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Tue September 18, 2012
Commentary: Bringing cities back
Everybody running a business or a government knows they can make painful spending cuts that may balance the budget.
But you can’t cut your way to prosperity. You have to attract new growth and new investment, and the trillion-dollar question is: How?
The other day I got a note from Fred Leeb, who spent a little over a year as Emergency Financial Manager in Pontiac until the middle of 2010. He started thinking a lot about this problem when he was running Pontiac. Leeb was a natural choice for the job; he was a recognized expert in turning troubled nonprofit businesses around. While he was in Pontiac, he managed to balance the budget and lead the city to an upgraded bond rating.
Eventually, he got tired of fighting with local politicians, and returned to the private sector. But while in Pontiac, he had a dream he never got to see become reality.
He wanted to see the government turn Oakland County’s capital city into a demonstration laboratory. He had this vision of bringing a hundred of the nation’s top turnaround experts to Pontiac, and giving them a ten-year assignment to reinvent the economy.
Leeb called his concept BIG -- for Business Innovation and Growth. He never did manage to interest the government in his program. But he’s been thinking about this ever since.
He’s now concluded that it would be virtually impossible to bring enough taxpaying new businesses and residents to any troubled city, if you focus on getting them one at a time.
There will always be too many better options -- especially since cities like Detroit and Pontiac cannot provide the kind of services and retail shopping upscale residents are going to want.
The chicken-and-egg dilemma is that they can’t provide quality of life services until they get enough residents who can pay for them -- but the residents are unlikely to come unless the services are already there.
Since leaving the pressure of running Pontiac day-to-day, Fred Leeb has been doing more research and is more convinced than ever that he is on to something. He notes that Quicken Loans’ Dan Gilbert moved nearly 2,000 employees to Detroit to help build the critical mass needed to revitalize downtown.
On a smaller scale, Cornell University and Technion, an Israeli technological institute, are plunging hundreds of millions into an attempt to transform a section of New York City’s Roosevelt Island. Mayor Michael Bloomberg believes this may generate up to $23-billion in economic activity over the next thirty years.
The other day, Leeb noted approvingly, former NBC news anchor Tom Brokaw joined those saying that what’s needed is a national jobs program, one on the scale of the Marshall plan that helped rebuild Europe after World War II.
Fred Leeb hopes that if President Obama is reelected, he will turn his attention to such a plan, possibly with the money saved from winding down the wars in the Middle East.
There are those who say that given the deficit, America can’t possibly afford to do anything like a huge jobs program. Leeb is anything but a spendthrift. But when he looks at Pontiac or Detroit, he thinks that the real question may be: How can we afford not to?
Jack Lessenberry is Michigan Radio’s political analyst. Views expressed in the essays by Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.