Jessica Meyer | Tuesday, November 3, 2015

How a unified vision helped transform Detroit's greater downtown

Three seasons room at Midtown
If you have lived in Detroit's greater downtown for even a year, you've noticed rapid transformations taking place all around you. On any given day, it seems like a new small business opens up, a free event is happening at one of the district's many museums and cultural institutions, and more and more people are out walking through the area's public and commercial spaces.
 
The vibrancy of Midtown and downtown today obscures the fact that just seven years ago, Detroit's core neighborhoods were hemorrhaging residents. This trend, coupled with a disastrous economic recession that was experienced acutely in southeast Michigan, made it very hard to convince young, educated individuals that Detroit was a place they should consider calling home.
 
Fast forward to 2015 and things have drastically changed for Detroit's greater downtown. Housing is consistently close to capacity (97 percent existing housing units in the greater downtown are currently occupied), small business districts like those along Cass Avenue and Canfield Street and in the Park Shelton in Midtown are thriving, and crime rates have decreased significantly. Not only are there more opportunities to get a job thanks to the downtown relocations of major companies like Blue Cross Blue Shield and Quicken Loans and the establishment of new ones like Shinola in Midtown, but more and more residents now have access to resources and support to help them pursue their own entrepreneurial endeavors.
 
While these changes seem to have occurred suddenly and spontaneously, many of the organizations, partnerships, and projects behind the current boom in greater downtown Detroit were the result of a strategic, shared vision led by the Hudson Webber Foundation, which coalesced key members of Detroit's philanthropic, nonprofit, and corporate sectors around what would come to be called the 15x15 Initiative.
 
Chasing a key demographic
 
In 2005, Michigan Future Inc., a data-driven non-partisan nonprofit, began issuing place-based reports on talent and prosperity in the state, highlighting Michigan and Detroit's disproportionate loss of educated people under the age of 35. When it came to retaining and attracting members of this demographic, Michigan ranked 34th in the country, with Detroit being one of the worst urban centers in this category. In 2008, there were only 55,000 people with a college degree living in Detroit, or roughly 11.8 percent of the city's residents over the age of 25. Not only were members of this cohort leaving Detroit, but educated people across the country were avoiding the city in favor of more prosperous urban centers.
 
Michigan Future's reports made clear that something needed to be done in Detroit to retain and attract this cohort, a high concentration of which it found to be the best predictor of a region's economic health and prosperity.
 
"If we didn't reverse [the flow of young talent], it would have a ripple effect for generations. Our tax base would shrink, and we would see less philanthropic dollars," says Dave Egner, president and CEO the Hudson-Webber Foundation.


 
Based on Michigan Future's findings, Hudson Webber began exploring placemaking as a talent retention and attraction strategy. They began asking questions around what were the most important factors and amenities that young educated people looked for when choosing where to settle.
 
It took three years to incubate a strategy that they hoped would build upon the momentum already created in the early- and mid-2000s through developments like the Compuware Building, Campus Martius Park, Slows BarBQ, the Lofts at Merchants Row, and pop-up businesses. In 2008, they launched the 15x15 Initiative, which had the lofty stated goal of attracting 15,000 young, talented households to greater downtown by 2015.
 
One of the first things Hudson-Webber did in developing the strategy was visit other cities across the U.S. that had working urban neighborhoods that were attracting the talent Detroit was losing. They identified four core focus areas that would guide infrastructure improvements to create those kinds of places back home: safety, housing, retail and third spaces (the places you go outside of work and home), and jobs and entrepreneurial opportunities. These four areas all saw incredible measures of success as Hudson Webber worked with partners throughout the greater downtown to develop programs aligned with 15x15.
 
For safety, Wayne State University's police force increased its capacity and expanded its perimeter outside of the immediate campus to include the entire Midtown district, which caused major crime rates to plummet by more than 50 percent. In downtown, Dan Gilbert coordinated a safety program focused on getting corporate security forces to work together, which also contributed to significantly lowering crime rates. Perhaps most importantly, however, is that people's perception of safety began to change dramatically between 2011 and 2014. In a Live Midtown survey conducted in 2011, 48 percent of survey respondents indicated that safety was an issue, but by 2014, that number had dropped to just 34 percent.


 
There was a real uptick of retail, restaurants, and other third space development in Midtown and downtown thanks to attraction and retention efforts led by groups like Midtown Detroit, Inc. The Cass and Canfield blocks were developed and filled almost immediately with local small businesses like City Bird and Nest in the Canfield Lofts building and Source Booksellers, Hugh, and Nora in the Auburn. In 2012, Hudson Webber's "7.2 Square Miles" report, which tracks investment in the neighborhoods of Detroit's core, counted 300 retail establishments, 301 restaurants, and 108 acres of parkland in the greater downtown area. In the 2014 edition of the report, those numbers increased to 352 retail stores, 378 restaurants, and 200 acres of parkland.
 
Other third spaces were created within older institutions like the Detroit Institute of Arts, which changed how the public interacts with the museum through programs like Friday Night Live and the introduction of casual spaces like Kresge Court. Outdoors, a greenways initiative created the Midtown Loop and Dequindre Cut, which both continue to expand. During this same time, programming ramped up in public spaces and parks like Campus Martius, New Center Park, and the riverfront.
 
And more jobs came downtown with Dan Gilbert's and others' decisions to move their corporate headquarters to Detroit's central business district.  Since 2010, Quicken Loans and affiliated companies have brought 12,000 new jobs downtown. Other employers like Blue Cross Blue Shield, which has hired 3,400 employees since 2010, and Campbell Ewald, which has hired 600 new employees since 2010, followed suit. Those firms, particularly Gilbert's Quicken Family of Companies, have picked up 15x15's placemaking mantle with initiatives of their own.
 
The New Economy Initiative, a project of the Community Foundation for Southeast Michigan, which, like Hudson Webber, is also headed by Egner, launched and funded economic development programs to build a network of support for entrepreneurs and small businesses. They focused on growing entrepreneurial assets clustered in greater downtown and subsequently saw a boom in entrepreneurial programs like Techtown, Blackstone Launchpad at Wayne State University, Next Energy, Build Institute, ProsperUs, and ACCESS, as well as the development of the BizGrid, a collaborative entrepreneurship resource guide.

Dave Egner, president and CEO of the Hudson Webber Foundation
 
Lofty goals and lessons learned
 
Despite the incredible momentum created by initiatives under the 15x15 umbrella, the numerical goal of 15,000 new households was not reached. Egner believes a huge factor in not getting there is because the pace of new housing units has not kept up with demand.
 
Many know firsthand how housing in downtown and Midtown has transformed as occupancy rates have remained at or above 97 percent in 2015. This is a significant change since 2010, when only 76 percent of greater downtown's 26,700 housing units were occupied. Today, leases are signed well before construction of new housing developments are complete, and waiting lists hover in the hundreds for those hoping to snatch a new apartment or loft and experience the excitement of Detroit's urban center. The Live Midtown and Downtown incentive programs, funded by Hudson Webber, launched to give discounted housing for employees of a number of companies downtown and in Midtown like Henry Ford Health System and Wayne State University.
 
But hitting the 15,000-person benchmark was never 15x15's real intention.
 
The initial goal of 15x15 was not just about achieving a number, but generating momentum that reaches beyond 2015. There is still much more work to be done in those four areas as Detroit continues to attract young talent. Egner believes in addition to moving things forward in Greater Downtown, it is important to start looking at the adjacent neighborhoods.
 
"15x15 was instrumental…A lot of [those partnerships] came along because people caught the vision of 15x15. We wanted it to be a shared vision by anyone who had the same idea," says Egner. "We're starting to ask the question, 'What lessons did we learn during this process that can be translated to the neighborhoods to start the same type of revival?'"
 
This special report is the latest in Model D's "10 Years of Change" series celebrating our decade of publishing in Detroit. Read other stories in the series here. Support for "10 Years of Change" is provided by the Hudson Webber Foundation.
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Lou Glazer, Michigan Future Inc.
Lou Glazer, Michigan Future Inc.
Lou Glazer is president and co-founder of Michigan Future, Inc., a non-partisan, nonprofit organization whose mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy.
 
Model D: How did you get involved in the 15x15 project and what was your role?
 
Lou Glazer: [Hudson Webber Foundation CEO and president] Dave Egner was chair of the Michigan Future Inc. board for quite a while. It was our data that made the case that we needed something like the 15x15 Initiative [in Detroit]. We had been trying to identify the most prosperous places around the country and find out what distinguishes them from us. The pattern that we found was that the regions with the brightest middle class are places that have two common characteristics: increasing their economy with more knowledge-based—not factory-based— job opportunities, and they have a higher proportion of adults with four-year degrees, which is the asset that matters most with knowledge-based employers.
 
We also found that regions and states with those characteristics have a central city with a higher proportion of people with four-year degrees than their metros, particularly among young professionals. That was eye opening to everyone. Young professionals are concentrating in central cities, so if you don't have that, you're not going to have this high proportion of adults with four-year degrees that's common with prosperous places. The city of Detroit had by far the lowest proportion of adults with four-year degrees. The important point to make is that the talent concentrations are the important ingredient in the region and the state. If the city isn't a talent magnet then it's hard to find high prosperity in metro Detroit. Then you're not getting high prosperity in the state.
 
The other piece of data we got plugged into was from CEO for Cities and national poll research. They found that young professionals post-college were deciding on where they wanted to live based more on place rather than jobs. That's what drove the 15x15 Initiative to be focused on placemaking. When you look around the country, you get large proportions of young professionals in high density, safe, walkable, mixed use, "24/7" neighborhoods. There were few, if any, of those places in Detroit.

MD: How's Michigan and how is Detroit doing in terms of attracting and retaining talent compared to the rest of the country?
 
LG: Detroit still has a long ways to go. Among the big cities in the country, it has the lowest college retention rate. The most successful places now have college retention rates in the 50-60 percent range. In 2014, it was basically 16 percent in Detroit. In 2013 it was 13 percent, and in 2010 it was 11 percent. Big jump between 2013 and 2014; that's the good news. It's starting to move in the right direction, but it has a long way to go.
 
The state is a little bit better. There are 52 metros with population over 1 million or more, and metro Detroit is 42nd. 25-30-year-olds have better ranking than overall population in Michigan. Out of 50 states we are 33rd in college attainment and 29th in the 25-30-year-olds cohort. We're nowhere near the successful states. We're better with that cohort than we are with 25 and older in general, but the camp is pretty big. Boston and Minneapolis are leaders and Pittsburg and Milwaukee are doing far better economically than us. They're making this transition to knowledge based economy. As a region, 33 percent of metro Detroit's 25-35-year-olds have a four-year degree. Boston is off the charts with 64 percent. We're making progress but we have a long ways to go before where we need to be a prosperous city, region, and state.

MD: What are the policy trends in other parts of the country where this is working?
 
LG: If you believe that placemaking is at the core, then having attractive places with 24/7 high activity is the key component. You need mixed-use development. You need good public transit; transit is a key characteristic of all these places. You need amenities like outdoor recreation, the arts, and safety like good policing and good lighting.
 
Richard Florida tells this story of how he ended up writing "The Rise of the Creative Class." There was this pattern developing at Carnegie Mellon. A lot of young people were moving to Boston. At the core companies were finding people with talent rather than people needing to move solely where jobs were. There was a fundamental shift in thinking about economic development.
 
When it comes to state-level policy in Michigan, we're still trying to retain and attract companies, not people. And we're not focused on retaining and attracting college-educated people. You don't get to the importance of central cities, and that's the role central cities are now playing.
 
All cities in Michigan are suffering from the same lack as the state, but Grand Rapids on a regional level is doing better because of their local investment in things that matter to this cohort. The city of Grand Rapids is at 42 percent of 25-30 years with a four-year degree. The region is lagging but the city is moving in the right direction and is pretty competitive. Grand Rapids is certainly ahead of metro Detroit in terms of transit and other areas like investment in the arts, parks and outdoor recreation, and other important amenities. Both Grand Rapids and Detroit are starting to understand that there needs to be more concentration on their greater downtowns becoming residential neighborhoods for these 25-30 year olds.
 
MD: Do our state and local policies line up with what's attracting young talent? And if not, what needs to change?
 
LG: I think it's fair to say Michigan by and large has been going backwards in investing in any of those things in the last decade or so. There's still an underappreciation of the city in the state's economic development. They did come together for the Grand Bargain to allow Detroit to get out of bankruptcy and move forward, but revenue sharing has been cut regularly, same as funding for the arts. There's hardly any state investment in parks and recreation. And in transit we're still horrible. So if there's any policy progress, it's been made at the city rather than at state level. City-level policy is beginning to understand the importance of high-density, mixed-use neighborhoods and taking regular steps to rezone. There's an understanding this matters but that we don't have the tax base to fund it. Same with safety—still a long way to go for safety.
 
There are big changes that need to be made in Michigan currently missing that are characteristics of other places. One is the understanding of the critical importance of central cities in helping the state economy. No one questions that Chicago is an asset to Illinois or Boston is an asset to Massachusetts. Here most people in the region and at state level still see Detroit as a liability and not an asset. This is the fundamental shift. Another problem (this is already shifting) is this belief that we can still make the 20th century factory-based economy the basis for policy.
 
Local level things are moving in the right direction. Regional you have some progress. At the state level, other than Grand Bargain, we haven't been making any progress, and I think you can make an argument we're going backwards.
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