The New York Times published a fascinating piece on a billionaire's investment in a two-square-mile area of downtown Detroit. My guess is that Dan Gilbert, worth $3.5 billion, will be a lot richer in a few years as a result of his massive and growing real estate holdings in the Motor City. Gilbert, the founder of Quicken Loans, moved 7,600 employees downtown and has renovated buildings with 80 startup and small companies. An MIT professor, Brent Ryan, doesn't believe Detroit's downtown can revive in the face of a shrinking regional economy, but we disagree. It's true that downtowns in growing regions will be generally stronger, but the lure of downtown is so strong now that it will overcome the regional factor. Central Detroit has too many assets — great historic architecture, world-class cultural institutions, medical and academic assets, jobs — to not grow in value given today's demand for urban living. Much of the rest of Detroit, however, will likely languish for a long time.
The concept of investing (other people's) money in order to make money, especially when pushed by experts with no skin in the game, is not one that local governments should be pursuing. We need a new model.
“Never before have we seen such crowds downtown,” says Jason Caudle, deputy city manager, of the 30,000 people who attended a Holloween and Harvest festival on the new downtown boulevard in Lancaster, California. The nine-block project, costing $11.5 million, has so far attracted $130 million in private investment and generated $273 million in economic output, according to an article in the January-February 2013 issue of Better! Cities & Towns. The street is designed with a Spanish "ramblas," which puts the public space at the center of the street, an unusual design that has worked well for this Southern California city.