By: Carmen Quinonez
The Erb Institute at the University of Michigan sits just outside of one of the greatest opportunities for business in the country: Detroit, Michigan. Following the city’s bankruptcy, images of a deserted Detroit were published in newspapers and shared on social media, but savvy businesses viewed this Midwestern city as an opportunity. Local communities saw vacant buildings begin to fill with new restaurants, retail shops and start-ups. The city’s government and residents are working hard every day to continue Detroit’s growth. Incredible benefits await businesses looking to move to, expand to or start in Detroit. Here are a few:
Detroit boasts many organizations with the specific goal of building a thriving business community in the city. Detroit Economic Growth Corporation (DEGC) is a nonprofit focused on the city’s economic development, working to provide key support and resources for businesses and bring in new businesses. DEGC offers businesses many services, including acting as a liaison with the city, finding tax incentives and financial assistance and facilitating public-private partnerships. TechTown 2.0 is a nonprofit organization offering a suite of entrepreneurial services for tech and neighborhood businesses, including an accelerator lab and coworking space.
The New Economy Initiative is a philanthropic collaboration that works to return Detroit to its position as a global economic leader by investing in entrepreneurs in the area. The Michigan Minority Supplier Council is a “non-profit organization promoting the economic growth of our corporate members and the minority-owned businesses that serve them.” The organization’s core business services are global business development, access to capital and strategic business consulting.
Detroit has tax incentive programs aimed at generating economic growth for existing, relocating and expanding businesses in the city. In Detroit’s Renaissance Zones, totaling 1,200 acres in 12 areas, eligible businesses can get a waiver from Detroit income tax, Michigan personal income tax, non-debt real property tax, and other tax-related expenditures. The Detroit Brownfield Redevelopment Authority provides “financial incentives on behalf of the City to revitalize underdeveloped or underutilized properties due to abandonment or environmental contamination.” Developers may be eligible for Tax Increment Financing (TIF) for both environmental and non-environmental activities.
Amazon told city officials that an insufficient talent pool cost Detroit the chance to host its second headquarters. However, the University of Michigan, Michigan State University and Wayne State University all sit within or in close proximity to Detroit, enabling a variety of student projects in the city. Detroit also holds the #1 spot in the ranking of Best and Worst Large U.S. Metros at Retaining College Grads, with a 77.7 percent retention rate overall. Nine percent of Michigan Ross BBA graduates and 6 percent of MBA graduates accepted jobs in Detroit upon graduation in 2017, and 18 percent of all Erb Institute graduates currently work in Detroit or its surrounding areas.
According to Dennis Bernard, founder and president of Bernard Financial Group, “The Detroit real estate market is as healthy as it’s been in 25 or 30 years.” Businesses can take advantage of Detroit’s public-private partnerships, involving Detroit Land Bank Authority, City of Detroit Planning and Development Department and others. The Strategic Neighborhood Fund recently announced its expansion to seven additional neighborhoods across Detroit. The combined effort between the city, J.P. Morgan Chase and foundations will drive holistic neighborhood revitalization through investing in streetscapes, parks, single-family home stabilization, neighborhood planning and commercial corridor improvements to attract new businesses.
Detroit is a city on the rise. Although the city is experiencing economic growth, it still faces challenges, including a poverty rate of 22.9 percent. While the University of Michigan’s own Poverty Center works to address that, it’s important for businesses to understand their role in Detroit’s continued growth. Doing business in Detroit presents significant benefits and incentives, in addition to the opportunity to make a difference in the city’s neighborhoods and communities.