Post-bankruptcy Detroit’s a bargain for corporations
2014 was a big year for Detroit. It was the year the city emerged from bankruptcy, shed a crippling load of debt and saw a renewal of interest from outside investors.
Despite the positive buzz, 2015 will be another year of challenges for the motor city, as it seeks to continue creating jobs, while also slowly starting the process of rebuilding neighborhoods.
But, if you’re looking for proof that the “Detroit brand” still sells, take a look at Shinola. The epitome of hipster chic, the company makes thousand-dollar watches and high end leather goods.
Shinola moved to Detroit in 2013 with the idea of tapping into a kind of collective pining for America’s blue collar manufacturing past. Its big idea was that “Made in Detroit” would sell better than “Made in America,” and it was right.
“Often it is positioned that Shinola has done something wonderful for Detroit,” says Shinola CEO Steve Bock. “The reality of the situation is that Detroit has done a wonderful job of helping Shinola get off the ground; we are very, very happy with our decision to come here.”
Shinola employs 350 people, with 260 actually based in Detroit. The company has plans to add 5 to 6 new stores in 2015. Following the resolution of the city’s Chapter 9 bankruptcy, many investors and corporations now see Detroit as a bargain.
Despite all the positive trends, Detroit’s unemployment rate still is still hovering around 14 percent—roughly twice the state average.
“There’s no magic jobs fairy and so someone’s got to be able to create jobs and to create jobs you need capital,” says Crain’s Detroit Business Editor Amy Haimerl. Unlike previous “Come to Jesus” moments for the city, this time she says Detroit can’t ignore the need for investment in small and medium-sized businesses.
“In the past, it was always about tax breaks and get the big company to come in from somewhere else,” she says. “That’s wonderful, but we’re also focusing on the other end of jobs creation which are neighborhood businesses, small businesses which may only hire 3 or 4 people at a time.”
Job growth is one thing, but for many Detroiters the first step forward is as simple as streetlights — close to half of which haven’t worked in years. This has been a particular problem for restaurants and shops.
“So a lot of businesses had to cut down their hours, because after a certain time there was no business,” says Esteban Perez. Perez is manager of La Terezza Mexican restaurant in Southwest Detroit.
Detroit is now turning on some 500 new LED streetlights per week. And Perez says other, small but big things are happening, too. Trash is getting picked up, police response times are decreasing, and things he says, just seem better.
“You know we’re all coming together as a city,” he says. “So right now, Detroit is the place to be, whether you want to open up a business, whether you want to buy a house.”
In terms of housing, blight remains a huge challenge for Detroit. As many as 40,000 properties are slated for demolition. The city’s land bank is auctioning the few that remain salvageable, and it just announced a new program to sell vacant homes to city employees and retirees at half price.
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