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The calculus of Detroit’s bankruptcy, 10 years later, shows a city on the rise


Tuesday marked the 10th anniversary of the largest municipal bankruptcy in American history here in our hometown of Detroit. The city’s path to financial rock-bottom was a decades-long, tragic culmination of financial mismanagement, endemical disinvestment, racial polarization, and political dysfunction. After the news of the bankruptcy declaration broke in July 2013, there was a resounding fear that Detroit – the birthplace of the African American middle class, the auto industry and Motown – would never recover.

But the city successfully exited bankruptcy in record time just 14 months later. Sacrifices by city pensioners coupled with an $830 million federal, state, private and philanthropic aid package enabled the swift resolution of the city’s financial and legal predicament and gave it the opportunity for both a fiscal and mental reset. One condition of the settlement was wisely conjured by the bankruptcy court judge, who – out of a desire to ensure that the city never showed up in his court again – demanded long-term commitments that would not only allow the city to recover but to thrive in the decades ahead.

That long view was exactly why Kresge contributed $100 million to the “Grand Bargain” fund. To be sure, adjusting Detroit’s long-term debt and restructuring public services was essential, but equally important to Kresge was a commitment to help rebuild the quality of life in the city in an equitable way that responded to and respected the needs of long-time residents.

The Detroit Riverwalk has been named the Best Riverwalk in America – three years in a row – by the USA TODAY 10Best Readers’ Choice Awards.

Some of those efforts were already underway through major Kresge investments made in the years prior: From supporting the redevelopment of Detroit’s international riverfront to accelerating the pace and scale of development in the Midtown Corridor . . . from contributing to the creation of the entrepreneurial fund dubbed the New Economy Initiative to stewarding the emergence of the Detroit Future City land-use plan and nonprofit organization . . . from bolstering the primacy of artists and the arts and culture sector to making a major investment in the initial stage of a regional mass transit system.

Media have published a variety of report cards this week grading much of the city’s measurable progress (and, in some cases, stagnation). And – even with the setbacks from the COVID-19 pandemic – their data largely show that today’s Detroit is nearly unrecognizable from a decade ago.

However, what is missing from these lists are factors harder to calculate but perhaps every bit as important.

It is tempting to assert that if you throw enough money at something, it is bound to get fixed. But we know that’s simply not the case. Money alone can’t reverse the effects of decades of disinvestment, correct educational and health outcomes, or bend the attitudes of community members who have patiently awaited change while their neighborhoods have been marginalized.

It instead takes an alchemy of ideas, fortified community problem-solving capacity, enhanced cross-sectoral engagement, and money wisely targeted and effectively implemented. That recognition shaped a more intentional pivot of Kresge’s investment strategies toward those building blocks – all with the explicit aim of promoting thriving, vibrant neighborhoods of engaged residents. And it is at the neighborhood level that some of our most interesting, and meaningful, work has come into play – work that has to stand at the core of any accounting of the progress our city has made since its emergence from bankruptcy.

Among the many examples include:

• The 53-acre Marygrove campus on the precipice of bankruptcy itself just a few years ago, has been fully reimagined into an educational campus serving more than 600 children in preschool, elementary and high school, and will soon incorporate an undergraduate degree-granting program through the University of Michigan Marsal Family School of Education.

A view of the Marygrove campus in norhtwest Detroit with the low-rise, terra-cotta Early Education Center in the foreground and the Tudor Gothic Liberal Arts Building in the background.
The state-of-the-art Early Education Center on the Marygrove campus in northwest Detroit opened in 2021. The center, designed by Marlon Blackwell Architects, has won several architectural prizes. (Photo by Timothy Hursley)

• The Kresge Innovative Projects: Detroit Plus (KIP:D+) program, now in its ninth year, has provided more than $12 million to 155 transformative projects designed and created by small, neighborhood-based organizations. Designed to tap the vision and creativity of residents to improve the quality of life in their neighborhoods, the program has successfully built confidence and organizational muscle within hyper-local efforts that have typically had little prior investment.

• The Kresge Arts in Detroit program, in its 15th year, has invested tens of millions of dollars into Detroit’s ecosystem of arts institutions, arts organizations, and cultural activities. The program’s fellowship has alone awarded nearly $8 million in unrestricted monies directly to nearly 350 artists in all stages of their professional development in the visual, literary, performance, film, and musical arts. We have been robustly joined in those investments by other foundations, such as the Knight Foundation through its Detroit Arts Challenge.

Fifteen metro Detroit artists have been named Kresge Eminent Artists, including (left to right): Gloria House (2019), Patricia Terry-Ross (2017), Bill Harris (2011), Shirley Woodson (2021), and Olayami Dabls (2022). (Photo by by Cybelle Codish)

• With the Kellogg Foundation and other partners, Kresge has invested more than $50 million in creating a comprehensive citywide early childhood development system to ensure that all Detroit children enter kindergarten with the emotional, intellectual, and developmental assets necessary to learn. The Hope Starts Here initiative has invested in upgrades to childcare facilities, stronger networks among early childhood providers, expanded access to high-quality seats, and increased local and state attention to the policy imperatives bearing on mothers and children in their earliest years.

• We have tailored our deep neighborhood investments in the Livernois/Six Mile, Southwest Detroit, North End, and Jefferson Chalmers neighborhoods to promote children- and family-centered approaches to economic development, housing, open space, and small business development.

A diverse group of community members stand in front of a pavilion being built on a vacant lot in the Jefferson/Chalmers neighborhood in Detroit.
Community members stand in front of a pavilion being built as part of the Fox Creek Artscape transformation of two vacant lots in the Jefferson/Chalmers neighborhood on Detroit’s East side. (2018 photo by Lon Horwedel)

In all cases, we hear from grantees, partners, and others that these actions and investments – sometimes small and sometimes very large – promote social cohesion, provide residents with the confidence and encouragement to make positive changes in their neighborhoods and solidify their commitment to place. It may not be susceptible to being counted or quantitatively measured, but it is there and very real, shaping the ebb and flow of neighborhood life.

The media have also skated over the unprecedented federal government investments into Detroit. Whether the $300 million investment on the tail of the bankruptcy, or the American Rescue Program Act’s $890 million distribution to Detroit City government and more than $1.2 billion to the Detroit Public Schools Community District or the untold millions of dollars that will land in the city through the Infrastructure Act or the Inflation Reduction Act.

Building on the strong foundation of investments by the City, philanthropy, the private sector, neighborhood residents, businesses, places of worship, nonprofits, and others, these dollars represent an unprecedented, transformational moment for the city’s trajectory. It affords the opportunity to take on the enduring, seemingly intractable challenges that Detroit and virtually all American cities face. Racial reconciliation. Wealth creation in communities of color. Aging infrastructure. Climate change. Health disparities. And on and on.

What the ten years since the bankruptcy have reminded us of is that these dollars cannot be squandered on business as usual. We need to step back, identify the defining issues of our future, align our aspirations, and marshal the right resources in the right form in the right doses in the right sequence. Only then will we multiply the impact of federal resources, unlock new forms of innovation, and equip community residents with the tools they need to engage the complexities of local problem-solving.

Exactly how much progress the city has made over these past 10 years is, justifiably and understandably, a point of disagreement. But it strikes me that, by whatever measure, that progress pales in relationship to what is possible in the next 10. We are a community whose very motto reminds us that we are up to the task: We hope for better things; it shall rise from the ashes.

Rip Rapson is Kresge’s President & CEO.