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Detroit – Unprecedented Challenges and Opportunities Benjamin Erulkar Vice President Economic Development May 15, 2014. Challenges and O pportunities. “Paris of the Midwest” in 1950 1.8 million population Now: Detroit as the prototype of urban ills Bankruptcy (Chapter 9) in July 2013 - PowerPoint PPT Presentation
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Detroit – Unprecedented Challenges and Opportunities
Benjamin ErulkarVice President
Economic Development
May 15, 2014
2
• “Paris of the Midwest” in 1950• 1.8 million population
• Now: Detroit as the prototype of urban ills• Bankruptcy (Chapter 9) in July 2013• Under 700,000 population
• A more complex reality:• $10 billion in direct investment since 2008• Place-based redevelopment• Beginnings of sectoral diversification
Challenges and Opportunities
3
• Deindustrialization• 300,000 manufacturing jobs lost since 1947
• Population• Great Migration leads to mass exodus
• Taxation, debt financing weigh more heavily on a shrinking tax base• Leads to a decline in services
• Great Recession hit Detroit especially hard
History
4
• Short Term: Make the City work again• Fiscal Solvency• Provision of essential services
• Medium Term: Redefine the City’s footprint• 142 sq. miles (227.2 sq. km.) is not sustainable
• Long Term: Education and population• Make Detroit a destination of choice
Current and Future Considerations
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• Goals: Restructure $18 billion in debt, and• Minimize reductions to pensioners• Preserve the City’s art collection• Leave the City with a sustainable fiscal base
• The Grand Bargain: $816 million• Coalition of government, philanthropies and City
institutions (DIA)
• Union approval is threshold indicator of voluntary or court-ordered resolution
Bankruptcy and Beyond
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• Essential City services• Security and first response• Lighting and sanitation• Regional transportation
• Remaking the City• Detroit Future City
• Education• From a school system to a system of schools
Policy Priorities
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• Industrial Policy• Focus on autos? Diversify? Or both?
• Legacy costs• How to manage public pensions
• Planning• Benchmark from best-in-class
• Accountability• Demand more from the leadership
Lessons for Other Cities