Grand plans by presidents, both Democrats and Republicans, fail in Detroit

During the Nixon years, Detroit’s business elite laid plans for the glittering Renaissance Center retail and office complex. The Ford and Carter administrations brought the People Mover, an elevated rail loop around downtown that hardly anybody rides today.

Other presidential administrations introduced enterprize zone tax breaks and empowerment zone development grants. President Obama promised to save the Motor City by saving the auto industry.

But none of it worked. Rather than becoming a showplace for the transformational power of urban policy, Detroit is remarkable mostly as a burial ground for good intentions — of both Democrats and Republicans.

Last month, Detroit became the largest city in U.S. history to file for bankruptcy, sobering evidence that decades of government and private-sector intervention was no match for decades of residential and business flight that eroded the city’s once ample tax base.

“It is as if the tide is going out and I take a fire hydrant and pump as much water on the beach as possible,” said Charles Ballard, a Michigan State University economist. “No matter how long I pump, there is still going to be more sand showing.”

The deceleration of the Motor City.

Still, political leaders kept pumping.

One reason was that the city symbolized that American era when blue-collar workers with high school educations, or less, could enjoy middle-class comforts as long as they were willing to work hard.

“Detroit has always had a special place in the American psychology,” said Henry G. Cisneros, who served as secretary of housing and urban development during Bill Clinton’s first term as president. Not only was Detroit the center of the automobile industry, but it was also a major destination for the vast migration of African Americans from the South in the first half of the 20th century, he said.

Detroit’s status made it an irresistible symbol for political leaders. For years, one sure sign that a politician was running for president was an appearance at the Detroit Economic Club.

“Part of it is, Detroit has always occupied such a place in American history, because it was in many ways where the American Century, from an industrial perspective, began,” said Chris Lehane, who was an aide to Al Gore when Gore was Clinton’s vice president. “It occupies a certain mystique, which is why what happened hits people so hard.”

Urban initiatives

Nobody has done an accounting of the money that has flowed to Detroit through the years in the name of urban renewal. But researchers note that the city has been a major recipient of federal money since the Model Cities program was launched as part of President Lyndon B. Johnson’s Great Society.

“Detroit has certainly seen its share of urban initiatives,” said Eric Scorsone, an economist and faculty member at Michigan State University.

Few have fared particularly well. The $500 million Renaissance Center, which was privately funded, has been derided as a fortress that is difficult to navigate and cuts off a key part of downtown from the Detroit River. It was sold to General Motors in 1996 for just $76 million. GM moved its headquarters there and invested heavily in renovations to make the space more inviting, but much of the retail space remains vacant.

Since beginning operation in 1987 — 12 years after a federal competition launched the project — the People Mover has stood out as an economic albatross. It circles downtown in a 2.9-mile loop, carrying a tiny fraction of the projected ridership and costing taxpayers millions of dollars a year in subsidies.

Other initiatives, including the $100 million empowerment zone — which offered tax breaks and other incentives to businesses — and grants to rebuild public housing on a more livable scale, have had mixed success.

Still, the money flowed, often because Detroit mayors forged tight relationships with Democratic presidents. “[Then-Philadelphia] Mayor Ed Rendell used to tease me miserably that every time he turned around, I was down in Washington getting money,” said Dennis W. Archer, who was mayor of Detroit from 1994 to 2001. “I’ll tell you: I worked hard to do that.”

Archer also pulled together public financing to construct new downtown stadiums for the Tigers, the city’s Major League Baseball team, and the Lions, its National Football League franchise.

At times, the efforts seemed to make a difference. Detroit made measurable strides during much of Archer’s tenure, as crime and poverty declined and the city’s alarming population loss slowed to its lowest rate in decades.

But that progress was not enough to alter the bigger picture of massive job losses in auto manufacturing, the industry that made Detroit famous. The downturn started in the 1950s, and it picked up speed in recent decades.

“The problems of Detroit fundamentally are the problems of a changing American manufacturing base,” Cisneros said.

Other cities, including Pittsburgh, which was once synonymous with steel, and Los Angeles, which grew with the aerospace and textile industries, were able to make the transition to other industries to one degree or another. But Detroit was not.

In 1978, Wayne County, which includes Detroit, was home to 256,000 auto industry jobs, according to the Center for Automotive Research. Now, there are an estimated 37,600 auto industry jobs in the county — a marked improvement from the nadir, just before the Obama administration’s auto industry bailouts in 2009, but far below the historic peak.

These days, the Motor City is home to two auto plants: a Chrysler factory that turns out Jeep Grand Cherokees and a General Motors plant that straddles the Detroit-Hamtramck border.

“The government help was too small to begin to make a dent in the major economic problems Detroit was facing,” said Thomas J. Sugrue, a Detroit native and an urban historian at the University of Pennsylvania.

Government jobs

As Detroit offered fewer auto-related jobs, government, at all levels, became one of the largest employment sectors, partially filling the void. But over the past quarter-century, the city’s workforce has been cut by more than half, and the number is likely to shrink further as Detroit reorganizes in bankruptcy.

Still, city government remains Detroit’s second-leading employer. Other major employers in Detroit include the federal government, two major hospitals and Quicken Loans/Rock Financial.

The national economic crisis found Detroit ripe for fiscal collapse. The city’s tax base had withered, and its population had dropped by more than 25 percent since 2000.

In the meantime, the city’s leadership fell into disarray under Archer’s successor, Kwame Kilpatrick, who took office in 2002 and resigned in 2008 after being convicted of corruption charges.

By the time Mayor Dave Bing took office in 2009, the city was reeling financially, and it was soon put under the control of a state-appointed emergency manager, Kevyn D. Orr. Notably, when Orr filed for bankruptcy, no prominent voices were heard calling for federal help.

“I think Detroit faced a tsunami of economic decline that I do not think any amount of urban renewal could address,” Scarsone said.

Karen Tumulty contributed to this report.

Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.

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