Why Detroit won't have a second act

The current mayor, Dave Bing, has been too bogged down in Detroit’s fiscal quagmire to propose anything grand. But a group of rich investors led by Dan Gilbert, owner of Quicken Loans, is spearheading a massive effort to bring businesses, hotels and residents into the city.

Gilbert has pumped close to $1 billion to relocate his headquarters in Detroit and scoop up real estate for stores, hotels and apartment buildings. Whole Foods recently followed suit as did Moosejaw, a retailer for outdoor apparel. But these ventures have been seduced by massive subsidies. Whole Foods’ local partner received $5.8 million in state and local grants as well as sizable tax credits.

Still, the business editor of Forbes Joann Muller declared two years ago that, thanks to Gilbert, green shoots were beginning to sprout in Detroit.

Since then, however, things have only gotten worse as more residents have fled and city services have deteriorated. Why? Because these shoots were Astroturf, not a spontaneous response to actual need. Worse, they were a wealth transfer from the average taxpayers to the rich who patronize these high-end stores.