Midtown Detroit Anchor Strategy
U3 showed Detroit’s anchor institutions how to spur a new economy for all.
During the height of the 2008 recession, Detroit was fighting for its own survival. As the city’s automakers filed for bankruptcy and population continued to decline, the Kresge and Hudson-Webber Foundations asked U3 to develop a strategy for revitalizing Midtown Detroit by increasing the economic impact of its anchor institutions – specifically , Wayne State University, Henry Ford Hospital, and the Detroit Medical Center.
The problem: these institutions thought of Detroit as a liability rather than an asset. U3’s first job was to change that perception. We worked together to convene philanthropic, civic, and institutional leaders to show them how their collective economic activity could be deployed to benefit the community and, ultimately, the anchor institutions themselves. We presented these anchors as enterprises, analyzing critical institutional data to more efficiently and effectively leverage their internal demand — from big issues like student and employee housing to small details like where they sourced cafeteria pastries.
Through this data-driven lens, it became clear that Midtown Detroit was suffering from economic leakage. Our research showed that only a small percentage of the 30,000 institutional employees and 30,000 students lived in Midtown. Moreover, the purchasing power and hiring needs of the anchors were not benefitting Detroit-based businesses and residents. To incentivize this newly revealed institutional demand, U3 created a three-part strategy.
To address the high residential vacancy rate in the neighborhood, U3 developed the “Live Midtown” program, which provided new incentives for institutional employees to live near their place of work. It quickly became one of the most successful employer-assisted housing programs in the country, and a model for institutions everywhere. The program offered $25,000 home purchase incentives and $2,500 rental incentives to employees of Wayne State University, Henry Ford Hospital, and the Detroit Medical Center. It also provided exterior home improvement grants to existing neighborhood residents. The effects of the Live Midtown program have been profound. As of 2015, the program has attracted and retained more than 1,500 residents — increasing housing occupancy rates to 98%, creating a more vibrant community, and providing more demand for additional neighborhood amenities.
The second part of our strategy, “Source Detroit,” helped connect institutional demand to local suppliers and residents. The universities saved money and the community benefited from the investment, which has driven $65 million of procurement spending to Detroit-based businesses. And yes, those pastries are now supplied by a local bakery that, once on the verge of closing, is now expanding its operation.
Finally, U3 helped consolidate two local not-for-profit organizations into Midtown Detroit Inc. (MDI) – a single organization created to support local businesses, support real estate development, and ensure that Midtown is clean, safe, and vibrant. Located in the heart of Woodward Avenue, MDI is a highly visible and incredibly vital part of the transformation of Midtown Detroit. Through its efforts, more than $30 million in philanthropic and investment capital and $200M in private investment was deployed in Midtown between 2010-2015. Additionally, the Woodward Corridor Capital Fund, in partnership with Kresge and Invest Detroit, was established to provide gap financing for development projects in Midtown. MDI also played a critical role in attracting new businesses to Midtown – including the headquarters and assembly factory for Shinola watches and Whole Foods, which opened a specially designed store tailored to the needs of the district. In 2013, MDI was awarded the prestigious ULI Award for Excellence for its stewardship of the neighborhood.
Thanks to these collective efforts, there are engaged new residents, thriving new business, and beautiful new public spaces bringing a new energy and sense of possibility to Midtown Detroit. The Motor City may have shifted gears, but it’s still moving forward.