A packed house at the Detroit Athletic Club Thursday heard several Detroit business leaders describe the future of Michigan’s largest city. And while there was plenty of grousing about the past, there was also optimism for the future.
Quicken Loans founder and CEO Dan Gilbert said he believes Detroit will be “the story of the nation in the next five to 10 years” for its entrepreneurial comeback, “if we can get out of our own way.” He said all that’s necessary is “capital, reasonable taxation, getting the bureaucrats out of the way.”
Gilbert a vibrant city center is vital to attracting more companies and more investment to Detroit.
“You have to have a strong, vibrant downtown… because, if you don’t have it… this technology, Internet, web-focused thing has to have a central core and an urban environment where companies are talking to each other, deal-making with each other and other companies are sprouting from them. And it can happen very quickly,” he said.
Gilbert predicted that within that time period, Detroit “will have several hundred entrepreneurial Web-based companies up and down Woodward Avenue. We’ll have an auto industry that’s come back competitive. We’ll have light rail.”
Gilbert is also the founder of Bizdom U, an entrepreneurial training center in the city that has so far launched 11 technology-based businesses in Detroit. Bizdom U is accepting applications through June 3 for fall training. More at http://www.bizdom.com/.
Gilbert said whether or not Detroit gets a state-appointed emergency financial manager is irrelevant to this comeback. He called it “a matter of what kind of Band-Aid do you put on, the Snoopy one or the Charlie Brown one.”
Detroit Regional Chamber CEO Sandy Baruah backed deep change in the area’s economic development efforts, pointing out that “this state has been on a downward economic trend not for the last 10 years but for the last 30 years, so if we want different results, we have to do things radically differently. We’re not going to get different results by changing things on the margin.”
Michael Finney, new CEO of the Michigan Economic Development Corp., said capital remains a problem. He described the problems of Detroit’s Avalon Bakery in getting expansion capital. Gilbert responded by saying the bakery should talk to another of his ventures, Detroit Venture Partners LLC, a venture capital fund he started last year with serial Web entrepreneur Josh Linkner and private equity veteran Brian Hermelin.
Panelists slammed attorney Geoffrey Feiger’s proposal to turn Detroit into a tourist destination by legalizing marijuana and prostitution.
“That is not the solution to our problems,” said Finney.
George Jackson, president and CEO of the Detroit Economic Development Corp., joked that it would “take urban farming to a new level, and other panelists weren’t willing to discuss the proposal at all.
During a discussion of pro sports teams — Gilbert owns the NBA’s Cleveland Cavaliers — Gilbert provoked groans by pointing out that “Detroit doesn’t have an NBA team, hopefully some day they will get one,” a reference to the Pistons’ suburban arena. Gilbert said only two of the NBA’s 29 teams — Detroit and Sacremento — play outside their city’s center.
David Egner, CEO of the Hudson-Webber Foundation, said the city must take advantage of the influx of young people, which he said are “now flooding in” to Detroit. And Jackson reminded those in attendance that we are all ambassadors for Detroit and the region.
After the program, Gilbert said he wasn’t sure exactly how Gov. Rick Snyder’s tax policy proposals would affect his business. “All aspects of it would affect us differently,” he said. But he said moving from the Michigan Business Tax to a straight profits tax is “probably a smart thing. If a business knows that they could be taxed whether or not they make a profit in Michigan, but would only be taxed if they made a profit someplace else, could make a difference” in their location decision.
Gilbert said it’s a shame that the company Groupon, founded in part by two Metro Detroiters, chose to locate their headquarters in Chicago. “They have 7,000 employees now in three years. And it won’t be just Groupon the booms in Chicago. They’re creating technology corridor and district around Groupon,” he said.
With a budget deficit and the looming threat of a state takeover, the city has a host of challenges — but Ray Johnson, chairman of the board of the Neighborhood Service Organization, told WWJ he’s optimistic about Detroit’s future.
“One thing I do know is this: the power of the spirit of faith and love and hope and caring and hard work and persistance… I know that that will be able to meet all those challenges,” Johnson said.
Johnson said while he’s pleased with some the work of Mayor Dave Bing, he’d like to see more of a team effort in terms of rebuilding Detroit.
“I think, in many areas, there are areas where we want to continue to see this moving forward. I believe that there are some things, in terms of a collaboratives spirit, in terms of a high performance team, that we have to engage everyone, and then move swiftly to be decisive on these issues,” he said.
Source: WWJ Newsradio 95