Detroit – Mortgage mogul Dan Gilbert and fitness entrepreneur Felicia Maxwell have at least one thing in common: they both symbolize the economic reawakening of Detroit.
Just a few hours after the chairman of Quicken Loans Inc., Mayor Mike Duggan and some of the who’s who in the city’s power circles gathered Thursday morning to formally mark construction on the old J.L. Hudson Co. site, the founder of Fit4Life Health & Fitness LLC detailed the growth of her small business thanks to the Entrepreneurs of Color fund.
“Now I have grown from less than 800 square feet to more than 3,000 square feet,” Maxwell, a former corporate lender, told a roundtable at the Little Gem Theatre that included the mayor, representatives of major foundations and a contingent from JPMorgan Chase Co. led by CEO Jamie Dimon.
She’s hired five instructors and grown her revenue base by 70 percent in the past year. She’s got 62 clients at her studio on W. McNichols near Outer Drive and is aiming to add another 75 over the next year, fueled in part by her success in landing investments from the Motor City Match program and the entrepreneurs fund.
Small potatoes? Sure. But Detroiters founding small companies that serve Detroiters and hire other Detroiters is a critical ingredient in the city’s steadily expanding economic reawakening — from downtown to the neighborhoods. Whatever success they have creates a virtuous circle that attracts even more funding.
“What’s happening in Detroit is not just unique,” said Ted Archer, vice president and small business program officer in global philanthropy for JPMorgan Chase. “It’s a remarkable success. The activity is here.”
The Entrepreneurs of Color Fund is managed by the Detroit Development Fund. Of its $34 million under management, nearly $5 million is earmarked for Entrepreneurs of Color, a sum DDF President Ray Waters expects to double to $10 million over the next 18 months.
Its funders: JPMorgan Chase and Fifth Third Bank, the Kresge, Kellogg and Ralph C. Wilson Jr. foundations — and more, if Waters is right and more would-be backers join an effort that is slowly expanding entrepreneurial activity outside the orbit of Gilbert’s family of companies.
“We have funded other economic development funds in the past ... particularly after the bankruptcy,” said La June Montgomery Tabron, CEO of the W.K. Kellogg Foundation. “Every lender across this nation should be plugged into what’s happening in this space. For years, we were told this is not possible.”
But it is. Credit a new generation of Detroit political, business and philanthropic leaders who recognize their common interests (and responsibilities) far more clearly than their predecessors. Credit, too, harsh financial realities that forced both the public and private sectors to rethink priorities and to tackle problems thought insoluble.
And credit a narrative of Detroit that is changing because the reality of Detroit is changing. Enclaves of downtown thrum with new businesses, restaurants and bars. Traffic is thickening, scaffolding blocks sidewalks and national publications historically biased to showcasing Detroit’s “Ruin Porn” are telling an altogether different story.
“The real secret sauce in this town,” Kresge CEO Rip Rapson said, “is cracking the code” on public-private partnerships, in alleviating suspicion between business and philanthropy, philanthropy and the public sector, the public sector and business.
The result is an alignment of common interests that backs funds for minority entrepreneurs, that coalesces quickly behind a regional bid for Amazon.com Inc.’s second North American headquarters, that funds a “grand bargain” in the city’s bankruptcy to protect assets of the Detroit Institute of Arts and bolster pensions of municipal retirees.
“What’s critical here is how focused they’re being,” said Peter Scher, head of corporate responsibility for JPMorgan Chase. “You’re seeing market-rate capital come in. You’re starting to see this kind of financing come into the city and go beyond downtown. That’s huge.”
And overdue in a city that has seen billions pumped into downtown and Midtown. Or witnessed construction of the billion-dollar District Detroit, anchored by Little Caesar’s Arena. And heard Gilbert Friday give the go-ahead to construction of a billion-dollar “city within a city” on a Hudson’s site vacant for nearly a generation.
All of it, large and small, is change to believe in.
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.