City stands as a burial ground for the good intentions of Democrats and Republicans alike

Presidents’ grand plans fail in Detroit

by Michael A. Fletcher

The Washington Post

During the Nixon years, Detroit’s business elite laid plans for the glittering Renaissance Center retail and office complex. The Ford and Carter administrations brought the “People Mover,” an elevated rail loop around downtown that hardly anybody rides today.

Other presidential administrations introduced enterprise zone tax breaks and empowerment zone development grants. President Barack Obama promised to save the Motor City by saving the auto industry.

But none of it worked. Rather than becoming a showplace for the transformational power of urban policy, Detroit now stands mostly as a burial ground for good intentions — of both Democrats and Republicans.

Last month, Detroit became the largest city in U.S. history to file for bankruptcy, offering sobering proof that decades of government and private-sector intervention was no match for decades of residential and business flight that eroded the city’s once ample tax base.

“It is as if the tide is going out and I take a fire hydrant and pump as much water on the beach as possible,” said Charles Ballard, a Michigan State University economist. “No matter how long I pump, there is still going to be more sand showing.”

Still, political leaders kept pumping.

One reason was that the city symbolized a once uniquely American era when blue-collar people with high school educations, or less, could enjoy middle-class comforts as long as they were willing to work hard.

“Detroit has always had a special place in the American psychology,” said Henry Cisneros, who served as secretary of Housing and Urban Development during Bill Clinton’s first term as president. Not only was Detroit the center of the automobile industry, but it was also one of the major destinations for the vast migration of African-Americans from the South in the first half of the 20th century, he added.

Detroit’s unique status made it an irresistible symbol for political leaders. For years, one sure sign that a politician was running for president would be an appearance at the Detroit Economic Club.

“Part of it is Detroit has always occupied such a place in American history, because it was in many ways where the American Century, from an industrial perspective, began,” said Chris Lehane, who was an aide to Al Gore when he was vice president. “It occupies a certain mystique, which is why what happened hits people so hard.”

Nobody has done an accounting of the amount of money that has flowed to Detroit through the years in the name of urban renewal. But researchers note that the city was a major player in garnering federal money since the Model Cities program was launched as part of President Lyndon Johnson’s Great Society.

“Detroit has certainly seen its share of urban initiatives,” said Eric Scorsone, an expert on the city at Michigan State University.

Few have fared particularly well.

The $500 million Renaissance Center, which was privately funded, was quickly derided as a fortress that was not only difficult to navigate but also cut a key portion of downtown off from the Detroit River. It was sold to General Motors in 1996 for just $76 million. G.M. moved its headquarters to the development and invested heavily in renovations to make the space more inviting, but much of its retail space remains vacant.

Since beginning operation in 1987 — 12 years after a federal competition launched the project — the People Mover has stood out mostly as an economic albatross. It circles downtown in a 4.7-km loop, carrying just a tiny fraction of its projected ridership and costing taxpayers millions of dollars a year in subsidies.

Other initiatives, including the $100 million empowerment zone and grants to rebuild public housing at a more livable scale, have had mixed success.

Still, the money flowed, often because Detroit mayors forged tight relationships with Democratic presidents. “(Former Philadelphia) Mayor Ed Rendell used to tease me miserably that every time he turned around I was down in Washington getting money,” said Dennis Archer, who served as mayor of Detroit from 1994 to 2001. “I’ll tell you, I worked hard to do that.”

Archer also was able to pull together public financing to construct new downtown stadiums for the Tigers, the city’s major-league baseball team, as well as the Lions, its National Football League franchise.

At points, the efforts seemed to make a difference. Detroit made measurable strides during much of Archer’s term, as crime and poverty declined and the city’s alarming population loss slowed to its lowest rate in decades.

But that progress was not enough to alter the bigger picture of massive job losses in auto manufacturing, the very industry that made Detroit famous. The downturn started in the 1950s, and it picked up speed in recent decades.

“The problems of Detroit fundamentally are the problems of a changing American manufacturing base,” Cisneros said.

Other cities, including Pittsburgh, which was once synonymous with steel, and Los Angeles, which grew with the aerospace and textile business, were able to make the transition to other industries to one degree or another. But Detroit was not.

In 1978, Wayne County, which includes Detroit, was home to 256,000 car industry jobs, according to the Center for Automotive Research. Now, there are an estimated 95,000 auto industry jobs in the county — a marked improvement since its nadir just before the Obama administration’s auto industry bailouts in 2009, but far below its historic peak.

These days, the Motor City is home to just one auto plant, a Chrysler factory that turns out Jeep Grand Cherokees. (A second plant, run by General Motors, straddles the border with neighboring Hamtramck.)

“The government help was too small to begin to make a dent in the major economic problems Detroit was facing,” said Thomas Sugrue, a Detroit native and an urban historian at the University of Pennsylvania.

As Detroit offered fewer auto-related jobs, government became one of the largest employers, partially filling the void. But over the past quarter century, the city’s workforce has been cut by more than half, a number likely to shrink further as the city reorganizes in bankruptcy. Still, city government remains Detroit’s second leading employer. Other big employers in the city include the federal government, two major hospitals, as well as Quicken Loans/Rock Financial Inc.

The eroding tax base, coupled by the national economic crisis, finally led to the city’s economic collapse. The city’s population dropped by more than 25 percent since 2000, causing tax revenue to further plummet. The city’s leadership fell into disarray under Archer’s successor, Kwame Kilpatrick, who was forced to resign after being convicted on corruption charges.

By the time Mayor Dave Bing took office in 2009, the city was reeling financially and was soon put under the control of a state-appointed emergency manager. Notably, when emergency manager Kevyn Orr filed for bankruptcy, no prominent voices called for federal help.

“I think Detroit faced a tsunami of economic decline that I do not think any amount of urban renewal could address,” Scarsone said.