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


Filed under Featured

Ohio Gov. John Kasich vs. the Cincinnati Streetcar

Ohio Governor John Kasich is back to his backwards-looking, anti-rail ways, and this time his target is the Cincinnati streetcar.

The Republican governor is trying to get his hands on $52 million allocated to the green transportation project that is expected to yield $1.5 billion in new investment in inner-city Cincinnati. Problem is, the money comes from federal grant reserved for transportation projects and can’t be used to plug the state’s $8 billion deficit. Moreover, Ohio’s Transportation Review Advisory Council — which was developed to remove politics from the funding allocation process — is solidly behind the streetcar.

Randy A. Simes at Network blog Urban Cincy has the details:

Local officials close to the Cincinnati Streetcar project believe Governor Kasich is attempting to strip the funds from the streetcar and reallocate them to the $2 billion Brent Spence Bridge replacement which scored a paltry 44 points on TRAC’s transportation list. The other reality is that the money could go to the Eastern Corridor plan which had three components scoring 34, 39 and 48 points – all well below the Cincinnati Streetcar’s state-leading 84 points.

According to [Ken] Prendergast [executive director of All Aboard Ohio], the end result may be a another legal battle for the controversial governor. He says that at attempt to move the funds from the streetcar to another, lower-ranking transportation project, that Cincinnati officials would have legal grounds to sue the state for not following its own criteria in awarding federal transportation funds.

“Why is our governor against redeveloping Cincinnati’s downtown and Over-the-Rhine areas with the streetcar? Steel rails offer a far superior path to jobs and growth and clean air than yet another asphalt road pitted with potholes,” concluded Jack Shaner, deputy director of the Ohio Environmental Council.

Kasich’s militant pro-highway, anti-transit stance is all the more troubling given Census figures announced yesterday that nearly every major city in Ohio had suffered steep population losses, including Cincinnati, which shed 10.4 percent of its population. Cities like Cincinnati — which are the lynchpin of the metropolitan areas that are Ohio’s economic drivers — are in desperate need of investments that will add vitality, not highways that will continue to suck away jobs and residents. The fact that Ohio’s governor doesn’t seem to understand that is more bad news for the embattled state.


Once again, this article originally appeared on Streetsblog, which has a dedicated stream of revenue to pay me to write, and by the way is awesome.


Filed under Featured, Politics, Public Transportation

A Story I Never Get Tired of Reading!

Ok, I know, we’ve written about this before (see here and here) so my apologies if you are sick of hearing about it.

But frankly, I think it’s important to remember that whatever challenges our part of the country faces, it’s no bed of roses in the Sun Belt, either.  And now there’s a book to explain more on this topic.

USA Today says the “sunburnt” cities of Florida, California and the Southwest must rethink themselves.

The paper writes, “Boomtowns that have been scorched by the housing crisis could learn from struggling Rust Belt communities,” according to Justin Hollander, urban planning professor at Tufts University and author of Sunburnt Cities: The Great Recession, Depopulation and Urban Planning in the American Sunbelt, which was published March 1.

“Sunburnt cities have a chance to limit growth for growth’s sake by allowing dense development and reducing parking requirements to encourage walking, public transportation and more green space, Hollander says.

‘In each place there are a lot of opportunities to think smaller,’ he says. ‘It hasn’t happened yet. Largely, these cities are in denial.'”

We’ll see, I guess, what kinds of choices places like the ones Hollander describes make.



Filed under Economic Development, Featured, Real Estate, regionalism, sprawl, Urban Planning

Is Generational Turnover Necessary for the Return of Cities?

How many times have you heard this line: Young people prefer urban living.

Of course, everyone acknowledges, this isn’t a universal preference. But a clear generational shift away from suburban lifestyles is the phenomena on which many of our discussions about urbanism are premised.

However, while young people may be a driving force in demanding vibrant urban environments, they aren’t necessarily in the driver’s seat when it comes to the important policy decisions that continue to shape metro areas, often at the expense of cities.

Mayor Cory Booker's success in redeveloping Newark, New Jersey, typifies of the brand of post-Boomer urban leadership that may be necessary to truly rebuild cities, Aaron Renn argues.

Alex Ihnen at NextSTL articulated this generational tension last month in a blog post after Census figures showed the St. Louis had experienced yet another precipitous population decline: “When will the ‘old guard’ who have overseen this exodus stop cutting ribbons and turning dirt with a smile and silver shovel and simply get out of the way?”

Aaron Renn at the Urbanophile has given this dynamic some thought. In his latest post, Renn wonders whether a turnover in generational power will be necessary before urban areas can regain their primacy in American life:

Gen-X and the Millennials have a much more optimistic and positive views of urban areas than baby boomers and previous generations. I think this results from the rupture that those earlier generations experienced when our urban cores declined. If you read a newspaper interview of someone in that age bracket, you always hear the stories about the wonderful things they did in the city when they were younger. It was the land of good factory jobs, the downtown department store where their mothers took them in white gloves for tea, of the tidy neighborhoods, the long standing institutions and rituals – now all lost, virtually all of it. Unsurprisingly, this has turned a lot of people bitter. Many people saw everything they held dear in their communities destroyed, and they were powerless to stop it.

Continue reading


Filed under Headline, Politics

Duluth Aims for 90,000 Residents

Duluth, Minnesota, is aiming to grow its population and reach 90,000 residents by 2020, according to this article in The Duluth News Tribune.

The city plans to build on its historic strengths such as shipping, and grow other areas like medicine and IT, according to the story.

It currently has about 84,000 residents, per the US Census via Wikipedia.

Do we have any readers in Duluth? What do you think?

Also, a personal observation – I was in Duluth for the first time last summer and was frankly blown away by how beautiful it was. Stunning Lake Superior views and waterfront, lots going on, and some amazing downtown architecture. I wish I could have stayed longer and I’m hoping to return again this summer!



Filed under Brain Drain, Economic Development, Featured, Great Lakes

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Cities…they’re like Happy Hour

Editor’s note: This post comes from contributor Lewis Lehe, and contains his trademark blend of straightforward economics and quirky humor. -KG

A question for the ages
Today I posed a seemingly obvious question to myself: Why do we care about saving the cities we live in?

Some of us care about carbon emissions, but people were concerned about cities before we knew about climate change. I like living in the city because I would rather spend an hour reading my Kindle on a bus than sit twenty minutes in stop-and-go traffic, but that doesn’t explain why I want other people to live in Pittsburgh with me. In fact, the more people, the more traffic.

One obvious answer is that cities are full of people, and people care about people. But the death of a city often means people simply moving to other cities. Why do I care about tipping people’s decisions towards living in Pittsburgh, where I happen to want to live? (The exception is when a city dies because Godzilla attacks it.)

A blinding insight
The real reason we care about dying cities, I believe, resembles the reason our coworkers ‘huphs’ if Kate or I skips happy hour. Partly, it’s because Kate and I are interesting, smartly-dressed, and fabulously wealthy; and to be seen with us confers a kind of status…a discerned worldliness typically obtained only by the possession of a rare violin or Oscar invitation. You could say our presence is “de rigueur.” But mainly it’s because happy hour is only happy with lots of people. If you see someone downing five beers alone at happy hour, they’re unhappy no matter how cheap the Iron City (or Great Lakes Elliot Ness) is.

Just like how happy hour requires a group to be fun, businesses require a critical mass of customers to earn profits. Try finding a gay bar in rural California, and you’ll have a hard time, not because it lacks gays or because the place is stiflingly intolerant, but rather because the population is so sparse that there are not enough gay people near any one spot to sustain a gay bar. That’s why there might be more (underground) gay bars in homophobic Tehran (population 7.8 million) than in San Francisco (population 815,000).

Living in a dense, populous place means there are critical masses for more types of businesses. I only eat Ethiopian food like once per year. I doubt most Pittsburghers eat it even one third that often. But there are enough of us that our occasional trips make the restaurant Abay viable year round. This gives me a really neat experience occasionally, and it’s a godsend for those who eat Ethiopian weekly. It’s usually the people, not the specific buildings, that make a place. This is why, time and time again, residents of Tokyo have rebuilt their tiny cardboard skyscrapers in the wake of a Godzilla attack.

The idea of the critical mass is related to an economy of scale. Restaurants, bars, museums, and even concerts have high fixed costs, and, to a point, low variable costs, so they need enough customers that the average revenue per customer exceeds the average cost per customer.

Usually we hear about economies of scale with giant factories, and that’s a useful analogy in a way: just like economies of scale make more experiences available, they can also make our experiences into better values. Bus fares would be way cheaper if more people lived in the areas where my bus runs. My commute from Shadyside to South Side Works is a pretty fixed cost–one bus, one driver, one insurance policy, etc. So if twenty people rode the bus with me, we could each pay one dollar instead of two. Some buses, such as those on the East Busway, run at capacity in the morning, so it might seem like adding more riders would not lower costs, since the cost can’t be diluted any further. But more riders would mean more buses running, and more buses running means more frequent trips…or even express buses that make fewer stops but go faster.

To summarize, living next to other people gives us more options and makes some of our options cheaper. That is why we want people to live in cities with us. When they move away, they erode the critical masses, and it’s as if we ourselves moved a little farther out into the country.

A bold vision
I think it’s important to define why we want people to live in cities with us in selfish terms like I have above, because young urbanists are sometimes characterized as do-gooders…as though we want people to live in cities because (a) we know what’s good for them or (b) we hate the crass materialism of suburbia. But actually, deep down, I think some of us want other people to live next to us because (a) we know what’s good for us and (b) we want to have more nice things for less money. In the American political landscape, you are much more likely to be taken seriously if you’re fighting openly for your own interest. (I also think that, in the climate change debate, an underrated argument is “I bought all this beachfront property and I don’t care about those coal miners if it means I lose money.”)

A new moral code
Finally, considering the scale economies behind the curtain of urban living casts many supposedly community-spirited actions in a different light. If you organize to stop a condo development in Squirrel Hill, then you’ve made my life in Shadyside worse: those condo-dwellers might have given the East End the critical mass needed for a sorely needed cheap southern restaurant…or an extra bus route. When people rally to stop new development, they presume a new building is the only thing we’re missing out on. They should actually feel they are snatching newer and cheaper experiences from residents citywide.

-Lewis Lehe

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Filed under Economic Development, Editorial, Good Ideas, Headline, Public Transportation