Detroit Post-Bankruptcy: Many Changes, With More to Come
Detroit post bankruptcy is a work in progress, though that doesn't mean much hasn't already been accomplished.
Troy Brownrigg was surprised to stumble upon a beach during a lunchtime stroll last summer — in the middle of downtown Detroit.
No mirage, the urban oasis was yet another gambit by Quicken Loans founder Dan Gilbert to turn the Motor City into the vibrant, livable jobs Mecca it once was.
For Brownrigg, the beach in the Campus Martius Park represented one of the many ways Gilbert is helping to revive downtown Detroit’s business community.
“It was decked out with fixtures and lounges. I mean, it was a great use of outdoor space,” said the Detroiter. He gives Gilbert credit for already creating the ideal work, live, and play atmosphere, “which is especially great for entrepreneurs.”
The downtown revival is one reason behind the recent move by Brownrigg’s family business, commercial insurer Brownrigg Companies, to open a downtown office. “We wanted to be part of the growing business community,” he said.
In the last five years, the midtown and downtown districts saw private capital investment of about $12 billion — leading to about 12,000 new jobs in those neighboring districts, according to the Detroit Regional Chamber of Commerce.
Sandy Baruah, president and chief executive of the Detroit Chamber, stressed the early role of private investment in creating conditions for the city’s turnaround. “There is not some federal program that is artificially creating this vibrancy,” he said. “These are private dollars coming in, private investors, private businesses, and private individuals who are moving downtown.”
Committed Private Sector
Cities in the Rust Belt have confronted the reality of weak growth and shrinking populations in recent years. Facing a bigger challenge than most industrial cities, Detroit is struggling make itself attractive to businesses and tourists, which requires effective government and an increase in livability. This won’t happen without a strong commitment from the private sector, says Baruah.
Thankfully, the city’s government operations are being retooled and private sector investment in Downtown Detroit is picking up. Many say Detroit’s latest urban renewal effort got legs after Gilbert moved his headquarters into downtown Detroit, bringing thousands of his employees along. Other small and large companies have followed suit.
Upping the ante, the venture capitalist has invested $1.3 billion in Detroit’s future and now owns or controls 40 properties downtown. He has launched renovation projects, invested in several startups, and transformed the meaning of work-life balance for Detroiters. Gilbert has dubbed his bold vision of a revitalized downtown — one bustling with entrepreneurs, shoppers, and urban dwellers — Opportunity Detroit.
Like Brownrigg, John Stewart has joined a growing number of entrepreneurs who are proactively opening shop downtown, spurred in part by Gilbert’s actions. Stewart, who owns a photography business, is securing space in TechTown Detroit, a business accelerator.
“It’s difficult for me to sit idle and pass up so many business opportunities,” Stewart said, noting that TechTown provides meeting and co-working space for entrepreneurs.
Simply put, Detroit is emerging as a different city. Ryan Landau, co-founder of office and school supply vendor Chalkfy, gives much of the credit to Gilbert. “They’re not just buying one or two buildings,” Landau said of Gilbert’s investment group Detroit Venture Partners. “They’re buying city blocks!”
Revival Depends on Startups
The investors are also investing heavily in startups, such as Chalkfly, which launched about two years ago. The office supplier joined Bizdom, an accelerator also funded by Gilbert, for three months.
Chalkfly was the first Bizdom startup to receive support from Detroit Venture Partners. Additionally, the company received a larger investment directly from Gilbert about eight months ago. The combined financial and operational support helped Chalkfly scale its team up to 17 employees. “We’re hoping to double or triple the business this year,” said Landau.
The Gilbert effect has also spilled over into the downtown housing market. Brownrigg purchased and renovated a foreclosure home in the historic neighborhood of Corktown about a year ago. Home values are now on the upswing. “The house two doors down sold for about two and a half times what we paid for ours,” Brownrigg said.
Despite the economic momentum, Detroit remains a work in progress. There’s no single bullet, says Baruah of the Detroit chamber. Economic growth isn’t sustainable without it private sector investment and confidence.
“It takes private sector effort, with government help, to create a community that is livable and attractive to people so they want to live here and come visit,” he said.
Video from Quicken Loans on “Discovering Downtown Detroit”