Section » Millennials
For economic growth: M1
The news that the city and state have walked away from the Woodward light rail (M1) is not a good way to end the year. Big mistake! M1 – and not a bus rapid transit system which is now the preferred alternative – is the most powerful potential long-term game changer for Detroit. For a city that desperately needs a game changer.
What is the difference between bus and rail transit? Buses are an effective way to move people. Rail transit is primarily a powerful catalyst of economic growth. As Megan Owen, Executive Director of Transportation Riders United, is quoted in a terrific overview Free Press article on M1: “Weʼre basically throwing away a $3- billion economic development investment.”
Several years ago at a Urban Land Institute (ULI) Michigan Real Estate forum I heard a presentation on the Portland, Oregon street car system put in place in the 70s. It was described as development oriented transit. The city made the investment first and foremost for rail transit’s ability to stimulate and steer economic development, not to move people. And it paid off! Portland’s boom has been very much rail transit driven.
And cities and regions across the country, except here, learned the Portland lesson. Including Salt Lake City which for more than a decade has and continues to invest in building an extensive light rail system as a lynchpin of their economic growth strategy. You read that right: red state, small government, low tax Utah investing taxpayers money in a light rail system.
This year at the ULI forum I was on a panel where one of the speakers said that national retailers are increasingly making new investments in central cities along light rail lines. Light rail, not bus lines – rapid or not. They too understand that light rail uniquely spurs and concentrates development. It is a particularly powerful attractor of young professionals that the city, region and state so desperately needs for its future economic growth.
Unfortunately our city and state elected leaders don’t seem to have learned that lesson. We are walking away from this powerful economic development initiative because as the Free Press report the lack of $10 million dollars a year in operating funds. $10 million a year would bring billions in economic growth and we won’t even try to raise the funds. Not smart!
The folks that get it are metro Detroit’s private sector leadership. The hopeful news is that the Kresge Foundation and Detroit’s business leaders are not taking no for an answer. As Crain’s Detroit Business reports, they sent a letter to the Mayor and Governor supporting development of M1 from downtown to the New Center area. They wrote: “Detroit is at a critical juncture,” the funders wrote in the letter. “The need for a powerful catalyst to spur investment, attract new residents and businesses and help restore the city’s tax base is urgent.”
In another Crain’s article Dan Gilbert put it best: “Detroit has a chance to make a decision. Does it want to be a second-class city or a first-class city? These kinds of decisions, like we are seeing right now, won’t allow us to compete as a first-class city,” he said.
And they have put their money where they mouth is. As Crain’s writes:
Signing the letter were Kresge President and CEO Rip Rapson, Penske Corp. founder and M1 Rail Chairman Roger Penske, Quicken Loans Inc./Rock Financial founder and M1 Vice Chairman Dan Gilbert and M1 CEO Matt Cullen. Compuware Corp. founder Peter Karmanos Jr.; the Ilitch family, which owns the Detroit Tigers, Detroit Red Wings and Little Caesar Enterprises Inc.; Henry Ford Hospital; and Wayne State University joined the other private funders in each having committed $3 million for the display advertising rights to a station along the planned rail’s route.
The lead funder is the Kresge Foundation which has committed $36.7 million to the project.
As we have written often, in a state where many candidates get elected by bashing Detroit, Governor Snyder deserves enormous credit for his courage to campaign across Michigan that for Michigan to succeed Detroit must be successful. He understands better than any Michigan governor since Bill Milliken that the most prosperous states in the nation are those with a high prosperity big metropolitan area anchored by a vibrant central city.
Now is the time to put that understanding into action. We need the Governor along with city and regional elected officials to join with business and philanthropic leaders to make M1 a reality and to put in place what we all so desperately need and want, a powerful spur for economic growth.
Young Talent in the Great Lakes: How Michigan Is Faring?
This report is part of the Michigan Future, Inc. New Agenda for a New Michigan project. Its focus is on identifying a path to better position Michigan to succeed in the flattening world economy of the future, a path that will return Michigan to high prosperity, measured by per capita income consistently above the national average in both national economic expansions and contractions.
Our basic conclusion: What most distinguishes successful areas from Michigan is their concentrations of talent, where talent is defined as a combination of knowledge, creativity and entrepreneurship. Quite simply, in a flattening world, the places with the greatest concentrations of talent win! States and regions without concentrations of talent will have great difficulty retaining or attracting knowledge-based enterprises, and they are not likely to be the places where new knowledge-based enterprises are created.
Click here for the full report
Detroit growing
Last May I wrote that the city of Detroit should focus on growing, not shrinking. As contradictory as it sounds the city needs to do some of both. But the priority needs to be growth. As I wrote:
Detroit’s problem is not that there is no demand for central city living. The last two decades have seen a rebirth of urban neighborhoods that were written off as dead across the country. They have largely been revitalized by a combination of immigrants and college educated households – mainly young and without children. Detroit’s problem is that it has not participated at any scale with these trends. Detroit needs an agenda to take advantage of the renewed demand for city living.
Two recent articles demonstrate that growth is possible. Both focused on young talent moving into the city. In fact, despite all the naysayers who have written Detroit off, growth is occurring in the city today. The Detroit News article is entitled: Cool factor lures the young, artsy to Detroit. Detroit’s renewal is also garnering national attention. The New York Times story is entitled: Detroit Pushes Back With Young Muscles. I recently did an interview with a video journalist from the Financial Times who, as part of a rust belt story, is interested in Detroit’s Live Midtown initiative.
The Times writes: The scene might have been run of the mill in Seattle or Williamsburg, Brooklyn, or other urban enclaves that draw the young, the entrepreneurial and the hip. But this was downtown Detroit, far better known in recent years for crime, blight and economic decline. Recent census figures show that Detroit’s overall population shrank by 25 percent in the last 10 years. But another figure tells a different and more intriguing story: During the same time period, downtown Detroit experienced a 59 percent increase in the number of college-educated residents under the age of 35 …
For most of Michigan, and unfortunately many in Detroit, the notion that the city could be compared to Seattle or Brooklyn is not believable. But not to young professionals. The News writes: “My friends in New York, L.A., Europe all think Detroit is really cool, and, thankfully, so do more and more people here. The energy seems great right now,” said Angela Topacio, an artist and managing partner of Gyro Creative Group downtown.
Obviously at the moment the growth is at a small scale. Hundreds of new residents, stores and businesses, not the tens of thousands the city needs. But it is evidence that growth is possible. And that growth not only matters to the city, but to the region and state as well.
Governor Snyder was both courageous and right when he campaigned across the state with the message that Michigan cannot succeed unless Detroit succeeds. The reality is there is a clear pattern across the country: the most prosperous states are either rich in energy resources or are anchored by an even more prosperous big metro with a vibrant central city.
The revitalization of Detroit that is enabling the growth has been led by foundations, anchor institutions, business leaders and community development organizations. The Hudson-Webber Foundation and Dan Gilbert – both featured in the Times article – have been particularly visionary in their leadership. As well as the energy and dedication of the young professionals who now call Detroit home.
It is time for city, regional and state policy makers to get more active. The region and state have a big stake in Detroit becoming a talent magnet. As we have written before the priority for city leadership is to be far more welcoming to all, development friendly and to provide quality basic services – starting with safety – and amenities. For the region and state the priority is to help with the investments that matter: starting with making Woodward light rail a reality but also finding ways to reverse the cuts in revenue sharing and the ending of historic preservation and brownfield tax credits. At the moment city policies and practices as well as regional and state policies are a headwind hindering Detroit’s growth. That needs to change!
Taking talent seriously in Lansing
“Either we get younger and better educated or we get poorer” is the slide we close all our presentations with. It captures our core belief that talent is the asset that matters most to Michigan’s future prosperity. And that because recent college graduates are the most mobile group in the country that where they decide to live and work after college will go a long way towards determining the future of the Michigan economy. Still with most Michiganians a hard sell.
But not in metro Lansing. A terrific new report from Capital Area Michigan Works! on behalf of the region’s impressive Talent Infusion Strategy Team and Advisory Committee touches all the bases needed to make retaining and attracting young talent a regional priority. Their work is worth checking out by Michigan’s other big metros. The authors understand the strategic importance of young talent. As they write: The decline of the 25- to 34-year-old group should be alarming to us. Moreover, we are not a fast growing metropolitan center overall and the key to becoming one is attracting young people.
The report includes a detailed data analysis. How has metro Lansing done from 2000-2010 in terms of concentrating young talent? Their honest assessment: not too well. And particularly not well compared to other regions across the country with a similar sized population and a major university.
Just collecting the data is impressive. But the report continues with a description of the work the region has done researching what young talent is looking for when they make a location decision. As they write the bottom line is: it’s all about placemaking! Most of the group believes engaging young talent is very much about creating a robust and vibrant place: Greater Lansing should continue to work on all the things that make the region a better place to live. In other words, if we make it a better place to live, “they will come,” and they will stay. Expanding the arts and culture scene, improving the region’s appearance and amenities and providing a lively entertainment culture are a few examples. Further, creating a pipeline to jobs and career opportunities is equally important …
One particularly creative initiative is the effort to make metro Lansing a place where Chinese students want to stay after college. The report highlights: … international placemaking efforts got under way when it was learned that there were few opportunities in the region that represented the street culture so familiar to Chinese students at MSU. As a result, Gillespie Group launched the China Creative Space, a proposed creativity center to create an atmosphere for cross-cultural collaboration and innovation among students, entrepreneurs and the community at large.
Wow! A Michigan region that has organized a Talent Infusion Strategy Team, done a detailed analysis of the region’s success in retaining and attracting young talent, researched the location preferences of young talent and is working to make Chinese students welcome. Metro Lansing is on the right track.
Business following talent
Fascinating New York Times article on UBS entitled Regretting Move, Bank May Return to Manhattan. Its about UBS considering moving back to Manhattan because they can’t attract talent to their huge suburban Connecticut trading operations. As the Times writes: …UBS is having buyer’s remorse. It turns out that a suburban location has become a liability in recruiting the best and brightest young bankers, who want to live in Manhattan or Brooklyn, not in Stamford, Conn. …
Now on planet ideology where an increasing number of Lansing policy makers, Michigan business leaders and pundits live, this can’t possibly happen. Their manta: companies only locate in places where business costs are the lowest. One thing we know for sure is business costs are not low in Manhattan. High taxes, high land costs and high labor costs.
Detroit News columnist Daniel Howes laid out well the case that is driving state economic policy these days in a column entitled: New tax policy could be game-changer that Michigan needs. He argues that businesses are mobile and move to where costs are the lowest. His case that Michigan is uncompetitive on business costs come from rankings from the Tax Foundation and a recent survey this month of 500 CEOs by Chief Executive Magazine. Both of which rank Michigan at or near the bottom of states.
Who else is at or near the bottom in both? New York. In fact, New York is dead last in the overall Tax Foundation’s State Business Tax Climate Index. So that means companies should be fleeing New York – and particularly even higher cost New York City – at least as fast as they supposedly are Michigan.
Wrong! As the Times article goes on to talk about other companies are making the same decision UBS is considering. One being Google. The Times write: The move would be the latest sign that New York has regained its allure as a caldron for the young and creative. Six months ago, Google paid nearly $2 billion for a large building just north of the meatpacking district, in the same Manhattan neighborhood where many of its employees live.
The article continues: “A key piece of the mayor’s economic strategy has been to make New York City a place people want to be,” Deputy Mayor Robert K. Steel said, “and more than ever the city is the ideal location for any company, like UBS, that succeeds by attracting a talented, motivated work force.” Mayor Bloomberg has figured out what our leadership hasn’t: talent concentrations are the asset that matters most to economic growth in an increasingly knowledge-based economy. Increasingly companies succeed by attracting a talented, motivated work force.
The leadership of companies like Google and UBS aren’t stupid and they certainly are profit maximizers. They don’t seek out high cost places to locate their operations. But they know that talent trumps low costs, because it is the skills of their employees that determine their success and ultimately profitability.
If we are looking for a state/local policy maker as a model for how to do economic development Mayor Bloomberg should be at or near the top on the list. His agenda – focused on preparing, retaining and attracting talent – is the path to the 3.0 economy Governor Snyder campaigned on.
Quality of place in the news
All of a sudden a lot of media reports on the importance of creating quality of place – particularly vibrant central cities – in growing the Michigan economy. Hopefully this media attention is a harbinger of policy maker attention. Because it sure isn’t on Lansing’s priority list at the moment. (If it ever has been!)
Here are reports that are worth checking out:
• A terrific piece by Rob South of WKAR radio on the importance of retaining and attracting young professionals to metropolitan Lansing.
• Two columns worth reading from Nathan Bomey for AnnArbor.com. (You can read them here and here.) They are both about how the success of Detroit is essential to the economic success of Ann Arbor. One of the columns is entitled: A vibrant Detroit would make it easier for Ann Arbor companies to attract talented young professionals. Believe me most folks in Ann Arbor – and the rest of metro Detroit – still don’t believe that. But they are wrong. Bomey quotes Bruce McCully, founder of Ann Arbor-based information technology consultancy Dynamic Edge who is one of the few that gets it. He is right on when he says: This isn’t going to be popular, but Ann Arbor is kind of a suburb of Detroit. We may live in our own little world because of the university and a lot of effort that goes into creating jobs and new technology along with the university. However, if Detroit fails, so does Ann Arbor.
• A surprisingly positive article in the Flint Journal on downtown Flint. Yes Flint. Another of those cities that conventional wisdom has consigned to the graveyard. Try telling that to the folks living in downtown Flint quoted in the article.
Young Detroiters Working to Retain Talent
A vital component of retaining talent is creating opportunities for young professionals to meaningfully engage with their community. We want opportunities to build our leadership skills, tap into our potential, and network with other enthusiastic young adults. Recently, I enjoyed such an experience at the Young Nonprofit Professionals Network (YNPN) National Conference, held in Grand Rapids, MI. YNPN boasts 47 chapters and over 20,000 members from around the country – many of whom were represented at the conference in Grand Rapids. Members flew (or drove) in from Seattle, Phoenix, Minneapolis, and New York City, among others. In addition to numerous networking opportunities, the conference covered a wide range of topics. Rosetta Thurman gave an inspirational talk on how to be successful in your non-profit career and Detroit’s stand out, Tammie Jones, led a discussion on how to use data to further your organization’s mission. The discussions were sincere and thought provoking and all the talks provided suggestions for immediate actions we can take to further our careers and exercise our leadership skills.
Michigan’s young adults are responsible for positive palpable changes in our communities. As the host, YNPN Grand Rapids showcased the role non-profits and young adults have played in revitalizing the city. Evidenced by the impressive representation of Michiganders at this national conference, the talent, commitment and drive to effect positive change is alive and well. Kelly Cleaver, 26, of Gleaners Food Bank, took the initiative to start the YNPN Detroit chapter; one year later, it already boasts more than 100 members! Our generation recognizes the importance of making Michigan a desirable place to live and work- too many of our classmates have left the state. We have the energy, ability and desire to tackle the brain drain.
I’m looking forward to when YNPN Detroit will host the national conference, so we can showcase Detroit’s impressive array of talent, leaders and organizations. As stakeholders in the future (and present), invite us into the space where critical decisions are made. We are the emerging leaders and thinkers – get us before we decide to leave.
Detroit rising?
Last week Matthew wrote of the growing interest at U of M’s Ross School of Business in Detroit. And USA Today recently did an article on the growing number of young entrepreneurs choosing to start businesses in Detroit. It’s title: Entrepreneurs feed Detroit’s extreme makeover. This is the good news about the future of Detroit. It, of course, is completely eclipsed in our public conversation by the reality of Detroit’s collapse documented by the awful 2010 Census data.
But the reality is both are true. Lots of folks this past decade moved out of the city. But at the same time there are folks – so far way too few– that want to move in. The big picture story of the continuing depopulation of the city is that the groups that are leaving cities across the country are leaving in far higher proportions in Detroit and the groups that are moving into cities across the country are moving in far smaller proportions into Detroit. The future of Detroit in large part will be determined by its ability to attract those who want to live in central cities. Create a place where they want to live, Detroit can prosper, don’t and it will continue its collapse.
Families with children – of all races – are leaving central cities across the country. That includes world class cities like Chicago. But as they leave, vibrant cities are attracting new residents. Primarily immigrants, college educated households without children and gays. Detroit’s collapse comes from participating at a high level in the first trend. And hardly participating at all in the second.
Detroit’s decline was neither inevitable nor irreversible. In many ways it is the result of decades of bad decisions, primarily by the city but also the region and state. This can and needs to be reversed. As we have written previously that means first and foremost becoming welcoming to all, development friendly and committed to providing quality basic services. These are the pillars around which you build vibrant central cities. Detroit has been bad at all three for a long time.
The reaction of Declare Detroit is exactly what the city needs now. Rather than whining about the Census data, own it! Admit we are responsible for the decline and commit to go in a different direction. We need to develop an agenda to make the city great again and get organized to implement it.
• Copyright 2009 • Twitter: #michiganfuture