Joseph Reyes, CEO of Integrated Media Technologies (Inner City 100 2005, #78) feels his hometown is headed in the right direction, and he says Kilpatrick is a big reason why. "As far as economic development goes Mayor Kilpatrick has been stellar for the city," says Reyes. "He continually advocates for business owners and understands that Detroit's tax base will only grow by bringing in companies both big and small." Reyes adds that Kilpatrick was the first mayor to attend meetings of the Hispanic Business Alliance and the targeted business development zones have helped secure work for entrepreneurs like him.
Reyes is positive about the city's direction, but not all business owners are buying what Kwame is selling. "I would say there is a dearth of entrepreneurial activity in the region and the city of Detroit is dead," says Michael McCorquodale, CEO of superconductor company Mobius Microsystems. To his point, there were zero VC dollars spent in Michigan during the first quarter of this year.
McCorquodale moved to Detroit because the company started while he and the other employees were postgraduates at Ann Arbor, and none wanted to relocate too far. He believes there is underutilized engineering talent in the area, but the managerial pool is so shallow that Mobius had to set up an office in Silicon Valley. Initially, McCorquodale checked out TechTown, but found it inadequate for his business's goals. "It's a small lab that's totally impractical for a high-growth venture-backed company like ours," he says.
Ironically, Mobius is one of the companies Kilpatrick touts for moving to the Motown.
Perhaps it is only fair to view Detroit as a city that hit rock bottom and is taking baby steps to recovery, but even with the Inner City 100 success, it's a fair question to ask if Detroit is worthy of entrepreneurial investment.
Walk around downtown on chilly gray afternoon without Kilpatrick's enthusiasm guiding the way, and the renaissance is a much tougher sell. The word bustling doesn't come to mind. Foot traffic is almost nonexistent. Two new loft-style apartment developments are going up, but they have yet to be filled. Amenities are limited in the area, and for employers, there is no mass transit to get anyone back home to the suburbs.
Anecdotal evidence aside, some numbers express a stark contrast to Kilpatrick's sunny outlook. A 2004 ICIC chart of inner city job growth between 1995-2001 found Detroit at the rock bottom, although the metropolitan area had a 2% gain. The city lost some 50,000 residents between 2000 and 2004, and faces an enormous projected budget deficit of between $230-300 million in 2005.
Even Detroit's notable achievement of having the most representatives of any city on the Inner City 100 list can be somewhat attributed to a strong effort his administration put forth in getting companies to apply to the list (Kilpatrick told the ICIC gathering that they went "entrepreneur fishing.") In addition, four of the companies are at least tangentially tied to the flailing auto industry.
More problematic for the mayor is the myriad personal scandals he is embroiled in, with or without merit. The most inflammatory accusation was of a raucous, stripper-laden party at Manoogian Mansion, the mayor's residence, which was investigated by Michigan Attorney General Mike Cox and found to be a wholly unsubstantiated "urban legend."
Cox also investigated charges of overtime fraud, police misconduct, and obstruction of justice by Kilpatrick for firing a deputy police officer looking into the party rumor. The attorney general's office found no evidence of criminal wrongdoing. Kilpatrick did admit to leasing a taxpayer-funded $25,000 luxury SUV for his family, sure to anger plenty in a metropolitan area where the unemployment rate is 7.8 %.
Kilpatrick claims the negative press hasn't affected any development in Detroit, but it's hard to believe entrepreneurs wouldn't take pause when Time labels you one out of three worst mayors in America , especially considering this is an election year. "It hurts but it hasn't stopped a thing," says Kilpatrick. "The slaps at Detroit are unfair, unbalanced and personal."
Prior to his ICIC speech though, Mayor Kilpatrick is in good spirits. "In the ebb and flow of being mayor, today is an ebb," he says throwing air jabs at his would-be detractors. Later that night, on stage at the awards ceremony, Kilpatrick will again pump his fists, as well as whoop and holler for every hometown entrepreneur who comes up to accept an award. "The ICIC recognition is great for the Motor City because it shows we're growing a diverse, vibrant economy beyond the dying rust belt town people think of," he says proudly.
Two weeks later, the Detroit Free Press reports the Kilpatrick administration ran up a $210,000 credit card bill that includes luxury hotels, spa treatments and steakhouse dinners. The mayor contests that it's a cost of luring business to Detroit, and has made some restitution.
Reyes gives Kilpatrick a ton of credit.
McCorquodale thinks Detroit is wilting and the administration is "awash in corruption."
The mayoral election is Nov. 8.
Indeed, things are happening in Detroit.
