Entrepreneurs Change the Course for Detroit
After Detroit’s emergency manager, Keyvn Orr, was unable to broker a deal between the city’s bondholders and its pension funds, Detroit has officially become the largest city to file bankruptcy in US History. This crisis not only marks an all time low for the city of Detroit, but the fall of what used to be one of America’s most industrialized, profit booming cities is now referred to as the “used to be”, making Detroit “the most nostalgic place in America” (CNN).
With the steady decline of property value, there are homes that have sold as low as $100, making property values a mere $95 and homes as low as $5. There seems to be little hope that a city which stood only 60 years ago as one of the top cities in the US could ever bounce back.
The problem is that Detroit has been trying to resurrect itself by reinvigorating its long past success of “big business” through large industries like car manufacturing. Let’s face it. The possibility of resurrecting the city through one or two large companies probably won’t prove to be very successful. It’s going to take the banning together of a lot of smaller companies and corporations with a common vision and purpose to turn Detroit into a sustainable reality.
“Detroit needed to decrease its reliance on manufacturing,” says Ross Sanders, CEO of Bizdom U. It needs to transform into a “brain economy,” he adds, rooted in innovation and entrepreneurship.
In spite of serious decline, those who stay refuse to see the city as anything other than a plethora of opportunity. There is hope. With the extensive amount of open space, inexpensive rent, talented young professional and tax incentives, Detroit is ripe for the fresh and innovative thinking that drives new business.
Bizdom U, founded and funded by Quicken Loans CEO Dan Gilbert, is among the many organizations formed the past few years with the aim of diversifying and sustaining business in the region. Gilbert’s umbrella company, Rock Ventures, includes some 75 companies which now employ about 9,200 people in downtown Detroit. Gilbert stated shortly after Detroit officially filed bankruptcy, “We are all in. We are more committed than ever to Detroit and the opportunities downtown. Detroit’s best days are ahead.”
Bizdom U and the Kauffman Foundation have poured resources into training business owners how to sustain growth for the future, making resources available to the young professionals who make up most of Detroit’s new downtown residents.
Detroit’s Madison Building, which was built in 1917 — just four years after Henry Ford revolutionized manufacturing with the assembly line is now home to more than two dozen high-tech start-ups backed by two venture capital firms.
Some are choosing to live in the grandiose mansions of Grosse Pointe in order to be closer to the urban scene. The 365-acre river east development is a plan investing billions of dollars in a new mixed use residential, commercial, and retail space for downtown Detroit to serve the people where they work and live.
These young professional “won’t be the building blocks to the economy necessarily, but the mortar that holds them together,” said Dan Kincaid, executive director of a foundation-funded master-planning process known as Detroit Future City.
“The tipping point is here,” declared Jacob Cohen, vice president of Detroit Venture Partners. The firm, whose backers include Quicken Loans founder Dan Gilbert, has invested more than $11 million.
The plan to resurrect the city won’t be easy, but the few who brave the challenge won’t be stopped. “The entrepreneurs of Michigan are now staying in Detroit and they want to be part of this story,” Cohen said. The sum of a few could end up being the rudder that changes its course.