Detroit’s RenaissanceAn economic rebirth spawned by a new administration is bringing both people and business back into the city by Paula Farmer
Leaving the sun and mountains of the picturesque Southwest behind him two and a half years ago, 27-year-old Derrick Martin headed to the cold and not-so-scenic northern city of Detroit. Aesthetically, many might find Martin’s move perplexing. But to the young Arizona native with a degree in communications, Detroit was the land of opportunity. It was General Motors’ former subsidiary, EDS, and the promise of engineering training that drew Martin to the Motor City. “The southwestern area of the country didn’t give me the opportunity that I needed to make the money I wanted to make,” claims Martin. “But in Detroit, with the ‘Big Three’ automakers, the doors were wide open to get into engineering.” Even with the chance to develop new skills and increase his salary, Martin was initially hesitant to make the move to Detroit because of all the negative things he’d heard about it. Now, with two and a half years under his belt as a Detroiter, Martin is pleased with his decision and would encourage others to consider making the same move. “You see more professional blacks here,” he adds, “and that gives a strong support base, broad networking avenues and refreshing social opportunities.” During the ’70s and ’80s, success stories like Martin’s would not have been told; it was a different time for Detroit, one of overwhelming challenges.
Heavily dependent on the auto industry for its bread and butter, the city was hit hard when domestic auto manufacturing took a turn for the worse. Crime rose, and businesses and residents were fleeing the city for safer ground in the suburbs. Besides that, the city once known as the home of the soulful, sentimental sounds of Motown was now better known for its infamous “devil’s night” fires. Fast-forward to the late ’90s–a new era with new ideas for a new Detroit has many referring to it as the “comeback city.” For the last several years, the auto industry has been strong and healthy, churning out hefty profits-which translate into more jobs and business opportunities. The combination of generous federal grants and large urban development projects is drawing businesses and residents back inside the city’s borders. And, the isolation between Detroit and its suburbs is slowly giving way to shared interests and oneness among communities. There’s no greater demonstration of this new spirit of camaraderie than the community’s united effort to take the devil out of the pre-Halloween fires that had plagued Detroit for decades. Thousands of residents from the metro area joined forces with city residents to patrol the streets, making the arsonous eve a thing of the past. Besides making the streets safer and turning around the city’s negative image, area residents frequent the sports and ever-expanding entertainment venues downtown, while city dwellers take advantage of some of the finest retail shopping at upscale suburban shopping malls in Oakland County, one of the richest counties in the nation. Detroit is fast becoming a city to be reckoned with. And, while much of its plan still remains on paper, its mayor, Dennis Archer, has set his sights on creating a renaissance that will restore Detroit to its former glory moving into the 21 st century.
BUILDING A NEW LANDSCAPE
Since 1994, the city’s development successes have captured local and national attention. Detroit ranked No. 1 in a 1997 Industry Week magazine listing of world-class communities, based on its manufacturing vitality. And, Mayor Archer, a two-time president of the National Conference of Democratic Mayors, was sited by Newsweek as one of 25 U.S. mayors to watch.
Archer can’t help but be proud of what his administration and a dedicated business community have accomplished. “It’s easy to recognize that the vision of Detroit becoming a world- class city is quickly becoming a reality,” says Archer. “The commitment of city government, residents, businesses and corporations to building a new Detroit has created new hope and opportunities throughout the city. While there is more work to be done, the tremendous accomplishments demonstrate that we are well on our way.” Capitalizing on the new emphasis on federal domestic policies launched by the Clinton administration, Archer ignited a spirit of collaboration among Detroit’s heavy-hitting business sector, snagging a coveted $100 million Empowerment Zone grant. In fact, the city’s success in attracting industrial development to the Empowerment Zone leads the nation, with more than $3.9 billion committed in private dollars for investment. Even small businesses such as private retail, restaurant franchises and drugstore chains, along- side corporate giants like the auto industry, have added another $2.9 billion to the coffers since 1994.
Detroit-based political analyst Mario Morrow says the winds of change are blowing through the city. “The doors have opened, the money is beginning to flow in and progress is beginning to be made, thanks to city officials, the business community and many people behind the scenes.”
Building a new city for the new century is no small task. But garnering support from businesses, residents and federal funding has proven easier than streamlining the city’s bureaucracy. Archer’s administration has been successful in revamping government to overcome its bureaucratic red tape. Now business permits get processed in about half the time taken previously. And Archer continues to investigate ways to reduce the income and corporate tax rate. The goal is to make living in and doing business in Detroit easier. BE 100s auto dealer Nathan Conyers, of Conyers Riverside Ford, is familiar with doing business in Detroit. Since 1970, Conyers and his family have stuck with the city through good and bad times, refusing to flee the inner city as others have done. “In the late ’60s [after the riots], there were businesses leaving Detroit in droves. We said to ourselves, ‘If we go into business, we want to be in business in Detroit,’ “recalls Conyers. “The city was experiencing some pretty tough times then, and there were fewer and fewer dealerships in central city. We came into business to provide economic opportunity for ourselves and others here in the city.”
After experiencing financial rough spots through 28 years of business, Conyers’ dedication to
his family business and Detroit is paying off. The oldest African American car dealership in the country is consistently turning a profit and serves as a training center for young would-be dealership owners.
With his network of eight dealerships throughout metro Detroit grossing more than $500 million annually, BE 100s CEO Mei Farr, of the Mel Farr Automotive Group, knows the unique challenges for African Americans looking to do business in Detroit. He believes that with certain elements in place, it can be a great place to see business ideas take off. “To succeed on any level will take the realization and education that a good living can be made through entrepreneurship,” says Farr. But he cautions that having a reasonable business idea is often not enough. “Following desire and expertise is locating funding.”
BREAKING THROUGH BARRIERS
Breaking into the white male-dominated auto industry was a challenge and triumph for persistent African American men like Conyers and Farr. But how much more so for an African American woman like Geralda Dodd, CEO of the Thomas Madison Co. This BE 100s firm has steel service centers and stamping plants in Detroit andMansfield, Ohio, and is a successful–and profitable-supplier to auto manufacturers. Dodd acquired the stamping company in 1990 when it was floundering and on the brink of failure. In just seven short years, its assets have tripled and Dodd modestly claims sales of $100 million for 1997.
Dodd loves the industry, which she has been in for some 20 years. And, she loves doing business in Detroit. “The economics of the city may be dominated by whites, but the politics of the city are black, and that can offer a unique sense of support,” she says. “I feel there’s room for improvement. People tend to lose focus on the need to share economic wealth, but there are great opportunities here and I couldn’t imagine being any place else.” Small business development is critical to Detroit’s economic growth. The Detroit Regional Chamber of Commerce and the Detroit Economic Growth Corp. (DEGC) offer assistance to start-up firms. The chamber is responsible for attracting business to the region. “As we uncover individuals and prospects that either have an interest in the city or in matching up well with property that may be available, we bring them into the Detroit Economic Growth Corp. and work to make that dream a reality,” says Dick Blouse Jr., president and CEO of the chamber. Ginwil Inc., a wholesale distributor of medical and surgical supplies, is one such example of a company benefiting from DEGC’s assistance. In 1996, DEGC extended a $25,000 loan to the growing supply company for equipment, furniture and working capital. Originally scheduled to be paid off in six years, the loan was paid in full within a year thanks to the improving economic climate in the area. “None of that would have been possible without the fiscal trust and financial investment the DEGC and its affiliates had made in the company’s business vision,” says Ginwil President and COO William
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David L. Littman, senior vice president and chief economist for Comerica Bank, says, “In terms of business activity, things seem to have stabilized over the last three years and have begun a slow comeback, especially when you look at the valuation of property and tax returns.” To make this determination, Comerica uses a “comeback index” that consists of 23 variables including neighborhood property values, income tax and the number of permits issued for business and residential development. According to Littman, all signs point to an economic upswing: “We’ve turned the corner; the numbers are now moving higher.” The dependency index is another indicator of a city’s well-being. This index reveals the percentage of the employed population that is on welfare and the total percentage of unemployment in the city. And that ratio is down. In fact, from 1993 to 1997, the unemployment rate has dropped by half, going from 13.6% to 7.8%. The average household income for Detroit has grown by 3%, from $34,710 in 1995 to $35,748 in 1996. The city ranks 11th in income for the nation.
Tyrone Miller, director of Detroit’s Board of Zoning Appeals, offers the recent surge in business and home building requests as evidence of the improved development climate in the city. “We’re really getting a lot of activity in the area of new single-family housing in existing neighborhoods,” says Miller. “The combination of community organization and a private developer will bring 60 new homes, while the overall housing values in Detroit have increased by 30%.” Market indicators suggest that Detroit is entering a period of potentially explosive growth. Within the greater downtown area, there are several million sq. ft. of office space, 15,000 housing units and an array of new retail and tourist facilities. A large part of the transformation is due to the highly anticipated creation of two new sports stadiums, three casinos and new hotels and entertainment centers.
Ground has been broken for the building of a new home for the Detroit Tigers baseball team and a new dome stadium for the return of the Lions football team, who’ve spent the past 28 years at the Silverdome in suburbanPontiac. The stadium projects represent a $505 million investment; the city will contribute $85 million, with the rest of the financing coming from private investors.
Not too far from the stadium area is the riverfront site for three gambling casinos and hotels to be undertaken by two gaming heavyweights, MGM Grand Hotel and Atwater Circus Circus. The third casino bid was awarded to the local partnership of Greektown and the Chippewa Indian tribe. The development and operation of the casinos and the stadiums are expected to bring millions-if not billions–to the city in taxes, create thousands of jobs and ignite tourism. Despite the seemingly bright picture, the projects and Mayor Archer have drawn criticism from some who worry whether the black community–which makes up 76% of the city’s population-will reap any benefits. One outspoken critic has been Detroit businessman and BE 100s CEO Don H. Barden of the Barden Companies Inc., whose bid to build one of the casinos was rejected by the Archer administration. Barden firmly believes that for at least one of the casinos not to be black-owned sets the community back. “Rarely in our history have we as a race been given the opportunity to determine significant participation in an industry,” he asserts. “For us not to take advantage of that is outrageous.”
With most of the white community’s support and the necessary backing of the Detroit Metro AFL/CIO unions, the Archer administration defends its choices for casino contracts. Citing Barden’s financial commitments as falling short of the contract criteria, officials believe the trickle-down effect would have ended up translating into few jobs for minorities. “The important thing is that we ensure as many African Americans benefit from this venture as possible,” says the mayor’s press secretary, Greg Bowens. “Those assurances are in the development agreements because they spell out how much we want, in terms of African Americanowned businesses, to get from the casinos and stadiums.”
The supplier base has to have at least 30% African American participation. Additionally, the unions have pledged training and apprenticeships to fill the demand for skilled labor throughout development. The administration believes these assurances will allow the money to be spread around rather than creating a black ownership symbol in one person. BE 100s CEO Bill Pickard, Ph.D., owner of Regal Plastics in Roseville, Michigan, is one of two general partners in the MGM Grand Hotel’s casino development project. He supports the mayor’s selection and will help to make sure that there is black participation. “I will advise and assist MGM in fulfilling the mayor’s and city council’s mandate on Detroit jobs, black contracting as well as participation in all facets of the management and ownership of the casino development project,” he says. The casinos notwithstanding, Detroit resident and radio news anchor Michael Barr, wife Candace and their seven-year-old son, Mike Jr., believe Detroit is the place to be. “The casinos’ coming to Detroit is important, but that’s just one cog in the machinery,” Barr notes. “If there was never any talk of casinos, Detroit would still thrive–you’ve got the new stadiums coming, a thriving entertainment and cultural district, and city services have improved.”
Financially, the two-income Barr family has no complaints, noting that the cost of living in Detroit is very affordable in comparison to other major urban areas they once considered moving to. The Barrs say their three-bedroom bi-level house, located in a middle-income neighborhood on the city’s east side, has doubled in value since it was purchased eight years ago.
Likewise, native Detroiter Irving Weaver, his wife Griselle and their daughters Melissa, nine, and Nicole, four, benefited from the city’s rising property values when they were forced to relocate to Clarkston, Michigan. When GM moved a portion of its operations north, Weaver and family followed. Not only did the couple cash in on the sale of their Detroit home, which had nearly doubled in value, but Griselle, who had previously worked for Ford Motor Co., got hired on with GM as a joint and fastener test coordinator contracted through its Modern Engineering division. As a transplanted New Yorker, Griselle views Detroit as “the smallest big city” in the world because everyone seems to be able to quickly identify people through family names and high school affiliations. She also continues to be amazed at how affordable it is to live in Detroit and the surrounding areas. “Our home is huge, with some land, which we bought for $250,000. In New York a home like this would be so expensive and unattainable for most.”
The jobs and money created by the Big Three automakers is unparalleled. GM’s recent purchase of theRenaissance Center, located along the Detroit River, is expected to increase the number of employees downtown, raise tax revenues and stimulate the addition of more retail shops and restaurants. Chrysler has invested about $5 billion in Detroit since 1992, with $900 million of that in a state-of-the-art engine plant it built last year. Chrysler, the third-largest domestic automobile company, has also chosen to build its latest hot new car, the Prowler, in the Motor City. In all, Chrysler has 11,000 employees in the city, including some of the highest-paid production workers in the country. Chrysler Vice President of Government Affairs Frank Fountain says the company is committed to the economic growth of Detroit and the inclusion of African Americans in its workforce. “We believe we’re helping the mayor and others who are working hard to revitalize the city,” he says. “As a company of 125,000 employees, about 27% of our total are minorities, and a significant amount make up management personnel.” Beyond jobs, the automaker gives generous support to the Detroit community through donations to the school district and flourishing cultural center. “The philanthropic arm of the company contributes substantially to the arts, including hefty ongoing donations to the newly built Museum of African American History, the Detroit Institute of Arts and the Detroit Symphony Orchestra. Not to be outdone, Ford has contracts with approximately 20 African American suppliers in the Detroit area and recently opened up the Detroit-based UAW/Ford Training Center.
DETROIT POPULATION BY RACE
Source: Michigan Employment Security Commission
DETROIT EMPLOYMENT BY INDUSTRY
Source: Michigan Employment Security Commission
BRIDGING THE GAP
Beyond city development and job opportunities lies the center of concern for most residents–quality of life. Without question, two areas that impact the quality of life in any city are crime and education. Over the years, Detroit has been brutalized in both local and national press for falling short. Now there’s evidence to suggest Detroit is taking control of its situation, cleaning house and reversing its tarnished image. New Detroit Inc. is a 30-year-old agency devoted to positive race relations through academic achievement and economic equity. The agency monitors the progress of the nation’s seventh-largest public school district. After the results are tallied, it publishes an
annual report card. Project Director Robert Brown explains the results of the agency’s latest Detroit Public Schools report: “In reviewing the last 15 report cards, it’s obvious things are improving in terms of test scores. The district is still behind state averages, in some cases nationally, but the gap is closing somewhat.” Brown admits that the task before the school board is daunting considering that the district has 180,000 students and an average classroom size of 32 students. The neediness of the students is a concern as well–two-thirds come from families that live at or below poverty level.
Located in the heart of the medical district near downtown, the Detroit Children’s Center is a private, nonprofit organization that has been in existence since 1929 to meet the expanding and rapidly changing needs of Detroit children and their families. Grenae Dudley, deputy director of programs, says the center’s commitment to the community is strong. “We’ve had a lot of opportunities to move outside of the city, but this is our home. We have recently strengthened our commitment to the community by building a $7 million building, and we are continuing to do capital renovations in the area to establish our programs.”
The center provides over 20 programs ranging from an incarcerated pregnant women’s group to general foster care. “We have mental health services in two schools,” says Dudley, “and our Detroit Abstinence Partnership is in 20 schools promoting the importance of sexual, tobacco and drug abstinence for students nine- to 14-years-old. Agencies like the Children’s Center and New Detroit contribute to the improvement of school districts. The 4,100 officer Detroit Police Department also boasts great strides in crime reduction. In the last four years, there has been a significant decrease in all major crime areas including the number of youth homicides, which dropped by half. Through a newly organized carjacking task force, carjackings have decreased by half in the last four years as well.
Part of the credit for crime reduction is due to the leadership of the department’s chief, Isaiah McKinnon, Ph.D., one of the few African American top cops in the nation. During McKinnon’s tenure several task forces have been developed and 380 additional police have been put back on the streets to combat crime. McKinnon believes the Detroit Police Department ranks with the best in the nation. “The higher echelon of the DPD are the most integrated, educated and trained in the country,” McKinnon declares. The department has put heavy emphasis on community policing, and officers can frequently be seen patrolling on foot, bike or horseback and maintaining a presence in and around schools.
After decades of economic decline and urban flight, the city of Detroit is being renewed with a contagious spirit of enthusiasm. With political leadership and aggressive development under way, it’s in a unique position to offer business opportunities to its residents and those considering a change. As a result, metro Detroit is on its way to earning world-class status and serving as a hotbed of opportunities for African Americans.