Detroit’s big business benefactors

July 15, 2014, 9:33 PM UTC
Abandoned Detroit
Bjarte Rettedal—Getty Images

In most cities, public services are funded with public dollars. But Detroit is not most cities.

Struggling under mountains of debt and with precious little cash, city cutbacks have left many Detroiters to their own devices. Some businesses have bought their own streetlights. A few artists have taken to beautifying abandoned buildings. And, increasingly, the city has come to rely on the kindness of a small army of private donors.

The list of Detroit benefactors reaches into the highest echelons of business. In May, JPMorgan CEO Jamie Dimon pledged more than $100 million of over the next five years for loans and redevelopment. Goldman Sachs incorporated the city into its multi-million-dollar 10,000 Small Businesses campaign. Local utility DTE Energy put $1 million toward creating jobs for Detroit youth, while AOL founder Steve Case launched a splashy multi-city $100,000 investment contest in the city’s M@dison Building last month. And in addition to funding many other civic-minded projects, Quicken Loans chairman Dan Gilbert has famously bought more than a billion dollars of Detroit real estate and plowed money into refurbishing it.

The big-ticket displays of corporate citizenship force the question: What’s in it for the companies? Public stewardship isn’t exactly part of the shareholder-value-maximizing playbook. And while public-private partnerships get a lot of lip service from politicians, at least one observer has fretted over the rise of an unelected corporate oligarchy. There are a few possible motivations for corporations chipping in: It could be that low prices encourage investment in the distressed city (many stand to gain financially if the city bounces back). It could be that it’s worth paying for the PR that comes from helping out an American underdog. And it could be that the corporate titans have a genuine do-gooding impulse. Or, maybe most likely, it’s a combination of all of the above.

Click through for a roundup of the Motor City’s privately funded services.

Detroit Institute of Art (and public pensions)

Forget what you’ve read in the national media about a pending dystopian Rodin fire sale. Detroit isn’t going to sell off its art. Instead—with a little help from private industry, major foundations and money from the Big Three—it’s creating an independent foundation to house the art and shore up public pensions along with it.  

The plan is called the “Grand Bargain.” If it works, the more-than-$800 million deal will link the art collection to city pensions, creating an independent nonprofit to hold the art, and funneling money to help support unfunded retirement obligations.

Nearly $200 million for the deal will come from the state, and $466 million will come from private coffers, primarily large local and national foundations. As part of the deal, the DIA would be required to secure $100 million on its own. So far, it’s raised more than half of that—including $10 million from Ford, $10 million from General Motors, and $6 million from Chrysler.


Police cars

The city’s ailing fleet of police cars got a boost from sponsors including Penske Automotive; Ford, GM and Chrysler; Quicken Loans; and the Kresge Foundation. As well as Platinum Equity LLC, FirstMerit Bank and Blue Cross Blue Shield of Michigan. The $8 million donation will provide about 100 additional police cruisers and 23 emergency vehicles. Announced last year, the final installment of 25 new cruisers hit the streets in April.


Public transit

Detroit's People Mover only moves people in about a three-mile radius.

In lieu of a subway, Detroit has a three-decade-old rail system called the People Mover. But the People Mover is almost hilarious in its inadequacy: in a city three times the size of San Francisco, the system covers only a 2.9-mile loop.

Enter the new M-1 rail project, which will link the city’s booming downtown and midtown neighborhoods. More than a dozen private donors have contributed $100 million to the project, led by Penske Chairman Roger Penske, Quicken Loans Chairman Dan Gilbert and Rock Ventures CEO Matt Cullen. Other sponsors and partners include Bank of America, the Compuware Corporation, Ilitch Holdings, the Detroit Medical Center and the Henry Ford Health System. The $140 million endeavor also got a public bump last year when the Department of Transportation announced it would contribute $25 million. 


Dog parks

Detroit now has two official dog parks. The first, which opened in May, was funded by PetSmart and is called the PetSmart P.U.P.’s Detroit Dog Park. The second, which opened in June, was funded by Detroit-based leather goods and watch manufacturer Shinola. Shinola, which is headed by the founder of watchmaker Fossil Inc., has also installed four clocks around the city. 


Blight removal

Homebuilding scion Bill Pulte launched an effort to clear Detroit blight with much fanfare last year. It didn’t quite pan out—the city took over the charge in April. But that’s not to say that private industry won’t still have a big hand in the demolition of Detroit’s 40,000 abandoned buildings (some 20% of the city’s total). The blight removal taskforce commissioned by President Barack Obama, which released a roadmap for tackling the problem in May, is headed up by businessman Dan Gilbert. 


Graffiti covers an abandoned building at the former Belle Isle Safari Zoo.

Recent years of underfunding have taken their toll on Detroit’s parks. Last year, the mayor’s office says, only 25 of the city’s 186 public parks were regularly maintained. The rest had fallen into various states of disrepair. That’s changing, mainly because of the state takeover of the city’s largest park, Belle Isle. But it’s also thanks to partnerships with volunteer groups. Detroit Mayor Mike Duggan says 65 community groups have agreed to mow and clean parks this year. (The city is also doubling its seasonal workforce.)

One of city’s the most visible public spaces isn’t a park at all, though. It’s the riverfront. Over the last decade, the banks of the Detroit River have seen more than $1 billion in revitalization efforts. Much of that push isn’t controlled by the government, but by the Detroit Riverfront Conservancy, a partnership between the city of Detroit, the Kresge Foundation and General Motors. 


Development planning

Detroit Future City, a roadmap for revitalization spearheaded by former mayor Dave Bing and championed by current emergency manager Kevyn Orr, wasn’t actually produced by the city. The project was sponsored by the Kresge Foundation, which both funded the research and is promising $150 million over five years to carry out the resulting recommendations. Other groups backing the project include the Detroit Economic Growth Corporation, the W. K. Kellogg Foundation, and the John S. and James L. Knight Foundation.


With a police department that notoriously takes 58 minutes to respond to even urgent calls, private security in Detroit is booming. Dan Gilbert’s companies have 300 local security cameras, which private forces monitor from a multi-million dollar control room in the Chase Building. Wayne State University’s police forces have bulked up while the city’s have atrophied. And John W. Stroh III of Detroit’s Stroh Brewing Company is paying for 3,500 hours of private patrol in the Jefferson East Corridor. But thankfully not everything in Detroit is going the DIY route: vigilantism in the city seems to be going down—falling from 33 incidents in 2011, to a still-alarmingly-high 15 in 2013. 

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