Message to Mackinac: Divide the Economic Pie

Grand Hotel_optThe 2015 Mackinac Policy Conference opens May 26 on Mackinac Island. But overshadowing the conference is the question of economic access for Detroiters and small business owners. Who gets invited to sit at the economic table or be in the room when the pie is divided will decide who succeeds or thrives in Detroit. In the last two years, Detroit has seen an inordinate amount of economic activity in the downtown and Midtown areas with heavy investments coming in almost monthly.
Who will benefit? That question has led to calls for attention to be focused also on Detroit neighborhoods, which Mayor Mike Duggan highlighted during a State of the City speech. But Roderick Miller, CEO of the Detroit Economic Growth Corporation (DEGC), says he is ready to tackle the issue of economic access for Detroiters head on.
“First, it’s important to recognize that economic inclusion is not about a false dichotomy of downtown vs. neighborhoods. We have to have a strong downtown and strong neighborhoods to have a growing, resilient, robust and inclusive economy,” Miller said. “We don’t advance the conversation about economic inclusion if we focus on this distraction. What we really should be talking about is access to opportunity for Detroiters. DEGC is focused on how to increase this access by growing attainable, good-paying jobs near where Detroiters live and supporting entrepreneurship in neighborhoods. Some of this is downtown, of course, but a lot of it is in our emerging employment districts throughout the city.”
Miller cited as an example, “the work that we are doing to advance the development of Mt Elliott Employment District with an EDA-funded reinvestment strategy and the development of the I-94 Industrial Park. This work will lay the foundation for future industrial job creation. But we are already working with companies like Sakthi Automotive to grow jobs today for Detroit residents.”
For many years, Miller said, “DEGC has worked hard to develop creative small business programs like our local buying initiative, D2D, the Green Grocer Project to increase fresh food access, and REVOLVE Detroit to stimulate neighborhood retail. Motor City Match is our newest effort to meet the challenges that new entrepreneurs have in opening their business in neighborhood locations throughout Detroit.”
On the state of the economy in Detroit, Miller said the city’s economy is in transition from a subsidized recovery to a market-driven one.
“Investors are only just beginning to understand the scale of opportunity in Detroit. Early investments took risks based on subsidy, undervalued properties, and a gut feeling that the city was moving in the right direction. Property appraisals still do not justify the cost of new construction, particularly in areas where assembling large contiguous parcels of vacant land is easily achievable,” he explained. “Nonetheless, investors are now beginning to see market evidence that demonstrates Detroit as a viable investment from a real estate and corporate expansion perspective. New investors from international markets as well as other domestic investors are considering Detroit for significant manufacturing projects, real estate acquisitions and corporate expansions. This focused interest on Detroit is increasing competition and moving our economy towards long-term growth.”
He noted that office vacancy in downtown Detroit is at 18 percent, lower than in suburban communities and the lowest it has been in many years.
“You can see the impact that is having in creating a vibrant downtown, with both regional headquarters moving back downtown like Fifth Third Bank and a slew of small creative firms, like Moguldom. Just recently, Sakthi Automotive announced a major expansion of its Southwest Detroit campus, adding 480 new jobs and investing $31 million into a state-of-the- art aluminum castings facility. You can begin to see how our manufacturing economy is shifting with LIFT, the national lightweight metals institute that opened in Corktown earlier this year, or American Axle Manufacturing’s announced R&D facility,” Miller said.
“In addition to our traditional base in downtown and manufacturing, we are seeing the economy beginning to diversify, especially in the food sector. Our food cluster is a great example of how entrepreneurship will spur Detroit’s future economic growth. Detroit is developing a broad food infrastructure with the capacity to support the city as well as other areas of the state. Companies such as Better Made and Ellis Island Tea are demonstrating our capacity in food manufacturing. Neighborhood grocers alone are investing expanding their stores throughout the city. Partners like FoodLab Detroit and Kitchen Connect are turning out new food entrepreneurs daily.”
On small business, the city’s economic engine chief said, “We’ve seen a lot of interest in starting and growing a small business in Detroit, but there is still a long way to go to the kind of scale we need, especially in neighborhoods outside of downtown. While the unemployment rate has decreased by more than half in the last five years to 11.7 percent currently, it is still twice the state and national average. While things are much better today than they were previously, there is still a lot of work to do throughout Detroit.”
However, he indicated that key to long-term sustainability will be comprehensive workforce programs that get Detroiters into quality jobs, access to opportunities to launch new businesses and provide turnkey support to companies that are looking to expand in the city.
“Encouragement of niche development strategies such as business cluster districts, neighborhood branding and alternative residential development models should promote Detroit’s transition into a more resilient and diversified economy,” he said.Grand Hotel_opt

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