No American city ever fell as far or as fast as Detroit.
Strategically sited on a strait connecting two Great Lakes and joining the United States to Canada, Detroit flourished for 250 years as a center of manufacturing, shipping, trading, and smuggling. But crashing from its mid-century pinnacle as the arsenal of democracy and the nation's industrial capital, Detroit has now dwindled into a place of unemployment and decay, a museum of all that is wrong with urban America. In 1950 Detroit built half of the world's cars; by 1990 it was making one car in a thousand. The fourth biggest U.S. city in 1942, it fell to ninth in 1992.
Today entire sections of the city are wasteland, with once lovely residential neighborhoods burned and vandalized into rubble, once thriving industrial areas abandoned, polluted, and derelict, and dozens of flamboyant downtown Art Deco and Romanesque office buildings half-empty. Parts of Detroit have reverted to prairie, so lush that Michigan's Department of Natural Resources exports Detroit pheasants to the countryside to improve the rural gene pool.
But now Detroit is poised for a comeback. Every signaleconomic, political, socialis positive. Detroit's resurgence, tentative but promising, feeds off a strong Michigan economy. In 1994 the state was first in the nation in new business creation and second in unemployment decline. The regional economy of Detroit and its suburbs grew 8.9 percent in 1993, according to Comerica economist David Littmann, mostly because of boom times at the three major auto companies, each of which announced record profits before recent slowdowns. Industrial leasing in the city itself jumped sharply during the final quarter of 1993 and has continued at record levels. Detroit's unemployment rate is down to 9 percent, far above the region's 5.3 percent but well below the city's 13.4 percent of April 1994 and way below 1990's 16.1 percent. Home prices are soaring.
Detroiters are hopeful, and much of their optimism focuses on their new mayor, Dennis Archer, a 52-year-old former Michigan Supreme Court justice who took office in January 1994. His fresh approach to governing the city inspires confidenceespecially in contrast with the previous 20-year reign of Coleman Young, the civil-rights hero who, after some successes in his first two terms as mayor, declined into an isolated autocrat and hastened Detroit's decay.
Archer began his political career as manager of Young's 1977 reelection campaign, when Young still commanded wide respect. But while Young had come of age as a political warrior battling the establishment, Archer rose smoothly through its ranks, eventually representing Detroit's corporate elite as a partner in one of the city's premier law firms, Dickinson Wright.
Not that Archer was born in such a milieu. He grew up in rural poverty in a tin-roofed house without plumbing in Cassopolis, Michigan, near the Indiana border. His father worked all his life, mostly as a handyman, despite having lost an arm. Young Archer worked his way through a local state college, Western Michigan University, living in a dorm known as "Hungry Hall" because it served no meals, making it the cheapest on campus. A month before the infamous 1967 Detroit riots, he married a fellow lawyer, Trudy DunCombe, now a Michigan trial judge. After graduating from the University of Detroit Law School, Archer worked as a trial lawyer in a couple of small Detroit firms. He became active in the American Bar Association, chairing a committee that was credited with increasing the number of minority lawyers in big firms.
A natural conciliator, disciplined and handsome, Democrat Archer works well with Republican Governor John Engler and the GOP-controlled Michigan Legislaturetoo well, some Democrats now charge, painting him as a closet Republican and a pawn of big business. Archer shrugs off such criticism. "We need business," he says. "We need economic development. We need jobs. That's what I was elected to produce."
Archer has set a tough standard for himself. "Write it down," he says coolly: "In ten years we will catch and overtake Toronto and similar places as the urban place to be." Robert C. Larson, chairman of both the Taubman Realty Group (owner-developers of regional shopping centers) and the mayor's Land Use Task Force, offers a more measured view: "Detroit is about what cities like Baltimore, Pittsburgh, and Cleveland have been about in the pastconfronting the reality of their situation very objectively and finding ways to marry the financial resources of the private sector with public resources to turn the city around. The example set by those three is what we're planning in Detroit."
Detroits decline is a textbook case of how to kill a city. The table of contents reads like this: a history of poor race-relations, a shrinking industrial base, the U.S. auto industry's collapse in the seventies, and Coleman Young's mayoralty.
Like other cities, Detroit suffered devastating race riots in the late sixties. But its race relations were unusually tense to begin with. Many of Detroit's white as well as black forebears had come up from the Deep South, bringing with them antagonistic racial attitudes that were worsened by auto industry labor policies pitting blacks and whites against each other.
During the thirties, Henry Ford recruited large numbers of blacks to Ford's River Rouge plant, winning their loyalty to the company in preference to the United Auto Workers, at that time 57 (like other unions) unfriendly to blacks. In January 1937, Ford assembled a squad of tough black men from the Rouge plant as guards. In that year's notorious Battle of the Overpass, several of those guards brutally assaulted leafleting union officials. Chrysler, for its part, recruited blacks to cross a picket line in 1939. Two years later, a strike at Ford's Rouge plant led to fist-fights, beatings, and stabbings between mostly white unionists and mostly black strikebreakers.
The Detroit Police Department was notoriously infected with racism: until a new city charter outlawed race discrimination in 1974, the department had routinely marked "C" for "colored" on blacks' job application forms. In 1967, when the force was still 90 percent white, the "rebellion"as many Detroiters still call the riotsbegan in reaction to a routine police raid of an illegal after-hours nightclub in a black neighborhood, which fanned smoldering hostility. Arson, looting, and sniping erupted. On the second night, a young police officer died, shot in the stomach. On the infamous third night, police and national guardsmen answered a call at the Algiers Motel, where they found ten black men, two white women, and no guns. When the cops left, three of the men were dead; the others, including the women, had been severely beaten. As word raced through the city, burning and looting raged more furiously.
The riots, Coleman Young once wrote, "put Detroit on the fast track to economic desolation." Whites fled; all in-migration ceased. In the last five months of 1967, out-migration totaled 67,000 people; another 80,000 left in 1968, and 46,000 in 1969. By 1973, when Young was elected mayor, the population had fallen to 1.39 million from its peak of 1.85 million in 1952; it stood at 1.03 million in 1990. The proportion of whites in Detroit dropped from 56 percent in 1970 to 22 percent in 1990the smallest of any of America's 150 largest cities.
Other factors helped fuel the flight from Detroit. Middle-class citizens, white and black, sought the lower taxes and better services available right across Eight Mile Road, Detroit's northern border. White flight escalated again during the court-ordered school busing efforts of the seventies. Mayor Young antagonized whites further by promoting a confrontational stance toward the suburbsa stance that allowed him to consolidate his political base by fanning the resentments of an increasingly black Detroit.
Meanwhile, Detroit's economic base weakened, the result in part of federal post-war industrial policies. Fearing a nuclear attack on the nation's industrial heart, Washington encouraged industry to disperse. It built expressways and then subsidized industrial move-outs, beginning in the late forties with Chrysler's move to Twinsburg, Ohio. Other plants soon followed.
Post-war federal urban renewal policy was little better for Detroit. Bulldozers razed whole neighborhoods, particularly African-American ones like Black Bottom and Paradise Valley. The tailor shop Coleman Young's father had owned was "plowed under" in 1950, says Young. "Ours was the first neighborhood to be eliminated," Young recalls. "We called it 'blight by announcement."' Black Bottom lay in ruins for six years before the first new buildings went up.
Detroit's economy unraveled most dramatically in the 1970s, as the auto industry made wrong decisions at every turn, setting off an unparalleled slide. The Big Three automakers continued producing gas guzzlers long after the Arab oil embargo hit in 1973. They built unattractive cars when consumers wanted style. They blamed their problems on outside forcespunitive federal regulations, unfair foreign competition, unforeseeable changes in taste. By the late seventies, Chrysler, which had drained cash and management talent from its Detroit operation to feed unprofitable foreign subsidiaries, faced bankruptcy and only survived thanks to a federal bailout. Ford, though far stronger than Chrysler, had waited until the second gas shortage after the 1979 Iranian revolution before retooling to make small cars, which, because of lower profit margins and Ford's inefficiency, lost money even when they sold well.
General Motors, much larger than Chrysler or Ford, set the terms for the whole industryand they proved self-destructive terms. When GM signed an excessively generous labor contract with the UAWas often happened in the days when U.S. companies could sell products as fast as they could make them and so kept their plants running at any costFord and Chrysler meekly followed suit. The Big Three raised car prices as they liked, with little fear of being undercut by overseas competition. The industry had become a shared monopoly, with predetermined, protected market shares. Labor and management costs mushroomed, and the industry's inbred culture stifled innovation.
GM's managerial culture set the pattern. Says auto industry analyst Maryann Keller of the Furman Selz investment firm: "The mystique of General Motors' 14th floor [the company's executive suite] had many bad consequences, not the least of which were obscene executive privileges and insularity. This was a story of arrogance, of management not wanting to recognize that the world was changing. Detroit was a very isolated place. Everybody in the industry went to the Detroit Athletic Club and congregated at the same country clubs; everybody told each other everything was fine. I remember Henry Ford II talking [in the early seventies] about how the Ford Pinto would push the Japs back into the Pacific Ocean."
The Big Three took forever to realize they had been leapfrogged by the Japanese. They believed that the Japanese had captured the American market only because they made smaller, cheaper cars. They were stunned by surveys in the late seventies showing that Americans thought Japanese cars were better and intended to continue buying them. In 1980, GM, Ford, and Chrysler lost a total of $3.5 billion. They laid off 250,000 workers; their suppliers laid off an additional 450,000, most in the greater Detroit area. Unnoticed until too late, the Japanese auto industry had grown from the smallest in the world in 1960 to the largest 20 years laterspelling disaster for Detroit.
Today, Detroit has just three auto assembly plants left. Only General Motors still has its headquarters in the city, but many executives now work in suburban Warren, Michigan. GM has fewer than 9,000 employees in the city itself, about one-third of 1984's number.
The non-automotive sectors of Detroit's economy suffered too. In the seventies and eighties, companiesUniroyal, Vernor's Ginger Ale, Revere Copperclosed their Detroit headquarters and left abandoned sites behind. Their plants, built in the twenties and thirties, were often decrepit and dangerous 50 years later, with inadequate ventilation, antiquated machinery, and polluted grounds.
Detroits political institutions, which mirrored the insularity and hubris of the auto industry, hastened the city's decline. Maryann Keller notes the eerie consistency of the elites' approaches: "What's the Detroit culturepublic sector and private? Bravado; insularity; perks. Every auto executive was marching his company off a cliff, refusing to recognize that anyone could think of a better way of doing things. No one took responsibility for anything. The lack of leadership in the auto industry and in Detroit itself certainly are parallel."
The central personage in the city's decline was Coleman Young, a larger-than-life figure with a larger-than-life impact on Detroit's fate. His family had moved from Alabama to Black Bottom in 1923. As a worker and union activist at Ford's River Rouge plant in the mid-thirties, Young allied himself with left-wing union militants against UAW President Walter Reuther, who opposed allowing African-Americans in top union positions. When he returned to Detroit, after a World War II hitch as a fighter pilot, he fought bitterly with Reuther, who put him on a blacklist of "subversives," making it hard for him 60 to maintain steady employment. During a McCarthy-era House Committee on Un-American Activities hearing in 1952, Young became a local hero for reprimanding a southern HUAC attorney: "That word is 'Negro,' not 'Niggra.' Speak more clearly."
In 1964, after losing a few runs for office, Young won a seat in the State Senate, andagain persisting after a couple of defeatshe won election as mayor in 1973 and reelection in 1977 with the strong support of the local establishment, the "gasoline aristocracy." In 1981, no serious candidate of either party would run against him.
That year, with both its tax base and federal aid shrinking, Detroit hit a fiscal crisis proportionately as severe as New York City's 1975 crisis. Young resolutely pushed through both a wage freeze for city workers and an income tax hike. He sold off some city assets, including four public hospitals; he eliminated such services as meat and milk inspections; he moved the city jails and Welfare Department to the county's jurisdiction.
That adept crisis-management was Young's peak: thereafter, his last decade in power proved catastrophic.
He stoked up racial resentment, describing himself as a "black man first and a Democrat second." During his 1973 campaign Young had promised to give blacks their rightful place in city government. He decreed that for every white cop promoted, a black officer had to be advanced too. One housing manager recalls: "I was a white liberal intent on doing some good. What surer route to doing good than public housing? Then in 1977 my career halted. My supervisor warned me nicely: because of my race, I had no future in the agency." To the complaint that such measures amounted to reverse discrimination, Young had a categorical reply: "You're damn rightthe only way to arrest discrimination is to reverse it."
Young's political style was famously confrontational and his sense of humor legendarily raw.
Some were charmed, including Eugene Keilin, a Lazard Freres investment banker, who advised the mayor during the 1981 fiscal crisis. "Coleman may not have been the first person to call me a mother fucker," he recalls. "But he was the first to call me that to my face."
Generally, Young's adversarial demeanor further isolated his city. In July 1991, national news programs broadcast an amateur videotape of two white suburban women being brutally beaten at a fireworks show by a group of young black women. Although four of the five Detroit women charged in the attack pleaded no contest, Young maintained they were victims of "a railroad job or lynch session."
Neither city services nor the lives of Detroit's blacks improved under Young's watch. Says Roger Kaplan, formerly with the Detroit News: "Young's rhetoric wouldn't have mattered if he had helped create a solid, entrepreneurial black middle class. The only black middle class became one dependent on government jobs."
Most important, Young seems to have lost interest in the details of governing midway through his administration. He stopped going to his offices in the City-County Building and lived in isolated splendor in the Gilded Age Manoogian Mansion, a few miles away on the Detroit River. Even his commissioners seldom saw him. Visitors tell of finding him in the mansion, at all hours, dressed in elegant silk pajamas, eating huge meals of ribs and fried chicken, and playing solitaire in front of three blaring televisions, each tuned to a different channel. Young is said to have developed his habit of keeping the TV loud when he became convincedaccurately, it turned outthat the FBI was bugging his rooms.
Young's inattention spread through the ranks. City agencies stopped functioning, so business people couldn't obtain routine permits and licenses. Many city employees stopped coming in altogether or, worse, came in and demanded bribes. Routine malfeasance led to spectacular instances of corruption. Young's police commissioner went to federal prison in 1992 for embezzling $2.4 million, for example.
The city grew dirty, dangerous, and polluted. In stark reproach, the suburbs sit right across the roadclean, safe, and lovelybecause, as Detroit contractor Joseph Thompson argues, suburbanites demand it. "A thief knows better than to go there," he says. "Here a thief knows he can do anything: he gets caught, he's out the next morning. Not in Grosse Pointe. You get caught, you get thrown in prison. Even the trash respects Grosse Pointe. It blows right to that line and then stops. It knows better than to cross the border."
Detroits deplorable public services come at high cost. As the city's population dwindledand as the real value of its property tax base declined by nearly two-thirds, or $3.6 billion, between 1970 and 1990tax rates rose and rose. The property tax rate hit the highest level Michigan law allows, higher than all major American cities except Chicago. Detroit also slapped an income tax on residents, corporations, and non-resident workers, all at the highest rate allowed by the state. The city squeezed a 5 percent tax from all utility bills. All these taxes come out of what was already the poorest urban population in the country, with a median income of $19,390 when Young left office.
Almost seven times greater than the Michigan average, Detroit's local tax burden is among the highest in the country, according to the U.S. General Accounting Office. Perversely, the state government rewards the city for its high taxesor "local effort," in Lansing's euphemistic phrase. "Detroit gets almost half of statewide distributions based on relative tax effort," notes the Citizens Research Council, a Detroit good-government group, creating "an additional and very real incentive to keep local taxes high."
Young was as unsuccessful in reviving Detroit's economy as in making its government work smoothly. Indeed, in his last years as mayor, he followed many of the same policies that had devastated Detroit in his youth, including mindlessly destructive urban renewal. His administration acquired and tore down whole swaths of Detroit; it issued 41,800 more demolition permits than construction permits.
For the most part, Young's economic development strategy centered on state capitalismbig, splashy projects of dubious economic value, created at taxpayers' expense. The hostile city government, meanwhile, helped smother thousands of small businesses. Contractor Thompson was determined to start an elegant restaurant in Brush Park, a neighborhood of nearly destroyed mansions. To open, he needed a certificate of occupancy from the buildings department. He wrote, he called, he went down to the City-County Building and begged; but he couldn't get an inspector to come out. When, in desperation, he opened his restaurant anyway, inspectors were there within an hour to shut him down. By the time he reopened two and a half weeks later, he had lost $60,000 in gross receipts.
Most entrepreneurs weren't so persistent. During Young's tenure, Detroit lost more than 40 percent of its jobs. Between 1972 and 1991, the number of manufacturing, wholesale, and retail establishments declined by over 45 percent, service establishments by over 17 percent.
Many white Detroit business people, unwilling to be quoted by name, look back on the Young years with particular bitterness. Says one, who left the city in 1982: "Coleman was a racist, and he made it clear that white businesses were unwelcome, which meant to me that we would go unprotected. We could get robbed, burned out, preyed upon by city inspectors, and Coleman wouldn't do anything. He encouraged attacks on us. There was absolutely no reasonnot a oneto stay in Detroit."
In the end, Young lost the confidence even of African-American former supporters. "I liked Mayor Young," says Joseph Thompson, "but I prayed he wouldn't last. I took the biggest gamble of my life when I opened my restaurant assuming we'd have a new mayor." The Reverend James Holley, the outspoken pastor of the Little Rock Baptist Church, says, "Coleman gave us pride, but pride took priority over substance. We can't live off pride; we can only live off the exchange of wealth. He stood up against white people and cursed them out, but did this put any money in the black man's pocket? Create 64 any new business? We were wrapped up in having a black mayor, but we didn't ask: What is he doing to make life better for all of us?"
Responsibilityhis own and his constituents'is a major theme of Mayor Archer's. In his inaugural address, he exhorted his largely black audience: "Sweep the sidewalk in front of your house. Clean the rubbish from the storm sewer on your street. Pick up the broken glass in your alley. Demand that I get the trash picked upon time. Insist that I make the buses runon time." He paused, leaned forward, and said, "And get a grip on your life and the lives of your children!" He got a tumultuous standing ovation.
Archer's political strategy is to replace Young's combativeness with conciliation. During Young's mayoralty, John Amberger, executive director of the Southeast Michigan Council of Governments, called Eight Mile Road the Maginot Line. Now, Amberger says, "it's becoming, instead of a barrier, a bridge between the city and suburbs." The counties of Wayne, Oakland, and Macomb and 16 communities, including Detroit, have formed the Eight Mile Road Association, a cooperative organization to manage cleanups and policing along Detroit's border with its northern suburbs.
Archer won the mayoralty with only about half the black vote: his 57 percent majority included 80 percent of the non-black vote. Coleman Young had endorsed Archer's opponent, and the black community is still far from unanimous in its support for Archer's approach. Some blacks argue that conciliation with the suburbs will mean betrayal of Detroit; they disapprove of the generous tax abatements and benefits Archer has used to attract companies to the city, plausibly arguing that it is unfair for newly arriving companies to shoulder a smaller tax burden than businesses and residents who stayed through hard times. Archer says that he too opposes such abatements in principle, but the dismal economy he inherited leaves him with no alternative. "I'm trying to attract enough of a tax base so we can cut taxes for everybody."
Archer is surely right in trying to end Detroit's economic isolation. If the city is to enjoy an economic renaissance, it will need investment from outside. "We're not talking instant gratification here," cautions Robert Larson, the suburban developer who heads Archer's land-use task force. "We're talking about the opportunity to reverse a trend of disinvestment and population loss that has occurred in Detroit over decades." Between 1960 and 1980, according to Michigan State University geographer Joe Darden, Detroit went from having 42.3 percent of the region's population and 49.6 percent of its wealth to having only 27.6 percent of its population and a mere 16.5 percent of its wealth.
Says Larson: "What Detroit has to do is set up the conditions that allow it to compete more forcefully for the businesses that have been attracted to this region for some time: the computer and high-tech companies attracted by the Lansing-Ann Arbor-Detroit educational corridor, health jobs attracted by the same corridor's health industry, and, of course, auto-related businesses." Comerica's Littmann says that the crucial industry will continue to be automotive: the Big Three manufacturers and their suppliers, thousands of smaller firms in the region and hundreds in Detroit itself.
GM, Ford, and Chrysler are all now profitable, thanks to corporate restructuring, popular new models, and the strong yen that has hurt Japanese carmakers. Yet the industry is volatile, and it was partly luck that the car Chrysler decided to make in Detroit, the Jeep Grand Cherokee, was a hit, prompting the company to announce recently that it would hire some 800 new workers for a third Jeep shift. "I'm more enthusiastic about the city of Detroit than I have been in the past 20 years," said Chrysler chief executive Robert Eaton. But many Detroiters ask the question Fortune magazine recently posed: Will the Big Three screw up again?
Analyst Keller says Chrysler and Ford won't, but General Motors is another matter. "GM would lose money if there were a recession tomorrow. Unless it brings its cost structure down to a truly competitive level, its market share will erode. But from Detroit's point of view, that may not matter: the gainers in market share this time will be Ford and Chrysler, not the Japanese."
The dominance of the auto industry, along with Detroit's proximity to Canada, makes the city a center of international commerce, with more than half of all trade between the United States and Canada passing through the area. Moreover, says John Carroll of the Detroit Economic Growth Corporation: "We're finding an increasing number of overseas companies locating here to sell to the auto industry. R&D firms know they need a presence here if they're going to sell to the Big Three. And since the auto industry is now looking to make a 'green car'a car that's lighter, cleaner, cheaperthey're looking worldwide for new technology." Carroll is working with three French companies seeking to establish themselves in Detroit.
Archer is trying to encourage the private sector in every way possible. "We will work day and night to improve the economic climate and attract more investment," he says. He has streamlined licensing procedures, set up a special office to help small-business people navigate the city bureaucracy, and negotiated with state and federal regulators on behalf of Detroit businessmen who feel harassed. He is working to make it easier for businesses to acquire city-owned or abandoned land and obtain environmental permits to build on it.
After his inauguration, city officials started getting 50 to 80 calls a day from businesses inquiring about locating in Detroit; it still gets five to ten such calls daily. Most of the callers ask what kind of land is available in the city; some, particularly retailers, ask about demographics. Sensing opportunity, big discount retailers like Toys "R" Us and Wal-Mart have expressed interest in the city, says Robert Larson.
Gloria Robinson, who became Archer's director of planning and economic development after holding a similar job in Wayne County, which includes Detroit, sees these efforts beginning to pay off. "We used to get businesses in Wayne County that had been driven out of Detroit," she says. "Now we're getting the reversebusinesses that had just been waiting to come back home to the city." Among the major companies that have already returned are Kroger, Honeywell, and Ace Paper Products. "Now that they're welcome here, they see economic advantages to coming," Robinson says.
Consider the case of F. X. Coughlin, an international freight-forwarding company that was founded in Detroit in 1959 and moved out in the late sixties. In March 1994, the firm won a packaging and warehousing contract to service a Chrysler plant. It could have built its facility in the suburbs but chose Detroit for its central location and business-friendly government. What's more, says William Gibson, a Coughlin manager of marketing and sales, "the infrastructure we need is more readily found within city limits: I'm talking about rail sidings, utilities, and the right layout of roads and highways."
More surprisingly, some companies cite the potential of the city's labor force among Detroit's attractions. Thyssen Steel, a German company with $1.7 billion in North American sales annually, offers German-style pprenticeships to local youths in its beautifully kept, unfenced steel processing plant that sits in the middle of a blighted neighborhood. "We have very dedicated workers with very low turnover," says senior vice president Malcolm Gill. "They are very trainablein fact, that's what they're often looking for. In exchange for our training them, they are loyal to us." Thyssen recently decided to double the size of its Detroit plant. "We really embraced Mayor Archer's philosophy of working with business. 66 He cut out some of the red tape."
Detroit's attention to the private sector comes after years of Mayor Young's disdain. So bad had Young's relations become with business that the CEO of Michigan's largest bank, the National Bank of Detroit, was quoted in 1994 as saying that the bank would have left Detroit had Young been reelected. Under Archer, NBD not only stayed in Detroit but also established a $40 million plan to invest in commercial real estate in the city. Archer persuaded the Clinton administration to award one of six $100 million empowerment Zone grants to Detroit. Unlike New York, which, City Journal reports, is focusing its empowerment money on nonprofit organizations (see "Where's the Power in the Empowerment Zone?" Spring 1995), Detroit has fully engaged the private sector: a consortium of banks, businesses, and financial institutions has pledged $1.9 million in capital to businesses and home owners within the zone, an 18-square-mile area of devastation that has seen almost no investment for 20 years.
Detroit has a growing, outspoken black entrepreneurial class. Dave Bing, a former Detroit Pistons star turned steel executive, moved his stamping operation into Detroit from the suburbs. Bing's two established companies have annual sales of around $90 million, mostly from contracts with Big Three automakers; his third company, which he formed last year in partnership with two other African-American Detroiters, will bring the revenues of all Bing ventures to about $180 million annually.
Bing says that three-fourths of the 300 people on his $8 million payroll are black, and 12 percent of his subcontracts are with minority-owned companies. Bing recently issued a challenge to business people to "put their money where their mouth is and start helping Detroit." He expects his fellow African-American entrepreneurs and investors to put their money into Detroit, even if it's riskier than locating elsewhere.
Detroit is also benefiting from tiny businesses started by a small but increasing population of immigrant entrepreneurs. Chaldeans (Iraqi Christians), who used to head immediately for Dearborn, are now starting grocery stores and small restaurants in Detroit; Mexicans are opening restaurants and shops in Mexicantown, part of the Empowerment Zone; Russians, Croats, and Serbs are settling near Poletown rather than suburban Hamtramck.
Perhaps most encouraging, young professionals are buying houses within the city, and older households are moving back. Home prices are running 25 percent higher than a year ago, and the average time it takes to sell a house is about 45 days, down from 180 days a year ago. When C. Beth DunCombe, Mayor Archer's sister-in-law and former law partner, went to close on a house in Detroit immediately after the election, she was told the price had gone up 10 percent. "Everyone knows that Detroit's going to turn around now," said the broker. "Property's worth more than it was last month."
But Archer faces huge challenges. He presides over a city once called the murder capital of the country, now ranking 11th among American cities in overall violent crime. Crime remains the top concern of Detroiters in nearly every poll. Archer's police commissioner is a much admired former cop who had retired in disgust during Young's administration and gone to Wayne State for a Ph.D. in philosophy. The new commissioner spent much of his first year trying to clean up the mess his predecessor left behind: chronic absenteeism, abuse of sick leave, unnecessarily expensive automobile leases, and inept computerization.
Detroit's services remain poor. "I inherited a City Hall in which we had rotary phones; we had no computers; vendors got paid eight to nine months later," says Archer. "Vendors charged us what they called a 'Detroit price.' They tacked on interest. They took a float on their money. We didn't do repairs by management; we did repairs by crisis. If something was an absolute mess, we fixed it; otherwise not. Our records of our land holdings were so fragmentary that we had no idea what we owned. HUD was getting ready to take over our housing department. I want to do the big stuff, but first I had to fix the little stuff. And at the same time we have to make the city attractive. safe. and clean."
The new mayor arranged for the Ford Motor Company to conduct Edwards Deming-style Total Quality Management seminars for city employees. "It's one way to get them to think about citizens as their customers," he says. Even as he tries to improve city services, Archer must shrink the city government, which is now Detroit's largest employer. His first budget cut 270 positions, including 50 that paid more than $60,000 a year.
Those who stayed in Detroit through its worst days are enthusiastic about the city's prospects under Mayor Archer. Peter Schweitzer, who heads the J. Walter Thompson advertising agency's Detroit office, made national news last summer when he refused a promotion to the top spot in the company's New York headquarters, in order to stay in Detroit. "We're at the beginnings of a revival in this town, and I want to be here for it," he said. "Business investment in Detroit is increasing, with the result that ancillary businesses like ours are doing very well. It's very clear that the domestic auto business, and certainly Ford, learned its lessons from the early eighties and is not about to repeat those mistakes. We also now have good local political leadership. We're all saying, 'Let's let the past be gone and get on with the future, because the future looks good."'
Detroit's motto, which dates from a catastrophic 1805 fire, is: Speramus meliora. Resurget cineribus. We hope for better things. It will rise from the ashes." Archer may be the mayor who makes that happen.