By now, most have probably seen the headlines that a federal judge Steven Rhodes has ruled to allow the city of Detroit to proceed with a bankruptcy filing. The ruling will be appealed, but it promises to have a big negative impact on the city’s pension benefits, retiree health coverage and its municipal bonds creditors.
Here are a few interesting (scary) facts about the fiscal mess Detroit is in pulled from a USA Today article.
- The city government has 9,700 workers, but 21,000 drawing retirement benefits
- Detroit’s population has declined 26% since 2000 and 63% since 1950
- Property tax revenues are down by about 19.7% over the last five years, but its per capita tax burden is the highest in Michigan
- Without restructuring, the city is projecting negative cash flows of 198 million if fiscal year 2014
The list goes on but you get the picture.
How did Detroit get in this mess? There are lots of reasons, but my guess is that Detroit politicians made short term decisions to cater to special interests that ultimately resulted in higher taxes and reduced city services. Citizens and businesses voted with their feet and left. Bankruptcy restructuring and new investment may save the city, but creditors, retirees and others are going to take a big hit.
Fortunately the city of Dallas is a far different story.
We office in uptown. The growth here and the breadth of entertainment and cultural offerings that have been added over the last few years is really exciting. The Klyde Warren Park, the Arts District, the Perot Museum, the new Convention Center Hotel and other attractions have been made possible with public/private partnerships. Dallas is a great place to live and work.
That is why I was excited to be invited as a guest of Good Space and developer David Spence to the annual membership meeting of the Oak Cliff Chamber of Commerce to hear Mayor Mike Rawlings speak about the city’s GrowSouth initiative. The meeting was held at Dallas Baptist University and after opening remarks by DBU president Dr. Gary Cook, the Mayor outlined the City’s Grow South plan. (BTW go visit the DBU campus sometime – it is beautiful.)
The GrowSouth plan has been around for a couple of years. You can read about it on the city of Dallas website, but a lot of people are unfamiliar with South Dallas.
Key takeaways from this meeting were:
- The high level of commitment of the Mayor and city staff to the southern sector.
- The importance of education and schools to the success of the area.
- The importance of developing a comprehensive housing plan for the area.
- A marketing initiative to the business community and investors to rebrand the area.
- The creation of a private investment fund for South Dallas investment.
Given the commitment of the city and the residents of the area and the success of areas such as Bishop Arts, Trinity Groves, Sylvan Thirty, UNT Dallas and the massive industrial and warehouse development along I-20, South Dallas has a chance to be the next big growth corridor in the Dallas area over the next 10-15 years. The growth of Southern Dallas presents a fantastic chance to increase the city’s tax base and provide opportunity for investors, employers and citizens. Southern Dallas should be high on the list of real estate investors and of businesses that are looking to expand or relocate.
James Mathis, managing partner of Echelon Investment Management, believes in enriching his clients’ lives by identifying, preserving and achieving their goals. Aspen partners with clients through every leg of their race ~ asset management, investment advice and retirement planning. Contact him at firstname.lastname@example.org.
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