Development Update: Speed Bumps or Not, Detroit’s Still Moving Forward

Yes, Virginia, the economic meltdown that eradicated Mommy’s 401K is affecting development in the city. How could it not?

“Even good business deals having problems getting financing, not just marginal or weak deals,” says George Jackson, head of the Detroit Economic Growth Corp. “It’s definitely hurt us, and other cities too.”

But local economic development leaders like Jackson and Detroit Renaissance president Doug Rothwell also want to get another point across, and their purpose is clear: to get the word out that Detroit is still making development happen.

Bring in new blood

Rothwell says Detroit Renaissance is focusing a lot of attention on diversification of the economy. He explains that, because Detroit is so manufacturing-heavy when it comes to its capital, the credit crunch can hurt us even more than other, less homogenous towns. So the focus is on bringing in new blood.

“We’ve done an awful lot of work to identify and target … businesses that have a reason to be here,” says Rothwell. Rather than a “shotgun” approach to nurturing relationships with any and all businesses that are potentially relocating, spinning off or starting up, a “targeted” approach is being used.

Life sciences, creative industries, alternative energy, business services (think legal, financial) and advanced manufacturing have been selected because of relative imperviousness to the current economic conditions, site needs and relationship to Detroit’s talent base.

While the economy makes their work all the more difficult, Jackson says, “This is not a time to withdraw.” DEGC is using approximately $1.3 million – up from just $200,000 two years ago – to go on trade missions, meet with companies one on one, engage in a marketing and public perception campaign and to better interact with trade groups like Automation Alley and the Detroit Regional Chamber. “No one is going to sell Detroit better that we can,” he says.

DEGC is engaging in a proactive, rather than reactive campaign, building relationships years out from when a company might actually be looking for space. “The economy will not always be this way, not in every sector,” he says.

Initiatives designed to help in this regard are the Detroit Neighborhood Market DrillDown, which develops demographics in a manner much more urban-friendly than traditional census methods; the Office of Foreclosures, which coordinates resources that can help minimize that particular problem; and the Fresh Food Initiative, which will soon release a study designed to draw in new grocers and improve existing ones.

None of this would be possible without the increased role that foundation support is playing. The success of the Lower Woodward Initiative that helped shape up downtown for the Super Bowl is now being used as a template for other such collaborations like the East Jefferson Retail-Readiness Program. 

“There is a growing comfort level there,” says Jackson. “From a fiduciary standpoint, we’ve been very successful, with a low overhead.”

What’s happening

Jackson and Rothwell want to be clear that development has continued through the recent mayoral scandal and ensuing City Hall shake-up. “We never stopped working,” says Jackson. “Things did not grind to a halt.” He has a laundry list to prove his point.

The scope of Eastern Market’s recently-completed district plan calls for $50 million of investment – up from the originally-estimated $20 million. Jackson calls it “ambitious” and says that the expanded scope is due in part to the market’s new director, Dan Carmody.

Jackson says that he was initially wary about the Dequindre Cut – which has apparently been renamed the Dequindre Greenway – but now admits it “looks pretty nice.” The first phase – Woodbridge to Gratiot – is almost finished and negotiations with property owners continue on the second phase that will extend the trail north to Mack.

The Paradise Valley cultural and entertainment district in the Harmonie Park area is progressing nicely according to Jackson, with infrastructure improvements are underway who and “three deals nearing” for new businesses to locate there.

The Rosa Parks Transit Center will open in the spring, after some roof design issues delayed construction by a few months. Then, Capitol Park can revel in some much-needed attention; when RPTC opens, buses will cease to clutter the area, allowing for a re-consideration of traffic flow and infrastructure. The Book-Cadillac as a neighbor should help matters some.

When it comes to Cobo Hall, Jackson became coy, stating only that the relevant parties were “still talking.” He had a bit more to say about Quicken Loans’ is still listed as a go. Jackson cited the fact that the developers are making a concerted effort to sell the units and that they have continued to invest their own funds into the project. On the other, @Water Lofts are dead in the, um, water. Jackson says the development agreement has been terminated due to lack of progress.

The third residential riverfront development at the Uniroyal site, because of its high level of contamination, has been problematic since well before the current financial crisis. Jackson says the state has adopted an approved remediation plan that names the polluting parties, but that their level of responsibility is still being negotiated.

Following the strait back downtown, Jackson is scheduled to meet with Mayor Ken Cockrel Jr. this week about plans for Hart Plaza. The concept calls for the demolition of Ford Auditorium; the construction of a new, larger amphitheater; and an overall softening and greening of the park. Plan A, as he characterizes it, focuses on landscaping and infrastructure while Plan B would also expand the underground parking structure from 400 to 800 spaces. Financing remains a question.

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Kelli B. Kavanaugh writes about Development News for Model D. Send feedback and tips here.

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