GHARIB: The motor city could be headed down the same road as General Motors (NYSE:GM) and Chrysler took recently. Detroit is teetering on bankruptcy. Right now, a 10-member board appointed by Michigan`s governor is deciding if the state should appoint an emergency manager to help run the city. But in the face of Detroit`s financial crisis, something just short of amazing is happening. Young people and businesses are moving to the city`s downtown. As Diane Eastabrook reports, it`s an effort to revitalize a city that has been in decline for decades.
EASTABROOK: Craig Steiner now has time each morning to enjoy breakfast, instead sitting in his car for a half-hour commute to work. Last fall, the 30-year-old moved from the suburbs to this loft in downtown Detroit, minutes from his job.
CRAIG STEINER, LOFT OWNER: I can walk to work now, I can ride a bike. During the winter, I`m driving my car just because it can get kind of cold.
EASTABROOK: Steiner used a $20,000 stipend from his employer, Blue Cross/Blue Shield of Michigan to buy his $60,000 loft.
DANIEL LOEPP, PRES. & CEO, BCBS OF MICHIGAN: That was crucial. Otherwise, I wouldn`t have been able to do it.
EASTABROOK: Blue Cross is among a handful of companies, including Quicken Loans and Strategic Staffing Solutions, moving jobs into Detroit and offering up to $4 million in housing stipends to employees who relocate there, too. Blue Cross is moving 3,000 employees from suburban Southfield to offices downtown. It`s getting $30 million in incentives from the city to do so, but President and CEO Daniel Loepp says that`s not what motivated the move or the stipends.
LOEPP: I`ve got two 20-somethings. They are not overly interested in living out in the country. They want to go where the action is. And I think if we can make that interesting and happening, you are going to attract people who will be interested in coming. Businesses are going to be interested in relocating, and that`s going to make for a better economy.
EASTABROOK: Dave Mansini is already seeing a difference. His Supino`s Pizzeria, located just across the highway from downtown, is always bustling.
DAVE MANSINI, SUPINO PIZZA OWNER: We`ve been pretty busy, to the point that I have a hard time keeping up with business sometimes.
EASTABROOK: “Live Downtown” is trying to reverse the near half century trend here in Detroit. Back in the 1950s, as many as two million people called the motor city home. But many residents and businesses fled to the suburbs in the 1960s following the race riots. Today, only about 700,000 people live here. Population loss has contributed to Detroit`s highly public financial woes. With fewer people, businesses have gone under. The city has been forced to shutter schools and abandoned homes pockmark neighborhood after neighborhood. While downtown Detroit has seen some revitalization with a new ballpark, theaters and other activities, the area is still short of the kind of housing that appeals to young urban dwellers.
DAVID DI RITA, PRINCIPAL, THE ROXBURY GROUP: It`s obviously very bright. It gives you some nice views into the city.
EASTABROOK: That`s where developer David di Rita comes in. His company has acquired the 100-year-old David Whitney building and plans to convert it into a 134-room hotel with 108 condominiums and retail space. Di Rita`s still trying to get financing for the project.
DI RITA: I think people seem to understand that the city is going through a difficult transition, a transition not unlike what our largest employers went through a few years ago and I believe the market understands that it`s going to come the other end of that.
EASTABROOK: Irvin Reid is President Emeritus of Wayne State University and part of the state board appointed to review Detroit`s finances. He says business investment in the city and the “Live Downtown” project will be considered as the group assesses Detroit`s fiscal health.
IRVIN REID, PRES. EMERITUS, WAYNE STATE UNIV.: We`re going to rebuild the city of Detroit — its finances, its financial foundation — on the basis of how much activities are going on here, how much business is going on here, how much employment is going on here, what are the prospects for the future.
EASTABROOK: Since “Live Downtown” started last year, Blue Cross has helped roughly 100 employees buy or rent in Detroit. Two hundreds more applications are in the pipeline. The company admits the project isn`t a cure-all for Detroit, but it could project commitment to a community that desperately needs it. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Detroit.