Bumped into Darin McKeever, chief program and strategy officer at the William Davidson Foundation, over the weekend. Do we have a shot at landing Amazon.com Inc.’s “HQ2,” he asked.
Yes and no. This community’s undeniable progress and redevelopment over the past seven years — especially since the city’s epic bankruptcy — inevitably will be weighed against its not-so-distant past of dysfunction, confrontation and parochialism.
Saying so isn’t negative; it’s rational, and grounded in history. How Amazon’s site selectors balance those contradictory realities is likely to shape Metro Detroit’s position in the mother-of-all hunts for a corporate headquarters: a $5 billion investment by the giant online retailer to create 50,000 jobs paying an average of $100,000 annually.
Quicken Loans Inc. Chairman Dan Gilbert is quarterbacking the bid, due back at Amazon in less than 10 days. He’s assembled a who’s-who of business and civic leaders, using Detroit’s unique North American geography (the only major American city north of the Canadian border) to craft a bi-national pitch boasting talent from Chicago to Waterloo, Ontario.
They’ve got a story to tell. With the obvious exceptions of communities devastated by hurricanes and floods, none have endured the economic dislocation, civic disillusion and public corruption of Detroit. None so large have used Chapter 9 bankruptcy to restructure City Hall’s books, or Chapter 11 to overhaul their bellwether industry.
The result is a community that looks and feels decidedly different than it did at the end of the Great Recession. It’s seen the value of teamwork, witnessed the effectiveness of public-private partnership, learned the limits of partisanship in intensely partisan times. And it’s felt what it’s like to win again.
Billions in private capital, augmented by tax-capture zones tied to new investment, are reshaping downtown, its sports-and-entertainment district and connecting it all with redevelopment in Midtown and the Cass Corridor. Detroit Metropolitan Airport has gone from worst to first, in many ways, offering enviable connections to destinations worldwide.
The state’s flat corporate income tax ranks among the most competitive in the country. Michigan’s Big Three state universities lie within an hour’s drive, plus or minus, of downtown. The state boasts a long tradition of producing technical talent, even as its K-12 education system lags further behind its peers.
Political, business and civic leaders are far more pragmatic and far less parochial than their predecessors. The state’s most powerful Democrat, Detroit Mayor Mike Duggan, is less partisan and more business savvy than his predecessors. And Gov. Rick Snyder, Michigan’s top Republican, is far more motivated to attack problems where they are than to subject them to silly ideological litmus tests.
All of that is necessary if the region hopes to make a credible play for Amazon. But it’s probably not sufficient for a bid that also seeks access to an effective mass-transit system connecting the urban core to an international airport and to suburban communities potentially housing an influx of talent attracted by HQ2 and its opportunities.
The East Lansing-based Anderson Economic Group devised what its calls the “AEG HQ2 Index.” It ranks 35 U.S. cities that meet the broad criteria Amazon details in its publicly available Request for Proposal, or RFP, using 11 “metrics” across three categories: access to labor and services, ease of transportation and cost of doing business.
New York and Chicago rank first and second, respectively, though AEG says the Big Apple would be an unlikely choice because its cost of doing business is so high — ranking dead last in the index. And Chicago’s fiscal troubles are problematic. Detroit? It ranks 32nd out of 35, behind Orlando but ahead of Kansas City and Sacramento, Calif.
“Amazon is explicit about transit, and our objective index is as well,” CEO Patrick Anderson writes in a “strategy memo” to “selected” business and civic leaders in Michigan. “On this, metropolitan Detroit can’t compete with metropolitan NYC or Chicago and their century-old mass transit systems.”
Amazon “explicitly asks for a highway system as well as an international airport. No competing city can offer an international border, with a second crossing now planned, so close to a major hub international airport.”
His advice is not much different from Gilbert’s public riffs since he agreed to head the Amazon effort: lead with the community’s strengths — a competitive cost of doing business, resiliency in adversity, a broad regional approach. Emphasize Michigan’s intangible “quality of life,” and how investing in Detroit would be reinvesting in American redemption.
The pitch may not succeed. But the discipline of the exercise, the willingness of powerful people with busy schedules to pull together to showcase a changing community, would be a win all its own.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.