21 Aug 2013

Detroit: bankrupt, but not without hope?

Detroit: the US city turned failed state, where even the priceless art collection could be up for sale. But there is hope too, with signs of new development and jobs – a contrast to talk of despair.

Detroit vandalised streets (getty)

Kevyn Orr has had to apologise. The man tasked with turning around the fortunes of bankrupt Detroit managed to insult the city and its residents, by appearing to call them “dumb, lazy, happy and rich”.

No matter that, as he explained, he was trying to make a figurative statement about complacency rather than being literal about its people. That’s not how it went down. “I apologize to the extent anyone was offended”, Mr Orr offered. “Let’s get by this.”

The comments appeared in an article published by the Wall Street Journal, where the new general manager of Detroit was criticising the way that many people just expected a good pension and health care, without worrying about who would bear the cost.

It provoked a general outcry, and calls for him to resign: calls that were not silenced by his apology. The Rev Wendell Anthony, president of Detroit’s branch of the NAACP, could barely contain his outrage.

You don’t have to go so low to rise so high. Rev Wendell Anthony, Detroit NAACP

“Many people with less than a high school education helped build this country. It tears me apart when the apologist says he is offended because the people he offended were offended”, he declared. “I would say to him, you don’t have to go so low to rise so high.”

Potential plans to sell off the city’s treasured art collection have not gone down well with locals, either. The Detroit Institute of Art is considered one of America’s finest museums, with a total worth of some $4bn.

Christies has now been tasked with appraising some of the pieces in a collection which includes works by Van Gogh, Rembrandt, Matisse and Diego Rivera. The museum is co-operating, for now, but has warned it could take legal action to block any sale.

The art, it says, is held in a charitable trust. It “cannot be sold as part of a bankruptcy proceeding.” As for Kevyn Orr’s efforts to rebuild the city, “(We) would point out that he undercuts that core goal by jeopardizing Detroit’s most important cultural institutions.”

Several counties have now threatened to stop distributing the levy from a property tax if any art is sold off: other protestors have posted rogue ‘For Sale’ signs around the building, declaring “Motor City – going out of business”.

Motor City – going out of business?

The art institute is a rare jewel in a city without many glimmers of hope. The white flight which began after the riots of 1967 tore the economic heart from its centre and quickly turned into a vicious cycle. Anyone who could get out, did. Detroit was not a place where you stayed.

The half mile long “8 mile wall” which was built in the 1940s to separate whites from blacks is still there, no longer a physical barricade but a living scar, a testament to the city’s enduring racial divide, which has turned Detroit into a virtual ghetto.

Geographically, it is the size of Manhattan, Boston and San Francisco combined, yet its declining population has now sunk to just 700,000. Vast areas of the centre lie vacant, abandoned.

Almost half the city’s street lights are broken: try calling the police and you’ll be waiting for almost an hour – five times the national average. This is the badlands. This is not what a thriving urban centre looks like.

From badlands to hipster scene

Windsor Star reporter Claire Brownell, who has been blogging her way through seven days in different parts of Detroit, has discovered a glimmer of hope amid the shadows of those vacant lots.

Some areas are finally being gentrified, with chic loft apartments springing up in Midtown and Corktown. Rents are going up, businesses are moving in, led by the online mortgage firm Quicken Loans, which has set up a venture capital unit and a new business incubator for IT start-ups.

Quicken Loans boss Dan Gilbert has spent $1bn buying up and restoring a host of buildings in the desolated downtown, encouraging other firms to follow his lead.

Fast Company reports that another venture, the New Economy Initiative, has brought ten foundations together with a $100m budget, to nurture new entrepreneurs and “accelerate the transition of the economy” through its young creatives.

Keep within that handful of up-and-coming streets, and you’ll find echoes of Brooklyn in the hipster craft breweries and artisanal coffee shops. There is even a branch of the upmarket grocery store, Whole Foods Market, which launched in a blitz of publicity and live-blogging which excited some locals.

There’s another side to the city, and it’s about hope and determination. Mark Strong, film actor

Inside the cool urban grit of those coffee shops, though, as the Windsor Star discovered: “No-one looks over 40. Almost everyone is lit by the glow of a MacBook.” Such is the face of the new pioneers, the e-generation which is driving the future.

The British actor Mark Strong, in the city to film a US version of the BBC mini-series Low Winter Sun, says everyone told him Detroit was a dangerous and difficult place to be.

But, he told the Free Press: “There is another side of the city, and it’s about hope and determination. I think that needs to be told as much as anything.”

The entrepreneur John Hope Bryant, who founded the non profit Operation Hope, aims to keep at risk communities out of poverty, including more than $1.5bn in private capital to some of America’s poorest neighbourhoods.

Welcome to the new frontier

He says that Detroit can achieve a renaissance: one driven not by cars, but by computers. The city’s problem, he says, was that it became mired in inertia and complacency.

“It forgot the magic that made it successful in the first place.. risk averse managers replaced (those) who actively drove risks in the name of progress”.

If the city siezes this chance to reimagine itself, to start over, he wrote, then bankruptcy need not be a death sentence, after all.

Clearly it will take more than a few hipster coffee joints to restore America’s lost prosperity. Still more, to ensure that opportunity finds its way to the impoverished black population that makes up roughly 90 per cent of the city.

As a real alternative to the high-tech treasure trove of Silicon Valley, well, Detroit has a way to go before it recaptures the success of its once-glittering past. But at least, on this evidence, and bankruptcy notwithstanding, they are making a start.

After all, if they can make it here, they can make it anywhere.

Felicity Spector writes about US affairs for Channel 4 News