DETROIT—The Motor City continues to suffer from a host of problems, but pending the outcome of forced budget cuts, a new transportation system and a new hero to believe in, the automotive capital may still have another rebirth left.
Ever since Michigan Gov. Rick Snyder faced city leaders in a takeover stare-down earlier this year, Detroit Mayor Dave Bing has been able to gain some forward movement in concessions. Corresponding budget cuts have cut to the core, with each week bringing a suggestion of excising another major program. A failing bus system isn't helping matters, though a new rapid bus plan, with possible new downtown light rail link, could encourage some of the Detroit faithful away from their two-car homes.
While it was most recently the Detroit Lions football team, which plays in a new stadium Downtown, that had the surprise comeback season, the new hero in town isn't the comeback kid quarterback Matthew Stafford.
Businessman Dan Gilbert, who actually owns sports teams, an arena and two underdevelopment casinos in Ohio, has turned out to be an unexpected Robin Hood to Downtown Detroit. It's been long believed that for downtown to prosper again, office users and residents would need to return. In just a few short years, Gilbert has made it happen, moving his main firm Quicken Loans from the suburb of Livonia.
Though this move brought thousands of workers Downtown, with a corresponding "live in Detroit" incentive for his workers, Gilbert didn't stop there. In late January, he purchased his ninth Downtown property.
One of his strongest strategic moves was the hire of Matt Cullen, the former General Motors economic development director who led the automaker's $500-million purchase of the Renaissance Center for its new headquarters. In a recent interview, Cullen tells REAL ESTATE FORUM that he thinks Detroit's stock is undervalued. He says the influx of residents to areas like Midtown and the New Center, along with increased after-hours activity Downtown, are signs that the city is changing for the better.
"It's comforting that the city government is starting to deal with its financial challenges," Cullen says. "The city leaders realize they now have no choice, and it will get handled. It's hard to run a city that can handle 2.5 million people with only about 750,000 residents."
He says his boss is dedicated to turning Downtown into a live/work area, and the idea seems to be spreading. Blue Cross will bring thousands of workers here, and retail chains, still largely unrepresented in the Downtown, are looking to move in. "It's hard to find a place to move Downtown now," Cullen says.
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