Tag Archives: Detroit Emergency Manager

Detroit Must Simultaneously Balance The Needs of All Its Stakeholders in Three Phases to Survive

detroit cant wait
Detroit has competing visions of its future that must finally meld if it is to realize Detroit’s great potential to re-create itself. Re-creation involves three distinct phases that must all begin immediately and in parallel, with each having different goals and differing endpoints, but with all participants in Detroit’s posterity understanding the importance of each phase being complementary of the others.

The first phase is Orr’s emergency planning phase. It should be expeditious and its pain and discord should end as swiftly as possible. All must sacrifice, but their sacrifices must be in keeping with optimizing the next two phases.

The second phase is the turn around phase. Detroit will not have the opportunity to grow if it cannot repair the structural impediments that are draining the city. For the turn around to succeed, crime will have to be dramatically reduced, 100,000 jobs will need to expeditiously return to the city targeting existing residents, schools must dramatically improve to contribute to reduced crime and to support an influx of new business, and home ownership must immediately be stabilized. What must be done to quickly implement these requirements? What impacts will they have on Detroit’s stakeholders?

The third phase is the most exciting for it is the growth phase in which Detroit has the opportunity to recreate itself. To sustain and to grow Detroit, the city must be re-tooled into an interwoven blend of modern livable communities that support existing and newcomer residents, including innovators and millennials who demand world-class standards in the cities they call home. How will Detroit integrate livability standards to compete as a growing, world-class city while meeting the needs of all its stakeholders?

Who are some of the stakeholders of Detroit who will demand that a collaborative solution for Detroit meet their needs as well? An optimal system-wide solution will ethically balance the best alternatives of each stakeholder, given the real alternative that Detroit’s sinking population might force dissolution if urgent actions are not taken to create a best effort model that can begin to go forward:

Current residents: Seek jobs, preservation of existing neighborhoods, lessening of crime, and better services

New residents: Must make up the remainder of a sustainable target population and want a highly livable city that meets professional, social, community, health, safety, and development goals

Detroit communities: existing and newly developed as part of a future envisioned Detroit

Property owners: Whether homestead or remote, that must upgrade and maintain their units, plus banks and trusts that must work with Detroit in the best interests of a master plan

Existing Businesses: Detroit’s Legacy industry and community businesses that anchor will key commerce zones in the new Detroit layout

New Businesses: Growth industry targets that will lure the innovators and entrepreneurs, and manufacturing industries that can optimize existing assets and fully employ Detroit’s existing citizens

Creators: Detroit professional and community planners such as the Downtown Economic Growth Corporation, Rock Ventures, Detroit Works, Greenways Coalition, and the Universities, Developers such as Detroit Venture Partners, and businesses that will tear down and construct, move homeowners, reuse and revitalize Detroit’s assets

Community activists that speak for the disabled, the elderly and the young, that seek balance against issues such as environmental injustice, and industrial racism, who will react to the solutions involving 100,000 feral cats and wild dogs.

Political activists that will protect against a shift in political and economic power that can isolate the minority as Detroit changes direction from decay to productivity and livability.

Philanthropists and Historic preservationists that seek a better Detroit and a preservation of Detroit’s character

Investors, shareholders, bankers, all who seek the profit motive of an optimal solution, ensuring efficiency of effort

Detroit services such as Detroit Emergency management, Police and Fire

Disenfranchised youth and organized crime that will be impacted by a shifting economy

Governments: City government, interconnected regional, state, and federal governments

People of United States who have a stake in the outcome as can be modeled by those that follow and Citizens of the world who have a stake in America living up to our ideals.

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Filed under American Governance, American Politics, City Planning, Jobs, Racism, social trajectory

This emergency manager phase for Detroit Should not be about loss or regret but about hope and rebirth

rebirth
Yet an important phase of rebirth must be letting go…When memories of what Detroit was, or visions of what one hoped it might become are released, then we can be free to see Detroit as it is and to plan for what it can really become.

After the economic burdens of Detroit’s collapsing past are lifted, the city must be ready to finally let go of old paradigms that have kept Detroit from transforming. We are free to state the starting point.

* Detroit is not safe

Detroit will initially still be a city that few will want to move to or to invest in until a clear path is created for Detroit to grow and to prosper. In fact, many will still want to leave if they can if crime is not dramatically reduced. But Detroit can become a very livable city if opportunity replaces hopelessness and if strong incentives for a prosperous future are introduced for newcomers. These are not just platitudes but very achievable goals.

* Detroit is blighted

After Mr. Orr and Detroit’s leadership make the tough choices, Detroit will still not be the vibrant city that downtown represents it to be. But it will have pockets of strong neighborhoods and it will continue to craft a fairly clean, brownfield canvas from which to build a future. Blight will continue to be cleared. Building exteriors, yards, sidewalks and vacant lots can be vigorously maintained by incentive and enforcement, main thoroughfares can be maintained to represent Detroit’s future, key growth centers can be enhanced to seed growth.

* Detroit is spread out and unwieldy

Detroit has three times the land that Walt Disney World had when it acquired 47 square miles in Central Florida. Speckled throughout the city, Detroit’s has liabilities but many can be transformed into assets. And Detroit’s land is one of its biggest assets. The West was settled by the draw of land. Given a well-defined land use vision, clear principles of growth, strong incentives for investment, and a culture recreated to support growth, Detroit can rapidly emerge, and positive signs of growth can simultaneously spread throughout its various neighborhoods, while highlighting the call for entrepreneurs, innovators and industry to return to Detroit’s key economic centers.

* Detroit is Gentrified

In 140 square miles, Detroit’s master plan has room for gentrification. It has room for high tech, for entrepreneurial centers, for commerce, education, and art. But Detroit is already the residence for 700,000 people, many of whom have been the forgotten ones, downtrodden, unemployed, poorly educated. Many have experienced the violence of Detroit. Most are hoping for opportunity and a better life.

Many of Detroit’s residents travel outside the city each day to give of their talents. Most can produce viable products and services right in Detroit, once employed. Yet, from Detroit’s existing population, workers must be matched to work they can readily perform. High wages for low skilled work is gone. Yet, the paradigm that living wages for low skill work cannot exist in an America that must compete in the world, that paradigm must be obliterated to put Detroiters back to work. There is a way.

* Detroit has stagnated in stalemate for decades.

A dynasty of political structures that preserved Detroit’s old economy must give way to equitable sharing of political powers for a new economy. A workforce power structure of high union wages for low skill work must give way to an economy that provides a living wage for low skill work and a city that promotes education and training for higher wage opportunities. Old prejudices that allowed Detroit’s neighborhoods to be underserved must be isolated through economic incentives that change behavior until prejudiced views can be reduced by stereotypes of a new economy.

* Detroit is isolated

A metropolitan region that has walled off communities from one another must be reconnected and interconnected to allow regional collaboration and regional growth. Solutions that can bring innovators, investors, and employers, those key components of growing economies, into the heart of Detroit will require agreement from regional, state, and federal governments, as well as support from entrepreneurs, local, national, and international industries to be dynamically effective.

As age-old paradigms are let go, Anticipation and new expectations can be formed to start rebuilding Detroit’s identity and to create a productive economy that provides jobs and a thriving future for all.

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Kevin Orr – Detroit’s Emergency Manager – Vulture or Savior?

orrKevin Orr has now been sent by the State of Michigan into the City of Detroit as an Emergency manager. He will most definitely slash costs and raise revenues by whatever measures necessary to solve Detroit’s budget crisis. Why is Mr. Orr what some may call a necessary evil? Why were the city’s elected officials unable to balance Detroit’s budget?

Detroit was established in 1701 and later incorporated in 1815. Through incorporation, the town established its own city government to provide the city with services. The city government became in essence a public business, funded by taxes to provide services to the residents and businesses located within the city’s limits.

As the number of residents and businesses grew, the size and complexity of the Detroit city government grew to support them. Detroit was densely populated with auto companies, companies that supplied them, and thousands of laborers who banded together in unions within this compact town.

In the boom years between WWI and the decade after WWII, Detroit grew rapidly, and workers enjoyed union wages that were 33% higher than most parts of the country. Workers claimed boom wages from growing business profits.

Intent on acquiring the financial gains that private union members enjoyed, public workers unionized within dozens of unions and their wages and benefits swelled as well. At the height of Detroit’s population in 1950, the City of Detroit employed 29,004. The ratio of citizen to city employee was 64 to 1.

Faced with boom wages and a highly organized union, the Big three began to move plants outside of Detroit over the next 15 years, and manufacturing jobs decreased by 138,000. As the city’s population shrunk, Feeling the pinch, Mayor Cavanaugh added the city’s first income tax to city funds in 1962.

Shortly after, Detroit’s public workforce began to shrink but the ratio of citizen to public worker continued to condense. By 1980, the ratio was 54 citizens per public worker, and this ratio was maintained until the 2005 crisis of government deficits. Why was this ratio maintained for forty years without causing a city finance deficit until 2005? The ratio actually was a problem well before 2005, but public unions were strong enough that politicians dare not dilute them further.

Detroit had excess public employees compared to other cities but Detroit’s population kept her police busy with the nation’s highest crime rate and her firemen busy with double the average fires due to blight arson. While Detroit had 54 citizens per public employee, the average of comparable sized industrial towns had twice that ratio.

But the excess number of employees wasn’t the only problem. Detroit was growing an excess number of retirees. Public sector employees could retire with significant health and retirement benefits after 25 years, police and fire after 20. By 2010, the city had 20,000 retirees compared to half that of active ones, severely crowding out funds for city services.

To cover increasing imbalances, Detroit added a utility use tax of 5% in 1965. The state began sharing its sales tax with Detroit in 1971. But with a local economy in free fall, the city needed more. By 1970, Detroit’s population had fallen 35%. As critically, Detroit’s housing stock that was its tax base followed the decline in population, dropping 100,000 units.

Detroit chased its falling population and housing stock with additional taxes but was consistently in arrears. Between 1973 and 2006, the city passed 46 obligation bonds to cover basic city services, increasing its outstanding debt load to over $12 billion dollars.

After considerable debate, the city allowed the opening of three casinos in the 2000s that added $180 million in tax revenues. Detroit also increased charges for services and pursued grants and private contributions. Yet, during the 2000s, the value of housing stock plummeted. By 2010, the average home sold for a mere $10,000. A third of housing had been torn down or burned by arsonists. The state reduced it revenue share to Detroit, and incomes of Detroit residents decreased, markedly reducing the city’s income tax collections. With 8 years of continued deficits, the city is now backed against a wall.

Kevin Orr is now faced with “rightsizing” Detroit’s government at a time when murders are rampant, when Detroit fires burn at double the rate of other cities, when 25% of Detroit’s lights don’t work, when emergency services are dangerously slow to react, when the city is plagued with wild dogs and feral cats, and when Detroit’s neighborhoods are blighted.

He must face the city’s unions, not only to reduce their workforce, but also to reduce their pensions. Detroit will most likely suffer through the work disruptions and slow downs that result.

He will also most likely sell some Detroit assets and lease others, while cramming down some of its long-term debt on bondholders. In addition, some of the 47% of residents that currently are not paying their property taxes should expect to pay them or face foreclosure.

This is the ugly point from which Detroit will painfully start. The question is whether Detroit can fix its structural deficits to turn the corner on its way back to a prosperous city, or whether Detroit will further decay. If Detroit’s leaders, union leaders included, choose to take the important steps to restructure Detroit’s future, then Kevin can play a pivotal role in giving Detroit hope.

However, he must not gut the assets that Detroit can use to lever its future. If his true goal is to help the city and not to carve it up for asset vultures, then Detroit will be poised to create a livable city. The future for those that have been left behind is either of creating a violent island of economic oppression from which there is no recovery, or, with Kevin’s crucial choices and sacrifice by all, of setting the path toward a brighter future for all of Detroit’s citizens.

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Hat’s Off To Mayor Bing

1BING.I want to pause and say that I am quite impressed with Mayor Dave Bing.

Detroit has been in a free fall for 50 years. After saddling Detroit with institutionalized racism and after pulling out the core of Detroit’s economy, centralized industrial military, and auto manufacturing, after having created an obsoleted urban housing system, after having swelled racial divisiveness to a tender box, and after having incited generations of oppressed black youth to react in desensitized violence, whites packed up their belongings, built highways, and skedaddled out of town.

Now, quite understandably, Mayor Coleman, who had dabbled as a youth in socialism as his potential answer to oppression, when elected the first black mayor during white flight, reacted with a sense of indignity. “Who needs deserters” was perhaps a normal reaction to have. But Detroit found during his 20 years that it did need investment, the very type of investment that had fled the city before his arrival.

And Mayor Archer, understanding the need for collaboration, did enlist the help of white business leaders in his efforts. It’s just that the generation that had just left Detroit hadn’t yet figured out that what Detroit now needed was transformation, not simply architectural monuments to lure shoppers back into a dying industrial town.

When their efforts failed, Detroit brought in what could have been fresh thinking to revitalize the city when they elected their youngest Mayor ever, Kwame Patrick. Yet, he turned out to be the poster child for white bigotry. Mr. Patrick gave into his base desires and missed out on the glory of raising up Detroit.

In his stead, Detroit elected a man of principle to follow the character of Mayor Archer. Mayor Bing had earlier shown his tenacity and leadership in the NBA, and he had proved his business leadership with his successful company. Mayor Bing was the right leader for Detroit. Yet he was taking the helm of Detroit in its final throws.

When Mayor Bing came to office, Detroit was already bleeding $150 million a year in deficits. When he came to office, the United States of America was already on its knees in the greatest recession since the Great Depression.

Read the tweet posts from above and you can see into Mayor Bing’s mind. He learned quickly what must be done. Within his powers, he orchestrated a great deal more than his predecessors had done in the previous 40 years tp redirect Detroit’s future toward a thriving path forward. Detroit is on the brink of being able to exercise a posterity that can either be aided by this emergency manager or obliterated by him.

A red flag of urgent observation and participation has now been thrown into the arena….

My hat’s off though to Mayor Bing!!!

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