The Detroit Economic Growth Corporation (DEGC), the nonprofit group working to bring new development to the city, has come under fire for having an agenda that favors white investors over blacks. The charges flow out of the mouths of politicians, community activists and citizens alike: “whites are trying to take back our city.”
The DEGC is accused of “giving” the city away. Its complainants want a “race” factor in the requisitioning and dispensing of development grants and loans. It’s difficult to see how over the long-term such appeasement could enrich Detroit’s path to revitalization.
Development stories that typically grab the headlines are associated with Quicken Loans buying downtown buildings, the Ilitch’s planned mega-million sports and entertainment complex and the M-1 group’s construction of a streetcar line along Woodward.
Those high-profile deals have the DEGC under pressure from black investor wannabes who insist on special dispensation. Some already have outstanding loans that are delinquent, which has resulted in $5 million reduction in the Detroit Block Grant annual allocation from HUD.
That hasn’t stopped critics from obsessing with the exploitation of development disparities and demanding preferential treatment — not based on how much “skin they’re willing to put in the game,” but the color of their skin. The DEGC won’t play this game.
In the past, whites investors were forced to accept prominent blacks as “fronts” into their deals. The minority partner had little real equity and no real decision-making authority. The DEGC has since raised the bar, not only serving as consultant and advisor to blacks entrepreneurs who go it alone, it puts money into deals that promise success.
Instead of hand wringing and forecasting economic doom, for example, businessman Chris Jackson and Jim Jenkins, owner of Jenkins Construction, partnered to construct a new $18 million five-story office/medical building in Midtown called the Queen Lillian Project. Detroit investor Gregory Jackson has purchased the twin 22-story, 584-unit apartment Lafayette Towers complex.
George Stewart and Mike Byrd are quintessential entrepreneurs with a contagious “can do” spirit who have embarked on rehabbing an entire block of the Gardenview Project in Midtown. Michael Roberts has invested in the East Riverfront project and plans to renovate the former Omni Hotel.
One of the more influential minority investors is Andra Rush, the Native American CEO of Detroit Manufacturing Systems who supplies Ford Motor Co. Her parent company is the largest Native American-owned in America.
Richard Hosey is a partner with Karp and Associates of Lansing, which will renovate three vintage buildings surrounding Capitol Park in downtown Detroit and convert them into market-rate loft apartments with retail and office space.
Hiram Jackson, CEO of Real Times Media, which includes the Michigan Chronicle, has invested in the acquisition and renovation of the former Dell Pryor building located in historic Paradise Valley.
Marvin Beatty, Elliott Hall and Ricardo Solomon are the developers and owners of Gateway Marketplace, the nearly completed Meijer retail power center at 8 Mile and Woodward. Beatty also is a partner in the Magic Plus LLC that includes Earvin “Magic” Johnson. The latter plans to turn the former Michigan State Fairgrounds into a multi-use venue featuring a movie theater, housing and restaurants.
Beatty’s investment team was able to overcome obstacles because the DEGC was there to help at every step of a laborious process. With Gateway, the group needed pension funds, Michigan Economic Development Corp. new tax credits, etc. DEGC helped seal the deal with an initially reluctant Meijer, as well as with “bridge financing” to facilitate cash flow during the construction phase.
Because the DEGC understands the needs of the marketplace, he told me, the organization was an important conduit that worked with his group, never against them.
“In my experience,” added Beatty, “nobody funds development projects based on people being black.”
Detroit will need a lot more of DEGC’s equal economic opportunity resolve – and investor risk-taking – on its road to recovery.