By JESSICA ORLANDO, Solutions News Bureau
Downtown Royal Oak and Birmingham are economic and cultural hubs. Residents partake in communal activities such as the annual Arts Beats and Eats fair, and financial opportunities for businesses including the Facade Grant Program and Community Development Block Grant. Warren, however, despite being the third-largest city in Michigan, and Metro-Detroit’s largest suburb, still lacks certainty for its plans to develop a thriving business and consumer-driven downtown.
The design of a downtown commercial and residential hub outlined in a 2017 master plan is on hold and faces uncertainty because of investment wariness and taxpayer funding. According to a recent article in the Warren Weekly, city council members are at a stalemate with the mayor, and residents wonder if downtown Warren is just a vague pipe dream.
The Warren Town Center Impact Analysis in the master plan indicates that socioecnomics plays a large role in attracting businesses and depends largely on the local economy. Warren is an industrial-based economy, whereas Royal Oak and Birmingham are commercial economies.
According to the Michigan Financial Dashboard, Warren has a population of 139.4 thousand people with a budget of 235.6 million. Out of that budget, 53.75 million is generated from local corporations (GM) and 70.08 million is generated from property taxes – both are the largest contributors of revenue.
In terms of expenditures, Warren spends $70.56 million on public safety, but only $777,799 thousand on community and economic development.
In comparison, Royal Oak spends around $456,000 on public safety, but $468,000 on economic and community development and $1.57 million on recreation and culture. The gap between public safety and development is more evenly distributed in Royal Oak.
But according to the Warren analysis, the development of a downtown Warren would allow the city to benefit from a fiscal model that profits more off of corporate wealth and equity than municipal and residential taxes in its yearly budget. The report estimates that approximately $14 million would be generated from hotel activities, $2.6 million in new local wages, and $4.2 million in annual property tax revenue.
Warren mayor Jim Fouts believes the analysis has merit.
“The advantage that Warren has is that we are directly across from the GM Tech Center,” said Fouts. “The Tech Center has in recent years invested about $2 million in new improvements and they’re going high-tech, so this type of town center would not only draw interest from many people in Warren but would also be adjacent to a good commercial population that would be necessary to sustain a town center.”
Since the GM Tech Center is the largest contributor to enterprise revenue in Warren, a combination of the auto industry (manufacturing) and a post-industrial commercial industry will generate the wealth that Royal Oak and Birmingham see in their downtown centers.
“In order to have a town center in a city like Warren you have to have an anchor – a full service hotel,” Fouts said. “That will get a lot of traffic which will then allow Warren residents to come and shop at upscale, midsize, pubs, bars, and restaurants.”
There are, however, some economic challenges for the proposed Warren development, according to John Klemanski, a political science professor at Oakland University.
“Compared to Royal Oak and Birmingham, Warren has a much lower per capita income ($25,000) compared to Royal Oak ($50,000) or Birmingham ($87,000),” said Klemanski. “Warren has a higher poverty rate than the other two cities.”
According to the U.S. Census, Birmingham leads in per capita income with $87,233 thousand followed by Royal Oak’s $50,527 thousand and Warren’s $25,803 thousand. There is an income difference of 70% between Birmingham and Warren and a 49% difference between Royal Oak and Warren.
“Unless cities such as Warren can successfully “convert” their local economies to accommodate more post-industrial developments, the city will be forced to focus on industrial and manufacturing economic development strategies,” Klemanski said. “Royal Oak has some industrial areas, but they’re largely light industrial and Birmingham tends to be more of a “bedroom suburb” (like in the 1940s-1960s) where it’s mostly residential, with very few commercial and retail businesses along its major roads.”
Royal Oak and Birmingham have a very distinct centralized downtown area that is home to shopping and businesses. Warren, however, is more of an industrial city with General Motors being at the center and communities spread around the GM Tech Center.
“Warren has lots of strip malls and areas of commercial and retail activity, but is there an anchor downtown area in Warren,” Klemanski asked. “Not sure – and this is possibly because Warren has been more of an industrial center with lots of manufacturing along major roads in the city, such as Mound Road.”
According to the impact analysis, some of the other primary concerns in switching a local economy include implementation and turnaround. Results are not always imminent, and it can take years in some cases to see a growth in the economy.
Harry Kazlowski, a local resident of Warren, sees pros and cons.
“I think the downtown area in Warren will serve a public purpose,” Kazlowski said. “It brings local business together, develops a community and other good purposes if it’s set up correctly.”
But he is also concerned about gentrification.
“If you have high-end stores seeing a downtown area springing up next to GM and they want to get it on those customers then it could shun some of the smaller local businesses or a socioeconomic class that can’t afford that.”