resolve the issues with Riverfront landowners in order to get ownership and control of the land for future development,
resolve the outstanding debt of $150 million to the three casino operators, and wisely spend the remaining dollars from the initial loan; and
re-engage the casinos in discussions to move forward and build their multi-hundred-million-dollar permanent facilities.
This strategy required an incredible amount of skill, timing and pure game. Straight up, Detroit, West Side, ol’-school game. And I was just the man for the job. It took three phases, which had to occur nearly simultaneously, and with excellent execution. First, I assigned my Corporation Counsel, Ruth Carter, and my chief development officer, Walter Watkins, the task of settling all the claims of the Riverfront landowners. This included three cement companies, complete with their own silos. We also used a couple of private sector attorneys to help with this effort. The team did a great job, and their work alone became a historic project for Detroit.
Ruth Carter, now a sitting district court judge in Detroit, had been a prosecutor for many years. She was incredibly tough, but she always made you feel warm and comfortable even as she was kicking your ass. She was also hilarious, She always had a quick quip or witty comeback. And when it was time for business, she could focus and get great results.
Walt Watkins was the immediate past president of Bank One (which later became Chase Bank). He was a thirty-year veteran in the banking business, with deep ties to the development and general business communities. He was incredibly smart, focused, organized and savvy. And he was a fun guy also. Every now and then, that old Omega Psi Phi would jump out of him.
Ruth and Walt engaged the plaintiff’s attorney, Al Ackerman, a longtime Detroit property and condemnation lawyer, and hammered out a deal that benefited the displaced Riverfront owners. The deal also moved Detroit’s Riverfront development efforts forward, along with our overall downtown development plans. Especially exciting was the opportunity to plan and develop residential units along the waterfront.
Next, we tackled the cement silos. The City couldn’t give the casinos the land because the $150 million was supposed to buy the cement companies, so the silos could be removed. Nearly $120 million had already been spent, and not one of the three cement silos had been purchased. Negotiations had taken place, but the City never bought anything from them. It was an all-talk/no-action situation. We somehow managed to buy them out with the $25 million we had left, and build them a new facility elsewhere.
The casinos’ demands for their $150 million launched the third phase of our strategy. We met with them and offered some straight talk. Essentially, the several meetings that we held in both Detroit and Las Vegas merely echoed my position from the start. I made my argument clear. “You need to just write off that money,” I said. “You’re making $1 million a day. You’re smashing records. And you don’t want to be perceived in the City of Detroit as these monsters who are not good corporate citizens. You gave that money to us, essentially. It was squandered by the last administration, but you gave it to us. Let it go. And by the way, I need a little more money from you.”
So, not only did I want them to forgive the $150 million debt and let us keep the land that we purchased with their money, I wanted some additional money. What a compromise, right? But at the end of the day, we got additional money from the casinos. We’d been getting nine percent of the gross receipts. I added two percent more for Parks and Recreation, and for the police. Because of the addition of a dedicated funding source from the casinos, we were able to build several new police buildings, purchase much-needed state-of-the-art equipment for police officers and build three new recreation centers for our senior citizens and children. These were the first new rec centers to be built in the city in more than twenty years.
We did a great job with that casino deal. In 2008 alone, the City got $190 million from that deal. In total, it was a $300 million switch. The City of Detroit owed the casinos $150 million. I negotiated us out of that debt, and then got $150 million. We negotiated agreements for permanent casinos. The only reason the City is surviving right now is because of that deal. Without it, Detroit would be bankrupt and in receivership.
We pulled off that third phase because I personally flew to Las Vegas, sat in the meeting and negotiated it myself. I did it without the lawyers. I always have hesitate to say how much I did, because I respect my team. But I took this negotiation personally. I was involved in every part of the strategy. I made sure that I stayed abreast of every detail in each part of this highly involved process. However, I saw the negotiations with the three casino operators a little differently. I truly believed that a positive result from these talks would be the catalyst to a new Detroit, and I was not going to come up short. So, I started attending all the meetings to be in on the negotiations. I stayed for as long as it took, unless it was better strategy to get up and walk out. You know, for effect.
In the last days of the negotiations at the Bellagio Hotel in Las Vegas, all of us—MGM, Motor City, Greektown and the City of Detroit—shared the same determination, and decided we would not leave Vegas without a deal.
I knew the deal was the fastest way to jumpstart development in the city in a way we hadn’t seen before. It would put carpenters, electricians and laborers to work immediately. The result? Each entity built a mega casino and entertainment complex. Each spent well over $200 million. And MGM spent more than $400 million on its facility alone. Thousands of jobs were created for Detroiters. And we worked into the deal an agreement that fifty-five percent of the labor force had to be Detroiters. If you walk into any one of the casinos right now, you’ll see brothers and sisters and other Detroit residents working there. That’s the beautiful thing about it.
We knew we had to close that deal. That was the key to everything else. Having that kind of construction going on in Detroit also spurred construction on the Riverfront, because we’d cleared that land. Those silos had become an albatross around the neck of the city skyline. While other big cities had turned their Riverfronts into havens for residential and business development, Detroit’s had, for too long, been dotted with abandoned warehouses and those terrible cement silos.
The casino development also ignited conversation about downtown development in general, both locally and nationally. The restaurants. The shops. It opened the door to build the Hard Rock Café. It even created the developmental energy that made the West Side Home Depot, on 7 Mile Road and Meyers Avenue, possible.
We were able to finish building Campus Martius, an area in the middle of downtown Detroit that boasts a concert pavilion with a stage that rises from underground. The Campus’s lawn converts to an ice skating rink in the winter. Detroit 300, the City’s tricentennial planning commission, had a plan for Campus Martius that had been submitted to the Archer administration. But it hadn’t moved by the time we came in. We drew the plan anew and re-engineered it. With the changed focus, we got it done. And it was possible because of the incredible energy created by our successful focus on basic City services and the casino deal.
The chain reaction continued with the news that Detroit would bring in hotels with showplaces. When Walt Watkins brought John Ferchill, a tough-talking, get-it-done developer out of Cleveland, to the table, and built the Hilton Garden Inn in Harmonie Park, downtown, we approached him and said, “Hey, why don’t you take a look at the Book Cadillac?” This was an old downtown relic on Washington Avenue that was simply too expensive for most to fix, but too beautiful and historic to demolish. It had stood abandoned since 1984. The roof was open, exposing the building to the elements. That meant it had spent twenty years collecting rain and debris within its walls.
This all changed the energy downtown. General Motors remained a huge partner for my administration, but the new energy, new deals, restaurants, nightclubs, lofts and office towers began to divert the crux of Detroit’s economic discussions away from the auto industry. Of course, the autos reclaimed that conver
sation years later when the economy went into decline, but I knew then that Detroit needed to get away from the auto industry as our “calling card,” because it’s a cyclical business. I never knew it would get as bad as it did, but we did figure it would encounter trouble. It always does. And because of the City’s heavy reliance on it, when the automotive manufacturing industry catches a cold, Detroit catches pneumonia.
The signs had begun to show by 2002, and I said in what felt like 100 speeches that Detroit couldn’t depend on the Big Three for economic survival. We had depended on the automotive manufacturing industry for nearly eighty years, but because of the cyclical nature of the business, bad times were always right around the corner.
The best thing about being mayor was the access to information through organizations like the U.S. Conference of Mayors. You could get on a plane to go see different cities, projects, people and organizations that are thinking and acting in different ways to create change. There were always ways to satisfy my intellectual curiosity. In 2002, the gross metropolitan product (GMP), a term describing the economic output of cities and the metropolitan areas around them, was added to the lexicon of economic insiders. This was very interesting to me because, for the first time, cities were able to determine their economic importance to their states and the country.
The GMP fueled an interesting new paradigm of metro areas throughout the United States. I was named Chair of the New Economy Committee for the U.S. Conference of Mayors, where this study initiated. It offered incredible amounts of information, like shifts and trends in population, industry, economic output, forecasting and more. Unfortunately, the information presented zero or negative growth in population, jobs and economic output for Detroit. It also showed the tremendous shift in hiring for automotive manufacturing jobs throughout the United States. I began to see very quickly, from the data presented, that Detroit and Michigan needed to do something revolutionary to stop the certain economic tsunami that was on the way. Detroit no longer cornered the market in auto jobs. Therefore, as the City’s leader, I felt we needed to move expeditiously to find and grow jobs in other economic and industry sectors.
Pete Karmanos’s decision to move Compuware, his innovative technology services company, downtown was huge, in light of this, because it was the big first step toward moving Detroit out of its singular-focused dependency on GM, Ford and Chrysler. We actively pursued others in the technology, financial services and healthcare industries, and we were able to land several new companies in all of these growing industries. We explored ways to help the Detroit Medical Center grow. We actively weaned the city off the automobile industry’s nipple, and the vision was becoming clearer and clearer to people each day. And we didn’t stop there. We began cleaning storefronts to attract small business, and we focused on entertainment. We asked the right questions, like, what else do we have to do to make downtown Detroit walkable? All of this energy crackled because the casino deal went through. The city was beginning to show signs of life.
chapter 10
Who’s the New Guy?
NOT EVERYONE was happy with me during those first two years. I had a chip on my shoulder, and I admit it. From the day my candidacy was announced, I heard that I wore the wrong suits, needed to wear red ties, trim my beard or remove my earring. To anyone reading this book who is not from Detroit, you wouldn’t believe how big an issue this was. In the midst of poverty, crime, population decline, racial tension and failing schools, a diamond stud that I wore in one earlobe made the front-page news and a big story on local newscasts. Often!
The stud was made from my wife’s first wedding ring. It was the one I’d paid for by layaway. After I became mayor, I bought her a new ring, but this first one represented a bond between Carlita and me. As trivial as it was to the public, she fought for me to keep it. My advisors, however, told me the day I announced my run to remove it.
It felt like people were trying to make me not me, and I constantly struggled with that. It sounds stupid to me when discussing it now, but it seemed like no one could move past the earring conversation during my first campaign! I mean, I was discussing policy, diversifying our industry base, exploring ways to better engage the appropriations processes in Washington, D.C., and in the State Capitol, and the next day’s news would be all about my earring! During one campaign meeting with Conrad, Bob, Christine and Carlita, a debate ensued.
“Man, the people can’t hear you,” the advisors said. “Just take it out.”
“No!” Carlita argued. “It’s who he is! First, you tell him he can’t wear the suits he wears. Now, he has to take it out? This is wrong!”
“Baby, this is nothing,” I said. “It’s just a damned earring. This ain’t about our love for each other.” I said the things men say to appease their women. I ultimately removed it, because it overshadowed the fact that I had a law degree and had led the Michigan State House. People responded like I’d won a prize or something, and the press wrote stories about it being gone. It was one of the first times I realized how much the media can drive public spectacle.
I don’t think I could have ever trusted the media to tell this story in a way that accurately depicted its impact on my relationship with my wife. Like most politicians and public figures, I am protective of the little bit of personal space that I have. I have to be, because stories like this, stories that place perspective on public figures’ lives, get trivialized. But it was real, and it drove a wedge between Carlita and me. She felt like I had chosen Detroit over her. I put the earring back in after the election, but she didn’t care. Removing it made a much deeper statement to her. That was a major moment in our relationship, the first such moment in which Detroit’s needs prevailed over my wife’s. She would tell me, later, how deeply it affected her. Worse, every major crossroad after that required an immediate display of devotion toward the City or my wife, I’d choose Detroit.
Ah, stigma, stereotypes and me. Among the biggest stereotypes about me is the rumor that I spent a lot of time hanging out and partying while serving as mayor. That’s frustrating, because I never did. But I should have.
Every now and then, I should have gone out, sat around, ate some good food and had a beer, even though I don’t drink. I would have been much happier. My age, my maturity level and my demeanor were always the talk of the town. People drew opinions of my ability to lead based on these criteria. The talk shaped the Kwame Kilpatrick aura, and it made me paranoid because it had such a strong undercurrent, such tidal potential. I felt like I was being controlled. Yada-yada suit. Yada-yada earring. Gotta show up with this. Call so-and-so back. You can’t go out, because they’re going to blah-blah-blah.
My whole life, I’d felt like a free man. As mayor, I felt like a slave, a puppet with a big-time job. As a result, I spent my time pent up at the Manoogian Mansion, the mayoral residence, or working very late with increasing regularity. Usually, Christine would stay late and work with me. Carlita hated my work schedule and the fact that I wasn’t keeping my promises to be home on a particular day, or to attend an event completely separate from the job that we had agreed to earlier. She began to completely withdraw from me and the job. And she no longer questioned my schedule at all. She was just hurt and angry.
There was never a shortage of work. There’s a saying that great things are done when men and mountains meet, but they rarely have time to waste in the street. If that’s the case, then Detroit was my Mount Kilimanjaro, a mountain of issues surrounded by every climate in the political world. On one side, there was the economic development we’d successfully spurred. It started downtown, but it was beginning to move out to the neighborhoods in the form of new home building projects and other commercial activity, like that Home Depot on the city’s Northwest Side. That was good. On the other hand, some of the toughest issues I’d ever face lurked in the darkness, just beyond my sight.
A string of Detroit youth murders that took place in 2002 tormented me. Twenty-two kids were killed in Detroit within the first six
months of the year, with a rash of about nine occurring within days during that span. Each case was completely unrelated to the next, making it feel like a city that had existing issues with law enforcement was coming apart at the seams.
I had to do something, and I did, by personally visiting crime scenes or hospitals whenever an incident occurred, and offering condolences to the families. It told the community that I took these deaths personally, and kept investigators sharp. I viewed children’s bodies on several of those occasions. On city streets. On hospital gurneys. It tore out my heart. Mothers and siblings would thank me for being there, while grabbing me and crying. They all told me that I had to do something about this, and I so wished that I could do more. I cared deeply. I wanted to ease their suffering. I wanted every perpetrator to pay. What I wanted can be described, but what I felt cannot. I can only suggest imagining a grieving parent clutching you while his dead child lies behind you. And everyone is emotional when you arrive.
Damn, Kwame! You gotta do something about this! What… the… hell? I didn’t know what to do for them, except try to be strong. This, for me, was the other side of the mountain. I crashed headfirst into one of my job’s brutal realities, one that ventures far beyond policy-making and business deals. I was expected to be the face, and the conscience, of an entire city. If I said I had a plan on how to contend with it, I’d be lying. I felt like, unless I worked my ass off, every day, all day, we would fail. And yet, I felt like it didn’t matter how much work I did. We’d still fail. The pressure was incredible.
It’s sad enough when a child is killed; it never makes sense. These kids, however, seemed to be dying for completely careless reasons. One child was shot while playing with a relative’s gun. Another young girl was killed by a bullet intended for a man who bought defective radios from her uncle with counterfeit bills. If it sounds insane, that’s because it was. What do you do about that? These scenes were just terrible! There was a guy who walked into a daycare center and opened fire where children were at play. Another case involved a child who was made to kneel as he was shot execution style.
Surrendered: The Rise, Fall & Revolution of Kwame Kilpatrick Page 11