Two weeks before Apple began selling its new Apple Watch, Shinola Detroit took out a full-page ad in the Wall Street Journal. Above a large photo of its analog watch, The Runwell, was the tag, “The Watch That’s Too Smart to Try and Be a Phone.” The Runwell starts at $550, the same price as the smaller-sized Apple Watch.
“Smart enough that you don’t need to charge it at night,” the cheeky ad continued below the image. “Smart enough that Version 1.0 won’t need to be replaced next year.”
Critics carp that Shinola’s watch innards are imported from Switzerland. But as Jesse Hicks pointed out on The Verge, “America hasn’t made watches in serious quantities since the late 1960s. There remain a few specialty outfits in the U.S., but the real action is still overseas, particularly in Switzerland.”
You have to start somewhere. And Shinola—which bought the rights to the name of the old shoe-polish company—actually does manufacture products in the city limits of Detroit. The fashionable watches range up to $1,650. Not that this ex-Michigander can afford one while living under the thumb of California taxes, but my favorite is the $1,000 Henry Ford Pocket Watch. The back reads, “BUILT IN DETROIT. U.S.A. Movement with Swiss Parts.” Contrast that with Apple products, almost all of which read, “Designed by Apple in California. Assembled in China.” Shinola Detroit also manufactures handmade leather goods, pet supplies, journals, and clothing.
Detroit’s expected resurgence in the 1970’s was epitomized by the construction of the 73-story Renaissance Center, which now hulks over the city skyline. A boondoggle from the beginning, in 1996 it was bought by GM for its world headquarters. The tall, center structure is a Marriott hotel. GM, once the world’s mightiest industrial company, went bankrupt in 2009 but has since made a comeback. Detroit itself—which once nearly nabbed the 1964 Olympics from Tokyo—went belly up in 2013. Its current population, 689,000, is two thirds of its peak in 1950, when it was dubbed the Paris of the West.
What’s happening with Shinola and dozens of other companies is the opposite of the top-down attempts to renew Detroit. “The bust of 2007 became Detroit’s boom,” Karen De Coster recently told me; a CPA in Detroit, she chronicles the city’s resurgence on her website, Detroit: From Rust to Riches. “While most regional markets in the U.S. tanked and opportunity evaporated,” she said, “Detroit, at about that time, became a center of opportunity because of the availability and affordability of real estate and, just generally, space, whether residential, retail, or commercial. Combine that with the low cost of living, as compared with other urban chic areas, and there existed an environment that was ripe for taking risks because of the potential return on investment.
“In spite of the coast-to-coast recession and ensuing uncertainty regarding this country’s economic prospects, the core of the city center, as well as many of the city’s historic neighborhoods, have been experiencing an economic revitalization driven by private investment, philanthropy, and perseverance on the part of communities that are reshaping their existence through hard work, hope, and an ample supply of faith and effort.”
Crime remains an obvious problem. But De Coster insists that is being dealt with: “The dissolution of the scandalous Kwame Kilpatrick mayoral regime, combined with a new mayor and a creditable police chief, served as a crucial turning point for the aforementioned risk-takers to take a chance once again on this city by dropping their dollars into the economy.”
After Kilpatrick resigned in 2008 and was imprisoned, he was replaced by Kenneth Cockrel, Jr., the president of the city council. Cockrel was defeated in 2009 by Dave Bing, a star of the Detroit Pistons in the 1970’s. Bing was succeeded in 2014 by Mike Duggan, the first white mayor since 1973 in the now 83-percent black city.
“I will rarely say this about any politician, but I love Duggan,” De Coster said. “He is a brilliant business visionary and manager, having brought Detroit Medical Center from near death to respectability and profitability” before entering politics.
Shortly after police chief James Craig took office in 2013, he nearly became the victim of a carjacking in his police cruiser. “As soon as I saw the suspect running to my car, I accelerated out of harm’s way,” he recalled.
In 2014, he said more guns in the hands of honest citizens “could be a deterrence to violent crime,” and “good Americans are armed.” That upset the gun-controllers. Chief Craig retorted, “Given what I saw coming into the door here in Detroit, the fact that the city has been [touted] as one of the most violent cities in America . . . we still have incident after incident where individuals like elderly people get dragged out of their cars at gunpoint.”
De Coster said Craig is changing the mentality of residents toward criminals, “But it will take a lot of time, even for him, to develop a strategy for bringing the criminal element under control.”
With the evaporation of city services, private security has been a growing industry. As early as 2009 Time reported, “With a police force decimated by budget woes, the Motor City’s middle-class enclaves are hiring their own to fight rising crime.”
Writing at the leftist Huffington Post in 2014, Heather Ann Thompson complained that these private security firms protect only the rich, who “save some money by hiring a company like the Threat Management Center in Detroit rather than paying Detroit Police officers a unionized wage.” But a significant reason why Detroit went bankrupt was that the city couldn’t sustain its high public-safety compensation, especially for lavish pensions. That fact was detailed in Emergency Manager Kevyn Orr’s 2013, pre-bankruptcy report on the city’s finances. The report asserted that, without bankruptcy, 65 percent of city spending soon would go to pensions and retiree medical benefits.
Detroit’s liberal welfare policies, like those of so many other areas of America, have helped to destroy families by replacing fathers with welfare checks. Detroit’s illegitimacy rate is an incredible 85 percent. By contrast, according to a 1904 article in the Journal of the American Medical Association, in 1900, at the beginning of Michigan’s rise to industrial preeminence, illegitimate births accounted for just 322 of 43,699 births in the entire state—less than one percent.
There’s no way the current Detroit business resurgence could take place without private security—which goes not only to the “rich” but to the middle class, the source of those businesses.
The city’s resurgence has also brought charges of gentrification, with whites and Asians supposedly driving out poor blacks. But Threat Management Center is headed by a black man, Dale Brown, who saw the need of everyday Detroiters for security, and provided it. And the business news site Financial Juneteenth (named after a holiday celebrating the abolition of slavery) criticized the media for doing
little to acknowledge the role black residents have played in the city’s effort to rebuild from years of decay and neglect. . . . With more than 32,000 black business owners in Detroit, it is not hard to find a voice to represent the black people who have been living and working in Detroit for years and who are now playing major roles in the city’s redevelopment.
If liberals wish to attack gentrification, they should look to their beloved Washington, D.C., and San Francisco, where high median home prices really are driving out blacks. In Detroit, one can still can buy a home for $10,000.
As conservatives have long maintained, a sane society is rooted in the land. After tens of thousands of homes and commercial buildings were cleared out in the 1970’s, flora and fauna not seen in decades began flourishing in Detroit. Small farmers soon arrived, often flouting city ordinances.
Last December, Entrepreneur reported that,
With an estimated 20 square miles of vacant land, Detroit’s abandoned lots are roughly the size of Manhattan according to the Detroit Future City Report. Detroit has an estimated 40,000 blighted properties needing to be cleared. The city allows residents to get an easy start at urban farming with the sale of side lots for only $100 . . . through the Land Bank.
The Detroit farming boom coincided with the rise of organic farming. Entrepreneur quoted “urban farmer” Noah Link, who moved back to his native Michigan in 2010 and started a farm. “There is definitely opportunity for urban agriculture businesses to grow in Detroit,” he said. “Next year we’ll operate a weekly onsite cafe to serve meals based around [sic] our own organic produce.”
After years of “gray market” existence, farmers in 2013 finally pushed into law the Urban Agriculture Amendments to the city’s zoning code, easing and simplifying farming regulations. Farmers commonly hawk their goods at the bustling Eastern Market, which I went to with my parents and grandparents in the 1960’s.
The Detroit art scene is now one of the most vibrant in the country, according to the January issue of Vulture, a New York-based magazine, which compared Motown to “Soho in the 1970s”:
After 19 years in Brooklyn, Galapagos Art Space is moving to Detroit, where you can still buy a romantically cast-off industrial building for cheap, just like you used to be able to do in the gritty old New York, before it turned into a polished bauble of global capitalism and everyone in the world decided they wanted to live here.
Painter James Collins told Vulture,
We like Detroit and all the people we’ve gotten to know here and we’re sticking around to see where things go. The city seems to be picking up momentum in regards to turning things around. The art scene seems to be picking up as well. I meet new artists all the time. A few have come from New York recently.
Shinola epitomizes the rise of Detroit’s small businesses. Big businesses also are expanding. The best ad in the 2014 Super Bowl was “Imported From Detroit,” by Chrysler, narrated by Clint Eastwood. Reflecting on the tough times faced by all Americans, he intoned, “The people of Detroit know a little something about this. They almost lost everything. But we all pulled together. Now Motor City is fighting again.”
The Chrysler Headquarters and Technology Center is located in the suburb of Auburn; and the company now is a division of what in 2014 became Fiat Chrysler Automobiles, headquartered no longer in Italy but in London, with a legal domicile in Amsterdam. It’s hard to avoid globalization. But Chrysler’s Jefferson North Assembly Plant expanded in 2011. It operates 24 hours per day and employs 4,600 workers churning out Jeep Cherokees.
Quicken Loans is the country’s second-largest mortgage lender and, according to the New York Times, its largest online lender. In 2010 Chairman Dan Gilbert consolidated the company’s several offices in the suburbs into the Compuware World Headquarters building in his native city. Compuware Corp. itself had moved to Detroit in 2003 from Farmington Hills.
A sign of Detroit’s resurgence is the arrival of Chinese land speculators. They have already bought up large swaths of California. Now, according to an NBC News report in November 2014,
Bankrupt Detroit’s thousands of empty buildings are being flogged at rock-bottom prices—and Chinese investors are answering the siren call of unbeatable deals. With family homes regularly selling for around $10,000, the beleaguered Motor City is now the number-four destination for Chinese housing investors in the U.S.
Asked about this development, De Coster cautioned, “Mostly, I dismiss these rumors until I see significant evidence of these actions.”
Standing in the way of Detroit’s future growth is the city’s government bureaucracy. Jarrett Skorup, a policy analyst at the Mackinac Center and the author of several policy papers on Detroit, warned me that, “While the bankruptcy has helped take care of many of the fiscal issues for the city, Detroit’s overbearing regulatory environment remains.” For example, the city still charges $1,800 for a valet driver’s license, $223 to be an auctioneer, and $400 to plop an awning on a building. And “starting a (legal) food business in Detroit is likely harder than anywhere else in the nation.”
The top city income tax is 2.4 percent for residents and 1.2 percent for nonresidents who work there, an extraction few Michigan cities charge; that’s on top of the state income-tax rate (4.25 percent). So the city combined rate is as high as 6.65 percent. De Coster points out that, although the city income tax hurts, Detroit’s tax rate is still lower than that of many big cities. New York City’s top combined state and city income-tax rate is 12.7 percent. In California, the whole state pays a 13.3 percent top rate—and middle-class taxpayers earning as little as $55,000 per year suffer a 9.3 percent gouging.
Skorup said that, to keep its resurgence going, Motown especially needs to give up its habit of going for “big, flashy projects backed by large amounts of public dollars. Whether it’s stadium subsidies, special corporate deals, film projects, or light rail—the city keeps going for the next big thing. Detroit needs to get back to the basics—lower taxes and less regulation—so the government can focus on important things like keeping its fiscal house in order and providing public safety.”
To borrow from an old blues song, was Detroit down so low it only could go up? No, De Coster insisted: “The combination of grassroots city boosters and promoters, Mayor Duggan, Chief Craig, and risk-taking entrepreneurs has taken a city from the brink of bankruptcy to a major attraction for high-level visionaries. This upward glide was all because of the effort and commitment of people rather than a predetermined fate.”
Detroit still has many problems. But its motto tells the story. Coined by Fr. Gabriel Richard, a French Catholic priest, after the city burned down in 1805, it reads, Speramus meliora; resurget cineribus: “We hope for better things; it will arise from the ashes.”
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