16. PEACE, JUSTICE AND STRONG INSTITUTIONS

Can Detroit provide insight into how St. Louis can grow again? – KSDK.com

Written by Amanda

Few American cities understand the struggles of St. Louis better than Detroit.

The Motor City reached its heyday in the 1950s and 1960s as the post-World War II industrial economy roared to new heights, bringing middle-class jobs and wages along with it. 

The decades that followed brought crime and corruption, decline and despair. 

That iconic city that got America where we were going eventually broke down, went bankrupt and, much like St. Louis, needed more than a minor tune-up.

Some say the Rams settlement could offer the funding the region needs to make a comeback similar to Detroit.

5 On Your Side is committing as a news organization to finding solutions. We are committed to searching for ideas to turn our region around, and we are starting in Detroit.

Chapter 1: Economic lessons in Detroit

The city’s economic engine needed a total rebuild.

“Detroit was broke,” said journalist and author John Gallagher. “When I got here in 1987, working for the Detroit Free Press. The city was still on its long … decline.”

Gallagher studied urban development in shrinking cities for more than three decades. He said when the American auto industry sputtered and stalled, the Motor City was dragged down with it.

“Detroit hit rock bottom. And that’s when you lose two-thirds of the population and 90% of the jobs. And you have 100,000 vacant lots in the city because homes have been abandoned and burned out,” he said. “You are rock bottom.”

There was nowhere else to go but up. 

“I picked the right time to become mayor, there’s no doubt about that,” Mike Duggan chuckled after a Feb. 1 press conference.

Mayor Duggan’s office recently touted a new achievement for the city’s unemployment rate, which dropped to 6.8% in November 2022. The height of the city’s unemployment reached 38% in 2020 during the worst stretch of the pandemic. The new milestone marks the first time in 22 years that the jobless rate in the city limits fell below 7%.

Monthly jobs reports from the Bureau of Labor Statistics show the city and the surrounding metropolitan region began a slow, steady economic recovery after the precipitous drop-off during the decline of the automotive industry. After losing more than 334,000 jobs between the fall of 2005 and the spring of 2011, the Detroit region gained all of those lost jobs back and then some, adding more than 383,000 jobs before the pandemic hit. Despite that more recent setback, the resilient city has nearly recovered all of the jobs it lost during the coronavirus. 

Everywhere we went in Detroit, people were buzzing about the city’s revival. 

“What Detroit been through? Shoot,” Big Keith the barber said. “The city is definitely getting back after everything it’s been through.” 

He said he recently moved back to his hometown after moving away when times get tough decades ago. 

Kaytea Moreno Elst, who runs a block club in her community, noticed a similar trend all over the city

“More people moving in,” she said. “You’re seeing people born and raised here go to Texas or New York … they’re coming back.”

“I think other cities had stuff to teach Detroit,” Gallagher said. “I think Detroit has a lot to teach other cities.”

One location stands above the rest as a symbol of revitalization on the city’s skyline: Detroit’s famous Michigan Central train station shuttered decades ago. 

After the last train left the station, the massive building fell into ruin and disrepair. Graffiti covered the premises and attracted photographers hoping to capture images of urban decay. 

The iconic building will soon shed its banner of blight and become the epicenter of a new wave of transportation technology. The site’s CEO, Josh Sirefman, walked the premises to tease a grand reveal in the near future. 

This all exists because of an incredible investment from Ford,” he told us. 

The site will feature testing spaces for self-driving cars, and other innovative technologies around e-bikes, e-scooters, electric vehicle charging stations, and drones that promise to deliver packages in remote, hard-to-reach areas. 

Sirefman projects the site itself will bring thousands of new jobs to the city, and the economic activity around the area will generate thousands of other indirect job opportunities. 

“The interest we see in the market is incredible,” he said. “I think there’s a real recognition that mobility is something that requires everybody to really apply new solutions into the real world.”

While Ford and other large corporations hope to see return on their investments in the city, other smaller businesses are benefiting from a menu of workforce training and grant programs flowing through the mayor’s office.

Just a few blocks away from Michigan Central, a new startup enjoys support from Motor City Match, a grant program with backing from the Ford Foundation, JPMorgan Chase & Co., the Knight Foundation, The Kresge Foundation, the W.K. Kellogg Foundation — all nonprofit arms of some of the oldest corporate mainstays in the area.

Tanya Saldivar-Ali, who runs Detroit Future Ops with her husband Louis Ali, gave us a tour of an old home in Detroit’s Mexicantown neighborhood. They plan to convert the Queen Anne-style house in into a design-build green hub.

“This hub will actually be an incubator,” Saldivar-Ali said. 

She and her husband won a $65,000 Motor City Match grant to complete construction on their workforce development center, where they intend to help contractors learn the business side of building things.

“That will push us across the finish line,” she said after pandemic-induced inflation derailed their construction project and delayed their launch.

Ford, Kellogg, Chase and their foundations all kicked in grant funds distributed through a program called Motor City Match, which operates with joint funding from the U.S. Department of Housing and Urban Development. City hall launched the program in 2015 to help businesses put down roots in Detroit.

Some of the other grants were awarded to a community grocer, a fabrics and upholstery shop, a youth start-up and entrepreneurial education center, and an assisted living center for low-income elderly adults. 

A recent audit scrutinized the grant program and questioned how effective the investments really were. Duggan’s office was undeterred by the criticism, and argued the grant funds often went to businesses that were still in their infancy. 

“We now have 216 Motor City Match businesses open that would not have been open,” Duggan told a crowd of local media and business owners. Statistics from his office claim the program has provided $11.4 million in cash grants, leveraging a total investment of $61.6 million in local companies. More than four in five of those companies are minority-owned, and nearly three in four are women-owned. 

While fiscal watchdogs will continue to monitor and measure the impact of the program on paper, the business owners on the receiving end of the grant funds say the cash infusion sends a larger message to the startup community about their role in the city’s resurgence. 

“It’s exciting, but it’s also shocking,” Saldivar-Ali said. “Growing up here all of our lives, I’m 47, and to see this kind of comeback? This is the first time in my lifetime. Older generations have seen Detroit in it’s glory, but for me, it’s the first time we’re ever seeing it.”

A similar grant went to the owners of The Red Hook, a coffee shop that offers high-speed internet alongside pastries and craft lattes.

“It’s hard to start a small business in any city,” owner Sandi Heaselgrave said. “As a first-time small business owner, banks were really hesitant to give us a sizeable loan.”

The $45,000 grant helped them expedite the launch of another location. She recently reopened the doors of her coffeeshop in a riverfront store and plans to expand into another site in the weeks ahead.

“It means we can open in two months instead of a year,” Heaselgrave said.

Aides to Mayor Duggan acknowledge that writing grants for small businesses isn’t exactly revolutionary. Neither are the workforce training or education scholarship programs championed by their staff. But constant effort to bring corporate partners to the table, collaboration with nonprofits, and public outreach to people in need, slowly started capturing people’s attention and shifting the narrative around the city’s decline. 

“Bottom line: results,” Deputy Mayor Todd Bettison said.

He said other cities should take note of Detroit’s incremental approach and take care to pick up small wins wherever they can find them, because sooner or later, they start to stack up into an undeniable mosaic of momentum. 

“City government should do what city government does, and do it well,” he said. “And then the business community will come in and they will do what they do well.”

“As an investor, I’m not going to move my company, or I’m not going to invest in a place that looks like it has no future,” Bettison said. “Detroit has a future. It’s bright, and we’re chipping away, chipping away, chipping away, and collectively working together; and St. Louis can do the same thing. It’s about really coming together, it’s showing those wins. And so you can’t do everything all at once. It’s impossible.”

Bettison said they deployed American Rescue Plan funds to expand programs that already showed promise, including direct payments to people who showed up to do the work.

The city is using American Rescue Plan funds to pay high school dropouts $200 weekly ‘Learn to Earn’ scholarships to finish their high school diploma.

Duggan tapped 18 local nonprofits to reach out and recruit long-term unemployed workers to learn new skills. The ‘Jump Start Detroit’ program offers to pay workers up to $300 a month to get job training and helps connect them with area employers looking for workers. 

John Cromer heads TMI Detroit, one of the nonprofits working with troubled youth. He mentors Los Rell, a local musician, who produced a jingle to give the Jump Start program some extra publicity.  

The employment rate has dropped under 7% recently,” Los Rell said. “Just the whole spirit. You can just feel it.” 

Cromer said when Mayor Duggan heard the catchy tune about the workforce training program, he sent a copy to President Biden. The White House recently promoted the JumpStart program as a model for other cities to follow. 

“We’re an example of what’s possible,” Cromer said. 

Later this year, Detroit expects to add 1,200 jobs at an Amazon distribution center at the former state fairgrounds. Additionally, a new employment center will soon break ground, providing an additional 400 new jobs.

This story will be updated as the “Searching for Solutions” series continues.

Source: ksdk.com

About the author

Amanda

Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai