Downtown Detroit rebounds while neighborhoods lag

DETROIT— The return of professional basketball to downtown Detroit adds another piece to the city’s fastpaced economic rebound two years out of bankruptcy, but it means little to John Iiolo if the city’s fortune stops short of his doorstep.

While downtown and Midtown are on the rise, his west-side neighborhood and several others have yet to bounce back from population loss, disinvestment and scores of foreclosures.

“Having the Pistons back downtown is going to attract a lot of business and going to bring more traffic downtown,” said the 50-year-old software designer, who’d like to see jobs populate along once-prominent business corridors that cut through Detroit neighborhoods. “If this is to be real opportunity, some of those businesses that would be downtown would have extended businesses here in the neighborhoods.”

The under-construction Little Caesars Arena, which also will house the Detroit Red Wings, is the centerpiece of a coming 50-block entertainment district in a part of downtown that’s already nearly at capacity with new residents and new businesses. The Pistons’ move next season from the Palace of Auburn Hills in the suburbs includes a component that guarantees Detroit residents will be hired to help build a basketball practice facility.

But Iiolo and others say the city is missing the kind of targeted spending that could reduce the number of impoverished residents—nearly 40 percent compared to about 15 percent of Americans overall—and raise the median income from $26,000, which is less than half of the national median income.

“The funding that used to be there to do the kind of rehabilitation seems to be drying up for neighborhoods or is being concentrated in other areas,” said Tom Goddeeris, the executive director of the Grandmont Rosedale Development Corp. which has purchased and renovated vacant houses in northwest Detroit to get them reoccupied.

Detroit is limited in what it can spend. It eliminated about $7 billion in debt during bankruptcy, which ended in December 2014, and a good portion of those savings has gone toward improving public safety, transportation and other services for residents. The city has had more than $128 million worth of federal help over past three years to Detroit to demolish thousands of vacant homes and buildings and eliminate other blight, and another $130 million also has been approved. Plus, Mayor Mike Duggan also is working through partnerships with banks, nonprofits and other organizations to improve the city’s housing stock and provide loans for people seeking to buy homes.

“They are tearing down a lot of houses, so I’ll give them credit for that,” said Darryl Norman, a 56-year-old auto mechanic who lives on the west side.

Downtown is the starting point for a city-wide turnaround, according to Eric Larson, who as the chief executive of the nonprofit Downtown Detroit Partnership is tasked with strengthening downtown though partnering with business, philanthropies and local government.

“The most important thing is that we, as a community, continue to recognize that we got in this condition over a long period of time,” Larson said. “We can’t fix everything all at once.”

The NBA still has to approve the Pistons’ relocation and formal agreements have to be finalized. About $34 million in taxpayer-backed bonds through the Downtown Development Authority will be used to upgrade the new arena for basketball; about $250 million in public bonds already have been issued to pay to build the arena.

Relocating the Pistons and building a new practice facility and corporate offices in Detroit could create about 1,722 construction-related jobs and 442 permanent positions, according to a study commissioned by Palace Sports & Entertainment.

The study by the University of Michigan Center for Sport and Policy also said the team’s move will generate about $596 million in estimated total economic impact for the city. But most of that will likely be in downtown, not beyond, said political science professor Laura Reese, director of Michigan State’s Global Urban Studies program.