Detroit has always been a very industrious city. Industrious even before Henry Ford and the famous auto revolution that our city is known for.  Actually it was the fact that the city already was industrious that allowed Henry Ford to see the success that he did.  And if Detroit residents are wise, it will be that legacy of industry that returns Detroit to prominence.

People that count Detroit completely out based on current circumstances would make a tremendous mistake.  It would be a failure to recognize history.  Not just Detroit history, but world history and we don’t need to look far into world history at that.  

Berlin the capital city of Germany is a great example.  Berlin was destroyed as a result of the Allied Nations bombing runs during World War II.  Most of the cities buildings were bombed out, the infrastructure destroyed and over 125,000 of its citizens killed.  The city eventually became ground zero for the cold war.  Most people over the age of 27 remember President Reagan’s famous edict to tear down the Berlin wall.

The interesting thing is that 20 years after that statement Berlin came to be known as the culture capital of Europe with over 440 art galleries in the city today.  Even MTV has its European headquarters inside the city limits.  Economically the city has growth, close to 2 percent yearly despite a contracting economy overall in Germany.  

And Berlin seems to be just ramping up with droves of the youth from Eastern and Western Europe moving to the city for its nightlife, diverse atmosphere and universities.  The lesson of Berlin is that even though cities die; from war, from economic decline or simply growth elsewhere…they can come and often do come back.

Detroit is poised to make the same kind of comeback but much faster and with a much more dramatic effect.  Detroit’s return if done right can literally be the poster child for American development.  And with our cities natural resources such as its labor force, production facilities, salt mines and water ways we can supply goods to the rest of the world.  Here is a very simplified and brief synopsis of how.

1) Economic Development Corp

In order to get any substantive change done in the city of Detroit it will take money. Not just tax revenues but when i say money I mean systematically deployed investment capital and lot’s of it.  That isn’t a problem to fret about because it can be solved relatively easy.

Money can be raised and utilized by creating a City of Detroit Economic Development Fund.  The fund’s sole purpose would be to raise money for strategic development of the city and to be a social investment vehicle for Detroit citizens much like war bonds were during World War II.

The target funding level would be set at just over 2 billion dollars.  Funding would come from a myriad of sources.  40 percent can come from a diversified bank group, depending on borrowing costs this percentage can be adjusted up or down. 20 percent should come from churches, non-profits and corporations who could purchase bonds with a 20 year maturity in 10,000 dollar blocks.  The last 40 percent would come directly from citizens who could purchase 20 years bonds in 100 dollar blocks.  The fund should be well publicized and investments transparent.

The fund would only pay a nominal rate of return. But participation would be driven from the opportunity for individuals to participate in Detroit’s resurgence.

An advisory board of 5 governors appointed by the mayor would operate the fund.  The fund would invest primarily in commercial and residential real estate as well as green manufacturing and alternative energies.  The development fund is central to this plan and leads us to growth point number two.

2) City Geography & Services

Detroit has the one of the largest land masses for a metropolitan city.  In fact within the city limits you can fit Manhattan and San Francisco at the same time and still have land left over.  However unlike those cities who have a combined population of at least 7 million of people living inside them.  Detroit only has 700,000 plus thousand.

This creates a unique challenge for the city.  Tax revenues are much lower than other cities, yet Detroit city services (Education, Police, Fire, Trash) need to stretch a much longer distance.  Often this means that the city services aren’t sufficient for the area they cover.

However Detroit could use the economic development fund to strategically buy up properties in areas where population levels are lowest. The goal would be to tear those properties down and develop urban food and wind farms.  Imagine areas of Detroit that are currently vacant or severely damaged now generating enough wind energy for the city to use and sell…generating enough food to sell through out the city on Detroit Market Sunday’s.  As a side benefit Detroit’s real estate market would see an increase in home values from less inventory and increased activity.

The residents of those areas would be moved into more densely populated portions of the city, this would make it easier for city services to be concentrated in areas where they are most needed.

3) Manufacturing & Energy

Detroit has always been a manufacturing powerhouse.  Even before Henry Ford and the   assembly line.  In fact it was Detroit’s ability to manufacture carriages that made it possible to manufacture cars.  Without a labor force that knew how and facilities that could be used for auto manufacturing it may have been too expensive to make cars in Detroit and the great auto boom may have happened somewhere else.  Perhaps even Berlin after all Germany is where the car was born.

I believe we can use the same manufacturing power to make electric batteries as well as components for wind and water energy farms.  In fact because Detroit plants have capacity and its work force is highly skilled in manufacturing we can make those parts quicker, cheaper and with higher quality than many other places on earth.  But for this to work Detroit needs to move quickly to be the first.  Otherwise places in China or India could easily become the manufacturing centers for those types of components.

To speed the transformation the Economic Development Corporation would make strategic investments in corporations that focus on energy development providing a healthy rate of return to its investors.  The end result of this type of strategic investment is substantially lower unemployment, higher tax revenues, higher property values and an increase in the population.  Not to mention restoring pride to Detroit and the American economy for being first in the world economy 2.0.

4) Young People

Detroit in the last few years has been in the middle of what some have called a talent drain.  Let me explain.  Some of Detroit’s most talented young people left the city and state in many cases for opportunities to attend school or better jobs.  The unfortunate thing is that many of them don’t plan on coming back.

In order for Detroit to flourish we need those young people.  People who specifically are  under the age of 40, willing to build and have the resources to do so.  Young people who are educated, married or single, have disposable income and either extremely creative, highly educated or both.

Cities are almost always developed by young people who eventually marry and start families.  Additionally it is usually the consumption of young people that help fuel local economies as they are typically the ones with the highest disposable income.

The Detroit Economic Development Corporation can help attract these types of people through advertising and social media.  The local city government could sweeten the appeal by providing student loan forgiveness in full or in part for any person who lives inside the Detroit city limits for five or more years.

Advertising at top tear universities and graduate schools could also bolster the effort.  The residual benefits of a move like this are seemingly endless.  Improved night life and art culture to name just a few.

5) Economic Empowerment Zones

The idea of a designated area for commercial tax benefits is nothing new and in fact has been employed by the leadership of Detroit for years.  However in this plan the city would expand the programs by harmonizing all zones as corporate tax free for 10 years.  These zones would also be targeted around specific industries such as urban agriculture, alternative energy or electric propulsion.   Additionally, in each and every zone the city could use the Economic Development Fund to finance business incubators for the very same industries.

Doing this would attract a very specific industrial base to the city and as a result create manufacturing synergies similar to the ones that exist for auto manufacturing today.

In Conclusion:

The ideas that i am proposing are not terribly radical or even new, however enacted in harmony and in a bold way they can change Detroit for the better.  These ideas can serve as the blueprint for American economic development going into the next 10 to 20 years.

In fact if other cities in the so called “rust belt” enacted similar plans nationally  we could lower unemployment, increase our gross domestic product and reduce our trade deficits with other nations.

We also would see a decline in energy prices, less dependence on foreign oil and an improved quality of life for American workers.  Lastly we would re-establish The United States prominence as the manufacturing capital of the world.

It’s just a thought of an urban righteous hipster…hopefully someone is reading or listening… 

By: @waltward3

What do you think?