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Lessons from Detroit

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Last week was a tough week in Rochester, with the news about Valeant moving the B+L headquarters to New Jersey and laying off hundreds of employees here. And I keep thinking about Detroit's bankruptcy.

There are a lot of differences between us, certainly, beginning with the sheer magnitude of Detroit and its problems. Detroit spreads out over 139 square miles. It had a population of 1.8 million in 1950. By 2012, that had dropped to 684,799: a 62 percent decline. Rochester's population, on the other hand, has dropped only 34 percent.

There are some hints of recovery in Detroit. "The good news, lost amidst the screaming headlines over bankruptcy, is that market momentum in Detroit's core is real and palpable and provides a strong foundation for future growth," Brookings' Bruce Katz and Jennifer Bradley wrote last month.

Katz and Bradley point to the impressive growth of private investment in Detroit's downtown and nearby neighborhoods. Quicken Loans' founder and chairman, Dan Gilbert, moved his company's headquarters – and 7000 employees – to downtown Detroit. He has bought numerous other downtown buildings, and he is helping spearhead a major new public-private initiative there. Other businesses have also been investing in the core area, as have medical centers and Wayne State University.

But the evidence of the city's challenges is almost overwhelming. Drive from the heart of Detroit's downtown to the edge of the city, and you see block after block of abandoned, boarded-up buildings and seedy, empty lots. And while Detroit does have beautiful, prospering neighborhoods, in some of them residents have resorted to hiring their own security force and holding fund-raisers to beautify the streets.

The June report from Detroit's emergency manager, Kevyn Orr, lists these grim statistics: 78,000 "abandoned and blighted structures," 66,000 "blighted and vacant lots." In 2000, the unemployment rate was 7.3 percent; in 2012, it was 18.6 percent – and it got as high as 23 percent in 2010.

Forty percent of the streetlights don't work. The average response time to the highest-priority police calls is 58 minutes (the national average: 11 minutes). Police and fire-department equipment is aging.

There's plenty of blame to go around for Detroit's problems, and for many of the city's critics, political corruption is an easy target. There certainly has been corruption, but a healthy city with engaged residents gets rid of corrupt politicians – and it rebounds from their misdeeds. Other critics have blamed pension costs and union contracts. But that's also too simplistic.

High on the blame list has to be the decline of the US auto industry. Automakers' complacency in the face of the threat by imports was one problem. (Complacency comparison? Eastman Kodak.) So were trade policies like NAFTA, and local tax incentives that result in race-to-the-bottom thievery among municipalities and states.

Racial polarization, white flight (followed by middle-class black flight), the flight of business and industry – including the automakers – to the suburbs, the complete lack of a federal urban policy: all of these contributed to Detroit's fall.

Rochester has not reached Detroit's depths yet. Maybe we never will. But the warning signs are there. And we'd better start paying attention to the similarities.

We should also pay attention to Detroit's positive signs: the growing corporate interest and leadership in the city's rejuvenation, spurring the relocation of suburban business to the city.

Some declining cities are able to turn themselves around. Detroit isn't the only US place to suffer a jaw-dropping loss of jobs at major employers, Robert Samuels observed in the Washington Post recently. In Seattle, employment at Boeing dropped to 38,690 from 100,800 between 1967 and 1971. "The Seattle area," wrote Samuels, "now has Microsoft, Amazon, and Starbucks."

What we do about our own challenges – what the Greater Rochester community does – will determine whether we'll survive the impact of the changes in our own major industries, our suburban sprawl, our racial isolation.

"Come visit Detroit, my fellow Americans," Detroit TV reporter Charlie LeDuff wrote in the New York Times recently. "Come take a look at your future."

"Rochester has not reached Detroit's depths yet. Maybe we never will. But the warning signs are there."

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