Benefitting the Community
The Detroit City Council once again approved major tax incentives to stimulate downtown development. In a vote of 8-1, Council approved $800 million in incentives for the Ilitch family to develop the area near Little Caesars Arena. This is the same area the Council approved $400 million in tax incentives for a decade ago. Then, the Ilitch group promised a vibrant neighborhood, jobs, stores, and restaurants. Instead we got parking lots and the violent displacement of people who had been living in older apartment buildings.
The city council meetings over this decision were long and contentious. Much of the argument focused on the question of what benefits flow to the community in exchange for the use of public funds for private development. This question comes in the context of long-standing concerns over inflated claims of community benefits offered by major developers.
Most recently Dan Gilbert received an additional $60 million in tax breaks for the Hudson site. This is on top of the $618 million in tax incentives awarded in 2018. Writing in opposition to the deal, Tina Patterson of the PuLSE Institute said these “agreements in exchange for tax breaks often remain unfulfilled, with no serious enforcement efforts to ensure the community actually receives the agreed upon benefits.”
In the wake of this most recent vote, the Detroit Free Press wrote a front page article entitled “Megaprojects shielded with secrecy; public denied data.” The article documents the sordid history of the lack of accountability of mega businesses to live up to promises. Where data was obtained, developers fell woefully short of promises.
This emphasis on community benefits is important, but it directs our attention away from a much more critical question. Are megaprojects the key to developing our city?
We have had more than half a century of mega efforts: office buildings, stadiums, hotels, casinos, and auto plants. Each one has promised a “new,” vibrant, Detroit. Yet here we are. We are among the poorest cities in America. We have been driving out long term residents, especially African Americans, contributing to a continued shrinking of our city. We have done nothing to deal with the shame of $600 million in illegal property taxes. We refuse to create viable systems to guarantee basic water, housing, and education to our people.
How many more times will we follow the lead of the richest people in the country, who are mostly good at getting richer?
If we really want to develop a vibrant city, we should not be looking to these mega efforts. They have demonstrated time and again their promises mean nothing.
We all know the world is changing quickly. The idea that cities will continue to hold giant office buildings and big mega stores is a vision fading quickly. Our city council is locked into an argument shaped by the past, not looking toward the kind of new cities that require radically different understandings of work, education, and provisions of care.
Historically economies are driven more by small, inventive entrepreneurs than by big businesses. In 2019 small businesses “generated 44% of all economic activity” in the country. Small businesses created a net 12.9 million new jobs in the last 25 years, which accounts for roughly 66% of all jobs created in that span. Big businesses only added a net 6.7 million jobs.
Since 2019 we have seen a surge in worker owned cooperatives. They grew by 30% through the pandemic. Cooperatives tend to attract women and people of color. Women make up 52 percent of the cooperative workforce, 44 percent identify as male, and 4 percent nonbinary. In addition, 47 percent identify as people of color.
If we are going to put public money behind private development, we should be asking what encourages local, small-scale efforts to meet local needs? How do we support young people in developing skills and crafts essential for living? How do we encourage artists and thinkers?
No matter what big developers promise, the community will never benefit in meaningful ways from their efforts. We can reimagine urban living, based on self-sufficient, self-determined efforts to provide what we need and what we enjoy together.