Building momentum

2011 was a relatively good year for Michigan and Detroit. After a decade of losing jobs, it seems like the state will finally have a net positive in job creation this year (http://www.freep.com/article/20111226/BUSINESS06/112260356/In-Michigan-decade-of-job-loss-is-finally-coming-to-end). While 64 k new jobs may not seem like much, especially compared to the ~1 million jobs in the 2000s, it is definitely a step in the right direction. Unemployment is down, the auto companies making billions and vehicle sales continue to recover. The real estate market is picking up, properties are moving, and transaction prices are rising. Anecdotally, there seems to be more and more interest in young people moving to the City (I have a new co-worker who has moved downtown and it seems properties, including rentals, are moving fast there). There have been a few hiccups (e.g., Detroit's continuing meltdown - I'm starting to feel a bit disappointed in the Mayor's work - an amergency manager may be needed; Governor's failure to get the bridge; decision to scrap light rail plan for high speed buses), but compared to the rest of the country, things are looking and feeling pretty good here in Detroit. 2011 has been a good year for us to build momentum. I have a feeling 2012 could be a breakthrough year, as long as the rest of the country and world doesn't collapse around us and the financial terrorists at the banks don't torpedo our economy again.

Ideas for Train Depot?

A column by Rochelle Riley in today's Free Press highlights some of the ideas bouncing around about what to do with the Train Station: http://www.freep.com/article/20111127/COL10/111270482/Rochelle-Riley-A-new-idea-for-an-old-eyesore?odyssey=modnewswelltextFRONTPAGEp

While I had read earlier that the Moroun's were open to suggestions, I didn't realize that they had setup a website for people to submit their ideas: http://talktothestation.com/

If you have any thoughts on what they could turn Michigan Central Station into, please share them with Matty Moroun!

Some ideas I have:

• Turn it into a Union Station type food plaza with cuisines from all over the world


• Turn it into a nexus for all consular offices in Metro Detroit (e.g., honorary consulates, official consulates) and a free trade zone


• Turn it into a dedicated museum to show a portion of Nasser David Khalili's extensive art collection from the Middle East and Arab lands on permanent display

Second fastest recovery in Michigan?

I'm not sure if this news is bittersweet or ironic or what: Michigan is recovering from the recession faster than any state other than North Dakota (which never really fell into the recession): http://detnews.com/article/20111103/BIZ/111030343/Michigan-recovery-second-fastest. The index tracking this performance is basing the ranking on growth since 2008, so the high ranking for our state is mostly because of how bad it was in 2008, not how good it is now. Things are better now, but still not too great. As Patrick Anderson notes, "I sense a very cautious optimism in my home state."
Some even better news around the City: Matty Moroun is pumping some money into the Depot and looking at options for redevelopment (http://detnews.com/article/20111103/BIZ/111030345/1001/Moroun-spending-money-on-Central-Depot) and the Birmingham-based Collaborative Group is building momentum with its Challenge Detroit to help bring young folks back to the City (http://detnews.com/article/20111103/OPINION03/111030328/1008/Project-sells-youth-on-a-city-in-need). These stories go to show that a little imagination and initiative can go a long way in this City. I had similar ideas about possible uses the train Depot, but this guy from NYC, Griffin, just wrote to the Morouns and basically that is how its renaissance started - kudos to him (of course, he had some relevant background, but still, a cold call of ideas can work, despite some of my experiences to the contrary). It might take a few years, but it looks like the Depot has a future! As for Challenge Detroit, I had heard about it about six months back, so I'm glad it is finally moving forward. Detroit really is the most interesting place in America right now, in terms of the ability of young folks to change the future. Occupy Wall Street has its place, but it is not necessarily productive per se. That much energy could have a tremendous impact in a place like Detroit.

Annual Wayne County Tax Auction

Wayne County is having its annual tax auction again. I believe the auction will run through Thursday. You can check out the properties being sold at www.bid4assets.com, but it is too late to register this year. The interesting twist this year may be the participation of a nonprofit group (the same folks behind Loveland) to buy properties with the public good in mind (kind of like a Land Bank), using a "social" funding mechanism: http://detnews.com/article/20111020/OPINION03/110200401/1409/Non-profit-to-be-foreclosure-auction-stand-ins-in-Wayne
It is great to see the Loveland platform being used like this: http://whydontweownthis.com/
Great work by that team - I look forward to reading about the impact there. I am also trying to bid on some properties this year for the first time, but so far, no luck.

Water and Michigan: Great Lakes Week

This week, there are some important meetings happening in Michigan to discuss one of the most precious things on Earth: Water. Thankfully, we have been blessed with plenty of fresh water in Michigan. However, that does not mean we should take it easy in terms of water conservation and water technology leadership. Saudi Arabia and Texas lead the world in oil and gas technologies, because that is where the oil is (albeit, without much of a conservation mindset). We should lead the world in water technologies, for our own self-interest if nothing else - The Free Press makes the point that if other places can extend their water resources, they won't be so inclined to steal ours: http://www.freep.com/article/20111009/COL32/110090546/?odyssey=obinsite.
If you want to follow the Great Lakes week live, Detroit Public Television is offering live streaming: http://www.freep.com/article/20111012/OPINION05/111011059/Live-coverage-Great-Lakes-Week?odyssey=modnewswelltextFRONTPAGEs

Detroit Gondola?

I thought I had an original idea a couple of years ago, to have a Gondola (or zipline!) across the Detroit River to Windsor. I think something like that would facilitate new traffic (pedestrian) across the border and spur business on both sides. Windsor has a nice downtown, and I'm sure people living in downtown Detroit would appreciate being able to access more activities.

Turns out, it wasn't so original. Some guy named Niels Jorgensen had the idea years ago, and the DEGC put the kibosh on it (http://www.freep.com/article/20110925/BUSINESS06/109250420/DEGC-s-Jackson-development-man) . Now, I don't imagine it would have gotten to 3 m riders per year (at least not at first), but that doesn't mean it wouldn't have been great for the City. Jackson's goal is to make Detroit the coolest city in the Midwest...I think the gondola would have helped.

Michigan vs. Texas

Over the past couple weeks, I've come across two very different takes on how fate has taken Texas and Michigan in different directions:
Michael Barone's piece in the WSJ -
http://online.wsj.com/article/SB10001424053111903392904576509992605316426.html
and
Brian Dickerson's piece in the Free Press -
http://www.freep.com/article/20110828/COL04/108280450/Texas-stomps-Michigan-Osama-MVP-
Of course, I can't really argue that Big Auto and Big Labor did not ultimately work out for Michigan and pretty much self-imploded...I don't think the Texas model is built on geographic benefits (i.e., proximity to oil) as much as on anything else. We'll see how much credit Rick Perry gets for an economic miracle that really isn't...

Good news - Somerset in the City!

As usual, there has been a lot of exciting news in the City in recent weeks, from the Federal government's support of Mayor Bing's neighborhood initiatives, to new incentives by employers to encourage workers to live in Detroit. What I find possibly most encouraging and exciting is the opening of a mini-Somerset mall at 1441 Woodward: http://www.freep.com/article/20110729/NEWS01/107290417/With-video-CityLoft-shops-hit-opening-day
People come visit Somerset from other states and countries (Canada, but still), so having a mini-Somerset in the City will certainly provide a great option to residents, and it may even pull some people to shop downtown (which is how most cities with normally functioning downtowns seem to operate)
When combined with the likely investments by Meijer, Whole Foods, and others, this will be a major help to solve a major problem the City has had in terms of quality of life - shopping.
Now, all we need is some other anchor type stores without a major presence in Michigan to setup shop nearby, and Detroit could have a great retail pull, just like that. Maybe Zara, the Cheesecake Factory, a Lego Store, or similar names could be offered free rent for a decade to help be that draw. Certainly, the City has some empty properties to hand out temporarily...

Learning from Pontiac - App hub

I was glad to read in the News about an app development hub coming to the area (http://detnews.com/article/20110618/BIZ04/106180321/1001/Firm-opens-shared-workspace-for-app-developers-in-Pontiac). It seems like demand for apps is only increasing, and that work can happen anywhere, so why not here? The MEDC even calculates mobile-app jobs have a 3.9x multiplier in job creation.

Since observing the rise of billion-dollar Web 2.0 (or is it 3.0 now?) firms like GroupOn out of nothing from outside of Silicon Valley, I've felt we should nurture similar start-ups here. Pontiac is doing it, offering a workspace to incubate mobile technology developers...Detroit should follow suit. We have local talent that currently goes out West to work for such developers, but if we have the facilities here, given the low cost of living, perhaps some of them will catch the entrepreneurial bug and start some innovative ventures.

Drive around and locked doors

I was driving around Detroit last week, showing a visiting scholar some of the highs and lows (on a side note, he is interested in re-locating here from California to help catalyze some grassroots progress in our City). He was particularly interested in visiting with the community of the slain Imam Luqman to see how they are doing. I had never been to that particular mosque, Masjid al-Haqq, or that part of town, so it was a very new experience for me. The community was forced out of its previous building over some administrative issues, and had moved into a house in the neighborhood. The entire experience was interesting, but there is one observation I wanted to share...Imam Luqman's son noted that Masjid al-Haqq was never locked, that it was open 24 hours all year round. This, in ostensibly the most dangerous city in America (though this neighborhood actually felt quite safe). In comparison, mosques in the "safer" suburbs are often locked and certainly close for the night. This dynamic says quite a bit about how differently the suburbs and City communities think about issues like safety and houses of worship.

Hiatus progress

After following developments in Detroit extremely closely for the past 3-4 years, I took my hand of the pulse for a few weeks this month. It is a bit strange not to have an exact sense of how our progress is coming, though my friends reassure me that not much has changed in the past month. We still have high unemployment, ridiculously low real estate prices, governmental deficits, and the rest of the problems we had a month ago. However, I do sense some positive changes in my absence (and not just the weather).
Of course, the national picture continues to improve gradually (economy, jobs, etc.) at least in the short run, which helps us. Auto demand is up, and given the high fuel prices, the fuel efficient product Detroit has invested in should sell well and pay off. Given the continued weakness in Japan, that means demand for our local product is up (Fiat wants to take advantage of this and buy up the rest of Chrysler - they have been increasing there share and are looking to invest more). We are seeing local hiring pick up as a result. After years of seeing regular layoff press releases in the thousands, it is nice to see some of those jobs coming back. They will never all come back, but some will help.
I've noticed some additional movement in the real estate space as well - nationally, prices are still falling, but they aren't falling as fast here. Also, while a third of local sales are foreclosures, at leaste properties are moving finally, instead of just sitting on the market for months on end...people are making moves and investing.
Are things swell...of course not, but that the worst is behind us is becoming more clear to me after seeing the City again after a month.

Global air traffic control hub in Michigan?

All sorts of different forces are pushing Michigan's economy in different directions. For the future, some would like to see Michigan become a hub for manufacturing green technology, like wind turbines. Others want Michigan to become the next Hollywood. Some are even content to simply rebound with the auto industry.

As we are down about a million jobs since 2000, I am happy to take all of the above and more. However, I have had one idea in mind for several years, and given recent news, I thought I would share and circulate.

Problem:

• There is a global shortage of air traffic controllers;


• We don't have enough in the US, and the ones we do have will be retiring soon;


• Other countries don't have enough either (otherwise we would probably import them), and air traffic around the world is growing;


• Despite the high pay, air traffic controllers are overworked, highly stressed, and, according to recent news reports, falling asleep on the job

Possible solution:

Why can't Detroit become a global hub for air traffic control? The need for the personnel is clear, and I think we could both train and employ air traffic controllers locally. We could develop academies or training/certification programs or have our universities form departments for air traffic control. Instead of studying automotive engineering, perhaps mathematically included university students could pursue air traffic control. Furthermore, given the increasing connectivity, communication sophistication, and advancement in monitoring, why can't monitoring for airplanes/airports around the world be done from Detroit (or Romulus)? Just as we initiated the mass production of automobiles, maybe we can mass produce air traffic controllers and develop a high tech center than tracks and guides planes around the world. This could represent tens of thousands of high-paying jobs, and it is worth looking into. It would benefit Detroit while solving a global crisis.

I'm not sure what the requirements would be and how feasible this idea really is, but I hope the Aerotropolis people look at it. If anybody should think about something like this, it should be us. It really fits what we have here: we have a great airport, are building toward an aerotropolis, have a large talent pool of quantitative/analytical types that graduate each year from our universities, we have a relatively low cost of living, and many other advantages.

Gathering of urban revitalization efforts in Detroit

There is an upcoming conference of national revitalization experts at the Westin Book Cadillac later this week. American Assembly has set up the event and has chosen Detroit for obvious reasons. Some interesting experts will be contributing, including the former mayor of revitalized Turin. For the most part, it appears to be a closed event, but there are a few open sessions, including lunch on Thursday with Mayor Bing to launch the program. If I can find more details about possible registration, I will update this post. Here is the Free Press article where I learned about the event: http://www.freep.com/article/20110411/BUSINESS06/110411039/Experts-meet-Detroit-discuss-urban-revitalization

Detroit Revitalization Fellows Program

I just came across a really interesting opportunity for those who hope to directly help Detroit. Wayne State University, with foundation backing, launched a program a few weeks ago to encourage graduate, post-graduate, and mid-career professionals to join different NGOs and entities working to reinvent the City. There is an application process and two two-year commitment involved. Candidates will be interviewed by different potential employers (e.g., Detroit Economic Growth Corporation, the Downtown Detroit Partnership, Invest Detroit, the City of Detroit, the University Cultural Center Association, NextEnergy, and the Woodward Corridor Initiative) and matched according to mutual fit and preferences. Given the difficulty volunteering directly for the City or some of these groups (which I have experienced personally with the City and DPS), this is a great potential opportunity for passionate, talented Detroiters to apply their skills and help their City in high impact roles. Despite the short lead time, I will likely submit an application and strongly urge interested readers with talent, passion, and skills to apply as well. I think there will be strong parallels between this program and The Collaborative Group's Challenge Detroit project. You can find out more here: http://wayne.edu/detroitfellows/

Bad news from the Census

No one expected good news to come out of the Census for Detroit...however, I don't think anyone thought the results would be so bad and so dramatic either. Last week's Census release indicated almost a quarter of a million people left the city since 2000 (237,500), or 25% of the population. The population hasn't been this small since 1910. While still a top metro area, Detroit could fall to 18th place in overall populatoin. Amazingly, Detroit is the only city in US history that exceeded 1 m citizens, and then fell back below the 1 m mark. Falling below 750 k jeopordizes many channels of federal funding, so the City has already appealed the findings. Now, as I mentioned, no one was expecting good news from this. What we have arrived at is a tipping point...Detroit can either rebound from this latest humbling blow, or it can quickly continue its free fall to oblivion. The need for people to move back to the City has never been greater, but the case to move down there has never been weaker, and the case to leave has never been stronger. Families certainly won't move down there, and they leave when they can. It is up to young professionals, urban hipsters, and the Millenials (who are already changing the world, as we see in the Middle East) to come back, clean up, and revitalize the City. The Midtown coalition of Henry Ford, DMC, Wayne State and their goal of bringing 15 k professionals to move downtown by 2015 is a start. The Collaborative Group's plan to bring tens of thousands of young adults to the City over the next few years is another good initiative. These numbers pale compared to a quarter million...but if a quarter million people can move out of a City in 10 years...they can move back in as quickly too. If Detroit can become the cool place to live, innovate, and rebuild (it already is in many ways - very cutting edge), and it can attract more Millenials who want to be part of something big, then a vibrant core by 2020 is not out of the question. The media are once again all over this story, and for better or worse, all eyes are on Detroit. We may as well take advantage of the attention to make our case and access the help and resources we need to rebuild. Recap: http://www.nytimes.com/2011/03/23/us/23detroit.html

IDEA: Detroit Conference

Crain's is hosting the IDEA: Detroit Conference this Wednesday at the College for Creative Studies. There will be a number of interesting Detroit activists and a few business leaders sharing their thoughts on business ideas that work in Detroit. It could be worth attending, for both the sessions and networking - I might try and stop by for a session or two.

Here are the details:
Date: Wednesday, March 23, 2011
Time: 8 a.m. - 4:30 p.m.
Location: A. Alfred Taubman Center for Design Education at the College for Creative Studies460 W. BaltimoreDetroit, Michigan
Tickets: $99 each, $125 on-site

You can register here:
http://www.regonline.com/builder/site/Default.aspx?EventID=913825

Cut, cut, cut?

It has been a momentous month around the world, as activists are demonstrating the power of ordinary citizens and non-violence in cities from Cairo to Madison. The oligarchs who have long controlled much of the world and what happens in it are right to fear, but hopefully they are realizing that the status quo of the past decades is unsustainable and that everything comes to an end - money, power, dynasties...nothing is forever. That being said, despite the gains made by ordinary citizens, the situation can still go either way (up, Eastern Europe after the fall of communism, or down, like Iraq after the fall of Saddam).

In any case, it is the demonstrations closer to home that are more relevant for Detroit. The newly empowered Republicans in states across the country are starting to act upon what they view as their mandate - to balance budgets by cutting spending. Predictably, there is resistance and protests against these cuts. The most prominent example of the conflict is in Wisconsin. In a nutshell:

• On one hand, you have a Republican governor and legislature succumbing to the same temptation that has stymied American politics and serious reform for the past few decades - overreach; The Republicans want to cut unionized government employee salaries and benefits, ostensibly to balance the budget, but more than that, they want to break unions, key supporter of Democrats, by stripping rights to collective bargaining
• On the other hand, you have a mass of union-supporters protesting the Republican power-grab by demonstrating in Madison; Furthermore, Democratic state senators have fled the state to avoid quorum and prevent any unworthy legislation
• I certainly am no advocate of unionized laziness, negligence and disrespect of the workplace (union's really need to take ownership of this issue to get rid of the stigma), but unions have played and continue to play an important role in our country (not the least to battle for the people against corporate, private interests)
• The situation is ridiculous, especially when both sides agree on the need to downsize government employee benefits; Why is it that with our two party system, both parties seem to feel like they should squeeze out whatever political wins they can while they are in power, and complain, obfuscate, and wait while out of power?

Thankfully, the battle in Michigan is not so heated or divisive, but the outline is the same - we've elected a Republican governor and inherited a tremendous deficit, and given the visceral attitude against tax increases, we are left with more and more cutting. It is two of Governor Snyder's proposed cuts that caught my attention: cuts to education funding and phase out of film tax credits.

• I must admit, I have never been quite clear on how the film tax credit math worked (the "Pure Michigan" investment was a lot clearer to me - for every dollar the state spent, it got more than a dollar back in tax revenues - but a 42% subsidy seemed too high); also, it does bother me a little when we take money from those already here to attract those who are not; that being said, I have been impressed with the effectiveness of the tax credits in building the local film industry and the positive buzz the films have lent the state; it is quite unfortunate to lose that support just as the first local studios are being launched; I hope some kind of compromise can be reached to continue state support for local film production, even if the % is lower, or a moderate cap is set
• As for the education cuts, it certainly would be the last thing I would cut; Communities across the state will suffer from the proposal to reduce state funding by USD 470 per pupil; I'm not sure schools like UofM could still be considered public if these continuous funding cuts are not stopped; Michigan's talent pool has long been one of our strengths, but continued underinvestment in education is killing one of our last pillars; It is broken education systems that result in crime and prisons where over USD 50 k is spent yearly on each inmate; I would rather let all of the non-violent offenders be released with ankle monitors to probation or house arrest and use the savings on education; That being said, pushing for cost savings and concessions and efficiency across the value chain is certainly needed in times like these
• The Detroit education cuts are most stark of course; In the past 10 years, Detroit Public Schools have lost half of its student population, and the deficit has grown under Robert Bobb, despite his heroic efforts to increase efficiency, improve quality and root out corruption; Barring additional funding or state loan guarantees, a bankruptcy-like situation is possible, and 100 of the 134 remaining schools could be closed, forcing 62 students into each classroom; the vicious cycle would continue in this case, as quality deteriorates further and more students are pulled out; Robert Bobb (whose contract was to expire today) has been asked by the Governor to stay on until June, and that will help, but the situation is very bleak

At the end of the day, no matter what protestors or propaganda say, reality rules and it comes down to dollars and sense. Michigan and Detroit are in a tough spot financially, and even more painful cuts are needed. As autoworkers have given painful concessions to help our auto companies survive, so too government employees and teachers may have to accept painful cuts for our state and cities to recover. It will not always be this bad and the generous systems of yesteryear may once again have a place in our state, but right now, we can't afford to be generous - we must be real. Cutting is necessary. But reality cuts the other way, and we need to ask ourselves, what can we not afford to cut.

"I like to pay taxes. With them, I buy civilization." Oliver Wendell Holmes, Supreme Court Justice

Operation Hope in Detroit?

My company recently had a volunteer event with Operation Hope (http://www.operationhope.org/) in Chicago, teaching underprivileged kids some basic economic and financial lessons. Frankly, I don't think they teach enough budget and money lessons to children of any background (not even in the best schools), so I am favorably disposed to the objectives of this group. That being said, I'm not sure some of the lessons fit to the ages my colleagues actually interacted with...probably high school is the most appropriate age for many of these lessons. Anyways, I hope this initiative makes some headway in Detroit...from what I hear, they are interested in launching some local operations, so I hope that works out.

On a related note, it looks like the Detroit Public Schools are starting a new program (http://detroitk12.org/businesscorps) to engage more support from volunteers and businesses (http://www.freep.com/article/20110128/NEWS01/110128048/Detroit-schools-kicks-off-volunteer-program-businesses-). I imagine some of the focus is on fundraising, but each partnership between businesses and schools will be unique, so there is a lot of room for supporting DPS students.

Relevant details for interested volunteers:

• The first training session for volunteers from the companies will be held 8 a.m. to 9:30 a.m. next Friday at the Michigan State University-Detroit Center, 3408 Woodward.
• Seating is limited and RSVPs are requested via e-mail to businesscorps@detroitk12.org or by calling (313) 870-3799.
• Training sessions also will take place 4:30 p.m. to 6 p.m. Thursday, Feb. 10 and 8 a.m. to 9:30 a.m. Friday, Feb. 11.
• Volunteers must be fingerprinted, a service that will be offered at all training sessions at a cost of $60, payable in money order, cashier’s check or business check.

Revitalization and Business Conference about Detroit at UM

There will be a very interesting conference tomorrow in Ann Arbor about Detroit-related issues (tonight's event is fully booked), and I encourage everyone to attend. Registration is USD 15, including breakfast and lunch. See below for more details:



Take a few hours to learn more about Detroit, entrepreneurship, and how a city goes through a rebranding and image adjustment. We will be talking to people involved in real estate and development, retail management, major corporations who deal with attracting top talent, and a number of other folks.

Register Now! http://randb2011.eventbrite.com/

Webpage: http://www.revitalizationandbusiness.com

SPONSORS: General Motors, New Economy Initiative of Southeast Michigan, DTE Energy, Zell Lurie Institute, Deloitte, Ross Net Impact, PriceWaterhouseCoopers, Lear Corporation

CONFERENCE SCHEDULE:

Thursday, January 20: A. Alfred Taubman Center for Design - Detroit
6:00pm- 9:00pm (buses leave Ross at 5:00pm)
Review of amazing Detroit Impact projects
Dinner by Slows Bar BQ

Keynote Speaker: Phil Cooley of Slows Bar BQ and NY Times-deemed de facto spokesperson for the revitalization of Detroit, Chairman of the Detroit Works Project

Friday, January 21: Ross School of Business
9:00AM- 2:30PM
Discussion Panels:
If You Rebuild It, They Will Come
Rebranding Detroit
Entrepreneurship in the D

Keynote Speaker: William Clay Ford Jr., Executive Chairman of the Board of Directors of Ford Motor Company, Vice Chairman of the Detroit Lions, Chairman of the Board of Trustees of The Henry Ford Museum, Chairman of the Detroit Economic Club, and Chairman of the Executive Committee of Detroit Renaissance

IdeaLab: Bold and innovative idea jam session with current Detroit revitalizers
Includes lunch and continental breakfast

Gov. Snyder's First State of the State - A Good Start

Last night, Governor Snyder gave his first "State of the State" address, and I must say, I liked much of what I heard. To be sure, I only listened for 15 minutes or so on the way home from work, but he made some good points that fuel my suspicions that he is a pragmatist who will govern from the center.

I'm not sure what to make of his stance against ergonomic standards (I had no idea they were an issue), but his support for the Pure Michigan campaign and his backing of a second international bridge in Detroit are very positive in my view for the state. Also, I like his commitment to cities and his idea to expand his Office of Urban Initiatives to cities like Flint, Saginaw, and Grand Rapids - all of our cities need help.

It is a good start...now he just needs to get the Legislature on board, which is no easy task, unfortunately...