detroit capitalism-failureThe Detroit Consent Agreement, approved by Mayor Dave Bing, the City Council and Gov. Rick Snyder, was necessary and sensible for all the right reasons. Not the least of which is that it envisioned that the city would divest itself of all economic functions and place them under the umbrella of the Detroit Economic Growth Corporation (DEGC), a quasi-public organization that partners with the government and businesses to attract new companies and investments to the city.

However, in and irresponsible, manic-like fashion, city officials are not just trying to scuttle the agreement they also want to renege on the covenant that would take the city out the economic development business. This government is without peer is being developmentally challenged.

Per the Consent Agreement, all parties were in accord with the following provision:

Consolidate the planning and economic development functions for the city within the Detroit Economic Growth Corporation to avoid duplication, enable the development of unified strategy and execution, and simplify the process for new economic development within the city.

This unification, of course, makes sense now — and is something the city should have done years ago.

Under the mayor’s office, for example, is a Planning & Development Department that doesn’t do much planning or development. It essentially works with grants that deal with AIDS, the homeless, seniors, Community Development Block Grants (CDBG) and Neighborhood Stabilization Program (NSP).

This agency, though, is best known its dysfunction. Detroit is at risk of losing a more than $200-million Neighborhood Stabilization Program (NSP) grant that the city can’t or won’t spend to rescue distressed neighborhoods. It’s not the first time. The city apparently lacks the mechanisms to take down abandoned structures and spend millions of dollars it received in HUD block grants

The City Council’s Planning Commission is equally inept. It primarily does Site Plan review, mediates zoning issues and whatever pleases a legislative body more prone to intervention in development deals based more on patronage than economic reality.

Combining these scattered resources would go a long way toward helping a certifiable schizophrenic administration trim bureaucracies, shed outmoded functions, take politics out of economic development decision-making and hand them to professionals in one fell swoop.

The DEGC might outsource these responsibilities, and save the city hundreds of thousands in employee health and pension legacy costs. Already under the DEGC are related government agencies like the Downtown Development Authority (DDA), Detroit Brownfield Redevelopment Authority (DBRA) and the Economic Development Corporation.

With or without a mutually agreed upon pact, this merger is a paragon of sanity. Conversely, it is the height of arrogance — or ignorance — for Mayor Bing to think he can effectively drive major business attraction decisions or tackle the difficult issue of competitiveness from his office. Neither can the council from their chamber. One look out of any City Hall window reveals the city’s impotence on that score.

The business of Detroit government should be reducing regulatory burdens and impediments to development. This group of elected official has proved incapable of providing efficient, effective essential services. If  focused only on the basics, they might make progress in creating a hospitable, welcoming environment in which job creation can take root and the city can prosper.

To summarize recent events surrounding a deteriorating issue that hastens the city toward bankruptcy: The city corporation counsel filed suit — arguably with the mayor and council’s blessing — claiming the agreement is void because the state owes Detroit a few thousand in unpaid water bills and a millions in state revenue-sharing funds. The state subsequently threatened to withhold revenue sharing unless the suit is dropped and the city takes the brakes off reforms connected to the agreement.

Meanwhile, Detroit Medical Center chief Michael Duggan added to mounting speculation he is interested in replacing Mayor Bing. Duggan’s has a reputation for intelligently getting things done. His emergence begs the question: “What would Mike do?”

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