Economic Redevelopment 101

What Santa Fe can learn from Detroit's economic and cultural reinvention

Large, empty rooms form the entrance to Lucky Bean Café in Sanbusco Market Center, the commercial mall located just north of the Railyard that houses mostly high-end boutiques. A couple of signs display arrows pointing to the café, which is tucked in the corner of a 25,000-square-foot room.

While Lucky Bean's owners maintain that their business is fine, the empty rooms surrounding the cafe hint at a deeper problem in the city.

"Let's face it: nobody's just racing to Santa Fe to open a 25,000-square-foot store," Orren David Jordan, co-owner of Wink Fabuloso, a hair salon that also sells high-end hair products in the Sanbusco mall, tells SFR. "There are empty spaces on practically every block in Santa Fe."

Last month, Sanbusco went into foreclosure after defaulting on its $9 million debt. Landlord Joe Schepps cited the loss of Borders bookstore, where Lucky Bean is now located, as the reason. But the area's economic problems aren't limited to Sanbusco. In April, the Santa Fe City Council approved the $5 million purchase of 22,000 square feet of office space in the Railyard's Market Station building. The building's owner, Railyard Co., LLC, had been unable to lease the space since the building opened in 2008, right as the economic downturn was underway.

"People had high hopes for the Railyard and Sanbusco and Guadalupe Street to kind of just blossom," Nina Houle, owner of shoe store On Your Feet and two other stores in Sanbusco, tells SFR. "And I just don't think it's turned out quite like how they thought yet."

While the city is devoting large resources to micro-stimulus projects like MIX Santa Fe and the Santa Fe Business Incubator, Santa Fe has still struggled in recent years to reshape its economic engine beyond tourism and government jobs [cover story, April 4: "Shadow Economy"].

Santa Fe, of course, isn't the only city in the country facing hurdles in trying to rethink a dated business model. Last week, SFR attended the Association of Alternative Newsmedia's annual convention, hosted in an oft-cited king of failed American cities: Detroit. During the recession, the once-booming metropolis became synonymous with Great Depression-level unemployment rates, auto industry bailouts and high crime rates.

But while the city's overall population declined by 25 percent between 2000 and 2010, during the same period, downtown Detroit reaped major gains in a category that Santa Fe might envy: a 59-percent increase in young professionals under 35. Santa Fe's share of residents aged 20-35 declined from 19 percent to 16 percent during this past decade.

In order to cope with the influx of a younger workforce, Jeff Aronoff created D:Hive, a community and business hub in downtown Detroit that serves as a one-stop shop for young people in the city. As executive director, Aronoff assists them with job, housing and quality-of-life resources. Like many of Detroit's other economic development initiatives, D:Hive, which formally launched last month, is funded primarily by a grant from a local foundation (in this case, a three-year, $1.2 million grant from the Hudson-Webber Foundation).
Foundations, supported largely by money from the once-booming auto industry, are still a mainstay in southeast Michigan.

D:Hive is located in downtown Detroit, where most of the city's economic development is taking place. But it's not always visible: Vacant skyscrapers and boarded-up storefronts still populate the city. Generally, Aronoff says, around 50,000 of the city's roughly 700,000 total residents are young professionals. Much of the remaining population still experiences a low quality of life.

"A lot of development is clustered in small areas," Aronoff tells SFR. "But you have to build in small areas before you can address all of your weaknesses."

Some of those areas may be geographic; others are demographic. For instance, Detroit is building on an existing strength: its large immigrant population. In 2010, the New Economy Initiative for Southeast Michigan commissioned a study that found that between 1997 and 2007, immigrants living in the area were three times more likely to start their own businesses than non-immigrants. Between 40 and 60 percent of all students in the Detroit area who are studying for advanced degrees in mathematics  are immigrants, Athena Trentin, a program director at Michigan's University Research Corridor, tells SFR.

The Global Talent Retention Initiative of Southeast Michigan, which Trentin leads, builds off that study by finding ways to retain international residents in Detroit. Immigration has large implications for the city's tech industry, she says, which is the fastest growing in the nation.

Another economic development initiative, Hatch Detroit, resembles the recent business-plan competition held by MIX Santa Fe (see page 14), but doles out more money ($50,000 compared to MIX's $10,000 prize) and focuses specifically on retail businesses.

But in Detroit, as in Santa Fe, economic redevelopment efforts also have their particular challenges—namely, ensuring that every sector of a recession-hit economy is included in its recovery.

"A lot of this is being driven by white people," Larry Gabriel, who writes a Detroit Metro Times column focusing on city development, local politics and African-American issues, says of that city's redevelopment efforts.

Gabriel believes that new businesses have to include the community around them in order to be successful. He cites his newspaper as an example: Detroit is 82 percent African-American, and in 1994, Metro Times became the first alternative weekly in the nation to hire a black editor.

But in many ways, Gabriel says, Detroit has been working for decades to reinvent itself. That's something to which 96-year-old Detroit activist Grace Lee Boggs can attest—and which she told the AAN convention can help lay the groundwork for truly revolutionary economic and social recovery.

"We have the opportunity to create something completely new," Boggs told convention-goers in a speech delivered from her wheelchair. "Imagination is more important than knowledge. Reimagine everything. This is the opportunity; take advantage of it."

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