Detroit bankruptcy helped lay foundation for growth
One of the biggest things to hit Detroit since the moving assembly line marked its fifth anniversary this week. That’s when the Motor City became the largest municipality in American history to declare bankruptcy.
Just weeks before, a union official said, quote: “It’s war.” But the financial restructuring that helped deliver four balanced budgets, drew three credit upgrades, improved delivery of basic city services, and attracted billions in private-sector investment turned out to be anything but.
Any celebration, however, belongs to the city itself -- not just the lawyers, politicians and meditators who worked the case. To the residents who persevered through bleaker times of dysfunction and political corruption. To the city pensioners forced to surrender a portion of their expected benefits to reach a settlement. To the business leaders who invested before the downward spiral accelerated.
Quicken Loans Chairman Dan Gilbert moved his operation downtown several years before bankruptcy. He says calls from would-be investors started within days of the city’s Chapter 9 filing and, quote, “the momentum continues to build.”
New street lights glow every night across broad swaths of the city. An estimated 10,000 new housing units are planned or under construction. Renovation is creeping outside the 7.2 square-mile patch of downtown and Midtown.
Ford Motor now plans to anchor a campus for mobility and self-driving vehicle development at the 105-year-old Michigan Central Depot in Corktown.
All of that and more is combining to revise the narrative about the nation’s longtime poster child for disinvestment, de-industrialization and decline. That’s success, especially for a city so much of America gave up for dead.
It would be a mistake to credit Detroit’s revival solely to its epic bankruptcy. But it’s not a stretch to say the federally supervised restructuring helped lay a foundation for the investment and positive energy that followed and exists today.
Detroit owes its new status as one of America’s hottest cities to the confluence of new leaders: a Republican governor who didn’t act like a stereotypical one; a Democratic mayor focused on pragmatism and results, not ideology and politicking; business and philanthropy leaders who quickly understood the stakes. They recognized the downside risks and upside potential bankruptcy could deliver – and the need to act, finally.
A new normal is setting in. Business that for decades bolted downtown for the suburbs is returning, reversing the mostly one-way capital flow. Investment in the city now is measured in billions of dollars. A new sense of civic pride and can-do spirit has emerged.
George Jackson can feel it. He headed the Detroit Economic Growth Corporation for years. He sees a spirit and pride he hasn’t seen in a long time.
He says, “We’ve come a long way, and we should be proud.” My friend George is right.
Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.