Dan Gilbert, chairman and founder of Rock Ventures LLC and Quicken Loans Inc. has sparked renewed optimism that a downtown Detroit rebirth is in the making. Although inspiring, the city remains short of major investors. Relaxing onerous regulatory barriers that keep opportunities at bay could significantly enhance its path to prosperity.
Take the example of millionaire developer Mike Sawruk, a Michigan native, who currently resides in Florida. In the 1980s he moved from a corporate position with Orlando’s largest employer, formed Sawruk Management Inc. and built Eastwood, the largest residential community in Orlando. He recalls that the challenge was to assess what the consumer marketplace dictated and try to convince local zoning and regulatory bureaucrats to allow him to meet the demand. It wasn’t easy.
About the same time, Walt Disney decided to build Walt Disney World at the crossroads of the Florida turnpike and I-4 and faced similar obstacles.
Disneyland was up and running in California in the face of numerous roadblocks, remembers Sawruk. “The more I dug into it the more I realized that Disney used a brilliant strategy in building Florida’s Epcot (Experimental Prototype Community of Tomorrow).”
Disney wanted to see what a city of tomorrow would look like unencumbered by government edicts. He petitioned the Florida Legislature and the governor to give him super zoning in one of Florida’s many drainage districts. It would mean that Disney had to essentially “drain the swamp.”
The surrounding communities fought the project. The city of Orlando wanted it within its city limits. So did Orange County. Disney wanted access to property unencumbered with the counterproductive minefields government seems to thrive on. He refused to commit his resources until the obstacles were removed.
Lawmakers created the Reedy Creek development district, which ultimately became the super-municipality it is today. Disney was given total freedom and control – no taxes, no environmental restrictions, etc.
Fast-forward 40 years and it is undeniable that the gamble paid off. The value of Disney World today is somewhere in the neighborhood of a trillion dollars. Orlando is arguably the top vacation destination in North America and attracts some 40 million visitors annually.
One of the major builders of Disney World, a Sawruk friend, was recruited to recreate the ski slopes of Switzerland in the desert of Dubai. The developer initially told his visionary Emir client that it wasn’t technically feasible in a locale where the temperature gets as high as 140 degrees. The Emir reportedly asked what it would take to make it technically feasible. Over a billion dollars, was the response. The developer was given both the financial resources and a clean slate in terms of regulatory impediments. Ski Dubai is a reality.
Sawruk concluded that the regulation-free model was transferable. If Disney World can be built essentially on swampland in the middle of nowhere, and a ski slope built in the desert, perhaps he could build a mega-multi-use complex in a “special development district” somewhere in Michigan. After all, the blueprint was established with renaissance and empowerment zones.
Sawruk and his partners don’t need government subsidies. They only seek an opportunity to invest as much as a half billion dollars of their own money in underdeveloped areas like the aerotropolis concept near Metro Airport. He also sees promise in a year-round International Detroit Auto Show in the auto capital of the world.
No doubt Detroit and Michigan are in desperate need of forward thinking risk-takers. But an intimidating bureaucracy, stifling mandates and a gauntlet of licenses, permits and inspections, characterizes Michigan’s regulatory climate. All are time-consuming and costly.
Is city and state government more committed to impeding development and innovation than creating synergy and jobs in a free market? If not, someone should be talking to Sawruk.