The Partnership puzzle

The methods of shaping Detroit are largely secret.

June 4, 1997

by Curt Guyette, MetroTimes

The vision of a new down own Detroit is coming into focus, an emerging picture that offers the promise of a center city rising from the wreckage of abandonment and neglect to recapture a vitality not seen for decades.

It is a vision of hope.

And considering the long stretch of bleak years when hope was a word not often heard in these parts, the promise held out by Mayor Dennis Archer during a press conference last week had an undeniably uplifting beat.

"Without vision, people will perish," intoned Archer, quoting scripture.

There were no specific details, because they have yet to be worked out. No projects were announced, because they have yet to materialize. How much public money will be involved hasn't been calculated.

What the mayor did offer was the "framework" for this "work in progress." It is a plan, a blueprint for developers to follow now that the message has been sent loud and clear that, in the mayor's words, "Detroit is where you can make a buck."

Whether this vision can make the long leap from drawing board to construction remains to be seen. What has already emerged is a clear picture of the mechanism being employed by Archer in his make-or-break attempts to raise Detroit from the ashes.

But if you want to understand the inner workings of the planning process that will define the look and feel of Detroit far into the next century, it is necessary to look behind the colorful drawings and uplifting rhetoric.

It is necessary to look at the Greater Downtown Partnership.

Calling the shots

Born in secret and running at high speed for months before any but a chosen few even knew it existed, Detroit's Greater Downtown Partnership Inc. was established at the suggestion of the corporate CEOs in Archer's inner circle. Operating as a nonprofit entity, the elite collection of Big Three auto executives, developers, bankers, philanthropists, millionaire entrepreneurs, one labor leader and two Archer administration appointees operates largely out of the public eye as it lays the plans that will carry Detroit far into the next millennium.

It is a scaled-down, more activist version of Detroit Renaissance, the similarly private collection of high-powered CEOs from which it was spun off. Officially that happened 14 months ago, although the Partnership had begun operating a full half-year earlier.

The Partnership's meetings aren't open to the public. It has a high degree of discretion as to what it does or does not disclose because its records are not directly subject to the Freedom of Information Act. However, some of its documents can be obtained through government bodies that are subject to the act.

The Partnership's first mission was straightforward and well defined: It had its sights set on acquiring title to the mammoth Hudson's building on Woodward Avenue and property around it so that the long-vacant hulk which dominates downtown could finally be dealt with.

Hence the rationale for secrecy.

If word were to get out that key players connected to the likes of mall king Al Taubman —whose right-hand man, Robert Larson, is chairman of the Partnership's board — the Big Three automakers and the city's major banks were buying up property downtown, prices in an otherwise bargain-basement market could soar.

So front companies were set up, and brokers began negotiating options on key real estate.

In little more than a year — operating on a $5-million budget donated by corporate backers and foundations — the Partnership efficiently accomplished what it set out to do: the Hudson's building and property around it have been acquired.

That was only the beginning.

Like Babe Ruth standing at home plate and pointing his bat toward the outfield wall to boldly proclaim the next pitch would be blasted out of the park, Chrysler Corp. Chairman Robert Eaton stood at the podium during last year's Mackinac Conference, which brings together Michigan's political and corporate power elite. He promised that as soon as the tide was free and clear, the wrecking ball would swing and Hudson's would tumble. Never mind that the City Council might want to have some say, never mind that city tax money would be required to tear the place down, never mind that someone else might have another plan.

As the then-head of Detroit Renaissance and currently a member of the Partnership's board Eaton displayed all the audacity of the Great Bambino, and, the way it now looks, the same knack for being able to call his shots.

Operating behind closed doors, the Partnership's board of directors voted in September 1996 to tear Hudson's down. Not that it could just go ahead and demolish the building. It would need city funds to complete a demolition pegged at a minimum of $12 million (as much as $30 million, if critics are correct), and that meant getting City Council's approval.

But as late as November, Larry Marantette, the former ANR Pipeline executive who runs the Partnership's daily operations as its president, told the Metro Times that viable plans to renovate the building would still be considered. Preservationist groups were being told the same thing.

But when a developer with a proven track record for transforming broken-down historic buildings into trendy apartments, offices and shops did come knocking, the brush off was quick and decisive. The Partnership wasn't interested. And when that same developer — Randy Alexander of Madison, Wis.— persisted by taking his case to the City Council, the Partnership flexed its considerable muscle for the first time.

After listening to Alexander's pitch, the council began expressing reservations. There was no plan to replace Hudson's. Did the city want to create a gaping hole in the heart of downtown without knowing what, if anything, would replace it?

In public the Partnership's Marantette worked in concert with Beth DunCombe, president of the Detroit Economic Growth Corp. and the de facto operations chief of the city's Downtown Development Authority. They did their best to shoot down Alexander's proposal. Appearing before the council, they said Alexander's plan wasn't feasible, would cost more than he said, that the public subsidy would be higher than he claimed.

Unswayed, the council called for a public hearing.

Then the Partnership began maneuvering. Marantette met behind closed doors with seven of the nine council members. What he said isn't known exactly: reports vary, with council members saying he did everything from outline broad, vague plans for the lower Woodward corridor to name specific developers interested in the site.

Whatever he said was effective. Less than a week later, with no advance notice, the council suddenly made a 180-degree shift and voted to tear the building down.

Before its about-face, council did one other thing: It listened to Historic Commission staffer Bill Worden's concerns about the legislative branch of city government being kept in the dark by the Partnership.

What Worden said, in effect, was that the council had better start paying attention to what was going on: Instead of a government agency pursuing a public planning policy designed to serve the public good, Detroit faced the danger of a private entity financed by business interests devising a plan that would first and foremost serve ... whom? The private interests financing the plan?

Certainly that is a danger, insisted Worden. So the council instructed him to draft a strongly worded resolution insisting the Partnership keep the city's Planning Commission and its Historic Designation Advisory Board involved in planning on a "continuing and integral basis."

The council's struggle to obtain information about Archer's development plans goes back to 1994 and the formation of his Land Use Task Force, which laid the foundations for the Partnership. The Task Force was headed by the same Robert Larson who now heads the Partnership.

Two months after the Partnership's formation had been announced, council members were still trying to get basic information about its legal standing.

Outside looking in

And its not just the council members who have had trouble getting information out of the Partnership.

"In my experience they play their cards pretty close to the vest," says Kathy Wendler, acting chair of the Detroit Historic and Community Development Forum. The Forum, says Wendler, would have liked to have played a greater part in determining the plan for revitalizing downtown.

"At times it has been frustrating," explains Wendler. "We really do hope for a closer working relationship with the Partnership. We see ourselves as a public voice advocating the public interest to be found in reusing older buildings."

The Forum was able to voice its views, but wasn't given a seat at the table where choices were made. "We don't feel we've played the role we would have liked to play," says Wendler.

By contrast, she points to the long and involved process the city followed in applying for its federal empowerment zone grant.

"That was a very democratic process," recalls Wendler. "It was painful at times, but in the end that type of public planning process produced a tremendously successful application."

Larson disputes any attempts to portray the Partnership's planning process as closed.

Asked why he thinks the city's Planning & Development Department isn't handling this chore, Larson answers that the reason is simple: "It can't do it alone." But neither could the corporate side do the job alone. “They each need to work together to get the job done,” he explains.

Larson, like Archer, points to the fact that more than 250 community members and downtown “stakeholders” were consulted during the process. The people invited to those meetings, however, were hand-picked by the Partnership. And no press coverage was allowed.

“They're not open in the sense that they are public meetings,” says Larson. “But these types of work sessions need to be unfettered. To have those discussions reported in the press inhibits the process.”

Now that the Partnership has delivered a plan, final decisions are going to be "made in the open, by the mayor, by the council."

What matters from this point on is results. "The proof will be in the pudding," says Larson.

And there are many who already like the way things are beginning to taste.

"Who couldn't like what this mayor has been doing?" asks Julius Nehmeth, who owns a number of downtown buildings. "Archer has done a marvelous job. I've never seen people standing in line to lease space like they are now. A few years ago you couldn't give space away. This is enjoyable for a change."

Gathering steam

At least a few council members don't quite see things the way Larson does. From their view the whole deal is so far along at this point little can be done to make any wholesale changes.

Following the agenda set first by the Land Use Task Force and then by the Partnership, the development train is not only rolling on the tracks, it is headed downhill at high speed.

"What we've seen is the privatization of the planning function," contends Councilman Mel Ravitz. "Part of the ability of this administration, with its close ties to the corporate power structure, is that it is able to get some things done.”

"But it is done at a price, and that price is that important decisions are not being made in the open. They're being made behind closed doors, and then revealed.”

City Council President Maryann Mahaffey and some others on the council share that concern.

Potential conflicts

There is another concern as well, and that has to do with the potential for conflicts of interest that are becoming apparent as the Partnership becomes entrenched as a planning force.

According to a March 1996 press release issued by Archer when announcing the nonprofit's formation, the group would "acquire and clear key blighted downtown sites so that they can be marketed for redevelopment. "

What wasn't announced, and has become apparent only recently, is that the Partnership would use significant amounts of public money to accomplish those tasks.

What is happening, in some instances at least, is that the Partnership has secured properties, but it is the city that's footing the bill.

The most notable example is the Hudson's building. The $12 million or more to tear it down is coming from city tax dollars although the Partnership is administering the project and will conduct the bidding process.

In the case of the parking garage in the 1400 block of Farmer, the Partnership obtained

an option for the property. But for the $800,000 needed to close the deal, the Partnership went to the Downtown Development Agency, a quasi-public agency that issues municipal bonds and funds projects using tax dollars.

Although the partnership is a nonprofit company, it has been using a for-profit corporation it created to conduct its real estate transactions.

According to records on file with the state, the president of that company, named Nomincorp, is Larry Marantette.

That the DDA came up with the money isn't surprising. Four members of the DDA board — which is appointed by Archer and makes the final decision as to which projects get funded— are also members of the Partnership board. Marantette is one of those four; two other DDA board members also work for corporations that have a representative on the Partnership board.

In addition to their significant presence on the DDA board, the members of the partnership are also major players in the Detroit Economic Growth Corporation (DEGC), a nonprofit entity that provides staff and oversees operation of the DDA.

Because the DEGC board comprises more than 60 people, the real power is concentrated in its six-person executive committee.

The president of the DEGC and the person regarded as the de facto head of the DDA, is Archer's sister-in-law, C. Beth DunCombe. The board's chairman is Robert Larson, who also is chairman of the Partnership's board. Two other DEGC executive committee members — Comerica Chairman Eugene Miller and Detroit Edison Chairman John Lobbia — also serve on the Partnership board. Chrysler Corp. executives also hold a seat on each board, again creating a situation where a quasi-public entity — about 80 percent of the DEGC's $2.5 million annual budget comes from the government — is dominated by Partnership interests.

This connection is significant because the DDA has gone beyond simply paying some of the tabs rung up by the Partnership; it is now providing direct funding to the non-profit group.

In February, according to an interoffice memo obtained by the Metro Times, the DDA entered into a contract with the Partnership, using $335,000 in public money to pay the nonprofit to provide acquisition, management, administrative and development services for the agency. How much more public money will go into the non-profit Partnership isn't clear, but the Partnership is apparently viewing the DDA as a significant funding source.

Among the objectives listed in its mission statement was the Partnership's desire to "secure funding from a mix of private and public sources."

Marantette later expounded on that.

Minutes from the Partnership's July 1996 meeting report: "Mr. Marantette stated that the Finance Strategy Committee had been asked to ... consider the needs of the Partnership to be in the tens of millions of dollars over the long term. In addition, he informed the board that an analysis of the conditions under which Downtown Development Authority bond proceeds might be used to finance Partnership activities had begun."

Links of power

The scope of the Partnership's vision was hinted at in the press release handed out during Archer's press conference last week.

"The Downtown Reinvestment Strategy ... provides a critical mass framework for the central core downtown," begins the release announcing the Partnership's plan. "It links existing areas of strength — the riverfront Renaissance Center, Greektown, the stadia area, New Center, for example — and upcoming projects and opportunities to create a revitalized downtown."

First, it should be pointed out that this language is virtually identical to a statement made during a September 1996 Partnership meeting. With great assurance, the Partnership made it clear — before any work sessions were held with any of the other downtown "stakeholders," before even Ken Greenberg was hired to come up with the downtown plan — the Partnership had determined that this "linkage ... will receive priority attention.”

Now consider some ways in which the individual interests of Partnership and Detroit Renaissance members intersect with Detroit Economic Growth Corporation and Downtown Development Authority actions.

For starters, Robert Larson is both chairman of the Partnership and chair of the DEGC's executive committee. Out of a total of 10 DDA board members, six also serve on the Partnership board or work for a corporation represented on boards of both the Partnership and the DEGC; Partnership President Marantette is one of those six.

Now consider some of the "existing areas of strength" the Partnership plan makes a top priority.

For instance, the Renaissance Center and New Center. GM owns four of the Renaissance Center's six towers and is looking to unload its old headquarters at New Center on the city. Executives of the auto giant serve on the DDA and Partnership boards.

It gets even more entwined in regard to the stadia. On the Partnership board are William Clay Ford Jr. (whose dad owns the Lions) and Marian Ilitch (whose husband Mike is one of largest forces in downtown). The DDA is providing $80 million toward the stadium deal. One of the banks loaning Ilitch's Tigers a total of $140 million for that deal is represented on the DDA board, another has an executive on the DEGC board. In addition, Detroit Edison, which partnered with the Ilitches on a real estate venture near the stadia, has its chief executive on the DEGC board.

And then there's the wild card yet to be played: casino interests.

Marian Ilitch has already announced she wants to be a player in that deal. Don Barden, a Renaissance board member, is also in the hunt for a gambling license in the city. Roles for the various banks or the DDA haven't been determined.

Bridge-to-bridge plans

"The Partnership will directly affect the sitting of the casinos by participating in the Mayor's Casino Advisory Committee," Marantette told the Partnership in November.

"Some potentially troubling doors are being opened here" is the way Council President Mahaffey describes the interlaced interests. Along with the gospel-fired enthusiasm and sense of optimism swirling through the mayor's press conference last week was a vague sense of deja vu.

After all, something quite similar to this has been heard before.

"I think there's enough momentum and commitment around the community that within a relatively short period of time the majority of the ideas will be implemented," promised former Detroit Renaissance Chairman Al Glancy exactly 10 years ago.

The comment was made as Detroit Renaissance unveiled its Detroit Strategic Plan, a public/private partnership intended to revive the city. One of the plan's crown jewels was its vision of a resurrected downtown, a "Town Within a City" concept that bears some resemblance to the plan unveiled last week. But the promised corporate financing announced in 1987 largely failed to materialize, and the revitalized downtown remained only a distant dream.

There is reason to believe things might be different this time around.

As Councilman Ravitz pointed out, Archer has worked tirelessly to tear down the fortress mentality that developed during the 20-year reign of his predecessor, Coleman Young.

Ravitz also sees a renewed interest in urban living springing up across the country. Add to that an economy that's booming and a Democratic president who seems to at least care about the survival of America's inner cities, and you have many factors for success that were absent a decade ago.

"At this point one can only be hopeful we can find the developers who will do the good things we want done," says Ravitz.

And the Partnership, shrouded from public view, is now integral to the process. The Partnership will soon be directing its attentions to areas beyond the lower Woodward corridor, as was made clear at Archer's press conference.

With its sphere of influence covering the five square miles bounded by the Belle Isle bridge and the Ambassador Bridge, and from the Detroit River to the New Center, the future of the city is largely in the Partnership's hands. There is reason to believe that Archer and the Partnership will be able to pull it off, says architect Dorian Moore, whose Archives DS firm has been involved in many of the Partnership's planning sessions.

"For 20 years here, nothing was happening. And somebody had to take the lead," says Moore. "To get this thing done correctly, there had to be a decrease in the amount of chaos. And the Partnership has done that."

And the fact that much of it took place behind closed doors?

"People have a right to be concerned," says Moore. "But they have to realize that the people who do this know what they are doing. The public has to trust that the right thing is being done."