First Start-Up Bank Since 1970 Planned In Detroit, Thanks to

An effort at economic revival in downtown Detroit has spawned the city's first new bank since 1970.

Capitol Bancorp Ltd., a $650 million-asset company in Lansing, Mich., has filed a charter application with the state Financial Institutions Bureau to start Detroit Commerce Bank in the downtown business district.

If regulators approve, Detroit Commerce is expected to open next June.

Joseph D. Reid, Capitol Bancorp's chairman and chief executive, said the new bank should benefit from a wave of economic development, including plans to build two stadiums and three casinos. "In the past, Detroit has been a victim of some economic decline," he said, "but we believe Detroit is on an upswing and now is a good time to do business here."

Detroit Mayor Dennis Archer, a Democrat who was elected to a second term this fall, is promoting a business-friendly climate in the city by developing enterprise zones and attracting the stadium and casino projects. "The mayor's office has created an environment that is very receptive to new business," said Michael M. Moran, a banking analyst at Roney & Co. in Detroit.

The start-up bank would be a novelty in a city traditionally dominated by large regional banks like Comerica Inc. and First Chicago NBD Corp. Community banks typically have shied away from competing with these companies' branches in Detroit, said Felix L. Fliss, executive vice president of the Michigan Association of Community Bankers.

Mr. Reid said Detroit Commerce hopes to attract customers turned off by big bank mergers, such as the Comerica-Merchants Bank deal in 1992 and the First Chicago Corp.-NBD Bancorp. merger in 1995. That strategy has worked well at Capitol's nine other start-ups in Michigan.

Detroit Commerce would serve individuals and small businesses, customers that community banks find easiest to attract after a merger, Mr. Reid said. He said Capitol Bancorp is searching for a president and board of directors for Detroit Commerce.

Industry observers said they believe other community banks may follow Capitol's lead and enter the Detroit market. "Any time there's any economic activity, bankers come because that's what they're all about," said Mr. Fliss of the community bankers group.

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