Detroit’s “renaissance” has enriched its billionaire sports owners while rest of city suffers

If you want a depressing read about the impact of Dan Gilbert, the billionaire Quicken Loans baron, Cleveland Cavaliers owner, and would-be Detroit MLS owner, on his hometown of Detroit, there’s a great one by Shikha Dalmia in The Week. Among the highlights:

  • Gilbert is pushing for the state legislature to approve a super-TIF bill that would kick back property, sales, and income taxes from environmentally contaminated “brownfields” sites to help pay for the project. It would only apply to projects costing over $500 million in cities of more than 600,000, so the only eligible developer is Gilbert, who is proposing a giant project on the former site of the Hudson’s department store in downtown Detroit.
  • Gilbert got $50 million in tax breaks to move his Quicken headquarters from the suburbs to Detroit.
  • He and his partner, Pistons owner Tom Gores, are seeking $300 million in cash and land in exchange for building a new soccer complex on a half-finished jail site (and a new jail elsewhere).
  • Detroit is about to open a new $187.3 million light rail system that will link “Detroit’s downtown, dubbed Gilbertville because it houses the Quicken office and other buildings where Gilbert’s employees live, with the midtown area, where the entertainment district [built by Gilbert’s fellow sports billionaire, the late Tigers and Red Wings owner Mike Ilitch] is. Never mind that Detroit’s jobless and carless residents would have much more use for bus lines transporting them to jobs outside the city.”

Okay, maybe it’s a high price to pay, but at least Detroit is finally undergoing a long-awaited renaissance as a result, right? Well, actually:

The whole argument for pouring taxpayer dollars into this area is that its growth will spill over to the rest of the city, opening up jobs and business opportunities for all Detroiters. But research by Michigan State University’s Laura Reese and Wayne State University’s Gary Sands published earlier this year suggests that on virtually every metric, life outside the targeted zone is worse than it was even in 2010, when the alleged renaissance began.

Detroit’s overall population actually declined by 2.6 percent between 2010 and 2014. The unemployment rate among Detroiters increased by 2.4 percentage points between 2010 and 2013. This may have been because of the bankruptcy-induced layoffs of city employees, but Sands maintains that the trends don’t seem to have changed much in 2015. “About half of the neighborhoods in the periphery saw employment and payroll declines,” he notes. What’s more, although the overall number of Detroit businesses remained unchanged between 2014 and 2015, 13 of the more peripheral city zipcodes saw a decline.

In other words, far from the city core leading a comeback, it is at best siphoning — and at worst destroying — business and employment in the rest of Detroit, perhaps because smaller enterprises are having trouble competing with powerful billionaires who can dip into taxpayer pockets and divert other public resources toward their grand designs.

The whole thing is a terrific read, if you like to be depressed about how our cities are increasingly being run as engines for boosting the profits of their richest citizens. But you almost certainly do, since you read this website, so by all means go check it out.

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18 comments on “Detroit’s “renaissance” has enriched its billionaire sports owners while rest of city suffers

  1. “for a skyscraper he wants to build where Detroit’s famous Hudson store once stood.”

    That part from the article comes across as rather deceptive. Gilbert didn’t demolish the famous icon–that happened back in the late 90s after it had sat wasting away for years. The only significance to it being on the old Hudson site is that locals know where that is and the angle of something new rising from the ashes of the old.

    And while watching Gilbert stuff his pockets isn’t appealing neither is watching Detroit collapse and turn into an urban prairie which is what has been happening for decades. There’d been countless redevelopment plans for many of these sites and his are the ones that finally are going to come to fruition. He’s not a hero but it’s hard to argue that things would be worse without his involvement. It’s fair to point out that the “renaissance” hasn’t yet pulled the entire city up with it but was that ever a realistic expectation? You rebuild areas and then hopefully more surrounding areas get rebuilt in time. It’s not an overnight process. At times I think people miss just how far Detroit fell.

  2. In the latest study Chicago was the only city to lose population ! Highest sales tax in the country , highest per capita property taxes in the country , 30% of the city milks the system and marches for thug rights. Sound familiar to the residents of Detroit in those neighborhoods with 3 houses per block.

    1. “Thug rights” isn’t against the No Personal Attacks policy so I’ll let this comment stand, but: Jesus, Steven, really?

      1. You are maybe not surprised, but there is some large overlap on the stadium financing issue with both people on the left who see it as corporate welfare and/or wasteful use of public money on forms of entertainment they don’t enjoy. And with those on the right who are of a more libertarian small/government mindset.

        And I really think someone based in NY like yourself might be surprised at how poorly the marches and demonstrations last summer went over with even centrists in much of the country.

        I think that had a much to do with the huge (and unpleasant) surprise that was the election as anything. Each freeway shut down mobilized a lot more politically apathetic suburban and exurban middle class people than it did additional liberal student activists (who don’t vote that much anyway).

        1. Oh, complaining about the marches is fine. I was just surprised at people using “thug” as a slur for “African-American” (or for “urban African-American” or however you choose to dice the connotation) in mixed company.

          1. March for real victims not knives & gun wielding thugs. Thugs come in all colors and the marchers were all colors. The one thing they have in common is caring more about criminals than their victims and thinking they were helping. Things have only gotten worse for the majority of law abiding citizens.

          2. The decimation of due process (in this case due to racism) should never be taken lightly and that’s what was (and is) at the core of those marches. Allowing it to erode when it doesn’t apply to us renders us complicit to a police state. The times when we MUST enforce the Constitution are the times when it’s the hardest to do – when we’re scared, when the recipient of those rights doesn’t appear to deserve them. Someday you or someone you love may need due process and you most certainly will want it to be there.

          3. I’d have to generally agree with you, Neil. Although the word “thug” itself is color-blind (since this is a story about Detroit, the name of Bill Laimbeer comes to mind even though he’s much more intelligent than his playing style ever let on), it’s become code for blacks. That so many rappers embrace the term does nothing to dispel the stereotype attached, but I’ve learned to take mental note of people who use it.

          4. I think part of the problem with the current era of everyone being offended by everything, and “triggers” and whatnot, is that people (like I assume Steven) stop caring after a while about the social niceties of not doing things like referring the urban marchers as “thugs”. WHen everything is a priority nothing is, and elements of the left (supercharged by social media in some sense) spent much of the last 5 years trying to make every line of thought/phrase they don’t like a thought-crime. People get fatigued and start opting out of the whole project of playing nice with words.

          5. That comes off a little concern-trolly, no? Regardless of what some left activists are doing, it still shouldn’t be hard to understand that “thug” has become a racial code word for “urban black people — not like Jay-Z and stuff, but those *bad* ones.”

            Debates about “Negro” vs. “colored” vs. “black” vs. “Black” vs. “African-American” vs “African American” can seem a bit esoteric and silly in retrospect, but I would hope that wouldn’t make anyone feel free to throw up their hands and start using the N-word.

          6. Of course, but I am just making observations about what I perceive as the reasons for some behaviors a lot of young liberals find perplexing.

            I am really struck by things like say the push for gay marriage in my and other states, where there is a sizable and growing support for that position. But then as soon as that battle is won all that organizational momentum doesn’t just evaporate, so they start picking fights about more contentious things, like transgender bathroom policy. And since they have an established rhetorical stance, they treat their opponents on this as though they are just as absurd.

            But it is a different battle and different situation, so there is a whole new round of backlash et cetera.

            The right of course does this as well on their issues. it is one of the real problems with the bifurcated nature of our political process. Everything stays acrimonious, because even if you win there is a whole infrastructure dedicated to just create a whole new fight along the same lines.

            Anyway getting pretty far afield now, just frustrated because I feel like portions of the left have led us into this current fiasco by being unwilling to consolidate their gains, and instead pushing pushing pushing. And it made a bad match with Clinton because then you are both alienating people because of this overall platform who are centrists, while also alienating progressive and people who are sick of the status quo. I feel like literally any even remotely less orthodox candidate wins that.

    2. Chicago has tried to dress itself up for years with the huge skyline and highrise living but it’s just as post-industrial as Detroit. The difference is Chicago is so much more of an economic powerhouse and draw that large swaths of the city get gentrified due to insane demand.

      And I agree about “thug marches” (thug should never mean anything other than a low class criminal from any race nor is it something to be proud of). By the way, Jay Z most certainly was a thug back in the day and is very much “one of those bad ones” but he’s used his ability and business sense to pull himself out of that so I can’t hate. The problem with liberals (and make no mistake, the left has become run by liberals) is that they always need a cause to come to the aid of. This leads them to divide up groups into what they can understand. That’s why you never hear the term “working class” anymore. They talk instead about “the poor” when in reality a lot of those people find it insulting to be called poor. That’s also why rather than getting involved with the actual larger community, liberals instead focus entirely on the more easy to understand cases such as kids and thugs or those involved in the life or the hip hop industry.

      If you really want to help urban communities of any color, get suburbanites/well-off folks to stop buying drugs and other vices there and push for those who do to be shamed and charged the same way dealers are, and fight for fair funding for education. Inadequate schooling and suburban dirty money are what keep the cycle that produces thugs humming along like a well-oiled engine in a supercar. Marching for actual thugs is the last thing anybody needs, and it overshadows innocents and cases of blatant disregard for life like the Trayvon Martin shooting and the shootings of unarmed black men running away from police or in some cases who are restrained.

      And people can talk all they like about “police states” but our cops go into warzones every day and see the worst of society. They’re fighting an unfair battle where they know the only way to get legitimate thugs to cooperate or to discourage them is by using the same tactics they themselves use to assert their power and dominance. Very few of the people who criticize them could ever put on that badge. That said, I’m glad that this has led to the use of body cameras and increased scrutiny on legitimately bad shootings by police. The worst thing about the legal system is the fact that people are able to BS on either side.

      In short, both sides need to stop politicizing two sides of the same community and butt out. It’s not about you if you don’t actually live somewhere. Not to mention the fact that the cops are merely an arm of the larger power structure. To me nothing is more symbolic of the class war that has existed for centuries than the front lines of the drug war. You’ve got cops who represent the power structure and more comfortable society digging in against the thugs who represent the have nots and the unbelievable hopelessness of their situation causing them to consider things they might not have otherwise in order to get by.

      Don’t march against the cops. March against the largely suburban communities sending them to the front lines and buying drugs, etc. The cops merely do what the power structure orders them to.

  3. I’m still holding out hope that some president, congress or state agency will eventually pursue companies like Quicken Loans, Citi, Countrywide, AIG etc.

    Criminals are criminals, no matter how rich or well connected.

  4. I strongly recommend people read the linked article. The most stunning kickback asked by the developers, to me, is the funneling of the income taxes paid by people working on the projects back to the developers, and the funneling (partial) of income and sales taxes of tenants of the projects also back to the developers. Isn’t the idea of development, as far as the government is concerned, to create jobs and taxes that go back to the government so that all of the public will benefit? This sickens me. To think that in addition to other government welfare received by the developers, the citizenry would be paying their taxes to additionally enrich the developers. Unbelievable.

    1. Property taxes, we are constantly reminded, are not “profit” for cities. They represent the cost of providing government services (since most waste collection, utilities and other services are now billed separately rather than being lumped into tax funded services, we must assume these services are the cost of providing government to the buildings owners and tenants etc).

      So, the whole concept of kicking back property taxes to fund a development is ridiculous. When this is done, who pays for the ‘cost of government services’ for the developments thus funded?

  5. Normally I’m in complete agreement with you on the subject of gifting things to billionaires and how stupid some cities (Vegas) are about throwing money at them but you and the authors are majorly reaching here.

    Gilbert and developers getting subsidies have zero to do with the urban decay in the formerly industrial neighborhoods or Detroit or elsewhere and really don’t have the ability to stop that or fix it. They aren’t Bill Gates rich, and they aren’t industrialists who can bring the needed jobs to people. This isn’t at all unique to Detroit. I suggest you watch the episode of PBS Frontline titled Two American Families. It will tell you all you need to know about these types of places. It’s common in what I like to call “river cities” and also in cities like Detroit and Milwaukee thanks to Chicago in fact siphoning everything from the rest of the Midwest. If you want to blame somebody, blame those who moved jobs away and the suburbanites who come into these places to buy drugs. As well as of course to a lesser extent the residents themselves.

    You’re trying to blame them for a problem that is so much bigger than and majorly predates them in order to make your point, which ultimately weakens your point. Unless you come from a place that used to have thousands of industrial jobs like I do, you’ll never understand the cycle and how inevitable it is once you take away jobs that are the lifeblood of a community. Detroit is the ultimate example of Industrial Age grandeur. It’s like the capital of the Cleveland’s, St Louis’s, etc. The exact same thing happened to not just those cities but also to Camden and Chester in my area and large swaths of Philadelphia. I really don’t think it helps either that the surrounding area has no satellite cities that are not the same as Detroit and the area’s biggest economic engine outside of Detroit is all suburban.

    1. Nobody is saying Gilbert and the like are responsible for Detroit’s original predicament. But for Detroit spending its scant available money on “development” that only helps developers and not anyone else? That one sticks.

      1. True but the author is trying to dismiss a genuine downtown renaissance based on completely unrelated conditions in other parts of the city. While I agree that giving sweetheart deals to developers who don’t need them is BS, I don’t agree that spending money on jobs and development isn’t the best use of it in a city that so desperately needed both. If downtown became as bad as most of the city, it would all be over for Detroit. Instead the redevelopment and whatever else you like to call it downtown has brought people and tourism back to the city. If done right, this arena district could create a vibrant extended core by connecting downtown and midtown. This increases the geographical area where tourists will feel safe and want to be. This same thing happened in Philadelphia in the late 90s-2000s, when the last stable working class neighborhoods went downhill once their industry was gone and the office market downtown went to hell. The difference though is that Detroit is much more geographically spread out and much more reliant on industry outside of the core. The fact is that the only way to ever fix the city outside of the core is a combination of gentrification and subsidizing industrial jobs like is happening in Camden, NJ. Any money thrown at the situation in any way would not be enough to adequately address even a single issue there. It would require 1,000 or more police officers, massive amounts of effort on the part of code enforcement and other property-related branches, huge undertakings in housing and development that’s affordable, and a huge influx of jobs. Because outsiders feel no shame in doing things that make the situation worse. Detroit will not stop losing population until the core and surrounding is all that’s populated. It’s inevitable. The only thing they can do is exactly what they’re trying to do: Bring the jobs, entertainment, businesses and corporations to the urban core where they belong. There’s no bringing back the rest of the city, and the core itself is probably not yet at the point where subsidies aren’t a reality of development.

        That said, I really don’t get the idea of putting an MLS team and stadium there. I guess soccer is big out there? Because I’d say the sports market is stretched to its limit with four major pro teams.

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