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BUILDING DIVERSITY: Black developers seek a fair hand in projects

Some fear race issues could block progress

March 12, 2004



It was an issue in the building of Detroit casinos, Detroit stadiums and Detroit schools: How big a piece of the economic pie will black people get when it comes to redeveloping the city?

As development fever takes hold in Midtown Detroit, many black residents and entrepreneurs want to make sure that black people get a fair share of any potential profits that could come from the neighborhood's renaissance.

"There is definitely an excitement of the renaissance, but there is also concern about participation in that renaissance," said David Burnley, president of Devon Industrial Group, a general contracting and construction firm that is building Detroit Medical Center's Rehabilitation Institute of Michigan on Mack and Brush.

"The playing field is still uneven, and race is always an issue," he said. "But things are changing for the better."

Already, there are some success stories. Firms led by blacks are developing projects in Midtown that include the 172-unitPalmer Court Townhouses and the 43-unit East Ferry Street residential development.

But developers and others watching Midtown's phenomenal growth note Detroit's history of race problems and how, if unchecked, they can impede progress.

The color of development

When Detroit voters approved a $1.5-billion bond in 1994 for capital improvements to schools, some residents and black contractors worried that much of the work would go to firms outside Detroit and that minority-owned firms would be shut out. Meetings were held between contractors and school officials, said Charles Beckham, who led the Association of African American Businesses and Contractors for a decade. The result: Detroit Public Schools hired a record number of minority contractors, about 50 percent, for its massive building program.

In Detroit, minorities have had to fight harder, exert pressure and push for new policies to earn jobs on major projects, Beckham said. Past tactics have included demanding business owners write inclusion clauses in contracts that guarantee minority participation in construction projects.

"In the last five, 10, 15 years you've had some guys who have gotten into the development game and done extremely well. We have some highly qualified African-American developers in this town who have been around a long time," he said. "Obviously, we could always use more, but it's a step at a time."

N. Charles Anderson, president of the Detroit Urban League, said to ignore the role of race in Detroit is to ignore history.

"The disinvestment of Detroit over the last 30 years was based strictly on racial preferences and feelings of those that abandoned the city after the riot of 1967," said Anderson, whose office is in the Midtown area.

But Susan Mosey rejects any notion that race is a factor in how Midtown develops. She is president of the University Cultural Center Association, which created the Midtown brand.

"We clearly have a vision of a very diverse neighborhood," she said. "I do feel in our neighborhood that we have attracted African-American investment. I see it happening with both commercial and residential development."

Mosey and others point to a number of blacks who are developing projects in Midtown.

"I don't think of myself as a black developer," said Julio Bateau, the managing partner for the East Ferry Street project. "I'm a developer who happens to be black."

Bateau, a mechanical engineer from Haiti, has built or renovated 43 units in his East Ferry Street residential project over the last decade. His first project in Midtown, which got off the ground due in large part to Mosey and the UCCA, was in 1979.

Reintegrating a neighborhood

If Midtown is considered a neighborhood, then it likely could be the most integrated ethnically, economically and socially in the Detroit metropolitan area.

Data from the 2000 census show African Americans make up about 70 percent of the 16,877 residents of Midtown Detroit. Whites represent about 19 percent; Asians 7.6 percent; Hispanics are 1.9 percent, and Native Americans are 0.5 percent.

Keeping a racial mix, some say, becomes a delicate act, especially when the value of property in the 2-square-mile area changes so rapidly and there's a mix of housing for various incomes.

"We're trying to strike a balance, but when you're trying to renew and rejuvenate a neighborhood, it's hard not to run all the residents out of there," said Beckham, who is a board member of the Detroit Neighborhood and Family Initiative Inc., a social service agency in Midtown. "Gentrification pushes people out. That's one of the complaints down there."

Further clouding the picture of inclusion is the role of financial institutions, experts say.

"Forty years ago, it was virtually impossible for an African American to get a loan from a white-dominated bank, and that was clearly detrimental to the development of African-American communities. But the situation is more complex now," said Thomas Sugrue, professor of history and sociology at the University of Pennsylvania and author of "The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit."

"I can't speak for the here and now, but banks are required to serve and grant loans to folks in minority and low-income communities," Sugrue said.

Financing progress

The Community Reinvestment Act, enacted by Congress in 1977, was intended to monitor depository institutions and help them meet the credit needs of the communities in which they operate, including low-income areas.

Between 1998 and 2002, the number of loans to residents and businesses in Midtown Detroit increased from 93 to 268, according to government data.

National City Bank has been offering residential and commercial banking products that it has used in the last two decades to redevelop downtown Cleveland. One such tool the bank offers in Midtown is the National City Housing Affordable Mortgage Program.

The financing program helps clients form partnerships with developers and find construction loans and provides discount mortgages to encourage home-buyers to move to Midtown.

"We want to encourage the middle class to come back or in some cases stay in Midtown Detroit," said Richard Buss, vice president of National City Bank.

Ideally, Beckham says, he wants to see a mix of people repopulate the area rebuilt by a diverse workforce.

"We're seeing more minority and women developers down there," Beckham said. "Like everything else, development is a field that begins to open itself up after a while, particularly in a place like Detroit with a predominantly black population.

"What we need to keep going there is the mix of developers, majority and minority guys, who really have a feel and a love for the community."

Contact ALEJANDRO BODIPO-MEMBA at 313-222-5008 or [email protected] Staff writers Kim North Shine and Megan Christensen contributed to this report.

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