Howes: Complacency is no option in post-bankruptcy Detroit
Mackinac Island — Don't quit now, says the guy who wielded the hammer in Detroit's historic Chapter 9 bankruptcy.
"The city's balance sheet is fixed," retired U.S. Bankruptcy Judge Steven Rhodes said in an interview Thursday at the Detroit Regional Chamber's Mackinac Policy Conference. "It has a plan to revitalize itself. It has the fiscal means to carry out the plan. It has the leadership that is committed to carry out that plan.
"And most importantly, the people of the city understand the necessity of holding their leaders responsible for the fiscal responsibility. They clearly have to respond to pressure from the citizens of Detroit in lieu of pressure from me."
The hammer is gone. In his place stands a mayor clearly in a hurry to replace streetlights and improve emergency response times, among many things; an administration in Lansing committed to continuing ways to help Detroit reverse decades of decline, dysfunction and disinvestment; business leaders and residents whose obligation to hold their government accountable is critical to maintaining the pace of change.
None of it is guaranteed. As 1,600 of the state's business and political leaders move into their second day of the policy conference, a recurring message here is unmistakable: now is no time to become complacent, to assume the rest is easy because the epic municipal bankruptcy solved problems decades in the making.
Only partly. Detroit Public Schools are a mess. A package to repair roads and bridges remains elusive. A deal to create a regional water authority is hurtling toward its mid-June deadline. The steep cost of incentives to woo post-recession auto jobs is threatening an economic agenda the state can ill-afford to jettison.
"Some of the lifting that is left is harder because you can't get it done as fast," says Doug Rothwell, CEO of Business Leaders for Michigan. "These are things that are years in the making. We're sitting here talking about fixing potholes. We should be talking about building an infrastructure that enables our economy to grow. Let's not pat ourselves on the back too much. Let's keep going."
In a city and state where good enough has been good enough for too long, it isn't — not in Michigan football, as Coach Jim Harbaugh concedes, and not in the overdue effort to reckon with a past overtaken by competition, mismanagement and the crush of debt. Bankruptcy helps, and so does a five-year swing in the economic cycle; but they're a beginning, not an end.
"I definitely feel a strong sense of confidence about the city's revitalization," says Rhodes, adding that bankruptcy experts around the country routinely press him to explain how "such an extraordinarily distressed municipality" can be put on the right path "as expeditiously" as Detroit was. "People are rooting for Detroit to succeed."
They should. The confluence of circumstances that tipped the city into bankruptcy are unique and common at the same time, meaning the process Rhodes quarterbacked offers clear lessons for others who may come later. The result also demonstrates the limits of Chapter 9, underscoring just how important leadership, patience and discipline are to finishing the job.
"I'm not a great believer in momentum," Mayor Mike Duggan said in an interview. "We're interested in what you did this week and what you're going to do next week. Everything's too slow."
Mortgage impresario Dan Gilbert's multi-billion dollar investment in Detroit real estate is driving the revitalization of downtown. But it's not sufficient until plays by national real estate developers answerable to shareholders (and susceptible to bureaucratic snafus) show that the rewards of investing in Detroit exceed the risk. That's not yet happening with enough frequency.
Second, the alignment of business and political leaders is as fragile as it is impressive. The success of the bankruptcy, particularly the public-private partnership that birthed the Grand Bargain, depends on the unique confluence of personality and circumstance — both of which can, and probably will, change.
Third, the revitalization of downtown and Midtown is heightening concerns that neighborhoods are getting shortchanged and that the rebound is tracking along racial lines. Simmering resentment in a town with the history of Detroit is anathema to the enthusiasm, community cohesion and business investment powering the city's extreme makeover — and changing the narrative of Detroit.
Fourth, the continuing clamor for jobs without meaningful and systemic reform of public education in Detroit has it backwards. That's why reform of DPS, punctuated here this week by the mayor's surprise proposal for schools reform, is so important. Education, training or both make would-be employees job-ready, not the other way around.
Finally, Detroit has great bones to build on. From the riverfront and iconic buildings to restructured cultural institutions and a business community with global reach, the city that put the world on wheels has a second chance to prove its rescue was worth the time, expense and angst it required.
"All of this is at risk unless we fundamentally redirect the trajectory of our city," says Rip Rapson, CEO of the Kresge Foundation, a major funder of the bankruptcy's Grand Bargain and other initiatives across the city. "This is our moment. The eyes of the country are on us. Let's seize it."
Daniel Howes' column runs Tuesdays, Thursdays and Fridays and can be found at http://detroitnews.com/staff/27151.