Jack Lessenberry Essays and Interviews:
Michigan Radio’s Political Analyst Jack
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Pontiac is one of Michigan’s oldest cities. People were living here as far back as the 1820s, before Michigan became a state.
Today, it is the center of government for affluent Oakland County and
home to Bloomfield Hills, tony Birmingham and Somerset Mall. Yet Pontiac
itself is in trouble, as are many small, older industrial cities
throughout not only Michigan, but the entire Midwest.
Last year, poor financial management and declining revenues led to what amounted to a state takeover of Pontiac.
Fred Leeb, a turnaround specialist with notable successes in both the
public and private sectors, was appointed Emergency Financial Manager in
March. That means he is essentially a one-man government, when it comes
to money issues.
Pontiac has a mayor and city council, but they don’t have the authority
to buy a pencil unless Fred Leeb says they can. I went to talk to Leeb
yesterday, in his modest office in Pontiac’s cavernous old city hall. On
his desk there was an immense pile of financial reports and invoices.
He insists on seeing and approving each one.
His job is an intriguing one: How do you take a declining older industrial city and turn it around? That’s not an academic question, nor is Pontiac a special case. A number of Michigan cities have had emergency financial managers recently: Ecorse, Hamtramck, Flint, Highland Park. It is highly likely that more will follow.
Saving cities for the long-term is what Leeb has been thinking hard about. He knows the nuts and bolts of his craft; he has an MBA from Philadelphia’s prestigious Wharton School of Business, and had successful careers at Ford and Occidental Petroleum.
He knows how to balance a budget, bring spending in line with revenues,
and divest a city of unproductive assets. He recently took heat for
selling the long-vacant Pontiac Silverdome, former home of the Detroit
Lions, for less than some thought it was worth.
In fact, getting rid of it saved the city $30,000 a week. But he also
knows you can‘t cut your way to prosperity. “The fact is that our main
sources of revenue, the income tax, the property tax, and revenue
sharing, are going to continue to decline,” he said. What’s needed is
new job-generating businesses. But how do you get there?
Fred Leeb has a fascinating idea. During World War II, the government
invented the atom bomb by corralling the best minds in physics and
bringing them together in Los Alamos.
Why not try that concept here? He’d like to see the government bring
perhaps a hundred of the nation’s top experts to Pontiac and give them a
ten-year assignment: Find a way to turn this city around. You would pay
them, but these would be people who are far more interested in making
something happen than in making money.
He thinks Pontiac would be the perfect laboratory.
Detroit is too big. But Pontiac, with twenty square miles and an ethnically diverse population of 65,000, could be perfect.
How much would this cost? Maybe $150 million, tops, about what the
government spends every day in Iraq. If it worked, it could provide a
model that could revitalize industrial America.
That’s a fascinating concept. If I were Gary Peters, the congressman
from the region, or U.S. Senator Carl Levin or Debbie Stabenow, I would
want to jump on this, right now.
That is, unless we are all ready for Michigan to give up and die.