Michigan CEO: Soul-Crushing Sprawl Killing Business
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.
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
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
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
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