of the 80 percent who
deserve to reap a far larger share of the benefits of the city’s resurgence
than has so far been the case.
Links:
Peter Cummings is
the founder of Ram, a real estate management and development company based in
Palm Beach Gardens, Florida. Two years ago he founded The Platform, a
development and management company dedicated to the rebuilding of Detroit. He
is the Chairman Emeritus of the Detroit Symphony Orchestra, and from
1996 to 2005, he spearheaded the Detroit Orchestra Place project that
rejuvenated the neighborhood surrounding Orchestra Hall with a $225 million
mixed-use development, including a new High School of the Arts. From 2010
through 2013 he hosted a show on Sirius XM that connected classical music to
jazz, pop and rock.