Despite Washington's help, Detroit slumps

WASHINGTON -- During the Nixon years, Detroit's business elite laid plans for the glittering Renaissance Center retail and office complex. The Ford and Carter administrations brought the "People Mover," an elevated rail loop around downtown that hardly anybody rides today.

Other presidential administrations introduced enterprise zone tax breaks and empowerment zone development grants.

President Barack Obama promised to save the Motor City by saving the auto industry.

But none of it worked. Rather than becoming a showplace for the transformational power of urban policy, Detroit now stands mostly as a burial ground for good intentions -- of both Democrats and Republicans.

Last month, Detroit became the largest city in U.S. history to file for bankruptcy, offering sobering proof that decades of government and private-sector intervention was no match for decades of residential and business flight that eroded the city's once ample tax base.

"It is as if the tide is going out and I take a fire hydrant and pump as much water on the beach as possible," Charles Ballard, a Michigan State University economist, said. "No matter how long I pump, there is still going to be more sand showing." Still, political leaders kept pumping.

Few initiatives have fared particularly well. The $500 million Renaissance Center, which was privately funded, was quickly derided as a fortress that was not only difficult to navigate but also cut a key portion of downtown off from the Detroit River. It was sold to General Motors in 1996 for just $76 million. G.M. moved its headquarters to the development and invested heavily in renovations, but much of its retail space remains vacant.

Since beginning operation in 1987, the People Mover has stood out mostly as an economic albatross. It circles downtown in a 2.9-mile loop, carrying just a tiny fraction of the projected ridership and costing taxpayers millions of dollars a year in subsidies.

Other initiatives, including the $100 million empowerment zone and grants to rebuild public housing at a more livable scale, have had mixed success.

Still, the money flowed, often because Detroit mayors forged tight relationships with Democratic presidents. "[Former Philadelphia Mayor] Ed Rendell used to tease me miserably that every time he turned around I was down in Washington getting money," said Dennis Archer, who served as mayor of Detroit from 1994 to 2001. "I'll tell you: I worked hard to do that."

Archer also was able to pull together public financing to construct new downtown stadiums for the Tigers, the city's major league baseball team, and the Lions, its National Football League franchise.

At points, the efforts seemed to make a difference. Detroit made measurable strides during much of Archer's term, as crime and poverty declined and the city's alarming population loss slowed.

But that progress was not enough to alter the bigger picture of massive job losses in auto manufacturing, the very industry that made Detroit famous. The downturn started in the 1950s, and it picked up speed in recent decades.

"The problems of Detroit fundamentally are the problems of a changing American manufacturing base," Cisneros said.

The decline in jobs

In 1978, Wayne County, which includes Detroit, was home to 256,000 car industry jobs, according to the Center for Automotive Research. Now, there are an estimated 95,000 auto industry jobs in the county -- a marked improvement since its nadir just before the Obama administration's auto industry bailouts in 2009, but far below its historic peak.

These days, the Motor City is home to only one auto plant, a Chrysler factory that turns out Jeep Grand Cherokees. (A second plant, run by General Motors, straddles the border with neighboring Hamtramck.)

As Detroit offered fewer auto-related jobs, government became one of the largest employers, partially filling the void. But over the past quarter-century, the city's workforce has been cut by more than half, a number likely to shrink further as the city reorganizes in bankruptcy. Still, city government remains Detroit's second leading employer. Other big employers in the city include the federal government, two major hospitals, as well as Quicken Loans/Rock Financial Inc.

The eroding tax base, coupled with the national economic crisis, finally led to the city's economic collapse. The city's population dropped by more than 25 percent since 2000, causing tax revenue to further plummet. The city's leadership fell into disarray under Archer's successor, Kwame Kilpatrick, who was forced to resign after being convicted on corruption charges.

By the time Mayor Dave Bing took office in 2009, the city was reeling financially and was soon put under the control of a state-appointed emergency manager. Notably, when the emergency manager Kevyn Orr filed for bankruptcy, no prominent voices called for federal help.