David L. Littman, senior vice president and chief economist for Comerica Bank, says, “In terms of business activity, things seem to have stabilized over the last three years and have begun a slow comeback, especially when you look at the valuation of property and tax returns.” To make this determination, Comerica uses a “comeback index” that consists of 23 variables including neighborhood property values, income tax and the number of permits issued for business and residential development. According to Littman, all signs point to an economic upswing: “We’ve turned the corner; the numbers are now moving higher.”
The dependency index is another indicator of a city’s well-being. This index reveals the percentage of the employed population that is on welfare and the total percentage of unemployment in the city. And that ratio is down. In fact, from 1993 to 1997, the unemployment rate has dropped by half, going from 13.6% to 7.8%. The average household income for Detroit has grown by 3%, from $34,710 in 1995 to $35,748 in 1996. The city ranks 11th in income for the nation.
Tyrone Miller, director of Detroit’s Board of Zoning Appeals, offers the recent surge in business and home building requests as evidence of the improved development climate in the city. “We’re really getting a lot of activity in the area of new single-family housing in existing neighborhoods,” says Miller. “The combination of community organization and a private developer will bring 60 new homes, while the overall housing values in Detroit have increased by 30%.”
Market indicators suggest that Detroit is entering a period of potentially explosive growth. Within the greater downtown area, there are several million sq. ft. of office space, 15,000 housing units and an array of new retail and tourist facilities. A large part of the transformation is due to the highly anticipated creation of two new sports stadiums, three casinos and new hotels and entertainment centers.
Ground has been broken for the building of a new home for the Detroit Tigers baseball team and a new dome stadium for the return of the Lions football team, who’ve spent the past 28 years at the Silverdome in suburban Pontiac. The stadium projects represent a $505 million investment; the city will contribute $85 million, with the rest of the financing coming from private investors.
Not too far from the stadium area is the riverfront site for three gambling casinos and hotels to be undertaken by two gaming heavyweights, MGM Grand Hotel and Atwater Circus Circus. The third casino bid was awarded to the local partnership of Greektown and the Chippewa Indian tribe. The development and operation of the casinos and the stadiums are expected to bring millions-if not billions–to the city in taxes, create thousands of jobs and ignite tourism.
Despite the seemingly bright picture, the projects and Mayor Archer have drawn criticism from some who worry whether the black community–which makes up 76% of the city’s population-will reap any benefits. One outspoken critic has been Detroit businessman and BE 100s CEO Don H. Barden