Business Monday

What Miami can learn from Detroit

The Detroit skyline rises behind the Monument to Joe Louis, also known as "The Fist," Thursday, July 18, 2013.
The Detroit skyline rises behind the Monument to Joe Louis, also known as "The Fist," Thursday, July 18, 2013. AP

Miami likes to compare itself to leading cities of the 21st century — San Francisco, Singapore and even Hong Kong. Detroit is not a city one would immediately think to match with Miami. Detroit’s long economic decline followed the troubles of the American auto industry. The city’s finances collapsed when the industry almost went bust during the Great Recession. Miami, meantime, has experienced its own boom and bust cycles, fed by real estate and tourism.

Rip Rapson is the president of the Kresge Foundation based in Troy, Michigan. The foundation’s financial purse came from the company that evolved into K-Mart. Its namesake founder had a mansion in Miami Beach. Today, the organization’s mission is “expanding opportunities in America’s cities.” It has several projects in South Florida.

WLRN’s The Sunshine Economy spoke with Rapson about trying to build (or rebuild, in Detroit’s case) a community and economy — and what Miami can learn from the Motor City. These are excerpts from that conversation.

Q: What does the ideal city look like for an American worker?

A: In many ways, Miami is well on its way to getting there. It is a community that reflects the vibrancy of the cultural and historical traditions of our country. It’s a community that is increasingly filled with the building blocks of opportunity, whether it’s educational opportunity or economic opportunity or transit mobility. It’s a place I think that is increasingly centered around institutions that are welcoming and democratic in all ways, [such as] arts institutions or even business institutions. And that’s obviously a community in which sort of the next-generation economy is open to all residents who want and are able to participate.

Q: One of the challenges that Miami has had in terms of growing its brand domestically for the United States is opportunity for early career or new positions because of a real lack of corporate concentration here in South Florida. Do you see it the same way?

A: From an outsider, I think if there is any line on Miami, it is that it is a two-tier economy. It’s the idea that you have this extraordinary vibrancy of tourism and cultural attraction and folks coming in and investing from other parts of the world in exciting ways. But for those of us who aren’t from your community, there is a sense that there is not the kind of the diversification and stability across the economy that provide pathways of opportunity where you can start as a nurse and move up to be a supervisor and ultimately move into management in a hospital organization, for example.

On the other hand, as I’ve come back to Miami over these last few years fairly frequently, it’s clear that that’s emerging. You’re diversifying in terms of healthcare, technology and entertainment. I think in many ways the narrative may not yet be caught up to Miami.

Q: What are the influences of that narrative?

A: One is simply stability over time. Miami has been such a dynamic economy and such a dynamic socioeconomic place over the last decade that I think it’s hard for people outside of Miami to sort of get a fix on it.

Someone once said to me that Miami’s a little bit like a bathtub with the drain open. The water keeps coming in and flows out over the edges and it goes down the drain. It goes in all directions. I think he meant it in a complimentary way.

There is so much change going on, and in this community I think it’s hard to pin down a narrative that seems to characterize you at any moment in time.

Q: With the other communities your foundation works with, specifically Detroit, what are some of the efforts that you see are applicable here in South Florida?

A: First, you should never underestimate the extent to which you have created a vibrancy in your arts and culture scene — whether it’s Wynwood or whether it’s the new institutions popping up along Biscayne. It is just extraordinary to watch. You only have to walk outside any evening in Miami and see the people spilling out of concert halls and art galleries and museums to understand what an extraordinary set of assets you now have. I think we often tend to push off to the margin issues of arts and culture as a determinant of long-term social and economic vibrancy, but I think you have really cracked that code in a really powerful way. And it’s not just Art Basel. It’s everything about this community that sort of speaks to a diversified and healthy and dynamic way of thinking about the next generation of our nation.

Second is the diversity of the population. It is so fascinating to walk the streets of Miami and see a mini-United Nations around every corner. The music, the food, the art, the culture, the languages make for a community that seems to both reflect our nation’s future and reflect the very best of what our nation has to offer right now.

There are a couple of things that we’ve learned in Detroit, however. A monoculture of any industry is not healthy. Obviously, in Detroit, that’s all about the auto industry. My sense is that tourism and entertainment industries in Miami are so dominant that efforts to diversify are going to be important to your future. You can’t just build a downtown economy. You’ve got to make sure that you pivot into neighborhoods and ensure that there’s the kind of residential, economic and social political stability in neighborhoods that any great community needs.

I think if there are other ways that Miami could move forward, it’s in the more ambiguous area of how you problem-solve. One of the things that we’ve learned in Detroit is that no single sector can take on the complexity and intractability of issues of education and economic growth and all of the other issues that any modern American city has to face. What we’ve tried to do is stitch together unusual combinations of the public sector, the private sector and the philanthropic sector so that each can sort of do what it’s best at. We created a new riverfront development over the last decade that was led by philanthropy and closely followed by the private sector. Only at the very end [does] the public sector come in.

I think the most successful places in America are those where there is a distributed leadership model. The public sector does not [exercise] command and control over all decisions but increasingly is working with the private sector and the philanthropic sector to crack problems in very different ways.

Q: Detroit clearly has had a very tough reputation for a number of years, and it got worse during the municipal bankruptcy. How has Detroit been able to begin to rebuild itself?

A: When I came to Detroit 10 years ago, my wife wept for the first year because it was such a tough climate. There was so little investment going into the city. There were such high levels of need and distress.

Now, 10 years later, you walk down the central business district and see cranes and activity and kids and families enjoying the community. You can just see it, you can feel the sense of hopefulness and optimism. Markets are finding their way back to Detroit. We have seen everything from residential to commercial to industrial to other forms of investment move back into Detroit.

We commissioned a survey last fall to ask exactly this question: What do CEOs from across the country think of Detroit? It was surprising how bullish American CEOs are about Detroit. About three-quarters of them felt that Detroit was a place they would like to invest. Although it’s interesting, we were surprised to find that only about 16 percent of the CEOs we surveyed knew that Detroit had actually emerged from bankruptcy.

Q: Is that right?

A: Yeah, we’ve got to do a better job of getting the word out.

Rip Rapson

Job title: President and CEO, The Kresge Foundation

Age: 64

Experience: Rapson began his career as a legislative assistant to U.S. Rep. Don Fraser and in that position oversaw development and passage of the Boundary Waters Canoe Area Wilderness Act of 1976, which brought full wilderness protection to the million-acre lake country of northern Minnesota. In the 1980s, Rapson was a partner at Leonard, Street & Dienard in Minneapolis. He served as the deputy mayor of Minneapolis from 1989 to 1993 and was the primary architect of its Neighborhood Revitalization program, a 20-year, $400 million effort to strengthen the city’s neighborhoods. In 1993, Rapson was named a senior fellow at the University of Minnesota’s Design Center for American Urban Studies. There, he led a successful six-year interdisciplinary project to examine the forces affecting first-ring suburban communities and to address the challenges brought on by declining tax revenues, shifting political forces, and changing economic and social demographics. Rapson was appointed president of the McKnight Foundation in Minneapolis in 1999. At the foundation, Rapson launched the Itasca Project, a private sector-led effort to develop a new regional agenda for the Twin Cities.

Since his appointment as president and CEO of the Kresge Foundation in 2006, Rapson has led the 92-year-old foundation to adopt an array of grant-making and investing tools to improve the economic, social, cultural and environmental conditions of urban life through six defined programs: arts and culture, education, environment, health, human services, and community development in Kresge’s hometown of Detroit. In 2015, the foundation awarded more than $145 million in grants and investment commitments. In Detroit, Rapson and the foundation provided central support to the ‘Grand Bargain,’ an unprecedented partnership between the philanthropic community, city pensioners, the state of Michigan and the Detroit Institute of Arts, to propel the city of Detroit’s successful emergence from municipal bankruptcy in 2014.

Also: He has co-authored two books: ‘Troubled Waters,’ an account of the Boundary Waters legislative battle in Minnesota, and ‘Ralph A: Sixty Years of Modern Design,’ a biography of his father, a globally renowned architect. An active member of the national philanthropic and southeast Michigan civic communities, he currently serves on the board of directors of the Federal Reserve Bank of Chicago’s Detroit Branch, ArtPlace America, Living Cities, Local Initiatives Support Corporation (LISC), Detroit RiverFront Conservancy, Downtown Detroit Partnership and M-1 Rail

Education: Rapson has a bachelor’s degree from Pomona College and a J.D. from Columbia.

Personal: Lives in metro Detroit with his wife and two children.

About the Kresge Foundation: The Kresge Foundation is a $3.6 billion private, national foundation that works to expand opportunities in America’s cities through grant-making and social investing in arts and culture, education, environment, health, human services, and community development in Detroit. In 2015, the Board of Trustees approved 370 grants totaling $125.2 million and nine social investment commitments totaling $20.3 million.

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