The challenges facing the city sometimes seem insurmountable. Tens of thousands of abandoned homes dot the city’s landscape, making redevelopment all but impossible in many areas. The population, which has been declining for generations, dwindled another 25 percent to 716,000 in just the past decade. Last year there were 411 homicides—the highest number in years. And the current unemployment rate of 23.1 percent puts Detroit first among America’s biggest cities.
“[In Detroit] you’ve probably seen the destruction of an American city on scale with the carpet bombing of World War II,” says Lyke Thompson, director of the Center for Urban Studies at Wayne State University in Detroit.
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But there are those who simply will not accept the conventional wisdom that Detroit is doomed—and are working hard to prove it wrong. A charismatic billionaire is investing huge sums of money downtown. Young people, drawn by cheap rent and the opportunity to play a role in Detroit 2.0 (whatever that may turn out to be), are moving into the city. And while the state’s takeover of Detroit’s governing functions is controversial, some think it could finally prompt meaningful reforms.
Today, Thompson says, “we’re seeing simultaneously the destruction and reconstruction of the city.” It’s not clear just what the future holds for the Motor City, but whatever it is, the following 10 people will play critical roles in creating it.
Phil Cooley, Restaurateur
Can any good come out of a foreclosure?
Phil Cooley—dubbed by many the “Prince of Detroit”—thinks the answer is yes. About two years ago, a bank asked Cooley if he was interested in purchasing a 30,000-square-foot warehouse near the popular restaurant he owns. The building cost $100,000, less than the price of a studio apartment in most cities. He named the facility Ponyride, and rents space in it at 10 cents to 20 cents per square foot to artists, nonprofits and upstart businesses. That’s made Cooley a popular person among the city’s hipster set.
Today, Ponyride is home to a diverse group of tenants. The nonprofit Empowerment Plan hires homeless women to work as full-time seamstresses; the women make winter coats that convert to sleeping bags for the homeless. Stukenborg Press is an old-fashioned letterpress that produces art and does commercial jobs. Beehive Recording Studio helps area musicians record professional-quality tracks—for free—and hosts them online in an effort to give them exposure.
PHOTOS: See what goes on inside Ponyride.
Sandy Baruah, head of the Detroit Regional Chamber, says the organizations inside Ponyride don’t necessarily need to become big in order for the project to be a hit; its real value is in promoting a sense of entrepreneurship in the city. “Culturally,” Baruah says of Ponyride, “it’s critical.”
A one-time fashion model, Cooley attended film school in Chicago and traveled the world for two years. Eventually, he was drawn to Detroit’s music and arts scene. He worked as a janitor and a bartender, eventually joining with two partners to open Slows Bar-B-Q in Detroit’s Corktown neighborhood in 2005. Some considered the venture a risk, but Cooley guessed correctly that there were more than enough potential customers. Quickly, the restaurant became a Detroit institution. “Because of all these misconceptions about Detroit, people are afraid to do business here,” he says, “and there ends up being more demand than supply.”
William F. Jones Jr., CEO, Focus:HOPE
After a long career in the auto industry, capped with a stint as chief operating officer of Chrysler Financial, William Jones hoped to retire in 2008. Instead, the nonprofit where he served as a board member tapped him to become its CEO.
In his role as head of Focus:HOPE, Jones’ goal is workforce development. It’s a critical task in a city where, officially, more than 1 in 6 members of the labor force are unemployed, and the real unemployment rate is even higher.
Jones sees job training as key: Detroit’s school system has gotten so bad that it’s now run by a state-appointed emergency manager. “We can’t ignore the needs of the adults who have been underserved by what’s been widely viewed as a failing education system,” Jones says. “As we fix it for the kids, we’ve also got to work with the adults to make sure they’ve got the skills to take advantage of the expanding but changing economy.”
MORE: 2 men responsible for bringing businesses to Detroit.
Focus:HOPE trains workers in manufacturing and IT, and through partnerships with area universities, helps them earn associate’s and bachelor’s degrees. A worker can go through machinist training in 12 to 26 weeks, while a student can go from almost no knowledge of computers to getting a Cisco IT certification in a year. Jones estimates that about 70 to 80 percent of people who go through Focus:HOPE’s training find work within three months. Employers, he says, know that if a candidate “comes through a program here, they can hire them with the confidence that they know what they’re doing.”
Jones knows Detroit’s population will never return to its earlier levels, but he says education and job training are more important than population numbers. “It doesn’t take 1.8 million or 1.9 million to have a thriving city,” he says, “but it’s going to take a lot of people who are well educated, gainfully employed and economically self-sufficient.”
Sue Mosey, President, Midtown Detroit Inc.
For 25 years, Sue Mosey has been working to make things happen in Midtown, the area just north of downtown anchored by the Detroit Medical Center, Wayne State University and the Detroit Institute of Arts. Today, that’s finally starting to pay off. The area’s gained a reputation as one of the city’s most desirable locations. It’s filled with restaurants, bars, art galleries and nonprofits, and apartment occupancy rates are at 96 percent.
Mosey is the driving force behind much of the change. “Pretty much anybody doing anything in the neighborhood will be sent here,” says Mosey, who works with developers to facilitate their projects by connecting them to the right partners, helping them secure tax credits and advising them on how to navigate city hall.
The organization she leads, Midtown Detroit, is involved in a dizzying array of initiatives designed to boost the neighborhood. It’s working with the city to rezone the area to allow more mixed-use projects and relax parking requirements. It owns a park that hosts summer concerts, in addition to two community gardens, a hotel and an office building. It runs a program that pays employees of some of the area’s biggest employers to live in the community. It runs popular events like the arts festival DLECTRICITY that draw thousands. All told, it’s helped fund 30 residential developments and 20 local businesses.
And there have been more unusual undertakings too. “I stopped the ‘Transformers’ people from blowing up one of our really nice buildings,” says Mosey, referring to the action movie partially shot in the city. While some would say Midtown Detroit’s broad range of activities is unfocused, Mosey calls it “our special sauce.” And it’s all done without city funding.
In the ultimate sign of neighborhood status, a Whole Foods is slated to open in Midtown this year. Now Mosey is in a position that at one time would have been unthinkable: defending the neighborhood against accusations of yuppiedom. “I think people think Midtown … is all about young, white people. They couldn’t be more wrong. There is that factor, but that’s negating all the other people that are moving here, plenty of people of all backgrounds and income levels.”
Robert Anderson, Director, Planning & Development Department
As Robert Anderson drives back to his office from lunch in Detroit’s Mexicantown, he passes an abandoned house with the letters “GASM” written in graffiti on its side. It’s a tag that has become pervasive throughout town. “GASM—I’d like to kick that guy’s ass,” sneers Anderson, the city’s no-nonsense planning director. While Anderson is a relative newcomer to Detroit’s government—he arrived in 2011—he speaks about his new city with the passion of a local. “Being out of state and reading about Detroit—I wanted to get back home,” says Anderson, who is originally from Michigan. “It’s a place where I’d have the opportunity to have a greater impact than anywhere in North America, and maybe anywhere in America in the last 30 years.”
Anderson, whose office administers many of the city’s federal grants, arrived with a splash. Shortly after starting here, he made headlines by announcing that the city had mismanaged more than $25 million in federal housing grants, awarding money to groups that weren’t qualified to use it.
He sees his job as building the capacity of his department so it can execute Detroit Future City, the broad plan designed to prepare for its next chapter. Much of that plan explores how a city built for 2 million people should adapt to the reality that its population is now less than half that. For example, Detroit has had a problem with prefabricated housing in derelict neighborhoods; just a few years after being installed, those houses frequently wind up empty. Anderson doesn’t want to prohibit building in those areas. But given the limited federal and city resources, he says, Detroit should avoid investing in places so far gone that they lack the potential for a comeback.
When Anderson first arrived in Detroit, housing rehabilitation funds were disbursed in an unsophisticated way. Thousands of residents would line up at the convention center and put their names in a drum, and city council members would draw the names and announce winners as if on a game show. The system—if you can call it that—didn’t actually evaluate what type of work needed to be done on homes or whether the funding would make a dent in the residents’ housing problems.
Now, Anderson says, city staffers actually visit homes, trying to determine which ones have the most immediate needs and how they can target funding to prevent future damage that would necessitate more costly repairs. Fewer people get help, but the aid goes further toward assisting each home that gets it. “The goal is to ensure each house is in good shape for a generation,” Anderson says.
Dan Gilbert, Chairman and Founder, Quicken Loans
Dan Gilbert is likely the most popular guy in Detroit right now. His impact has been enormous. Rock Ventures, the umbrella corporation that includes the mortgage lender Quicken and dozens of other companies in Gilbert’s empire, has purchased more than 20 buildings encompassing 3 million square feet of commercial real estate in the city’s central business district. More than 70 organizations have moved into those buildings in the last three years.
“Given the level of disinvestment in Detroit, no one could possibly think that the turnaround can be quick,” says Sue Mosey, who promotes development in Midtown, just north of where Gilbert focuses his efforts. “But downtown is sort of a different situation. You’ve got one guy spending a lot of his own capital, so [the city] can affect something pretty quickly.”
This spring, Gilbert and city officials unveiled a vision for a lively downtown—sidewalk cafés, outdoor concerts and movies, food carts, art installations, beer gardens, dog parks, volleyball courts, and even public Ping-Pong—to be funded both privately and publicly. The idea is to get a critical mass of people living, working and visiting downtown in order to make larger-scale retail and residential development attractive again.
Development in troubled cities has always faced a chicken-and-egg problem: Retail tends to go where people live, but people won’t live somewhere if shopping is unavailable. “Our approach is to put the resources behind it to attack both issues at the same time,” says Matthew Cullen, president and CEO of Rock Ventures. “We’re not a passive real estate investor.”
Already, Gilbert’s done his part to populate downtown. In 2010, he moved more than 3,600 employees from his companies’ suburban offices to the heart of the city. Since then, another 4,000 new hires have started working for him downtown, and his companies plan on hiring 1,000 paid interns there this year.
Some worry it’s risky for the city to invest so much hope in just one man. Others say he’s ignoring blight in neighborhoods outside the city’s central core. Cullen says he and Gilbert aren’t oblivious to other dilapidated areas, but their resources are most suited to make an impact downtown. Gilbert’s actions aren’t altogether selfless: If his gamble on Detroit pays off, few will profit quite as much as he will. “This is not philanthropy,” Cullen says. “We think there’s an opportunity to do good and do well.”
Leslie Lynn Smith, President and CEO, TechTown Detroit
Leslie Smith is essentially in the same business as William Jones: workforce development. She’s just going about it much differently. “We have a huge talent gap,” Smith says. “There are not lots of people in Detroit who are serial entrepreneurs. That doesn’t mean they don’t have entrepreneurial capacity or potential. It just means they may not know it, and we haven’t put them in places where they can excel.”
TechTown, one of a growing number of business incubators in the Detroit area, is based on the idea that the people who build businesses can themselves be created. The nonprofit was launched in 2000 as an initiative by Wayne State University to commercialize the school’s research. At its launch, it received $35 million in private and public funding, and General Motors offered up a huge building—140,000 square feet—that has innovation in its bones: It’s the place where the Corvette was designed.
A former executive with the Michigan Economic Development Corp., Smith was drawn to TechTown largely because of the speed at which it works. “The proximity between decision and impact at the state level is longer than impatient people can deal with,” Smith says. The nonprofit’s specialty is “boot camps” designed to teach business acumen quickly. One shows entrepreneurs how to turn early stage technology into a viable business. Another caters to students looking to launch technology-focused ventures. A third takes retailers from concept to opening in just a few months. TechTown claims it has offered some sort of assistance to more than 600 businesses since 2007. While its biggest success is Asterand, a provider of human tissue research to drug researchers, it’s also worked with a coffee shop, a pharmacy and a café.
Incubator programs have had only modest success in most other cities, and at their best can reach only a fraction of the people who might benefit from them. But Smith is convinced they can play a central role in Detroit’s recovery.
“We try to apply a level of urgency to our work,” Smith says. “I firmly believe that we can’t continue to say we’re in crisis and not move quickly to solve it.”
Tom Nardone, The Mower Gang
While Detroit businessmen like Dan Gilbert negotiate high-level deals, Tom Nardone is trying to revitalize Detroit one blade of grass at a time.
One recent spring evening, he was in Stoepel Park No. 2, in far west Detroit. It was overgrown, covered with trash and bounded by dozens of abandoned homes. On this particular evening, it was soggy with rain. There’s no reason anybody should be there, but Stoepel was teeming with activity, thanks to The Mower Gang.
This group of self-proclaimed “renegade landscapers” descends on a different overgrown public park every other week in order to remove debris and mow the grass. In cash-strapped Detroit, park maintenance isn’t a public priority, which sometimes means parks are plagued by waist-high vegetation.
PHOTOS: View The Mower Gang in action.
The situation was so bad that earlier this year the city announced it would close 119 of its more than 300 parks due to funding woes, though corporate donors and other grant money have saved them for now. “I’m sure there’s a year’s worth of growth here,” says Nardone, the group’s leader, as he zips around Stoepel in a high-powered Husqvarna riding mower, joining about two dozen other people.
Nardone acknowledges that The Mower Gang’s work since 2010 isn’t a substitute for the city’s role in park maintenance. “One guy working for the city with a tractor and a truck could do as much as my group does in a year,” Nardone says. “With the right piece of equipment, a single guy could mow a park in a day. We’re not nearly the replacement for government service.”
Nardone, who has the unusual day job of running a company that sells sex toys and other marital aids, knows his group of “schlubs with old lawn mowers” isn’t going to single-handedly fix Detroit’s parks. But as he said at a recent TED event in Detroit, that’s the point of volunteerism: Just doing something—even something small—is better than doing nothing.
Bill Pulte, Detroit Blight Authority
As one of the country’s biggest homebuilders of the 20th century, William Pulte made a career constructing houses. His grandson Bill is making a name by demolishing them. The younger Pulte, an investment banker, is the driving force behind the Detroit Blight Authority, a nonprofit that takes a new approach to removing the derelict structures that plague the city.
Earlier this year, the group made its first effort, clearing 260 lots over 10 blocks near a school. The work included demolishing 10 homes and two commercial structures, with the whole job coming in at $200,000. The Blight Authority partnered with the city to help streamline the permitting process and ensure that the group had the legal grounds to demolish the property.
Pulte decided to tackle blight in the city after reading a news article about a young girl who said she was fearful every morning when she walked to school. “It just didn’t seem right to me that, given everything our country has [accomplished] we couldn’t figure out how to knock down homes in Detroit,” Pulte says. Indeed, the city has an estimated 78,000 vacant buildings, and city officials say no more than 10 percent of them will ever be reused. Those blighted structures are a haven for crime, and are damaging property values of everything nearby. “They’re making every homeowner in the city poorer,” says Lyke Thompson of Wayne State University.
PHOTOS: See how the Heidelberg art project brightens otherwise bleak areas of Detroit.
Pulte says historically the city has used federal resources to clear individual homes on a piecemeal basis, as opposed to clearing whole blocks at a time, which will be the focus of his organization. “We’ve spent millions of dollars on this demolition program, but you’d never know money had been spent on it,” says Pulte, referring to previous demolition efforts.
His goal is to bring efficiency to the demolition process, and he says his team can clear a home for less than $5,000, while demolitions by the city cost more than $10,000. The assembly line process he’s employing brings in specialists in demolition, asbestos removal, utility disconnection and vegetation control. Since 80 percent of the materials the Authority recovered during its pilot were recycled, Pulte knows he can save on the costs of transporting waste to landfills.
Some critics say that Detroit will never be able to tear down all its abandoned properties without a massive infusion of state and federal cash. But Pulte has gotten an inordinate amount of attention for demolishing just one area, and many believe his strategy has great potential. “The city will eventually have to pick up our model,” Pulte says. “Detroit is going to have to take care of these structures. It’s just a matter of when.”
Kevyn Orr, Emergency Manager
The most polarizing figure in Detroit these days is Kevyn Orr, appointed by Gov. Rick Snyder in March to guide the city on its path toward financial solvency. The circumstances of his appointment were unusual: Although Michigan residents voted last year to repeal the emergency manager law that allows state-appointed officials to assume control of troubled cities, the legislature simply replaced it with another version of the law, setting the stage for Orr’s takeover of city hall.
Orr is a bankruptcy expert who represented Chrysler during that firm’s bankruptcy in 2009. A partner at the Washington, D.C., law firm Jones Day, he got off to a rocky start in Detroit when critics said it was a huge conflict of interest to have that same firm getting multimillion dollar contracts with the city. “I’m prepared to be the most hated man for a period of time, but some of that vitriol will abate,” Orr told The Detroit News after his appointment.
Orr’s supporters say his role is necessary to help rein in the city’s troubling finances, which include a general fund deficit in excess of $300 million and nearly $15 billion in long-term debt. His power is vast: He can change contracts with unions and vendors, as well as sell city assets. The city council and mayor still make decisions, but Orr must approve them. Critics say his appointment by the governor is undemocratic. They argue that it’s a way for the state to isolate the city’s problems so they won’t spill over and impact the state’s credit rating. Orr hasn’t made clear what concessions he’ll seek from the city’s workers, but labor leaders are already circling the wagons.
Ed McNeil, chair of the coalition of labor unions that represents city workers, fears Orr will work to outsource many city services. McNeil also accuses the city of walking away from labor concessions unions have accepted that would save Detroit millions of dollars a year.
But the city’s business community has praised the arrival of an emergency manager as an unpleasant but necessary step toward financial stability. “He understands a challenge and he has a good support group around him,” says George W. Jackson Jr., head of the Detroit Economic Growth Corporation. “I think the average resident of this city doesn’t care who’s in charge, as long as stuff starts working.”
Lyke Thompson of Wayne State University says Orr might be able to help the city adjust to its financial situation in the short term, but the city’s macroeconomic challenges—which extend beyond city hall—are too big for him to address on his own. “The emergency manager is one small piece of the puzzle of the vast rebuilding of Detroit,” Thompson says. “People see it as the critical piece, but it isn’t at all.”
Deirdre Greene Groves, Executive Director, Challenge Detroit
As a 20-year-old college student, Deirdre Greene Groves, a native of rural Michigan, took an internship in Chicago. The experience of being a young person in a booming city was a thrill, but it was also bittersweet. “I wanted this vibrancy at home,” Groves says. Today, she leads Challenge Detroit, which hopes to draw the country’s top young talent to the Motor City—and hopefully use it as a catalyst to spur that same kind of vibrancy that Groves saw in Chicago.
The program hooks up a group of competitively selected fellows with Detroit employers like United Way, Quicken and Chrysler for one year while providing them a housing stipend. Relying mostly on word of mouth and social media, Challenge Detroit drew more than 900 applicants for this year’s program, which was whittled down to 28 fellows ages 22 to 29. The new class arrives in August. The program recruits recent grads from diverse fields including science, business and urban planning.
In addition to working and living in Detroit, each month the fellows address a different “challenge” in concert with area nonprofits. They analyze ways to address problems like food access, education and health. The idea is to groom young people who will stay in Detroit and eventually become leaders.
The fellows are roughly divided among Detroit-area natives, Michiganders from elsewhere in the state and newcomers to the region. Groves expects most will remain at the end of their year, but insists even those who don’t will play a valuable role. “If they’re in New York or Chicago or L.A., when someone says, ‘What were you doing in Detroit for a year?’ they can say what they did and why it was amazing.”
What About ...?
The auto industryDespite Detroit’s deep ties to the auto industry, much of the discussion about the city’s possible turnaround focuses more on companies like Quicken and tech upstarts than on the big automakers. That’s no surprise. “The people who’ve been here a while—they have a complex relationship with the auto industry,” says Sandy Baruah of the Detroit Regional Chamber. “They’ve ridden the highs and they’ve ridden the lows. Since they’ve been burned by the auto industry, there’s some school of thought that we need to diversify away from it.” Baruah, for his part, says the automakers and associated industries are critical to the region.
“They still play a major role; the difference is you have other types of companies stepping in,” says George Jackson of the Detroit Economic Growth Corp. “They’re not as dominant as they used to be now that we have other large-scale employers here.”
Mayor Dave Bing
After months of speculation, Mayor Dave Bing announced in mid-May that he would not seek a second four-year term. His decision didn’t come as a shock. Just a few days earlier, emergency manager Kevyn Orr had released a grim report on Detroit’s finances, indicating that the city was nearly broke and had become “dysfunctional and wasteful after years of … mismanagement.” Meanwhile, as mayor, Bing has suffered a string of health problems, including a perforated colon and a pulmonary embolism.
The question now is who wants to take over? As long as Orr is around, the mayor of Detroit doesn’t actually run the government. Any decisions are subject to review by the emergency manager. A recent poll named Wayne County Sheriff Benny Napoleon and Mike Duggan, former head of the Detroit Medical Center, as the leading mayoral candidates. The primary is scheduled for August.
The banks
Some activists in the city have decried the role of lending institutions, who they argue have contributed to Detroit’s financial woes. Indeed, a recent Bloomberg News analysis revealed that since 2005, the city has paid more than $474 million to financial institutions in fees alone.
As of June 2012, the city’s long-term debt was more than $8.6 billion, according to state estimates. That figure rises to nearly $15 billion if you include pension liabilities and the cost of other post-employment benefits Detroit is currently committed to pay. While contractors, employees and retirees may take a hit in the city’s financial restructuring, don’t bet on bondholders losing big. The law requires Orr’s financial plan to provide for “payment in full of the scheduled debt service requirements on all bonds, notes and municipal securities.”
