A recent whirlwind tour of what is right about Detroit showed the old and the new.
The old -- boarded up stores, empty lots, sagging houses. The new -- One Detroit Center, the Jefferson North Chrysler plant, the Victoria Park housing subdivision.
Detroit is working to fix its image as a dying auto town, a city still scarred by the 1967 race riots and a playground for arsonists every Halloween eve. Its leaders are playing a tough game of catch-up, one financed largely with new debt, after what at least one city official sees as almost two and a half decades of no action to attract or keep investment in the city.
One Detroit Center, a 50-story, granite-clad office building that is the lates addition to the city's downtown skyline, was the first stop on Mayor Coleman Young's media day tour on June 12. David McGinnis, a vice president of Hines Interests Limited Partnership, its developer, called the building "a tribute to a public-private cooperative effort."
Indeed, the building was built with the aid of $20 million of tax increment finance bonds sold by the city's Downtown Development Authority, according to Robert Spencer, president of the Detroit Economic Growth Corp., the city-created group charged with beefing up Detroit's commercial sector. But, then again, he said, almost every new project built in the city's downtown has some government money in it.
Without issuing bounds or providing other kinds of incentives, Mr. Spencer said there would be "zero" new development. It is a way for the city to be competitive with the suburbs and other cities, he added.
Mr. McGinnis even admitted that although his building is almost 100% leased, the tenants represent "very little new business" for the city.
"If you don't bring some new projects on line you just continue to lose," Mr. Spencer countered. "There wouldn't be anything downtown."
The tour was diverted to the city's budget, which was about $110 million short of money in the current fiscal year, according to Edward Rago, Detroit's budget director. But, he told reporters, that deficit will be funded in the $2.12 billion budget for the fiscal year that begins July 1.
He repeated the city's official mantra in the face of recent talk among Michigan officials that bankruptcy is lurking in Detroit's future. "the city is not bankrupt and is not going bankrupt," he said, adding. "We do have very serious problems in Detroit. Everyone is aware of that."
After lunch, it was on to the latest monument to Detroit's automotive heritage -- Chrysler Corp.'s Jefferson North Assembly Plant on the city's east side, which has been a home to auto production since 1907. The new plant produces hundreds of Jeep Grand Cherokee vehicles daily with an army of union workers and robots.
While 1.75 million squarefoot facility, which opened in January, cost Chrysler $1.2 billion, it also received a lot of city help. To buy the land and environmentally improve it, Detroit issued $130 million of limited tax bonds and $42 million of tax increment finance bonds and used $10 million of proceeds from a GO bond issue.
The city's new budget calls for refinancing the $126 million of outstanding limited tax bonds as GO bonds, if approved by voters in August. The chage would save about $12.6 million annually.
Chrysler officials crowed about the popularity of the Jeep and the quality of the work at the plant. But the auto industry overall is slumping. Auto plants are closing in Michigan and elsewhere. Tastes in cars change. Is Chrysler committed to keeping the Jefferson North plant open until the last of the city's bonds are paid?
"We have made no specific commitment of time," said Christopher Hosford, a Chrysler spokesman. "But it's a lot of money for us and if we don't use [the plant] it would be a billion dollars flushed down the toilet. We can't afford to do that."
The city's hope, according to Mr. Spencer, is that the newest plants will be the last to close.
"The greatest security lies in the value of the facility," he explained.
Not too far from the plant is a city-induced housing rebirth project, surrounded by a mixture of newer multifamily housing and older single-family homes.
Victoria Park is the first new sub-division of single-family homes to be built in the city in nearly four decades. Most of the 86 lost and 20 model homes are already sold. The city's plans call for a total of 157 homes. The modern houses, manicured lawns, and outside decks provide a suburban feeling.
Henry Hagood, the city's director of community and economic development, explained that Mayor Young wants to build housing in the city "block by block." And the mayor is putting the city's money behind the plan, using $14 million of GO bond proceeds over the last four years to help finance housing, Mr. Hagood said. For example, in Victoria Park, where the city was the developer, lots were made available to home builders for $1 each.
The aim, Mr. Hagood said, is for the city to hang on to its residents and the income tax dollars they generate.
Some of the praise for Victoria Park may have struck city officials as ironic. "You wouldn't think this was in Detroit," exclaimed one of the tour attendees.
Deputy Mayor Adam Shakoor took a more upbea tone at the dinner that capped the tour.
He acknowledged that Detroit does not have the best image. But he suggested that when reporters write about the place and its people, they remember the phoenix and recognize that the city is working hard to arise from its own ashes.
