Excerpt from newly published book about Kresge and Detroit explores the creation of M-1 Rail and Regional Transit Authority of Southeast Michigan

Kresge has really been willing to take risks and use their resources in ways other foundations aren’t willing to—and here I’m talking [about] the light rail down Woodward.

—Tonya Allen, former CEO, Skillman Foundation, 2009

In February 2006, Detroit hosted Super Bowl XL at Ford Field, then a four-year-old stadium at the northern edge of downtown. The event, with its nationwide publicity, partying crowds numbering in the tens of thousands, and a parade of celebrities (including several famous Detroiters), pumped a shot of adrenaline into the city’s beleaguered mood and image. Years of planning, driven by a civic coalition adroitly led by Roger Penske, made it “a tipping point for changing the conversation about Detroit,” as Susan Sherer, staff director of the Super Bowl Host Committee, put it a decade later. Although the vast majority of Detroit remained economically and physically troubled—conditions that would soon worsen in the Great Recession of 2008—the ability of its factious civic and government establishment to pull together and produce so much visible improvement was energizing. Civic collaborations of the recent past— particularly those to organize the celebration of the city’s three hundredth birthday and to create the Riverfront Conservancy—had already signaled a growing cohesiveness among Detroit’s public and private leadership. The Super Bowl dramatically confirmed the trend.

The preparations and immediate aftermath included extensive improvements to Woodward, Washington Boulevard, and Broadway; the conversion of several office buildings to apartments; street-level facade improvements; and the opening of new shops in long-vacant storefronts. What it did not provide, as became clear amid the massive burst of street traffic, was a convenient way of traveling beyond the vicinity of Ford Field and downtown, whether to visit Detroit’s cultural, educational, and medical institutions farther north in Midtown or to connect with the wider region.

It appeared that the momentum that had been developing downtown was more than ready to extend northward, but the distances between the most popular destinations needed to be bridged—safely, conveniently, and attractively—if they were ever to become more than separate nodes of activity.

To Roger Penske and Matt Cullen, both key players on the Host Committee and in the spreading redevelopment, linking the various growth spots seemed like a natural way of combining their respective strengths, spurring redevelopment in the gaps between them, and fusing their economic energies into a single, rebounding Woodward Corridor.

The same idea had occurred to Rip Rapson, who, in a seminal conversation with Penske soon after the Super Bowl, recommended that philanthropy and the downtown civic leadership join forces in what Rapson later called a “grand adventure” to bring rail transit back to Detroit.

Newly arrived at Kresge after six years as president of the McKnight Foundation in Minneapolis, Rapson had seen firsthand the economic and community development benefits of well-designed transit. McKnight had, in fact, supported exercises in transportation planning that had forged a previously elusive relationship between grassroots interests and citywide transportation planners.

Rapson was baffled that transportation had thus far played little or no role in Detroit’s redevelopment planning.

Laura Trudeau, who would soon be appointed to lead Kresge’s Detroit Program, tried to explain to him why the idea of transit had long been considered a poor fit for the city’s history and economic demography: “We had all these disparate job centers,” she told him, “and very dispersed, single-family housing—not really an amenable physical layout to be connected by a transit system. But he said, ‘No, you’ve got it backward. You have to build the transit, and then over time the development will happen where the transit is.’ He said, ‘You just have to get started and build it. Build something that people can see and feel, and they’ll want more of it.’”

Where Penske and Cullen saw a chance to galvanize and accelerate economic growth in the city’s core, Rapson also saw a means of using that growth to benefit at least the immediately surrounding neighborhoods with a combination of physical improvements, ease of access, and opportunities to cultivate local businesses and jobs. By linking a lower Woodward rail line to hubs of wider transit, particularly the Amtrak lines to Ann Arbor and Chicago and the downtown People Mover, Rapson also saw the potential to encourage further transit beyond the core—and to achieve, at long last, a regionwide transit system befitting a large and reviving city. But for any of that to happen, it was necessary to start somewhere—and the somewhere was unquestionably lower Woodward.

Penske fleshed out the idea, consulting with other civic figures and transportation experts, and arrived at a rough estimated cost of $100 million. With a global financial implosion underway, and given the straitened condition of the city’s finances even in stronger times, it at first seemed likely that this would have to be an entirely private undertaking. Eventually, a fully functioning, economically sound system could then be turned over to a public authority for permanent operation. But raising $100 million for an unprecedented project of this kind, in an environment with little or no appetite for rail transit, would be a tall order, even for Roger Penske.

As Rapson told the story some years later, “Roger looked at me and said that if Kresge would be willing to invest the first $35 million, he would enlist others to secure the rest. At one level, it was a crazy idea—municipal governments, not foundations, build streetcars. But the audacity of the aspiration justified the risk, or so it seemed to me. I agreed, and we moved forward.”

The next eager participant was John Hertel, then head of the Regional Transit Coordinating Council, a body with little formal power but with a mission of encouraging coordination of transportation policy across Wayne, Oakland, and Macomb Counties and the city of Detroit. Like Rapson, Hertel believed that true regional transit would require some initial project around which to build momentum, and he had been alert for any signs of movement in that direction.

At the invitation of Dave Egner, then president of the Hudson-Webber Foundation, Hertel attended an early planning meeting and provided a crucial voice for regional government in the midst of discussions that were otherwise almost entirely private-sector—consisting essentially of foundations and business leaders, with Rapson and Trudeau, Penske, Cullen, and soon Dan Gilbert at the fore. Because Woodward Avenue is a state roadway north of downtown (its official state designation is M-1), Hertel approached the director of Michigan’s Department of Transportation, Kirk T. Steudle, who assigned a senior official with experience in rail transportation, Tim Hoeffner, to devote significant time to the project. With a leadership team in place, Kresge proceeded with a pair of planning grants in 2007 and 2008 to develop the idea into a feasible proposal.

The initial concept called for a streetcar line just over three miles long, with twelve stops running from the waterfront to Grand Boulevard. Although participants loosely referred to the project as “light rail,” that phrase technically describes a more express form of commuter train, typically running a longer distance with a dedicated lane separate from traffic. The Woodward rail, by contrast, was meant to run along the curb, blend in with traffic, and encourage passengers to step on and off at relatively short intervals. It would, in essence, make the entire three-mile span a single shopping/business/educational/ entertainment/residential complex, by removing the need to drive from one point to another. Still, planners at first believed that the multistop circulator line they were envisioning could later be extended or attached to a true light rail that would someday carry passengers at higher speeds to the city limits and into the suburbs.

But to raise the money for the first stage, and to sustain the coalition of supporters through all the challenges that lay ahead, it was first essential to create a consensus about what the project would be—what it would represent for the city and, eventually, the region, and what it would contribute to the economic development of central Detroit. To start creating that kind of understanding and enthusiasm, and to see comparable systems in operation, in March 2008 Penske invited a team of participants—business and civic leaders, foundation executives, and government officials whose support would be essential—on a marathon tour of urban rail projects that had been catalytic for economic development.

The group began with Minneapolis–St. Paul and Portland, Oregon. The Twin Cities’ first rail lines opened in 2004 and have been expanding ever since; Portland’s system started in 2001, running as a loop comparable in length to the one envisioned for Detroit. It, too, has been extended several times in the ensuing years. Significantly, Portland’s initial streetcar system was built primarily with local money; less than 5 percent of the initial development cost came from federal transportation subsidies.

The group set out on Penske’s private plane from Oakland County Airport, toured transit lines and met with transportation leaders in both cities, and returned home, exhausted but inspired, nearly eighteen hours later. Soon after, another group visited Denver’s light rail system, which opened in 1994 and has since expanded considerably. As Hoeffner remembered it, “What we got to see was the traditional way of doing [rail transit] in Minneapolis,” under the Federal Transit Administration (FTA) and using federal funding. “And then we compared that with Portland, where it was more private-sector led, less conventional.” The Portland experience particularly impressed the civic and corporate participants, who, as Hoeffner put it, “felt that they could deliver [the project] under a private-sector model faster and cheaper, without the bureaucratic processes” that burden most publicly sponsored transportation projects. Before long, a chance to win some federal support, without sacrificing the project’s independence as a private venture, made the idea even more appealing. But even before that, the possibility of a privately led development made a strong impression.

So did the economic effects of rail transit on surrounding neighborhoods—a distinguishing feature of all three cities’ systems, and a critical factor for Kresge. In all three cities, the growth of what’s called “transit-oriented development” along the rail lines— clusters of new shops, restaurants, markets, mixed-income housing, public attractions, and amenities—tended to peak in places that drew transit traffic. The two tours showed not only that urban rail systems were feasible and popular, but that they more than repaid their cost by enriching the surrounding economy. Encouraged by the tour and persuaded by the completed feasibility study and business plan, in March 2009 Trudeau presented to the Kresge board a proposal for $34.6 million to back the project. Some Foundation trustees, blanching at the huge price tag, asked whether it might be better to commit just to the first phase of work, totaling some $1.6 million, and then consider additional support later. But as Trudeau pointed out, transportation developments are essentially an either-or proposition: you can’t win the requisite political and regulatory support unless you have a clear financial path to completing the job.

To read more, visit Embracing a City’s website and order the book. You can find additional excerpts:

• Chapter 1 excerpt: The quiet launch of 1993’s Detroit Initiative changed Kresge and the city where it was founded
• Chapter 2 excerpt: The Woodward Corridor, from riverfront to Midtown, was key to advancing Detroit’s revitalization
• Chapter 3 excerpt: Focusing on neighborhoods beyond the city’s core became an imperative