Monday, December 8, 2008

Detroit is a big vacant parking lot

GM's Bust Turns Detroit Into Urban Prairie of Vacant-Lot Farms 
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By Michael McKee and Alex Ortolani

Dec. 8 (Bloomberg) -- General Motors Corp.Ford Motor Co., and Chrysler LLC are fighting for their lives. Large stretches of Detroit are already dead.

With enough abandoned lots to fill the city of San Francisco, Motown is 138 square miles divided between expanses of decay and emptiness and tracts of still-functioning communities and commercial areas. Close to six barren acres of an estimated 17,000 have already been turned into 500 ``mini- farms,'' demonstrating the lengths to which planners will go to make land productive.

The city, like the automakers, has to shrink to match what's left, said June Thomas, a professor of urban and regional planning at the University of Michigan in Ann Arbor.

``The issue is how,'' she said. ``There's no vision.''

The 11th largest U.S. city is running out of options and money as its three biggest corporate citizens seek a federal bailout and the economy contracts. While Detroit isn't even sure how short of revenue it is, the latest estimate from the mayor's office puts the deficit at $200 million and climbing on an annual budget of $3.1 billion.

The population of the once vibrant manufacturing hub that grew up around the 20th century expansion of the auto business has contracted to less than 850,000 from a peak of 1.9 million in the 1950s. More fallout is expected as the area's biggest industry eliminates jobs.

``People are moving out of the city, trying to find work,'' said David Martin of Wayne State University's Urban Safety Program. Those who stay ``can't afford to move out.''

Foreclosure Rate

That exodus has left Detroit with the highest poverty and foreclosure rates in the U.S. and, at 10.1 percent in October in the area including Livonia and Dearborn, one of the steepest measures of unemployment in the nation as well.

``How do you downsize to the right level when there doesn't seem to be a bottom?'' asked developer Fred Beal of J.C. Beal Construction Inc., which wants to do a $50 million conversion of the vacant 34-story David Broderick Tower near the city center into offices, shops, restaurants and lofts.

Detroit has seen decades of fruitless renewal efforts as successive mayors built sports stadiums, welcomed casinos and renovated the riverfront. That endeavor included the Renaissance Center, a downtown office-and-hotel complex that began as a Ford project in the 1970s and switched to GM ownership two decades later after failing to spur long-term development.

Move Away From Cars

Now, business coalitions such as Detroit Renaissance are moving forward with plans to identify neighborhoods where resources should be concentrated and help the area diversify away from cars. The organizations want to use local research hospitals to attract health-care and biotech startups, according to Doug Rothwell, president of Detroit Renaissance, as well as foster a creative community around the city's legacy of advertising agencies.

``You have to build your economy with a larger number of smaller companies,'' he said. That means ``growing by 20 jobs at a time, rather than replacing the thousands of jobs you're losing.''

Current projects are concentrated downtown, along the Detroit River and in a four-mile corridor along Woodward Avenue to GM's former headquarters, now a state office building.

``You're not going to redevelop all 138 square miles at the same time,'' said Olga Stella, vice president for business development at the Detroit Economic Growth Corp., which coordinates the city's revival efforts. ``Private-market forces have made decisions on where they want to develop.''

Tough Choices

The city hasn't made similar choices yet. Detroit's Recreation Department is the only agency that acknowledged the need to shrink, Thomas said. Its 2006 master plan called for ``fewer but better sites and facilities.''

``It's a sign of what's to come for other departments,'' Thomas said.

Planning has been delayed by the resignation of former two- term MayorKwame Kilpatrick after pleading guilty to lying about an extramarital affair. The city will hold a special election in May, with 18 candidates already filing.

On Nov. 25, the City Council passed a Neighborhood Stabilization Plan that seeks $47 million from the federal government to address the city's problem of vacant buildings and empty land. An estimated 55,000 lots are considered unproductive because they bring in no taxes and cost money to maintain.

The grant would pay for knocking down 2,350 of Detroit's tens of thousands of abandoned homes and clear the sites for development. If no buyers materialize, planners would consider adding the space to public parks or land reserved for recreation or environmental preservation.

Land Banks

land bank the city created in July would coordinate the project if approved by Washington. These clearinghouses for vacant lots make it easier and cheaper for developers to invest in urban areas. Parcels in a similar program in Cleveland sold for as little as $1 as long as buyers agreed to maintain the property and pay taxes.

``We're looking at pretty innovative ideas,'' said George Jackson, Detroit Economic Growth's chief executive.

One is urban farming. In many parts of Detroit, land that once held houses now grows cucumbers, tomatoes, peppers and collard greens.

The city has more than 500 gardens and ``we plan to triple that every year,'' said Michael Travis, deputy director of Urban Farming, a Detroit-based nonprofit corporation that helps clear land and provides topsoil and fertilizer.

Corporate Sponsorships

Urban Farming was started by pop singer Taja Sevelle in 2005 and has attracted corporate sponsorships from Sevelle's label, Atlantic Records, and companies such as Whole Foods Market Inc. and Home Depot Inc. The group has ``mini-farms'' in seven other cities including New York, Los Angeles and Minneapolis.

Harvests are sold in markets or donated to soup kitchens. This year's produce was picked ``quickly because people need food so badly,'' said Sevelle.

The farms may also raise home values. In many neighborhoods, nearby gardens could add as much as $5,000 to selling prices, said real estate brokerRuss Ravary, who works in the city and surrounding suburbs. The average price of a home dropped 55 percent to $18,578 in the first nine months of the year, according to the Detroit Board of Realtors.

Even Ravary concedes that mini-farms are a stopgap measure at best.

``I hate to say it,'' he said, ``but I wouldn't put my money in Detroit.''

To contact the reporters on this story: Michael McKee atmmckee@bloomberg.netAlex Ortolani in Detroit at

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