Detroit's population falls 25 percent in 10 years

On the one hand, I see these industrial metropolises that got killed by their industries going overseas.

On the other hand, I see this great potential for urban renewal.

If the economy stays down for the next two or three years, and that is a reasonable bet, it would be a killer opportunity for a developer with a good vision to come into a place like Cleveland (I see Detroit as too problematic, but maybe there is potential there--it would certainly be cheaper to buy up the city), buy up a lot of area for pennies on the dollar and develop little-by-little . It would require some patience --ability to absorb time with no return on investment -- and help by the city, which would have to be willing to give incentives to woo businesses. You could concentrate a bit on trying to induce big corporations to come, but you aren't likely to have great success. The trick would be to make it small business friendly and then develop residential housing within that zone. Even give it an artsy vibe, as other cities that have seen that revitalization have done. With that little base, you could build out a bit, and if it caught on, you'd have a gold mine on your hands relative to the very little amount you'd have to pay today for whole swatches of areas.

I could totally see that happening. I can't say it will. But I can name places where that formula has worked pretty well. It took someone with deep enough pockets to consider the investment a small part of their portfolio.

 

Bob, What I am talking about is a private developer or two with a lot of vision. This is not quite the same thing, but it will give an idea about what I am talking about. There is a neighborhood in Brooklyn, in New York that is hot beyond belief, called DUMBO. It is right on the water, between the Brooklyn and Manhattan Bridges and can have you in Manhattan in 5 to 10 minutes, so it is well situated. Plus it has great skyline views. For years it was kind of dingy. Old abandoned warehouses, some from the 1800s. It still has old cobblestone streets and trolley tracks going through certain areas. And has this odd, but cool, industrial / modern potential vibe. You just had to envision it, and no one really did. Then about 15 to 20 years ago, a single developer with deep pockets came in and essentially bought the whole neighborhood up. He attracted a few artists, who had always lived there, and then started attracting some small businesses with a creative bent -- a couple of decent video production houses and rap artists moved in -- and some small boutique shops and eventually art galleries. Living there was still relatively cheap. And the neighborhood took on this whole new character. At the same time, the city and state governments really started to develop the waterfront, which had been neglected and turning it into beautiful park area. A lot of it was done (albeit with payoffs, which disgust me) with the help of the influence of the Walentas' (the developers). Then they started converting some of these old, solid buildings into lofts and attracting people getting priced out of Manhattan (at the time, a lot of people were fleeing Manhattan and Brooklyn was becoming hot). And then they started tearing down some of what they owned, and building high rises with multi-million dollar apartments. They were unencumbered by the preservation people that lord over the neighborhoods surrounding Dumbo, so had picked the perfect place. Today the neighborhood is thriving and has this great vibe. Restaurants, art galleries, a warehouse theater, a performance art space, the coolest indie bookstore around and lots of interesting businesses, although rents have gone way up. It took a lot of vision for the Walentas' to pull that off, and to an extent they are reviled (but I chalk some of that up to jealousy, even though some of it is that they are not above paying off politicians to expedite getting what they want). And all it took was someone with deep pockets and that vision. And most importantly, done privately -- which gives incentive to pull it off. Profit incentive.