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 9:56 AM EDT, Tue July 22, 2014
Ukraine's president says the downing of MH17 was a terrorist act, but Richard Barrett says it would be considered terrorism only if it was intentional
updated 4:15 PM EDT, Tue July 22, 2014
Robert McIntyre says the loophole that lets firms avoid taxes should be closed
updated 3:28 PM EDT, Tue July 22, 2014
Aaron Miller says Kerry needs the cooperation of Hamas, Israel, Egypt and others if he is to succeed in his peacemaking efforts
updated 11:35 AM EDT, Tue July 22, 2014
Jeronimo Saldana and Malik Burnett say Gov. Perry's plan to send National Guard to the border won't solve the escalating immigration problem.
updated 1:42 PM EDT, Tue July 22, 2014
Sally Kohn: The world's fish and waters are polluted and under threat. Be very careful what fish you eat
updated 8:42 AM EDT, Tue July 22, 2014
Les Abend says threat information that pilots respond to is only as good as the intelligence from air traffic controllers. And none of it is a match for a radar-guided missile
updated 8:35 AM EDT, Mon July 21, 2014
Frida Ghitis: Anger over MH17 is growing against pro-Russia separatists. It's time for the Dutch government to lead, she writes
updated 8:27 AM EDT, Mon July 21, 2014
Julian Zelizer says President Obama called inequality the "defining challenge" of our time but hasn't followed through.
updated 7:57 AM EDT, Mon July 21, 2014
Gene Seymour says the 'Rockford Files' actor worked the persona of the principled coward, charming audiences on big and small screen for generations
updated 10:17 AM EDT, Mon July 21, 2014
Daniel Treisman says that when the Russian leader tied his fate to the Ukraine separatists, he set the stage for his current risky predicament
updated 12:42 PM EDT, Fri July 18, 2014
Andrew Kuchins says urgent diplomacy -- not sanctions -- is needed to de-escalate the conflict in Ukraine that helped lead to the downing of an airliner there.
updated 9:50 PM EDT, Fri July 18, 2014
Jim Hall and Peter Goelz say there should be an immediate and thorough investigation into what happened to MH17.
updated 11:07 AM EDT, Fri July 18, 2014
Pilot Bill Palmer says main defense commercial jets have against missiles is to avoid flying over conflict areas.
updated 1:55 PM EDT, Sun July 20, 2014
Valerie Jarrett says that working women should not be discriminated against because they are pregnant.
updated 3:53 PM EDT, Mon July 21, 2014
David Wheeler says the next time you get a difficult customer representative, think about recording the call.
updated 3:33 PM EDT, Fri July 18, 2014
Newt Gingrich says the more dangerous the world becomes the more Obama hides in a fantasy world.
updated 6:11 AM EDT, Fri July 18, 2014
Michael Desch: It's hard to see why anyone, including Russia and its local allies, would have intentionally targeted the Malaysian Airlines flight
updated 3:14 PM EDT, Thu July 17, 2014
LZ Granderson says we must remember our visceral horror at the news of children killed in an airstrike on a Gaza beach next time our politicians talk of war
updated 8:06 AM EDT, Thu July 17, 2014
Sally Kohn says now the House GOP wants to sue Obama for not implementing a law fast enough, a law they voted down 50 times, all reason has left the room.
updated 8:14 AM EDT, Thu July 17, 2014
A street sign for Wall Street
Sens. Elizabeth Warren, John McCain and others want to scale back the "too big to fail" banks that put us at risk of another financial collapse.
updated 4:16 PM EDT, Thu July 17, 2014
Newt Gingrich writes an open letter to Robert McDonald, the nominee to head the Veterans Administration.
updated 12:01 PM EDT, Fri July 18, 2014
Paul Begala says Dick Cheney has caused an inordinate amount of damage yet continues in a relentless effort to revise the history of his failures.
updated 10:04 AM EDT, Fri July 18, 2014
Kids who takes cell phones to bed are not sleeping, says Mel Robbins. Make them park their phones with the parents at night.
updated 1:29 PM EDT, Thu July 17, 2014
Buzz Aldrin looked at planet Earth as he stood on talcum-like lunar dust 45 years ago. He thinks the next frontier should be Mars.
updated 2:04 PM EDT, Wed July 16, 2014
Mark Zeller never thought my Afghan translator would save his life by killing two Taliban fighters who were about to kill him. The Taliban retaliated by placing him on the top of its kill list.
updated 11:18 AM EDT, Thu July 17, 2014
Jeff Yang says an all-white cast of Asian characters in cartoonish costumes is racially offensive.
updated 9:24 PM EDT, Wed July 16, 2014
Gary Ginsberg says the late John F. Kennedy Jr.'s reaction to an event in 1995 summed up his character
updated 12:41 PM EDT, Wed July 16, 2014
Meg Urry says most falling space debris lands on the planet harmlessly and with no witnesses.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT