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 6:45 PM EDT, Mon July 28, 2014
LZ Granderson says the cyber-standing ovation given to Robyn Lawley, an Australian plus-size model who posted unretouched photos, shows how crazy Americans' notions of beauty have become
updated 7:56 AM EDT, Mon July 28, 2014
A crisis like the Gaza conflict or the surge of immigrants can be an opportunity for a lame duck president, writes Julian Zelizer
updated 2:22 PM EDT, Sat July 26, 2014
Carol Costello says the league's light punishment sent the message that it didn't consider domestic violence a serious offense
updated 8:51 AM EDT, Mon July 28, 2014
Danny Cevallos says saggy pants aren't the kind of fashion statement protected by the First Amendment.
updated 2:52 PM EDT, Mon July 28, 2014
Margaret Hoover says some GOP legislators support a state's right to allow same-sex marriage and the right of churches, synagogues and mosques not to perform the sacrament
updated 2:31 PM EDT, Mon July 28, 2014
Megan McCracken and Jennifer Moreno say it's unacceptable for states to experiment with new execution procedures without full disclosure
updated 2:50 PM EDT, Mon July 28, 2014
Priya Satia says today's drones for bombardment and surveillance have their roots in the deadly history of Western aerial control of the Middle East that began in World War One
updated 12:35 PM EDT, Mon July 28, 2014
Jeff Yang says it's great to see the comics make an effort at diversifying the halls of justice
updated 11:55 AM EDT, Sat July 26, 2014
Rick Francona says the reported artillery firing from Russian territory is a sign Vladimir Putin has escalated the Ukraine battle
updated 2:22 PM EDT, Sun July 27, 2014
Paul Callan says the fact that appeals delay the death penalty doesn't make it an unconstitutional punishment, as one judge ruled
updated 6:25 PM EDT, Thu July 24, 2014
Pilot Robert Mark says it's been tough for the airline industry after the plane crashes in Ukraine and Taiwan.
updated 11:10 AM EDT, Fri July 25, 2014
Jennifer DeVoe laments efforts to end subsidies that allow working Americans to finally afford health insurance.
updated 11:33 AM EDT, Sat July 26, 2014
Ruti Teitel says assigning a costly and humiliating "collective guilt" to Germany after WWI would end up teaching the global community hard lessons about who to blame for war crimes
updated 8:45 AM EDT, Fri July 25, 2014
John Sutter responds to criticism of his column on the ethics of eating dog.
updated 9:02 AM EDT, Fri July 25, 2014
Frida Ghitis says it's tempting to ignore North Korea's antics as bluster but the cruel regime is dangerous.
updated 2:50 PM EDT, Fri July 25, 2014
To the question "Is Putin evil?" Alexander Motyl says he is evil enough for condemnation by people of good will.
updated 2:03 PM EDT, Thu July 24, 2014
Laurie Garrett: Poor governance, ignorance, hysteria worsen the Ebola epidemic in Sierra Leone, Guinea, Liberia.
updated 9:49 AM EDT, Thu July 24, 2014
Patrick Cronin and Kelley Sayler say the world is seeing nonstate groups such as Ukraine's rebels wielding more power to do harm than ever before
updated 6:05 PM EDT, Wed July 23, 2014
Ukraine ambassador Olexander Motsyk places blame for the MH17 tragedy squarely at the door of Russia
updated 7:42 AM EDT, Thu July 24, 2014
Mark Kramer says Russia and its proxies have a history of shooting down civilian aircraft, often with few repercussions
updated 2:53 PM EDT, Thu July 24, 2014
Les Abend says, with rockets flying over Tel Aviv and missiles shooting down MH17 over Ukraine, a commercial pilot's pre-flight checklist just got much more complicated
updated 9:17 AM EDT, Thu July 24, 2014
Mark Kramer says Russia and its proxies have a history of shooting down civilian aircraft, often with few repercussions
updated 12:37 PM EDT, Thu July 24, 2014
Gerard Jacobs says grieving families and nations need the comfort of traditional rituals to honor the remains of loved ones, particularly in a mass disaster
updated 10:13 AM EDT, Thu July 24, 2014
The idea is difficult to stomach, but John Sutter writes that eating dog is morally equivalent to eating pig, another intelligent animal. If Americans oppose it, they should question their own eating habits as well.
updated 12:30 PM EDT, Wed July 23, 2014
Bill van Esveld says under the laws of war, civilians who do not join in the fight are always to be protected. An International Criminal Court could rule on whether Israeli airstrikes and Hamas rocketing are war crimes.
updated 10:08 AM EDT, Wed July 23, 2014
Gordon Brown says the kidnapped Nigerian girls have been in captivity for 100 days, but the world has not forgotten them.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT