Lewand (Todd McInturf / The Detroit News)
Depending on how you look at it, Tom Lewand has the worst job in Detroit — or the best.
The longtime lawyer and well-connected Democrat left his practice at Bodman PLC, where his clients included Ford Motor Co. Executive Chairman Bill Ford Jr., to become Mayor Mike Duggan’s jobs and economy czar. The perch makes him accountable for what he called “creating jobs for Detroiters” and landing development deals amid the largest municipal bankruptcy in American history.
No small task, his.
“I think I have the best job in America right now because we have so much opportunity in Detroit,” he said in an interview this week. “What I see is tremendous opportunity for access to capital. Now, is that capital going to be affordable? I have to figure that out.”
He’s not alone considering the unfolding story of Detroit in transition. Despite the high-profile bankruptcy and the lingering after-effects of the auto bailouts, the city is emerging as one of the hottest prospects among investors looking for higher returns in their post-recession portfolios.
But to what — yet another heap of dashed hopes and false promises built with other people’s money, or a fundamental transformation to something completely different and uniquely Detroit all at the same time? Even the big decision-makers, Lewand included, cannot yet answer with anything more than an educated guess.
The markers, however, are promising. Properties remain comparatively cheap; demand, especially for Class-A rental housing, is rising; capital is circling, aware that hard times often are the best time to get in; and the unspooling bankruptcy, whatever the drama du jour, signals that the national urban basket case is coming to terms with its dysfunction.
Just this week, Lewand met with representatives of 25 banks, investment funds and real estate investment trusts looking for new opportunities to reallocate their capital to boost returns. He’s fielded interest from Goldman Sachs and talked with a Boston fund managing $25 billion in assets. He’s pushing the city bureaucracy to deliver on the mayor’s promise of a one-stop shop for business permitting.
He says community development financial institutions from around the country are looking for ways into Detroit. They use tax credits, foundation dollars and bank lending to build affordable market-rate housing, develop small businesses and support general economic development efforts.
Talking, of course, is not the same as the doing that will determine how Lewand and his boss, the mayor, will be judged. Detroit residents and business leaders are eager to see discernible progress, and Lewand says that should be measured in the jobs he helps create for Detroiters.
He’s right, but reality intrudes, too. As much as locals and would-be investors see opportunity written all over Detroit, Detroit also represents something else to capital markets — namely, a destroyer. It’s a city that borrows money it cannot pay back, home to a generation or two of political leaders who conspired with lenders to engineer risky financial transactions because they could, not because they should.
The result is a historic Chapter 9 bankruptcy case marked by intricate deals to bolster underfunded pensions, interest rate shenanigans with casino taxes and a legacy of acrimonious litigation likely to scar Detroit’s rep in the municipal finance markets for years to come. That heritage belongs to Lewand and his boss, too, however non-existent their responsibility for it.
On the job less than six weeks, the city’s jobs and economy czar sounds like the newbie that he is. Words like “opportunity,” expressed with the enthusiasm of someone facing a challenge he does not yet fully understand, come almost as easily as praise for the guy who drove Detroit development for the past three mayors.
“We wouldn’t have a downtown if it weren’t for George Jackson creating a critical mass of downtown buildings,” Lewand said. “But we need to put that on steroids.”
Um, yeah, depending on who “we” is. Is it the city, state government and mortgage impresario Dan Gilbert and his expanding real estate empire? Or is it the foundation and cultural community? Or is it the amorphous collection of private investors angling for the next new thing? Or is it all of the above?
And how do you “create jobs for Detroiters,” I ask, given the city’s high level of functional illiteracy and the fact that so many of the jobs moving into Detroit appear to be of the high-tech, often college-degreed variety?
“We’re aware of the challenges,” Lewand says. “This administration is all about setting goals. It will be action oriented.”
Meaning? For starters, it apparently means an “all-of-the-above strategy,” a City Hall-orchestrated effort to marry job-training programs with economic development, federal, state and foundation support with the Detroit Future City plan, a restructured city planning and development department with heavy reliance on the Detroit Economic Growth Corp., the entity Jackson led for years as he served as the city’s de facto chief development officer.
He’s leaving at the end of March to start his own consulting gig, partly because Lewand’s arrival threatened to impede the direct access to the mayor’s office he so readily enjoyed. His departure presents another challenge for Lewand, the new guy in a very tough job.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays.