Wednesday, January 24, 2018

Dan Gilbert blames Detroit's Amazon HQ2 loss on 'reputation,' not reality

Posted By on Wed, Jan 24, 2018 at 10:10 PM

click to enlarge SHUTTERSTOCK/WIKIMEDIA COMMONS
  • Shutterstock/Wikimedia Commons

It's been a week since word came that Amazon passed over Detroit as the possible home of its planned second headquarters, and most everyone has walked away with an understanding of which of the region's shortcomings are to blame for the loss.

A lack of talent and uncertainty over whether the region could attract it were among the reasons Amazon reportedly gave in a phone call with members of the bid committee. Also at issue was a lack of mass transit.

These are concepts most people buy. But not Dan Gilbert. No, the man who spearheaded Detroit's bid has a different theory, one that he has dubbed "The Elephant in the Room."




In a letter first shared with members of the bid committee and released publicly on Wednesday via Twitter, Gilbert, the king of open letters, makes the case that Detroit's muddy reputation was what actually stood in the way of an investment that would have brought $5 billion and 50,000 jobs to the region.

"We are still dealing with the unique radioactive-like reputational (sic) fallout of 50-60 years of economic decline, disinvestment, municipal bankruptcy, and all of the other associated negative consequences of that extraordinarily long period of time," Gilbert says in bold face type on the final page of the five-page letter.

At first glance, the theory seems plausible, if one is to overlook the fact that the statement hinges on the reputation created by this fallout, not the lingering effects of the fallout itself.

But Gilbert goes on to suggest that he does indeed believe the notion of a screwed-up Detroit to be pure myth.

"We have witnessed for ourselves, time after time, those who have recently visited the Motor City leave with a completely turned around, positive impression of our city," he writes. "An impression that is light-years closer to reality than the old narrative."

The thing is, it's not. Dan Gilbert has transformed the downtown core by adding a total 17,000 employees and buying up more than 90 of the city's finest buildings. This is the Detroit he sees every day.

But the city at large still lags. Detroit has the highest poverty rate of any major city in the country, with more than 1 in 3 people living under the federal poverty line — about $12,000 for an individual. Thousands of households in Detroit continue to be lost each year because people were unable, or unwilling, to pay tax bills that are the price of shitty used cars, adding kindling to the cycle of decay. And the city's crime rate, while improving, is abysmal by national standards, with the FBI ranking Detroit the most violent city in the country in 2016.
These are facts that city residents beyond the downtown and several quaint neighborhoods cannot ignore. But for Gilbert, the people who see this reality are just haters.

"It is clear that we don’t do ourselves any favors by feeding the pessimistic narrative about Detroit and our region, when this view is not anywhere
near the balanced, full story," he writes. "I believe this is the single largest obstacle that we face."
Unfortunately, if history should serve as any indication, pouring a thick layer of sugar on a shit sandwich never helped anyone gain lean muscle. Detroit's problems are myriad, and could probably best be solved by admitting them first.

You can read Gilbert's full letter here. We've copied and pasted its final section below.

The Elephant in the Room

You may be asking yourself: “If Detroit scored well on most other criteria, then why would the lack of mass transportation alone eliminate us from making the top 20?”

After all, there are cities that made the list that are also missing adequate mass transit or other significant pieces of Amazon’s required criteria such as a major airport.

So, what is the elephant in the room?

We are still dealing with the unique radioactive-like reputational fallout of 50-60 years of economic decline, disinvestment, municipal bankruptcy, and all of the other associated negative consequences of that extraordinarily long period of time.

This lingering, negative perception has unfortunately survived our impressive progress over the last several years. It is clear that we don’t do ourselves any favors by feeding the pessimistic narrative about Detroit and our region, when this view is not anywhere near the balanced, full story. I believe this is the single largest obstacle that we face.

Outstanding state-of-the-art videos, well-packaged and eye-catching proposals,
complex and generous tax incentives and highly compelling and improving metrics cannot nor will not overcome the strong negative connotations that the Detroit brand still needs to conquer.

Old, negative reputations do not die easily.

What is the solution to finally overcome the chasm between Detroit’s reputation and reality? It will take many strategies and tactics to overcome this fundamental challenge.

One highly-effective remedy to the fallout of a half century or more of reputational damage is to bring people physically HERE to see, touch and feel the excitement, opportunity, growth and reality that is the Detroit of 2018 and beyond. We have witnessed for ourselves, time after time, those who have recently visited the Motor City leave with a completely turned around, positive impression of our city. An impression that is light-years closer to reality than the old narrative.

There are many innovative people already in this region who are capable of developing creative strategies and tactics required to attract people to Detroit and the area.

Once we get them here, we’ve got them.

The good news is, all of the blood, sweat, and tears that went into this monumental effort will not go to waste. This process has allowed us to curate and package our region in a way that has never been done before.

Undoubtedly, this will be extraordinarily valuable to the many opportunities that are coming our way on an almost daily basis.

Much appreciation and gratitude for the time and talent that you contributed to this valiant effort. I am not sure there has been such a collaborative, purposeful and unified initiative in this region, in all of our lifetimes.

Let this mark the beginning of a new era of how Detroit does business…

Move Here. Move the World.
Dan Gilbert

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