Motor City Match: Detroit's Business Challenge

DDF_21_Regal_optAs the city undergoes reconstruction and continues to recover from bankruptcy, Mayor Mike Duggan has launched Motor City Match, a new program for small businesses that matches entrepreneurs with real estate, financial aid and technical assistance. The initiative is backed by federal and foundation dollars.
The program will make $500,000 available every quarter for people who want to start businesses in the city. The purpose is to fill empty and commercial space with entrepreneurs who may be great on ideas, but short on a place to bring their goal to fruition.
“The goal of the program is simple,” said Michael Forsyth, business development manager for the Detroit Economic Growth Corp. (DEGC). “It’s to find the best vacant commercial real estate in the city, and find the best businesses from in and around Detroit, and the world, and fill that space. We provide a combination of grants, loans and technical assistance to help get these businesses open and these spaces back into productive use. It’s an exciting time to be in Detroit.”
The program will be paid for with $4.25 million in community development block grant funds and federal money administered by the U.S. Department of Housing and Urban Development. With a competitive process in place, up to 50 small businesses are expected to be selected during its first year in existence.
The program is designed to bring about business interest in the neighborhoods where the city is not experiencing considerable growth.
The mayors said, “The Motor City Match program is designed to expand the business growth we are seeing in downtown, Midtown and Corktown to key neighborhood corridors across our city.”
The DEGC will match vacant real estate in some of the city’s distressed neighborhoods with startup businesses that need space, acting as the intermediary between property owners and entrepreneurs looking for a place to do business. The real estate side represents an acute need for many entrepreneurs. Despite Detroit’s glut of vacant properties, it remains surprisingly difficult for many entrepreneurs to find and fix up suitable space for a neighborhood business.
The program starts July 1 and will provide $500,000 in matching grants to help business and building owners. It will also provide an additional $1 million this year in small business and renovation loans, and $1 million in support services to help businesses open.
“Mayor Duggan, who really inspired this, who was one of the driving forces behind this, said let’s let the market decide where there will be future businesses.” Forsyth said. “Instead of us going out building by building, block by block, we put the call out there and let the building owners and the entrepreneurs and the investors come to us and show us where the interest is. I think that’s the beauty of the process. We’re going to start building momentum and start building a message and we’re going to see folks come to us from areas around the city.”
Motor City Match is made up of two entities, one for building owners and the other for business owners. The Building Owner Track is for Detroit property owners with a vacant space looking for quality new tenants. The Business Owner Track is for businesses from Detroit and around the world that are looking to start or expand in Detroit.
“Motor City Match focuses on opening permanent business,” Forsyth said. “We’re going to see that happen at different scales and in different contexts throughout the city. I think most of our applications will come from areas that you and I think are on the rise — Livernois and Outer Drive, Grandmont Rosedale area, West Vernor, Jefferson and Chalmers and of course along the riverfront. I think we’re going to see that come through in the application process.”
Applications for the Building Track close at the end of the week. A second round of Building Owner applications will open Aug. 1 and close Sept. 1. Applications for the Business Track open June 1 and close July 1, with a second round opening Sept.1 and closing Oct. 1. Business and building owners can apply at
Business owners can also apply for two other types of aid — grant funding and technical assistance in dealing with the city’s permitting bureaucracy.
“I think this program is especially exciting because it is designed based on leveraging the best resources that Detroit has,” Forsyth said. “In terms of real estate and structures, everybody I’ve worked with has underestimated what it costs to build out a space. You blow through your working capital pretty quick.”
The three tools offered by the program — space, funding, and technical assistance — will help close an estimated 15 to 50 percent gap in what entrepreneurs need to start a business and what they actually have.
The areas targeted for the program will include 10 to 15 “high opportunity” districts around the city. Since the money paying for the program comes from federal HUD funds, any businesses and property owners selected for the program must benefit low- and moderate-income neighborhoods or contribute to the removal of blight.
“The goal is to see where the interest really is,” Forsyth said. “So when we get these building applications in on May 1, we’ll have a strong indication of where there is interest of where the real estate community wants to invest. What we want to be able to do is create a critical mass of investment that is going to be able to spin off additional business interest.”

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