The old Argonaut Building has a big place in Detroit’s history. From 1936 to 1956, it was the home of the General Motors Research Laboratory, the first in-house research & design studio in the automotive industry. The mass-produced automatic transmission was developed there, and over three decades every GM car was designed and styled in the Argonaut building. From 1956 to 1999, the building housed Argonaut Realty, GM’s real estate arm. But for the next decade, the somber 11-story structure, designed by famed architect Albert Kahn and built to support the weight of new cars on upper floors, was empty. So were many of the other buildings where people made, designed, or sold cars, or prepared legal documents, or saw patients, or did much of the everyday work of Detroit.
For most observers of the city, where an emergency financial manager, Kevyn Orr, filed for bankruptcy on July 18, that’s where the story ends—empty buildings, lost jobs, and a pervasive sense of decay and defeat.
But in reality, the Argonaut building has come back to life, re-imagined and re-named the Taubman Center for Design Education. Today, a small company called Shinola produces watches and bicycles, curiously old-fashioned yet hipster-ready objects, in a 30,000 square foot watch factory and smaller custom bike workshop. The highly regarded College for Creative Studies also uses the building for its graduate and undergraduate programs in advertising and various aspects of design. There is also a charter school on site, promoting arts and design education for 6th through 12th graders.
Like the Argonaut, the core of Detroit, encompassing the Midtown and Downtown neighborhoods are also undergoing a revival. Thirty-seven percent of the jobs (about 120,000) in the city of Detroit are in these neighborhoods, which take up only three percent of the city’s land. Dan Gilbert, the founder of Quicken Loans and various other businesses, has invested $1 billion in downtown office buildings. Approximately 10,000 new jobs have come to downtown in the last two years. While it doesn’t show up in official data, people on the ground suggest that the biggest surge in jobs has been in the last year or so, indicating that the area is only gaining momentum. From 2009 to 2011, the city as a whole lost jobs, but Midtown and Downtown saw a 5 percent jump. Thousands of new workers are now downtown, including companies like Blue Cross and Compuware that relocated from the suburbs.
People also want to live in midtown and downtown: Rental occupancy rates are higher than 90 percent in both neighborhoods and home sale prices are much higher than the rest of the city. Finally, there is new investment from private companies, including Whole Foods, which opened a midtown location in June 2013.
This investment and activity has benefits for Detroit as a whole, by creating jobs, drawing in residents, and generating tax revenue for a city that is greatly in need of all three. For example, almost three-quarters of Whole Foods employees are Detroit residents. And Midtown and Downtown have the potential to do even more for the city, and the wider Detroit region. The metropolitan economy needs to generate new ideas, products, and services that the rest of the country and the rest of the world wants to buy. Midtown and downtown could become the country’s next innovation district, where the density of innovative institutions and companies—hospitals, universities, research centers, clusters of tech and creative firms, plus resources for entrepreneurs and new businesses—begets still more new businesses, new products, new export opportunities, and new jobs.
Over time, this economic activity, and the new apartment buildings and retail strips that it draws, spread into surrounding neighborhoods. This is how the Detroit economy could, slowly but surely, regain traction. Getting the city’s fiscal house in order is only part of the story.
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