×

The cause and effect of economic development

Gentry

If one thing could be done to stimulate the economic vitality of our downtown, what would it be? Which projects come to mind?

Could it be redevelopment of the DPI site? The restoration of a prominent downtown building? The introduction of a new employer to our community that would add new, good-paying jobs? The addition of new housing units?

The former Director of Planning & Development for the City of Detroit, Antoine Bryant, was asked a similar question about the revitalization that has happened in Detroit in the article “What Downtown Gets Right About Downtown Recovery.” From the national attention the City received while hosting the NFL Draft in 2024 to the rankings residents give about their improved experience downtown, Detroit is getting a lot of things right that have led to its revitalization after decades of decline. If they could point to one thing that transformed their downtown, what would it be?

The answer surprised me. It wasn’t one project or one individual’s big, bold dream. Their response? Invest in people’s comfort and safety and experience of the downtown. Make small investments, consistently, into things like sidewalks, lighting, and landscaping that make people feel safe and comfortable and want to be there. “2024 was a real turning point, a culmination of all the hard work that preceded the moment. Our guiding principal was always designing for a city, not for an event,” Bryant commented. These comments were echoed by the Downtown Detroit Partnership about the article: “Great downtowns don’t emerge from a single project– they grow from consistent leadership and execution.”

What a reversed understanding of the cause-and-effect of economic development that we are usually told. The singular, bold, transformative projects and investments– from Little Caesar’s arena to the redevelopment of the riverfront to the Hudson site to the NFL draft– these are culminations of economic development effort, not the cause.

This understanding even contrasts the state’s frequent approach. If we invest in large, singular projects with big promises, then smaller investments will fill in the gaps. A new battery plant will bring hundreds of new jobs to a declining area. These new residents will create the demand for housing, which someone will rise to fill. These new employees will have money to spend, and people will start new restaurants and shops to fill their needs. The tax base of the area will increase, resulting in better schools, parks, and roads. This understanding paints a compelling picture that justifies state resources like tax breaks and financial incentives to go towards such projects.

But reality paints a different picture. The Mackinaw Center for Public Policy recently shared data on the effects of business subsidies under Governor Whitmer’s administration. The title: “$1.8 billion for 608 jobs.” The findings: Many of the incentives issued to these large, sweeping economic development projects underdelivered on their promises. Of all the deals, only 608 jobs came to fruition out of the 20,595 jobs promised. Two created vacant fields. Two projects were cancelled altogether. Two others merely supported ongoing operations at existing auto plants without expanding their operations.

In closing, the author comments, “Rigorous evaluations of the effects on economic growth of targeted fiscal favors for select businesses show little impact. The state’s economic trends come from the decisions made by millions of people responding to their own opportunities.”

Millions of people who make what may seem like “small” investments and business choices that can be transformative to the community in which they live. A new business on one corner that adds several new jobs. A renovated building that adds to the tax base and eliminates blight. New landscaping to improve the experience at a park. Taken together, these investments can transform one’s experience and perception of a place. When state resources are allocated to these types of projects, true economic development happens.

I think Detroit’s got it right. Take small bets and make small investments, consistently. Make people feel safe when they’re walking downtown. Invest in lighting, signage, sidewalks, cleanliness, and landscaping. Give people a reason to come downtown for reasons large and small; not every weekend needs to be the NFL draft. Focus on consolidating your entertainment, food, beverage, and cultural opportunities into a walkable area, so that it becomes a “downtown for everyone,” in the words of Bryant.

These small bets add up over time to create a district that can culminate in these large-scale investments. And as Detroit can demonstrate, with consistent leadership and execution on promises, great cities can be rebuilt.

Newsletter

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *
   

Starting at $3.50/week.

Subscribe Today