Detroit faces state takeover threat

A declining tax base has left Detroit in a deep fiscal hole and at risk of a state takeover.

By Chris Isidore@CNNMoneyApril 4, 2012: 5:36 PM

NEW YORK (CNNMoney) — It’s crunch time for Detroit.

City and state officials are facing a Thursday deadline to save the city from the threat of looming financial insolvency or a takeover of city government by Michigan.

Fierce opposition from unions — in a city that remains a bastion of labor power — has so far stymied efforts to pass a rescue package.

A deal backed by Mayor Dave Bing and Michigan Gov. Rick Snyder, a Republican, would grant the city the power to void contracts and slash costs but not provide state funding or loans to bail the city out of its financial problems.

Without city council agreement on that deal, Snyder can by law appoint an “emergency manager” who will assume the powers of the mayor and council to run day-to-day operations. He has until Thursday to take such action.

The city council is under pressure from the public and city unions to reject the deal with the state. At the same time, it would lose its powers if Snyder goes ahead and names an emergency manager.

The council was meeting again Wednesday. Earlier in the week, the council moved to double the city’s corporate income tax to 2% as a way to raise badly-needed revenue.

Cool new cars

Years of decline in population and businesses and a shrinking of the tax base have pushed Detroit into a deep financial hole despite a recent resurgence in the U.S. auto industry.

Without more cost cutting, the city won’t be able to pay its bills come June. An estimate in January, the most recently available, was that the city would be down to $20.9 million in the bank by the end of this week.

An emergency manager would have authority to void contracts with both unions and vendors. He or she could also sell off various city assets, from the water department to valuable art in the city’s museum.

As the debates, negotiations and lawsuits raged this week, they did so without Bing, who was recently released from the hospital after serious intestinal surgery and won’t return to work for two weeks. Both Bing and Snyder say they want to avoid a state takeover, which in itself could be the first step toward the largest municipal bankruptcy in the nation’s history.

While Detroit’s own finances continue to struggle, the U.S. automakers based in or near the city have enjoyed a financial resurgence.

General Motors (GM, Fortune 500) reported a record profit in 2011. And a pick-up in auto sales and hiring has led to a nearly two-point drop in Michigan’s unemployment over the last 12 months, the biggest improvement of any state.

First Published: April 4, 2012: 2:27 PM ET

http://money.cnn.com/2012/04/04/news/economy/detroit-state-takeover/index.htm?hpt=hp_c1

Advertisements

Start-up City, USA

Detroit isn’t a blank canvas. Instead, it’s a complex scene that has everything an entrepreneur needs to start his dream company, Josh Linkner writes.

Image

INSIDE/OUTSIDE: A project by The Detroit Institute of Arts that takes its collection to the streets as part of a celebration of its 125th anniversary.

“Detroit is a blank canvas.”

I cringe every time I hear this phrase, even though it’s used by people who mean well.

To say something that references “emptiness” regarding a city founded in 1701 is both unfair and inaccurate, as it implies that there’s nothing here—or worse—that there’s nothing worth talking about here.

By suggesting this, the speaker disregards momentum building around the Detroit 2.0 movement, which is in full swing. Dan Gilbert, my partner in Detroit Venture Partners, has purchased nearly three million square feet of commercial real estate, setting off a trigger reaction for private investment downtown, where sports, business, technology, and the arts converge. Over the next few years, we’ll witness the positive effects of our city’s revitalization from within, as fallout from this tipping point of innovation.

Rather than refer to Detroit as a blank canvas, perhaps it makes more sense to call it an unfinished one. There are already splatters of paint on the board demonstrating promise, as well as blunders that need to be fixed. However, there is still enough white space left for someone to come in and make a mark, which will leave a lasting impression on the painting. People innovating and using creativity to win are making some of the most impactful brush strokes; the end result is a more beautiful painting for us all to enjoy.

Entrepreneurship requires you to get in the trenches. It’s true that Detroit’s trenches are more war-torn than others you might find. That being said, there’s a strong case to be made for starting a business here, stemming precisely from these long-standing challenges and problems. The following elements are like buckets of paint, a toolkit of brushes, or even a paint-by-number guide: they make it easier for someone to add to the canvas.

Talent: This area is chock full of people who are hungry for an opportunity. New graduates make up the first camp—those born and bred in the region are educated in a local network of world-class universities, leaving ready to enter the business world. The current market has forced many of these graduates to launch their careers elsewhere, causing a “brain drain,” but this trend can be stopped by providing jobs locally. Unfortunately for the economy, there’s a large group of professionals who are out of work. Engineers, laborers, techies, sales associates, managers, consultants and a whole host of others now need jobs, many of whom have years of business experience under their belt. For a savvy business owner, this second group provides a capable workforce. Why pay more to fight over average talent when you could have your choice of hirable, less expensive A-listers?

Space: With more than 130 square miles and too many vacancies to count within its borders, Detroit boasts land. Lots of it. No other major city would have empty skyscrapers available for purchase, let alone for pennies on the square foot. Similarly, no other major city would have vacant lots, begging for parks, gardens and public art pieces, let alone with herds of new downtown residents awaiting them. Just as a brush needs a painter to bring it into action, so too does this land require someone to make use of it.

“Small” Town: Although Detroit is one of the largest American cities, it retains an attitude of a “big city, small town.” When someone starts a business in New York or Los Angeles, it’s easy to get lost in the shuffle. Here, new businesses stand out and we take notice, welcoming newbies with open arms and celebrating their entrepreneurial fire. Because of this, it’s often easier to get face time with head honchos here than it would be elsewhere, which makes your business’s goals more quickly attainable.

Something Bigger: It’s rare to be in the right place at the right time, but when you are, the sparks just seem to ignite out of thin air. At this moment, Detroit seems to be “right,” as it’s experiencing a truly fresh start through revitalization. It’s not just an up-and-coming downtown center that’s drawing talent; it’s the chance to help change the landscape of a region that is in dire need of it and the opportunity to make a long-lasting impact. Being a part of something bigger than oneself is special and adds another layer of importance to anything your company does. Instill a sense of purpose—and pride—in your employees by being a part of something meaningful. Put passion first, and dollars will follow.

Yes, Detroit is in a sense wide open, awaiting those who want to take advantage of opportunities for growth. Yes, the city has much room for improvement in a variety of areas, many of which have long been ignored. No, that doesn’t mean it’s a blank canvas, and it definitely doesn’t mean we should refer to it as such. Instead, we need to realize we have the once-in-a-lifetime chance to make a noticeable brushstroke on a canvas whose final version affects us all. Let’s seize it.

Josh Linkner is a five-time entrepreneur, venture capitalist, professor, and New York Times best-selling author of Disciplined Dreaming—A Proven System to Drive Breakthrough Creativity.  You can read more at JoshLinkner.com. @JoshLinkner

http://www.inc.com/hot-spots-detroit/josh-linkner/detroit-is-start-up-city-usa.html

Retooling the Manufacturing Community through Technology

This article was sent to me by a fellow student, and I feel it explains exactly how I hope this project will aid in recovering the economy of Detroit, and ultimately revive the city into a new digitally driven manufacturing hub.

In the article Bruce Katz states “Economy shaping is going to require a new kind of placemaking.  Placemaking has been focused around quality places and liveable places, which is very important to attract and retain talented workers.  But the urban planning field has been too narrowly focused on placemaking.”

The goal of my project is not to create some new great place for people to come and go as they please. The project is designed to engage people in a fundamentally different way. It is going to draw them in not through the beauty of the architecture, but through the substance it provides. The innovation, the creativity, the aura are the essential elements that keep people coming back. The idea is not to create a place that is flashy and is the talk of the town for a couple of years until the next big thing comes along. The idea is to create something that truly progresses the norm. Something that transcends current comprehension and opens up new doors that no one knows exists.

For this reason, the project is located in building that currently exist, buildings that have been neglected for thirty years.  The project adapts these building to create spaces and architecture that does more than provide a place for people to come.  It provides a place for people to learn, to collaborate, to adapt and to transcend themselves into new discoveries.

The future of Detroit does not lie in new casinos or sporting complexes.  The future of Detroit lies within its people and their ability to adapt to the ever changing world.  The future of Detroit lies within its economy and its ability to adapt to new technologies and industries.  The future of Detroit lies within its people to create something truly transcending.

Bruce Katz: Better Economic Structure Will Save the City

Image

“Monument to Joe Louis,” Detroit’s iconic sculpture. Photo: Dogs New Clothes/Flickr

Bruce Katz sees the future of our cities a little differently than his fellow urbanists.

Katz, the founding director of the Brookings Metropolitan Policy Program, believes optimizing economic structure, not urban form, is the key to revitalizing depressed cities and strengthening thriving ones. It’s a departure from the thinking of many colleagues, who believe revitalization based on pretty buildings and the service sector will attract business.

The way Katz sees it, cities have gotten their forms down pretty well. Most of them have done a good job optimizing density, emphasizing greenspace and generally making things more attractive. But economic development has too often focused on what Katz calls “Starbucks and stadia.”

There is a legitimate case for service-sector communities, he argues, but it is far wiser to embrace tech, manufacturing and exports. This would bring more shared and sustainable growth as cities shift from consumption- and service-reliant economies toward economies built on innovation and production.

Wired.com: You’re suggesting cities take a fundamentally different approach to urban development than has been the norm. Who’s actually doing it?

Bruce Katz: New York. If you look at New York right now, what Mayor [Michael] Bloomberg focused on for the last decade was building stadiums for use in the Olympics. That has changed to focus on the applied sciences and attract Cornell [University] and other institutions to build and diversify New York’s economy from the service and financial sectors of the economy.

Wired.com: What other cities are embracing this model?

Katz: In other cities and regions, such as northeast Ohio, they are focused on retooling the industrial sector for the green economy because they are a powerhouse for manufacturing. This builds on their history, including the automotive industry. Seattle has the potential to be a hub of big, clean information technology due to the firms already in the region, such as Microsoft.

Wired.com: Has the recession played a role in this?

Katz: Since the recession cities are now moving away from the service and real estate sectors and starting to look toward the tradable economy for sustained growth. These are the wealth-generating sectors that drive everything else. Without them you do not have a functioning retail or housing sector. We are trying to work with cities on identifying their strengths and how they focus on moving their economies toward this model of development.

Wired.com: During the last 30 years cities have focused on creating places and on the urban form. Is what you’re suggesting so different an approach?

Katz: Yes, but urban form is critical to this. Economy shaping is going require a new kind of placemaking. Placemaking has been focused around quality places and liveable places, which is very important to attract and retain talented workers. But the urban planning field has been too narrowly focused on placemaking.

Wired.com: Meaning?

Katz: You can’t just focus on housing and transit in the core of a city, you need to focus on the physical needs of manufacturing, development and the needs that go along with them. That will clearly have a huge effect not only on the city but regional level.

Wired.com: How so?

Katz: On the city level, it will create what we call innovation districts. If you take the major research institutions and tech clusters that are being created, how do you take them and arrange them in a purposeful way with mixed use housing and amenities that attract talent but work for industry? Boston is doing this and Barcelona is clearly doing this. San Francisco and Detroit are doing this also. These cities are creating places that let all of these sectors work in a derivative way and form starting at the economic level. By doing this the form follows these sectors that drive wealth.

Wired.com: San Francisco and Detroit are two vastly different cities in two different regions, culturally and economically, especially with regard to tech…

Katz: I am actually very bullish on Detroit. If you look at the Woodward corridor downtown to midtown, what you see is the growth of some tech-oriented industries with Quicken Loans and Compuware and Henry Ford Medical and Wayne State. What you have are some major institutions being the platform of both residential growth, which is happening, but also the growth of business incubators. I think the core of Detroit, with focused public and private sector investment, could be very different. You also have the added bonus of seeing Canada from Detroit. Having our largest trading partner bordering the city is a big advantage, and one that hasn’t been exploited. The growth from that in the way that we see in Europe across national lines could really change how Detroit grows in the future.

Wired.com: Not to dwell on Detroit, but do you think it could be the next tech city?

Katz: Detroit has the possibility to do that, yes. Detroit also has some real problems that need to be addressed, but with what is going on there the entire core could be an innovation district.

Wired.com: What needs to happen for cities like Detroit to rebound?

Katz: The cities that will flourish are the ones that are on the vanguard of policy. Historically, New York and Chicago have the ability to adapt and flourish because large cities are essentially co-governed. Private capital and institutions work with city governments to create physical forms and policies that perpetuate this type of growth.

Wired.com: But can Detroit become Silicon Valley?

Katz:The tech we should focus on is not just Facebook tech or Google tech but rather manufacturing tech, green tech. If we don’t focus on this we will see ourselves in 50 years having lost our economic advantage and loose our place in the world. This is well within our grasp. We have the ability to be the leaders if we just focus our attention. This is not just about advanced telecommunications. That it is part of it. But most of our new patents come form manufacturing. We need to stay on the forefront of this.

Wired.com: You’ve mentioned things like public investment, smarter policy and the need for more government involvement. Given the current political climate, is this possible? Can we even have the discussion?

Katz: If you really want smart cities, you do not want government to get of the way, you want it to get into the game. You can really integrate technology across places and spaces throughout cities if the government is working with the tech sector to make it happen. It takes local political leaders and private capital to make it happen. The federal government is very disconnected from this. The cities are the engines of the economy. It is not Ben Bernanke who will do this, but cities supporting their key industries.

http://www.wired.com/autopia/2012/02/bruce-katz/

VISIT DETROIT – Day Four

Day Four – Urban Ruins

I spent the day driving around the city on a mission to find urban ruins. I knew of a few, and during my traveling I found more than I could imagine. The city is truly FILLED with old abandoned, sometimes damaged buildings that have been rotting for years. Some of the most famous ruins such as The Fisher Body Plant, The Packard Plant, and Michigan Central Station are easy to find and are well known. What I did not expect was to find so many other buildings, from multi-family housing, to fire stations, to small shops. The abandonment just gives the city an eerie feeling.

| Insert Video |

I began to wonder what the city would look like if all of the abandoned and damaged buildings were torn down. What would the city fabric look like then? This sprawling city would be reduced to nothing more than a downtown area and satellite areas of neighborhoods and business. There was an article in the paper for the day that highlighted some of the public work changes that are occurring around the city. It noted that the city was going to begin to focus its efforts in neighborhoods that had potential for a successful future. The city will only spend money “where it will do the most good.” This statement foreshadows a bleak future for neighborhoods that are in long term decline. A map accompanied the article which highlighted neighborhoods and their potential. This map illustrates how the city could be transformed if neighborhoods in decline were removed. The downtown area would be on an island and most of the population would be situated along the river bank and northern areas of the city. A greenbelt could be situated around the downtown area, providing much needed long term greenspace for the city.

| Insert Neighborhood Map |

City finding a way to make Detroit Works actually work, http://www.freep.com/apps/pbcs.dll/article?AID=2012202190501

Why has the city held onto these buildings for so long? Why are there no requirements by the property owners to do something about a majority of these buildings? Is the issue neglect or just pure abandonment? If it is abandonment, why has it taken so long for the city to do something about the problem? I drove up to the Packard Plant and was amazed that I could just walk into the building. The building appears to be very unsafe, as parts of the building have collapsed, and others are showing extreme signs of decay. There was no fence around the building and it was literally trashed out. The ground was covered in debris, almost like a landfill. There were piles of tires in one corner, remnants of old burned up furniture in another and nothing worth anything was left in the building. Is it not the responsibility of the property owner to provide some sort of security on their site?

The shocking part of this trip is the history that sits behind many of these buildings. So many of the iconic buildings are directly tied to the automobile history of the city, and other than the original Ford Plant on Piquette Street, the remaining buildings sit in disarray and ruins. The Ford Piquette plant was recently restored and now has tours that run from April to November. Many of these buildings, including dozens in downtown are local, state and national treasures, but they sit with little to no attention.

The nightly news is pretty depressing, as it is mostly filled with reports of the downfall of the city. One report was about how the city ambulance fleet is in such poor shape that they are asking for donations from municipalities around the country. They want other cities to donate their older ambulances, ones they are not using or are looking to get rid of. The report began with an account of a women dying because the ambulance broke down on the way to get her and the backup unit did not make it in time. Watching the news while I have been in Detroit makes me fully aware that the city has no money, but that has not always been the case. Much of the abandonment has been going on for quite some time, but the recent economic downturn has exacerbated the issue. So why did the city wait until they were flat broke? What has the citizens tax dollars been used for over the last 30 years? Has it been used on endless efforts to build new ideas and provide typical and expensive urban public projects like the Detroit People Mover? This may be the largest example of how to not run a city, and why it is important to remember that a city cannot change its direction by just building a football stadium or putting in a public transit system that only serves a small population.

I have a friend who is from Detroit, but moved away about 4 years ago. He still visits the city as some of his family lives just north of Detroit, and he recounts that the city has been like this for some time. He noted on our trip while we drove around that he had not realized it had gotten this bad. On the other hand, his mother kept telling me that the city is not all that bad. She is very positive about the city and believes that there are pockets of good things happening. I want to agree with her, but after what I saw over the last few days, my reaction is semi-hearted. I personally feel that this is just about as bad as the city could get, and that it only has the potential to go up. I do believe that it is heading in a better direction that it has in quite some time, but it is going to take some time to make a big dent in the over 30 years of decline. It appears that Mayor David Bing has the right idea on what to do with the city. Although it may be tough to tear down so much of the city and its history, this may be the best opportunity for the city to start over. How many cities get this opportunity? Cities like Houston just keep building on top of itself. This is where I think the biggest potential lies with the city.

During the afternoon, I went to the Detroit Historical Museum just north of Wayne State University. The museum had on display much of the city’s history, most of which focused on the automobile industry and the early discovery and development of the city. There was a small section dedicated to the architecture of the city. This area highlighted the movement and development of the Big Three car manufacturers and architecture accompanying their movement. The city has a rich history and it was amazing seeing the pictures of the city in its hay-day and then driving up Woodward Avenue and seeing the stark difference of the city today. The city streets, like Woodward, were once bussing with activity and future, but today most residents opt for the highway which provides a quick in and out of city. This leaves streets like Woodward relatively empty and less traveled.

| Insert images of the city fabric over its history |

I learned of an organization by the Big Three automakers to collaborate on technological advancements. This effort is called USCAR (United States Council for Automotive Research) and they are partnered with Ford, GM and Chrysler to provide and promote advancements in automobile technology. At first glance, it is difficult to tell how successful this organization is and how integrated it is with advancing technologies in automobiles. It will take some more digging and research to determine the full extent of its involvement and contributions to the automobile industry.

USCAR, http://www.uscar.org/guest/index.php

PROGRAM

The goal of this project is to interlink or “stitch” back the city through a transformation of the automobile manufacturing industry. The city is like a quilt, with some patches in very poor shape and some doing quite well. These patches together form a quilt that is not functioning well. Some seams are loose, and are letting cold air in. Others do not have a strong connection to the patch next door, because either the stitches that hold them together are tattered and worn, or the patches do not complement each other. The quilt is bigger than just Detroit, it has stitches with the State of Michigan, the Rust Belt, and the greater planet as a whole. Once all of the stitches are working well with each other, the quilt can function properly.

The automobile industry in Detroit is tattered and needs a vision that will transcend it into the modern era. Automobiles of today are more about the looks, gas mileage and the gadgets in them than anything else. In the middle of the 19th century the automobile provided very little, mainly a way for transportation. Today, the automobile is becoming a mobile office and family entertainment center in addition to this mode of transportation that it has always provided. The automobile is more of a technological gadget than it ever has been. A greater number of electronic parts and instrumentation are jammed into automobiles every day, so much so that people who used to be able to work on their own vehicles are being forced to take them to a mechanic when they are having trouble. The auto mechanic is going to need an engineering degree in the future in order to work on these cars.

What is it going to take to pull Detroit out of the funk that the city has sustained over the last 40 years? Urban plans such as high speed rail, cultural museums, park space and the like have no chance of reviving the city’s pride and stopping the bleeding that is devastating the city’s urban core. Not to mention that the city has no money and is having to cut essential surfaces like police, fire and community services. What the city needs is a flood of ideas and innovation. This can be achieved through advancing the city into the digital age. The automobile manufacturing industry needs an infusion of digital technology, one that brings innovative advancement to the American car makers. These advancements go beyond the things we know today, they push the envelope and bring new creative blood to the design table. So how does this Technology Think Tank work?

In some instances, this type of process is often called a business incubator. Similar to a business incubator, this process will aid in the ushering in of ideas and creative mind-set that is necessary to maintain a business in today’s society. The only difference is that this incubation process focuses on the advancement of technology, which in turn should aid the progress of the business influenced by the process. For Detroit, the biggest downfall of the city has been the one-trick pony aspect of the manufacturing industry. Although the automobile industry has brought so much prosperity to the city, it has been the single issue with the exodus the city has experienced in recent years. The technology think tank will cultivate new ideas, which will immediately help the automobile industry, as well as usher in new industries to the city. This will provide an opportunity for diversification that is much needed in this region of the country.

How does this project work? The project starts with the introduction of a mobile think tank that is located in a degraded area of the city. The mobile structure is designed to quickly establish a presence in the city. During the time this mobile structure is established, a community committee establishes a consortium of members and stakeholders from critical organizations. This kick starts the process of creativity and gets people excited and invested into the process. Any and all interested people are invited to be involved in this process.

Following the establishment of the mobile technology laboratory, a permanent Technology Education Center is established that will provide long term support to the community through education, community outreach and collaborative support to industry. This collaborative effort provides much needed technological education to residents and cultivates a breeding ground for future innovators and entrepreneurs. The construction of the TEC utilizes vacant or abandoned space located around the mobile laboratory. The mobile laboratory and the TEC work hand-in-hand and feed off of each other. The presence of construction invigorates the team and in turn the think tank provides insight into the type of programs and education that is provided at the Technology Education Center.

This initial investment spent on TEC aids in the long-term reinvestment of the manufacturing industry, which in turn will aid in restoring the city fabric and reviving residential communities. Like an electronic circuit, all of these elements depend on each other and are interconnected through a network of necessary pieces such as education, funding, and inspiration.

What is the goal of the Technology Education Center?  The Technology Education Center is the lifeblood of this project. The TEC is designed to engage a collaborative effort between industry and education. The TEC is like a cooperative, educating employees of industry who can then provide innovation to the industry as a whole. This education gives more arsenal to those who work in Detroit who can then provide new industrial possibilities outside of the automobile industry. Detroit then becomes something more than just the Motor City. The intent is not to draw the city away from its roots, but rather revive and transcend the city beyond automobiles.

In his book “Triumph of the City”, Edward Glaesner says, “If Detroit and places like it are ever going to come back, they will do so by embracing the virtues of the great pre- and postindustrial cities: competition, connection, and human capital. The Rust belt will be reborn only if it can break from its recent past, which has left it with a vast housing stock for which there is little demand, a single major industry that is dominated by a few major players, and problematic local politics. Beneath these cities’ recent history lies an instructive older story of connection and creativity, which provide the basis for reinvention. To understand Detroit’s predicament and its potential, we must compare the city’s great and tragic history with the story of other cities, like New York, that have successfully weathered industrial decline.”

So much of the industry of Detroit is based on analog processes that have been perfected for decades. The education of digital technologies will infuse the city with new opportunities. The education at the TEC is meant to digitally transcend the manufacturing community, most importantly its people, into a fabrication community.

The community becomes less focused on the direct manufacturing of the vehicles and turns its attention to fabrication of parts and electronics that supplement the automobile industry. These parts can be put into American vehicles as well as exported to foreign auto makers, thus expanding the market. At the same time, these fabrication communities can cultivate new ideas that other industries are begging for. All of this provides the diverse community the city needs, provides a larger number of higher paying jobs to its residents, and prevents the elimination of the city through economic downturns.

Who are the partners?

The lifeblood of the project may be the TEC, but the success is solely dependent on the educational and industry partners that provide the resources and dedication to the process. The Technology Education Center is meant to be a collaborative effort of education and industry. Together the sharing of knowledge, resources and innovation can flow back and forth, each providing opportunities for the other, as well as advancing the education of the people of Detroit.

Detroit is blessed with education providers within its city limits as well as some just outside the city. Wayne State University is located just north of downtown. Detroit Mercy has a campus in the north region of the city as well as a satellite building located downtown. The University of Michigan has a campus located in Dearborn, just north of the Ford manufacturing plants. Additionally, there are opportunities for community colleges and high schools to get involved as the process grows.

Initial industry investments include Ford, General Motors, and Chrysler, all of which call Detroit home. Additional industry involvement will expand with the introduction of new technologies and interest in the Detroit region. Other manufacturing companies located outside of the city could include Dow Chemical, Whirlpool, Steelcase and Herman Miller.

Educate the People

EDUCATION IN AMERICA

In his book “Triumph of the City,” Edward Glaeser states,“While it may be wrong to attribute too much of these places’ problems to politics, political mismanagement was often a feature of Rust Belt decline.  Perhaps the most common error was thinking that these cities could build their way back to success with housing projects, grandiose office towers, or fanciful high-tech transit systems.  Those mistakes came out of the all-too-common error of confusing a city, which is really a mass of connected humanity, with its structures.

Reviving these cities requires shedding the old industrial model completely, like a snake soughing off its skin.  When a city reinvents itself successfully, the metamorphosis is often so complete that we forget that the place was once an industrial powerhouse.  As late as the 1950s, New York’s garment industry was the nation’s largest manufacturing cluster.  It employed 50 percent more workers than the auto industry did in Detroit.  America’s Industrial Revolution practically began in greater Boston, but now nobody associates smokestacks with that city.  These places have reinvented themselves by returning to their old, preindustrial roots of commerce, skills, and entrepreneurial innovation.

If Detroit and places like it are ever going to come back, they will do so by embracing the virtues of the great pre- and postindustrial cities: competition, connection, and human capital.  The Rust belt will be reborn only if it can break from its recent past, which has left it with a vast housing stock for which there is little demand, a single major industry that is dominated by a few major players, and problematic local politics.  Beneath these cities’ recent history lies an instructive older story of connection and creativity, which provide the basis for reinvention.  To understand Detroit’s predicament and its potential, we must compare the city’s great and tragic history with the story of other cities, like New York, that have successfully weathered industrial decline.”