Skip to main content

Reviving Detroit from the ground up

By John Bare, Special to CNN
updated 7:28 AM EDT, Wed May 22, 2013
John Bare says a smart revival strategy in Detroit took advantage of the scale of nonprofit groups.
John Bare says a smart revival strategy in Detroit took advantage of the scale of nonprofit groups.
STORY HIGHLIGHTS
  • John Bare says nonprofits in Detroit saw an opportunity to spark the economy
  • He says that by bringing together key stakeholders, jobs were created, projects launched
  • Organizations saw that together, their massive size would provide opportunities, he says

Editor's note: John Bare is vice president of the Arthur M. Blank Family Foundation and executive-in-residence at Georgia Tech's Institute for Leadership and Entrepreneurship.

(CNN) -- When others dismissed Detroit as a falling knife unworthy of investment, David Egner saw something else.

Egner imagined Detroit regenerating from within, with damaged civic tissue repairing itself to foster new life and commerce. As president of a foundation named for a patriarch who emigrated to Michigan 130 years ago and immediately launched a business, he was in a position to test his idea.

The secret, Egner figured, is harnessing the collective power of what he calls "anchor institutions": in this case, Wayne State University, Henry Ford Health System and Detroit Medical Center.

John Bare
John Bare

Through what emerged as the Midtown Project, Egner's Hudson-Webber Foundation, alongside other funders, is finding ways to hitch the fortunes of these institutions to the fortunes of the surrounding neighborhoods.

Hudson-Webber's research partner, Omar Blaik from U3 Ventures, compiled the data that confirmed the hunch: The anchor institutions carry breathtaking heft.

At a moment when the City of Detroit has been declared insolvent and foundations are looking for innovation, the approach carries two critical lessons for community development.

First, investors must build from assets, not deficits.

Many foundations like to use quality-of-life indicators to guide their philanthropy. I have been involved in a number of these efforts over the years, and too often, foundations find it irresistible to direct their charitable giving to whatever problem tops the charts. It feels like the right approach; if dropout rates emerge as the worst problem in a neighborhood, why not tackle it?

Problem is, whether the needle moves on this indicator or not, the approach is unlikely to contribute to broader neighborhood transformation.

Hudson-Webber's method reveals the potential of another kind of analysis, one that is based on the untapped power of existing assets.

It turns out Wayne State, Henry Ford and Detroit Medical employ about 30,000 people, hire 3,300 associates every year, enroll 32,000 students, control about half of Midtown's real estate and -- perhaps most important -- spend about $1.7 billion every year on goods and services.

Blaik found that about 4.5% of the $1.7 million in spending on goods and services was going to Detroit vendors; the rest is what Blaik calls leakage. If Detroit businesses could step up to provide quality goods and services at the right price -- this is a business play, not charity -- then even small upward ticks would represent enormous amounts of investment and, in turn, jobs.

Midtown Detroit Inc. organized vendor fairs to introduce local businesses to the big institutions and made sure local businesses got to see all the requests for proposals coming from the anchors.

As a result, a local bakery, a local print shop and a local construction firm were among the firms winning $20 million in business from the anchor institutions. The contracts created jobs for area residents and enabled the small businesses to ratchet up their capacity.

The successes point to the second critical lesson for foundations: Instead of limiting themselves to traditional charitable gifts -- building a playground, offering scholarships to deserving high school students -- the approach strengthens the connections between neighborhood residents and the marketplace.

By aligning work force training with the needs of the anchors, the Midtown Project has placed 50 local residents in entry-level jobs. Once up to full speed, Susan Mosey of Midtown Detroit believes, the arrangement can place 200 residents a year into jobs.

Midtown Detroit Inc. is also rebuilding a strong neighborhood residential core. Incentives to lure renters and buyers have drawn more than 1,000 residents to the neighborhood.

While the experiments are ongoing, the results are promising. Post-Great Recession, cities had to find new approaches to revive neighborhoods. It's not enough to build low-cost housing, says Bruce Katz, founder of the Brookings Institution's Metropolitan Policy Program, and there is no massive investment coming from the federal government.

"The cavalry is not coming," said Katz, who describes local innovations from across the country in a new book, "The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy."

Cities cannot wait for old programs to return, Katz says. They are not coming back.

Instead, cities should build from whatever assets they have at hand and make a new kind of business case for investment, from within and without.

U3 Ventures' Blaik believes that focusing on anchor institutions forces a discipline that prevents wishful thinking. Foundations, with their government and private-sector partners, can base expectations on the realities of supply and demand for hiring, business activity and residential growth.

In the end, anchor institutions may present the best hope for neighborhood transformation simply because of their scale. When it comes to sources of employment, investment and connectivity, the scale and power of the Midtown Detroit anchors dwarfs anything a foundation could sustain.

Even better: Instead of assuming residents need a handout, the approach gives residents an opening to participate in capitalism.

Follow @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of John Bare.

ADVERTISEMENT
Part of complete coverage on
updated 8:27 PM EST, Fri December 26, 2014
The ability to manipulate media and technology has increasingly become a critical strategic resource, says Jeff Yang.
updated 11:17 AM EST, Fri December 26, 2014
Today's politicians should follow Ronald Reagan's advice and invest in science, research and development, Fareed Zakaria says.
updated 8:19 AM EST, Fri December 26, 2014
Artificial intelligence does not need to be malevolent to be catastrophically dangerous to humanity, writes Greg Scoblete.
updated 10:05 AM EST, Fri December 26, 2014
Historian Douglas Brinkley says a showing of Sony's film in Austin helped keep the city weird -- and spotlighted the heroes who stood up for free expression
updated 8:03 AM EST, Fri December 26, 2014
Tanya Odom that by calling only on women at his press conference, the President made clear why women and people of color should be more visible in boardrooms and conferences
updated 8:12 AM EST, Fri December 26, 2014
When oil spills happen, researchers are faced with the difficult choice of whether to use chemical dispersants, authors say
updated 1:33 AM EST, Thu December 25, 2014
Danny Cevallos says the legislature didn't have to get involved in regulating how people greet each other
updated 6:12 PM EST, Tue December 23, 2014
Marc Harrold suggests a way to move forward after the deaths of NYPD officers Wenjian Liu and Rafael Ramos.
updated 8:36 AM EST, Wed December 24, 2014
Simon Moya-Smith says Mah-hi-vist Goodblanket, who was killed by law enforcement officers, deserves justice.
updated 2:14 PM EST, Wed December 24, 2014
Val Lauder says that for 1,700 years, people have been debating when, and how, to celebrate Christmas
updated 3:27 PM EST, Tue December 23, 2014
Raphael Sperry says architects should change their ethics code to ban involvement in designing torture chambers
updated 10:35 PM EST, Tue December 23, 2014
Paul Callan says Sony is right to call for blocking the tweeting of private emails stolen by hackers
updated 7:57 AM EST, Tue December 23, 2014
As Christmas arrives, eyes turn naturally toward Bethlehem. But have we got our history of Christmas right? Jay Parini explores.
updated 11:29 PM EST, Mon December 22, 2014
The late Joe Cocker somehow found himself among the rock 'n' roll aristocracy who showed up in Woodstock to help administer a collective blessing upon a generation.
updated 4:15 PM EST, Tue December 23, 2014
History may not judge Obama kindly on Syria or even Iraq. But for a lame duck president, he seems to have quacking left to do, says Aaron Miller.
updated 1:11 PM EST, Tue December 23, 2014
Terrorism and WMD -- it's easy to understand why these consistently make the headlines. But small arms can be devastating too, says Rachel Stohl.
updated 1:08 PM EST, Mon December 22, 2014
Ever since "Bridge-gate" threatened to derail Chris Christie's chances for 2016, Jeb Bush has been hinting he might run. Julian Zelizer looks at why he could win.
updated 1:53 PM EST, Sat December 20, 2014
New York's decision to ban hydraulic fracturing was more about politics than good environmental policy, argues Jeremy Carl.
updated 3:19 PM EST, Sat December 20, 2014
On perhaps this year's most compelling drama, the credits have yet to roll. But we still need to learn some cyber lessons to protect America, suggest John McCain.
updated 5:39 PM EST, Mon December 22, 2014
Conservatives know easing the trade embargo with Cuba is good for America. They should just admit it, says Fareed Zakaria.
updated 8:12 PM EST, Fri December 19, 2014
We're a world away from Pakistan in geography, but not in sentiment, writes Donna Brazile.
updated 12:09 PM EST, Fri December 19, 2014
How about a world where we have murderers but no murders? The police still chase down criminals who commit murder, we have trials and justice is handed out...but no one dies.
updated 6:45 PM EST, Thu December 18, 2014
The U.S. must respond to North Korea's alleged hacking of Sony, says Christian Whiton. Failing to do so will only embolden it.
updated 4:34 PM EST, Fri December 19, 2014
President Obama has been flexing his executive muscles lately despite Democrat's losses, writes Gloria Borger
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT