Article in October 2, 2007 Detroit Free Press

Kilpatrick steps up retail recruiting

Mayor cites report's findings that Detroit's quality of life is better than people think.

David Josar / The Detroit News

DETROIT -- Touting new statistics that claim the quality of life in Detroit is better than many believe, Mayor Kwame Kilpatrick on Monday said he's renewing his bid to lure retailers from large stores to small specialty shops to the city.

Also on Monday, Kilpatrick released an update on steps his administration has taken to bolster six neighborhoods as part of his Next Detroit Neighborhood Initiative. The improvements, which started in May, have included road resurfacing, more code enforcement and Detroit police blitzes to remove abandoned vehicles and crack down on prostitution.

The glowing statistics, contained in a report released by the nonprofit Social Compact, claim Detroit has 933,043 residents, nearly 62,000 more than 2006 Census estimates. The report also claimed each resident spends a third of all their retail dollars outside the city -- roughly $1.7 billion in buying power that new Detroit businesses could capture.

Social Compact officials said they based their findings on a data collection method that includes tax assessments, credit card purchases, building and renovation permits and utility bills. Private groups paid for the $150,000 study.

"Accurate market information is the first step to attracting retail and other investment in our neighborhoods," Kilpatrick said.

Still, the 933,043 tally is down from the 951,000 residents the U.S. Census estimated in 2000.

City development officials will take the report and use it to reconnect with a number of retailers they've been trying to convince to open shop in Detroit.

"We'll go back to the people we've been talking to and show them this data," said the city's chief economic officer, George Jackson.

Since Kilpatrick took office, he has been stymied by efforts to draw retail to the city. He regularly champions his success in convincing Home Depot to open a store at Seven Mile and Meyers, but there have been few other success stories.

In the six months, Farmer Jack has shuttered the last of its Detroit stores, but in one instance, the Kilpatrick administration was able to convince an independent grocer to move into the vacated store at Seven Mile and Livernois. The new owners promise to include a deli and bakery when they open.

The report concludes Detroiters not only have plenty of spending dollars, but they live closer together. Six times as many people per square mile live in Detroit than elsewhere in the region -- a retailers' dream, said John Talmage, CEO and president of the Washington D.C.-based Social Compact.

Social Compact has done similar reports for eight other communities including Oakland, Calif.; Cleveland; and Jacksonville, Fla.

"Whoever comes here first will do very well here," Talmage said.

He notes the success Starbucks had when it opened its first store in Harlem in 2002, which led to a rash of other new business.

To back up his claim, he noted that major grocery stores need to have roughly $355 in business per square foot of store space. The party stores that dot Detroit do $855 per square foot.

Social Compact will continue studying trends in Detroit and complete other reports that could boost development in the city, Talmage said.

While Irma Raskowicz, who operates a beauty parlor and supply shop on McNichols west of Woodward, likes the numbers the mayor quoted, she noted that running a business is not as easy as finding a place with lots of people who have money.

"Do the stats account for the high cost of insurance? Do they include the theft and the crime and finding good workers?" Raskowicz, 49, said. "I'd love to see more retail too but Detroit has problems that make it tough to operate here."

But Colin Hubbell, a developer of several loft condominium projects who lives in East English Village, said he hopes the report will bring the sort of retail that proliferates in the suburbs.

"This should make a difference," said Hubbell, who noted he and his neighbors are miffed that, despite their buying power, they have to drive to the suburbs to do much of their shopping.

Article in October 1, 2007 Detroit News

Report may boost Detroit's image

Social Compact survey hopes to use community data to attract new retail business to the city and improve life.

David Josar / The Detroit News

DETROIT -- Mayor Kwame Kilpatrick today will unveil the findings of a specially commissioned study from the nonprofit Social Compact that city leaders hope will boost retail development and improve the quality of life.

Social Compact, which is based in Washington, D.C., and began doing the studies in 1999, has spent the past six months crunching Detroit statistics that range from new building permits to utility bills as it uses its "Drill Down" approach to paint an economic picture of Detroit. The group concluded its work in the city last week.

Social Compact has done the studies in eight other cities and the results are invariably identical: population in the particular city is higher than U.S. Census estimates, crime is leveling off and the buying power of residents is more than suggested.

"People are going to be amazed at what was found," said Matt Allen, Kilpatrick's press secretary. "It's going to change some perceptions."

The group will send researchers to do more intense surveys over the next few months, Allen said.

The Detroit survey is the largest the group had conducted, although Social Compact has done segments of Chicago and New York City.

The mayor today also will deliver the first update on the NEXT Detroit Neighborhood Initiative, a strategy Kilpatrick's staff launched in May that will focus on improving six specific neighborhoods in areas ranging from police presence to improving housing stock.

The Social Compact report, which cost about $150,000, was paid for by the Kresge Foundation and the Community Foundation for Southeast Michigan, two of Kilpatrick's key partners for the Neighborhood Initiative.

"We need something that can get the city to a tipping point where you will have some retailers come in hopefully this might make some difference," said Rip Rapson, president of the Kresge Foundation.

City officials hope the report will boost the city's image and the data can be used to entice new businesses. In the eight other cities where the report has been completed, that goal has a spotty record.

A study in Harlem, N.Y., resulted in a few new ATM machines and two Fleet Bank branches; in Cleveland, Key Bank opened a branch in a blighted shopping center; and in Houston, a 750,000 square foot new mall was built; and in Chicago, it helped lure in a Home Depot store.

In Cincinnati, their study, which was released in June, pegged its population at 378,259 and not the 332,252 the U.S. Census estimated.

"We need a tool that more accurately shows who we are," said Cincinnati Mayor Mark Mallory, who is formally challenging the census figures.

In selling its reporting, Social Compact boasts on its Web site how it will make the data look rosier for whatever community hires it to do its report: "Poverty and deficiency data are replaced with business indicators of market strength. Outdated census and modeled data is enhanced with current economic and demographic information."

The group's managing director, Ryan Sullivan, said there is an "information gap" between the traditional types of data used to gauge a city's health and information potential entrepreneurs want who are making the business decision on where to locate a new store.

"Traditional data can tell you about single-parent families who get federal aid, but it can't tell you about something that resonates in the business community. We want to reframe the data in a way business people can relate to.

"We want to change the discussion away from focusing on challenges and negatives to looking at opportunities in the community," he said.

In Detroit they've been looking at the amount of predatory lending, the number of new housing starts -- a statistic where the city has been the leader in the state for several years -- and utility payments, which Sullivan gives a more accurate view of how many people are living in the area.

Researchers have been visiting the city monthly during the project, he said.

Both Allen and Mallory used "unique" to describe some of the findings in Detroit.

Neither Allen nor Mallory would comment on how the rash of foreclosures, which has affected thousands of households in Detroit, would factor into the findings.

Last October, the group released a 32-page report titled "Downtown Detroit In Focus: a Profile in Market Opportunity." The group found that the average downtown household income was $59,300, and 83 percent of residents in that area had at least a college education compared to a nationwide average of 26 percent.

Detroit economic leaders have been trying to use those numbers to draw retailers downtown, a stiff challenge as most retailers have scoffed at whether the number of downtown residents is enough to work in their business model.