Why Bankruptcy May Be the Best Thing for Detroit

  • 25 Jul 2013
  • by
  • Architecture News
M@dison Building, a tech hub in . Image via Inc.com

While the rest of the world scoffs at Detroit’s recent announcement of bankruptcy (using it as an opportunity to bemoan how far the city – and the country – has fallen since its golden Motown days), many Detroiters themselves are embracing the move as a long overdue turning point.

Like Las Vegas, undergoing an urban patronage from Zappos CEO Tony Hsieh, Detroit has similarly been the focus of its own CEO: native-Detroiter and Quicken founder Dan Gilbert. By channeling over $1 billion dollars into the city, and inspiring others to follow suit, Gilbert is helping Detroit attract young, tech-savvy entrepreneurs. Throw in the lure of cheap land/rental rates, and it’s no wonder the city’s is host to a burgeoning tech scene.

The only thing that’s been getting in these techies’ way – is the city itself. Which is why many are hopeful that Detroit’s bankruptcy is just the beginning.

More after the break…

Detroit’s tech-emergence has come about hand in hand with an (in-process) urban revitalization. In the midst of dissolving public infrastructure and massive foreclosure (about a quarter of all homes are abandoned), the private sector has become Detroit’s only beacon of hope.

One of the greatest symbols of Detroit’s burgeoning tech renaissance is the M@dison Building: once a movie theater, now the heart and 50,000-square-foot home for about 300 entrepreneurs, investors, and developers (including Twitter). Quicken’s Gilbert has also contributed greatly, not just buying and renovating office towers, but also identifying underused infrastructure, most recently offering to take on and adapt an “unsightly and over-budget jail.”

As a result, hundreds of college grads are going to Detroit to “land higher-impact roles [...] than they might find at comparable companies in larger urban tech hubs such as San Francisco, Chicago, or New York.” And they’re meeting with considerable success.

In fact, in the words of FastCompany reporter Chuck Salter, who’s been fastidiously reporting on Detroit’s fall/rise for the last few years, the greatest “threat to their progress” is the strapped city itself, plagued with mismanagement, corruption, and multi-million dollar debt.

So, according to Salter, Detroit’s bankruptcy is a necessary “pivot”; as in business, “If something fundamental isn’t working–the business model, the core technology–you make a dramatic change, despite the risk and short-term pain. It’s a gambit for the long-term survival of the enterprise.”

For more on Detroit, follow Salter’s excellent coverage at FastCompany

Cite: Quirk, Vanessa. "Why Bankruptcy May Be the Best Thing for Detroit" 25 Jul 2013. ArchDaily. Accessed 23 May 2015. <http://www.archdaily.com/?p=405859>
  • Steve

    Capitalists fixing a problem caused by over a half century of almost 100% Democrat (socialist) governmental rule over Detroit. That’s the story in a nutshell.

  • James MD

    A city isn’t a business. The emergency manager concept is unconstitutional as the people of Detroit aren’t democratically represented by the decision. Just because a couple of Facebook wannabees think corporate fascism is a better way to run a city, that doesn’t make it the American way. This is corporate fascism as a model for urban redevelopment, and any architect supporting it is on the wrong side of democracy on this issue. The city’s art collection is being raided by corporatists for pete’s sake, along with everything else of value. Anyone who uses business as a model for government so literally is trying to steal something from your community, bet on it – and that goes for architects who write articles like this too. Government exists largely to counterbalance the power of business (especially the tech industry) – it shouldn’t emulate it or gov’t becomes the very thing it’s meant to protect us against: corporatism.

    • Dave

      You raise an interesting issue here about the community. A village or a small town can be ONE community but one big town, is it ONE community or a collection of communities? Does it even resemble a community or is it just a place to get a job?

      As for the administration model, well it depends. If the yuppies get enough leverage in the city you could say it’s democratic because that type of administration would be the “will of the people”. Not the will of ALL the people but the majority or the most influential.

    • jimmuh

      So, JamesMD; you clearly have a better solution than capitalism……WHAT IS IT? BTW: unusual explanation of why we have government…..

      • James MD

        I missed the part where the Constitution mentions our “capitalist form of government” (ie there is no such thing on the planet, except maybe in Somalia where they have pure libertarianism – maybe you can move there and see how you like it). It’s sad how little understanding or respect corporatists have for even our corrupted form of democracy. In terms of economic systems, social democracies provide the best model, a balance between socialism and capitalism – ie a brand of capitalism that’s sufficiently regulated to prevent the rich from exploiting everyone else and creating a permanent aristocracy (which is what we’ve become). Obviously since the rich are stealing Detroit’s artwork much like the fascists did during WWII, we don’t have such a healthy system.

  • Michael Eskridge

    The real danger is the possible selling off the city’s cultural assets IE school public parks services & utilites, parks and art work.

  • Kajuete

    I hope Detroit tech-companies prove to be different than their counterparts in San Francisco and Silicon Valley. Tax avoidance schemes, rising property prices, the Google bus … All issues that made a lot of locals quite angry.

  • Susan Patel

    It’s not that it is the best for Detroit but that it is the only viable option considering their situation. Hope they can get back up though.