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Michigan CEO: Soul-Crushing Sprawl Killing Business

11 March 2011 177 Comments

This is the full text of a letter from a business owner on why he might need to leave Michigan. This guy NAILED it, what we have been trying to express on this blog about sprawl and economic vitality. This is what the leadership in Cleveland doesn’t seem to get. Thank you, Andrew Basile!

From: Andrew Basile, Jr
Sent: Friday, July 30, 2010 12:16 PM
Subject: Why our growing firm may have to leave Michigan.

All,

I hope you find this essay of interest/value. It’s probably something
you’ve heard a million times but I thought I ought to at least try to
vocalize it rather than silently surrender.

We have a patent law firm in Troy. In 2006, our firm’s legacy domestic
automotive business collapsed. We rebuilt our practice with out-of-state
clients in a range of industries, including clients like Google, Nissan and
Abbott Labs, located in the US, Japan, Europe and China.

Today, we have 40 highly-paid employees and much of our work now
comes from out of state. This makes us a service exporter. We are very
proud of the contribution our firm makes to the local economy. We also
created a not-for-profit incubator using excess space in our office. The
incubator is home to 4 start-ups, all of which are generating revenue and
two of which have started employing people. This is something we do
without charge as a charity to help the state.

We’d like to stay in Michigan, but we have a problem. It’s not taxes or
regulations. There’s lots of talk about these issues but they have no
impact on our business. We spend more on copiers and toner than we do
on state taxes.

Our problem is access to talent. We have high-paying positions open for
patent attorneys in the software and semiconductor space. Even though
it is one of the best hiring environments for IP firms in 40 years, we
cannot fill these positions. Most qualified candidates live out of state
and simply will not move here, even though they are willing to relocate
to other cities. Our recruiters are very blunt. They say it is almost
impossible to recruit to Michigan without paying big premiums above
competitive salaries on the coasts.

It’s nearly a certainty that we will have to relocate (or at a minimum
expand ) our business out of Michigan if we want to grow.
People – particularly affluent and educated people – just don’t want to
live here. For example, below are charts of migration patterns based on
IRS data Black is inbound, red is outbound. Even though the CA
economy is in very bad shape, there is still a mass migration to San
Francisco vs. mass outbound migration from Oakland County (most
notably to cities like SF, LA, Dallas, Atlanta, NY, DC, Boston, and
Philly) San Fran only seems to be losing people to Portland, a place
with even more open space and higher quality urban environments.


The situation for Michigan is even worse than it seems because those
lines are net migration. You can click on the links and see the composite
of outbound and inbound. I went through many links, and in most cases,
the average income of the outbound from Oakland County is high (e.g.
$60K, and the average income of the inbound is low (e.g. $30K).

Recession or no, isn’t it screamingly obvious that people with choices in
life – i.e. people with money and education – choose not to live here?
We are becoming a place where people without resources are grudgingly
forced to live. A place without youth, prospects, respect, money or
influence.

There’s a simple reason why many people don’t want to live here: it’s an
unpleasant place because most of it is visually unattractive and because
it is lacking in quality living options other than tract suburbia. Some
might call this poor “quality of life.”
A better term might be poor
“quality of place.” In Metro Detroit, we have built a very bad physical
place. We don’t have charming, vibrant cities and we don’t have open
space. What we do have are several thousand of miles of streets that
look like this:


Having moved here from California five years ago, I will testify that
Metro Detroit is a very hard place to live. Ask any former Detroiter in
California, and you will hear a consistent recital of the flaws that make
Metro Detroit so unattractive. Things are spread too far apart. You have
to drive everywhere. There’s no mass transit. There are no viable cities.
Lots of it is really ugly, especially the mile after mile of sterile and often
dingy suburban strip shopping and utility wires that line our dilapidated
roads (note above). There’s no nearby open space for most people
(living in Birmingham, it’s 45 minutes in traffic to places like Proud
Lake or Kensington). It’s impossible to get around by bike without
taking your life in your hands. Most people lead sedentary lifestyles.
There’s a grating “car culture” that is really off-putting to many people
from outside of Michigan. I heard these same complaints when I left
25 years ago. In a quarter century, things have only gotten considerably
worse.

Ironically, California is supposed to be a sprawling place. In my
experience they are pikers compared to us. Did you know that Metro
Detroit is one half the density of Los Angeles County?

The fundamental problem it seems to me is that our region as gone
berserk on suburbia to the expense of having any type of nearby open
space or viable urban communities, which are the two primary spatial
assets that attract and retain the best human capital.
For example, I
noted sadly the other day that the entire Oakland Country government
complex was built in a field 5 miles outside of downtown Pontiac. I find
that decision shocking. What a wasted opportunity for maintaining a
viable downtown Pontiac, not to mention the open space now consumed
by the existing complex. What possibly could have been going through
their minds? Happily, most of the men who made those foolish
decisions 30 or 40 years ago are no longer in policy-making roles. A
younger generation needs to recognize the immense folly that they
perpetrated and begin the costly, decades long task of cleaning up the
wreckage.

These are problems, sure, but they could be easily overcome, especially
in Oakland County which is widely recognized as one of the best-run
large counties in the country. But despite our talents and resources, the
region’s problem of place may be intractable for one simple, sorry
reason: our political and business leadership does not view poor quality
of place as a problem and certainly lacks motivation to address the issue.
Indeed, Brooks Patterson — an otherwise extraordinary leader — claims
to love sprawl and says Oakland Country can’t get enough of it. These
leaders presume that the region has “great” quality of life (apparently
defined as big yards, cull de sacs and a nearby Home Depot). In their
minds, we just need to reopen a few more factories and all will be
well. The cherished corollary to this is that Michigan and Metro Detroit
have an “image” problem and that if only people knew great things were
they would consider living or investing here.
The attitude of many in
our region is that our problems are confined to Detroit city while the
suburbs are thought to be lovely.

We don’t have a perception problem, we have a reality problem. Most
young, highly talented knowledge workers from places like Seattle or
San Francisco or Chicago find the even the upper end suburbs of
Metro Detroit to be unappealing. I think long term residents including
many leaders are simply so used to the dreary physical environment of
Southeast Michigan that it has come to seem normal, comfortable and
maybe even attractive. Which is fine so long as we have no aspiration to
attract talent and capital from outside our region.

My fears were confirmed when I began trying to gather local economic
development literature to use as a recruiting tool. The deficits which so
dog our region are sometimes heralded by this literature as assets. For
example, some boosters trumpet our “unrivaled” freeway system as if
freeways and sprawl they engender are “quality of life” assets. In San
Francisco, the place sucking up all the talent and money, they have
removed — literally torn out of the ground — two freeways because
people prefer not to have them. I noted one “Quality of Life” page of a
Detroit area economic development website featured a prominent picture
of an enclosed regional shopping mall! Yuck. It’s theater of the absurd.

The people who put together that website must live in a different cultural
universe from the high income/high education people streaming out of
Michigan for New York, Chicago, and California.
Not only is there no
plan to address these issues, I fear that the public and their elected
leaders in Michigan don’t even recognize the problem or want change.

We have at least one bright spot in the nascent urban corridor between
Pontiac, and Ferndale, which is slowly building a critical mass of
walkable urban assets. At the same time, there’s no coordinated effort to
develop this. Indeed, MDOT officials lie awake at night thinking of
ways to thwart the efforts of local communities along Woodward to
become more walkable. Another symptom the region’s peculiar and
self-destructive adoration of the automobile. Even though the Big
Three are a tiny shadow of their former selves, Michigan is still locked
in the iron grip of their toxic cultural legacy.

I’d like to hang on another five years. I feel like we’re making a
difference. But by the same token, I don’t see any forward progress or
even an meaningful attempt at forward progress. It’s almost like the
people running things are profoundly disconnected from the reality that
many if not most talented knowledge workers find our region’s
paradigm of extreme suburbanization to be highly unattractive. It seems
to me that we are halfway through a 100 year death spiral in which the
forces in support of the status quo become relatively stronger as people
with vision and ambition just give up and leave. As we descend this
death spiral, we must in my mind be approaching the point of no return,
where the constituency for reform dwindles below a critical threshold
and the region’s path of self destruction becomes unalterable.

Thank you for considering my views. I welcome any opportunity to be
of help to any efforts you may have to fix this.

Andrew Basile, Jr.

Andrew R. Basile, Jr.
Young Basile Hanlon & MacFarlane, P.C.
228 Hamilton Avenue, Suite 300
Palo Alto, California 94301

Offices also in Troy and Ann Arbor Michigan

  • http://diggingpitt.blogspot.com/ John Morris

    Likewise in the Pittsburgh region, there was substantial industrial sprawl almost from the start. Steel Mills and factories located all along the rivers wherever there was a decent flood plain.

  • http://rustwire.com Schmange

    I’m not saying all suburbs are unnecessary and evil. What I’m saying is without a vibrant urban core it doesn’t matter how nice your suburbs are. Detroit will always have suburbs. But what it has right now is suburbs to the exclusion of all else and it’s a recipe for disaster, the disaster that is unfolding right now.

  • Bergschrund

    I don’t know what set of events will shake Detroiters from the siren song of the suburbs. But in a perfect world, anyone claiming that Detroit (read: Southeastern Michigan) “simply has a perception problem” would be placed in a criminally-negligent retirement home.

    Unfortunately, this opinion is parroted from the same cohort of boosters who doggedly believe the sister memes that “American car manufacturers simply have a perception problem” and that “buying American cars will retain Michigan jobs.” Not only are these particular delusions common, (even though one would think, self-evidently false by anyone affiliated with the Auto Industry) they’re required dogmas of our corporate and popular culture and thus have become mass delusions (yet another manifestation of a popular consensus that isn’t consistent with reality).

    Anyway, so the tortured logic follows: since our problems are simply perceptual, then the logic-defying gifts of advertising and PR alone will save us! Hence the Imported from Detroit ad campaign, and shameless product-placement by GM in Transformers, the vacuous special-effects fiesta, (where nearly every protagonist happens to be a GM car) and countless other examples.

    Like an addict stuck in the bargaining stage, we’ve attempted to reason a solution which doesn’t involve any significant change in our collective behavior. It’s been said that most addicts need to hit “rock bottom” before the desire to change can overcome ingrained behavior. I fear that Detroit is no different. What’s really frightening is that given our mounting social and economic problems, I can’t imagine when that agreement might occur – or even when a counter-narrative grows into a respectable minority. Andrew Basile’s editorial is a step in the right direction.

  • http://diggingpitt.blogspot.com/ John Morris

    Very well said.

    This what I meant when I much of today’s Rustbelt thinking with what happened in the old South. The ultimate emergence, to the extent it has happened in the New South is the product of far more than good advertising. There was real change and self examination. At the bare minimum, people in the business community who needed investment capital, technology and new workers realised that the old behavior was bad for business.

  • http://diggingpitt.blogspot.com/ John Morris

    Ooops,

    This what I meant when I compared much of today’s Rustbelt thinking with what happened in the old South. The ultimate emergence, to the extent it has happened in the New South is the product of far more than good advertising. There was real change and self examination. At the bare minimum, people in the business community who needed investment capital, technology and new workers realised that the old behavior was bad for business.

  • http://kunstlercast.com Duncan Crary

    Suburban sprawl critic James Howard Kunstler, author of The Geography of Nowhere, dedicated an entire episode of The KunstlerCast podcast to discussing this letter:

    KunstlerCast #150: Suburban Sprawl in the Rust Belt

  • http://www.humandog.tv Chris Weagel

    Heard a run down of your article on the Kunstler Cast Podcast.

    I’m 29 and have lived in Metro Detroit my whole life. I’ve about had it with the place and am saving money to flee.

    I produced a short video in early 2005, a tour of my Home Town, St Clair Shores, that illustrates your points nicely. It can be viewed here:

    http://www.humandog.tv/2005/01/hd-vidblog-053-lac-st-clair/

    The Older Generations still in control have no idea how incensed and disgusted the young people are at them for destroying Detroit and telling us to be thankful.

  • mimayor

    Bergschrund, I don’t know anyone who is claiming Detroit has only a perception problem. The problems are real and the result of decades of poor leadership, govt corruption, crime, indifference, neglect and much more. Mayor Dave Bing has a full plate but is a positive influence with down-to-business approach and plenty of willing support in govt and private sector.

    The USA Today had a below-the-fold cover story on Friday, April 1st saying that despite the overall mass exodus from the city of Detroit, the new census showed that thousands of college educated 25 to 35 year olds moved into targeted midtown areas. Further north, there is a master plan developing to restore the University District neighborhood near the University of Detroit Mercy. Livernois Road is becoming somewhat of a gallery row in that area. Despite the odds and long road ahead, there are many signs of encouragement if one cares to look.

  • mimayor

    Today’s Crains Detroit Business is reporting that Whole Foods has expressed interest in Detroit’s Midtown neighborhood. Mayor Dave Bing said at a luncheon last week that it is not a question of “if” but “when” regarding a deal for Whole Foods. WF is already building its brand in the city of Detroit with a sponsorship of pole banners in Eastern Market. A 2009 study by Social Compact noted in the CDB story says that Midtown has the city’s highest average household income of new homebuyers at $113,788.

    http://www.crainsdetroit.com/article/20110403/FREE/304039993

  • http://burghdiaspora.blogspot.com/ Jim Russell

    The problem with equating population decline with brain drain:

    http://www.usatoday.com/news/nation/2011-04-01-1Ayoungrestless01_ST_N.htm

    “Even in Detroit, where the population shrank by 25% since 2000, downtown added 2,000 young and educated residents during that time, up 59% , according to analysis of Census data by Impresa Inc., an economic consulting firm.”

  • http://diggingpitt.blogspot.com/ John Morris

    “If anyone cares to look.”

    Did you care to look at and read the letter–or listen to Kunstler’s podcast? Neither one of them take shots at the city of Detroit itself. The letter was written to city leaders in Troy, well north of the city.

    Nothing in the letter brings up the common stereotypes of crime, racial tension and urban decay you seem to be implying. The subject is very much about the nasty aspects of the suburbs themselves. The writer also said he suggested moving the firm into a center city, although which one is not named.

  • MC

    It’s always amazing to me to see the quality of housing stock that is being let deteriorate in Detroit. I am used to living places where pre-war walkable neighborhoods with historic homes are some of the most expensive parts of the city, or at least include a range of prices and desirability. When I read the policy idea of “downsizing” Detroit and taering down homes, I really think its short-sighted. Long term, it seems that these neighborhoods need to be revitalized and rehabilitated, with better shcools and services. If anything should be torn down, tear down some of suburbia to create accessible open spaces. But without addressing schools and crime, it seems it will be hard to reverse Detroit’s population losses. And without fiscal sustainability, it will be hard to address schools and crime.

    “The people who put together that website must live in a different cultural universe from the high income/high education people streaming out of Michigan for New York, Chicago, and California.”

    But the funny thing is, working in urban planning in Colorado, I constantly hear people say they want to live in and create “suburban” places. The old folks say it. The professionals say it (who wants to live in gritty old town with its small houses?) The liberal environmentalists say it (cities are bad!). The conservatives say it (cities are against the American Dream!). The only people who don’t say it are perhaps those who live in Denver. Until those who favor walkable urbanism influence policy and also live in urban areas in the Detroit region, it seems it will be hard to have the kind of neighborhoods you find in Denver, Seattle, etc.