ESD will unveil its “Made in Michigan Pipeline” plan Thursday at the Dearborn Inn.

Christopher Webb, director of the ESD Institute, said ESD created the initiative after the trend of more jobs but fewer jobseekers emerged.

ESD’s job fair in spring 2009 attracted 1,400 jobseekers and 30 employers. Fewer than 500 jobseekers but more than 60 companies turned out for its latest event last fall.

“Just two years ago, when ESD held job fairs to match employers with engineers and technical professionals, the line of applicants was twice the job openings available,” Webb said in a statement. “Last year, those lines of supply and demand crossed and today the gap has reversed — more openings; less people. Employers hungry to hire can’t find the people they need.”

Several automotive suppliers, including Continental Automotive Systems Inc., Denso International America Inc. and Hirotec America Inc., are having troubles filling vacancies, executives told Crain’s in recent months.

Webb said the “Made in Michigan Pipeline” will focus on recruiting talent back to the state, retraining existing talent for current skill sets and retaining Michigan’s workforce.

“We’re through studying, we’re in an action mode now,” he said. “At some point we have to stop wondering where all the applicants went and provide pragmatic action plans that represent what we feel is solution to a stark reality.”

Webb declined to reveal specifics of the plan until Thursday’s conference.

Manufacturers have been hiring more consistently than other employers, for jobs with better-than-average pay. They just had their best month of growth in five years. And more factory output has raised demand in some other industries, such as shipping, leading to further hiring.

“The manufacturing sector is on a tear,” said Paul Ashworth, an economist at Capital Economics.

It’s an optimistic theme that serves President Barack Obama’s political needs. On Wednesday, Obama traveled to Milwaukee to salute a company that brought jobs back to the United States. The president has promoted the nation’s manufacturing base as an engine of growth and as evidence of a recovering economy.

No one thinks manufacturing will return to its 1950s peak. After all, the factory sector now makes up barely one-tenth of the economy.

But since the recession ended more than 21/2 years ago, factories have been contributing disproportionately to the recovery in hiring and the overall economy.

A big reason, economists say, is that individuals and businesses are making major purchases they delayed during the Great Recession and its aftermath. Consumers are buying more cars and appliances. Companies are investing in industrial machinery and computers.

The release of that pent-up demand gives manufacturing a kick that isn’t visible in some other corners of the economy. Manufacturing was hit particularly hard by the recession. Consumers postponed purchases ofcars, refrigerators and flat-screen TVs.

“Manufacturing has punched above its weight, but that’s because it was punched in the stomach in the recession,” Michael Montgomery, a senior economist at IHS Global Insight, said.

CRE sale prices stalled a bit in December as heavy year-end trading kept pricing stable in the fourth quarter, a trend CoStar has observed in each of the past two years, according to this month’s release of the CCRSI, which tracks sale pair transaction data through Dec. 31. The National Composite Index ended 2011 up a flat 0.2% from year-ago levels, but 5.5% above its low point in March 2011, thanks to a mid-year surge.

The Investment Grade and the General Commercial indices of the CCRSI both followed a similar trajectory in 2011, with prices declining in the first quarter, rallying at midyear and coasting during the flat final quarter. Highlighting the investor flight to safety to major markets and core assets, the Investment Grade Index finished December up a cumulative 14.6% from its March 2011 trough, while the recovering General Commercial Index ended the year up 3.5% from March.

CoStar’s Multifamily Index continued to lead all property sectors, with prices rising by 6.8% in the fourth quarter and increasing a total of 15.3% in 2011. After several quarters of relative weakness, the West regional index recorded the largest overall gain in the country, helped by outsized growth in office and multifamily pricing. In total, the Northeast regional index has continued to see the largest cumulative pricing gains since the trough of the real estate cycle.

Lone among commercial property types, the Retail Index lost ground in the fourth quarter of 2011, falling to its lowest value since 2003.

The impact of distressed property transaction on pricing levels was blunted by a surge in non-distressed property trading in the fourth quarter, although the volume of distressed trades remains high.

CoStar this month also introduced new quarterly pricing indices for hospitality properties and commercial land in addition to office, industrial, multifamily and retail, the four major CRE properties types. Both hotels and land ended 2011 near cyclical lows.

Reflecting a disproportionate level of distress, the Hospitality Index remained 47.6% below its third-quarter 2007 peak — the widest gap among the six property types — despite improving occupancies and revenue per available room (RevPAR). As a percentage of the total sales pairs, the level of distressed hotel property transactions ranks at the top among all commercial property types and has not yet begun to decrease significantly, tamping down average hotel sale prices.

Likewise, the Land Index finished 2011 down a cumulative 41% from the peak of the last cycle, and has not shown any tangible recovery to date following three years of quarterly declines, although losses appear to be easing.

The multifamily index has now grown by a cumulative 21.6% since the bottom of the cycle, outperforming the second-ranked office sector by more than 400 basis points. Renter demand has eclipsed supply, causing vacancies to contract by 170 basis points over the past two years, prompting rental rate gains. Strong property level income growth expectations by investors appear to be baked into the heightened pricing of current transactions.

Investor interest in office property also rebounded in 2011, with the office property index increasing by 17.3% since the end of March 2011. Like the recovery of the broader economy, the office rally has proved to be volatile and uneven despite the significant firming up of prices.

“Pricing gains have proven to be more explosive in tech-centric markets than in the overall market,” according to the CoStar CCRSI report. “The office index will likely continue to vacillate between gains and losses until office demand growth becomes more evenly dispersed across markets.”

Industrial property pricing increased by just 4.4% since March 2011, and was down slightly in the fourth quarter compared to year-ago levels.

Retail is the notable exception to the recovery story to date. Shopping center fundamentals remain soft despite an improving economy and a burst of pent-up consumer spending that has pushed retail sales above the peak of the last cycle. Bucking the trend, power centers and super regional malls have seen gains in tenancy gains over the past year, which could signal a coming turnaround in retail pricing, according to the CoStar report.

Larger and higher-quality properties generally outperformed the market in timing and magnitude of prices improvement, mirroring the growth in CRE fundamentals over the past year. Prices for investment grade properties stabilized at the end of 2009, more than a year ahead of price stability in the general commercial properties. The Investment Grade Index gained 3.4% in 2011, compared with 0.2% for the General Commercial segment.

While the volume of distressed transactions in December remained well above the monthly average for the year, the percentage of distressed trades fell from 35.4% in March 2011 to 24.8% in December, helping push up the National Composite Index.

Hampering the market recovery is the continued softness in levels of real estate lending. Mortgage originations fell by 7% in the fourth quarter from the previous quarter, according to the quarterly survey by the Mortgage Bankers Association (MBA).

The Northeast Composite Index, powered by the exceptional rebound in multifamily and office pricing, gained 12.3% from the market bottom, ending 2011 only 14.3% below the peak of the last boom cycle, reflecting an investor preference for the best assets and densely populated coastal markets. Pricing in the South, Midwest, and West regions is recovering at a more moderate pace, with the indices for each region finishing December 2011 down between 34% and 39% from the market peak.

However, the West won as the most improved region of the country, with the composite index advancing by 5.8% in 2011, compared with a 4% gain in the Northeast, a 2.2% gain in the Midwest, and a 6.9% loss in the South.

“Barriers to supply in the West have improved the marketability of CRE assets in this region as investors branch out to seek opportunities beyond the core coastal Northeastern markets,” CoStar said in the report.

In other CCRSI regional results among specific property types:

• Apartments were the only index to record positive gains in 2011 across all regions, while office recorded the second-best growth rate in 2011, with regional gains ranging from 8% in the West to 11% in the Midwest and Northeast.
• The South, the only region to record a loss on the overall composite index in 2011, recorded a 4% pricing loss in office.
• Retail, universally the worst performer, experienced losses ranging from 1.2% in the West to 10.3% in the South in 2011 prices.
• Fourth-quarter results in the Top 10 Largest Metro indices reflected the investor preferences for the best properties in the top markets. The Office Top 10 Largest Metro Index gained 23.8% since the trough of the last cycle as of the fourth quarter, significantly outperforming the 17.3% of the National Office index.
• The Multifamily Top 10 Index recovered 25.6% from its trough, compared with 21.6% in the overall multifamily index.
• The industrial and retail Top 10 Largest Metro Indices, however, underperformed their national counterparts. The Industrial Top 10 index declined by 11% compared with a 2.9% decline in the national index, while the retail top 10 metros also proved to be drag on the National Retail Index, with quarterly and annual losses nearly double the national average.

By Randyl Drummer, Costar Group

The new store is expected to open by the end of February and is the 13th just Baked to open in Metro Detroit.

“It has always been a goal of mine to open a Just Baked in downtown Detroit,” Pam Turkin, founder of Just Baked said in a press release. “We feel it is the perfect time to join the renaissance of the City that I grew up in.

Just Baked will be open Monday – Friday, 7:30 a.m. – 6 p.m., and weekends during major events. The store will offer same-day delivery of its cupcakes through a partnership with Suburban Delivery.

The projected 0.8% gain in retail receipts would follow a 0.1% advance in December, according to the median forecast of 65 economists surveyed by Bloomberg News before Commerce Department figures on Tuesday. Industrial production jumped and the cost of living increased in January, other data may show.

The drop in unemployment to a three-year low is evidence of an improving job market that’s essential to sustaining purchases, which account for about 70% of the world’s largest economy.

“As we’ve seen further gains in labor market activity, that should lead to further gains in spending,” said Millan Mulraine, a senior U.S. strategist at TD Securities in New York. “It’s hard to argue against the case that the U.S. economy is gaining momentum.”

Employers added 1 million workers to payrolls over the past six months, according to Labor Department data.

During that same period, the unemployment rate dropped by 0.8 percentage point.

Retail sales at stores open more than a year, excluding Wal-Mart Stores, increased 4.8% in January, compared with a 3.5% advance in December, the International Council of Shopping Centers said in a Feb. 2 statement.

Glassman told those at the Glen Oaks Golf & Country Club in Farmington Hills that fears of the recession returning are groundless, despite ongoing worries about European debt, and that 2012 will be a good year for Michigan, the Midwest and the U.S.

“The moon and sun are aligned,” he said. “This is going to be a better year than we’ve had so far. The bad stuff will be less bad, and the good stuff will be better.

“As an economist, I’m embarrassed when people talk about a double-dip recession. There is nothing in the data to support that,” he said.

Glassman said that by “the bad stuff,” he means troubles in Europe. But those have bottomed out and won’t pull down the world economy.

He also said that despite the stock markets having gained back most of their losses since their pre-recession highs, “you can make a case that there is still a fair amount of upside in the equity markets.”

Glassman gave five reasons for his optimism.

• The real estate market is finally poised for recovery, fueled in part by the youngest segment of the workforce, hit hardest by the recession, doing the best in recent jobs reports. They will fuel pent up demand to buy homes.

• After-tax profits by U.S. companies are at their highest level since 1947 —about 11 percent of gross domestic income, compared with the previous 65-year high of just more than 8 percent.

• Manufacturing has rebounded strongly in general, combined with the ability of the Detroit Three to generate profits on lower auto sales. “Manufacturing is the star of the Great Lakes region,” Glassman said. “The auto industry can make money at 14 million units, which is still a depressed figure. In the next two years, that will rise to 16 million units. The auto industry has good things ahead of it.”

• Recent discoveries of huge natural gas deposits nationwide not only will keep energy prices down but also will ease price pressure on a range of goods and services — and that will spread throughout the economy.

• The Federal Reserve Bank will keep interest rates at historic lows for the foreseeable future. Glassman said the Fed will keep rates low until unemployment is down to about 5 percent, which is years away.

“We are in a recovery mode, and it’s in your interest to begin thinking about expansion and investing in new projects,” he said.

Glassman said that criticism aimed at U.S. businesses for hoarding cash is unfair, despite record profits last year of $1.6 trillion. He said they have been understandably slow to invest in their companies over fears of a double-dip recession, but signs are that they have begun to spend and will continue to do so.

“The business community has switched gears from survival mode and defensive mode to offensive mode,” he said.

And he said worries over the slow pace of job recovery miss the point. All previous recessions since the Great Depression were led by the housing sector until now, he said.

“If I told you three years ago that the homebuilding business would be dead for three years, who would have thought any recovery would be possible?” he asked.

Glassman said the pace of job recovery should continue to improve. “You’ve heard the pessimism that this is the new normal?” he said. “It’s not.”

The restaurant will be in the Temple of Odd Fellows Building, at 1211 Randolph St. on the corner of Randolph and Monroe streets — on the border between Campus Martius and Greektown.

The 12,000-square-foot restaurant will seat 425 and is spread over three floors: the main bar on the first floor, a second-floor banquet operation and a rooftop patio bar.

Michael Ansley, CEO of Southfield-basedDiversified Restaurant Holdings, said he has kept his eye on the Odd Fellows Building for several years.

“Literally, my broker and I have been working on this for 3½ years,” Ansley said. “I knew I wanted to be down there, but what sold me was when I went there a couple years ago, sitting in Campus Martius, looking at that building. That is what sold me.”

Construction on the project, which Ansley said is the largest he has worked on, is to begin in April. The restaurant should be running by November.

Ansley said the project will cost about $3 million, but he could not give a projected sales figure for the space.

Diversified Restaurant Holdings owns and operates 22 Buffalo Wild Wing franchises throughout Florida and Michigan. It also owns the Bagger Dave’s Legendary Burgers and Fries restaurant franchise, which it also hopes to bring to Detroit.

The Commerce Department says business stockpiles grew 0.4 percent in December, after a 0.3 percent rise in the previous month. Sales rose 0.7 percent after a 0.4 percent gain in November.

Companies are building up their stockpiles again after cutting them over the summer amid recession fears. Higher inventories require more production, which boosts economic growth. It also suggests companies expect more sales.

Rising inventories were a key reason growth accelerated in the final three months of last year. Still, some economists expect the restocking to slow this year.

Wholesalers reported a 1 percent increase in inventories. Retailers reported a 0.2 percent gain and manufacturers 0.1 percent.

The announcement came this afternoon from Gov. Rick Snyder, during a speech to the Detroit Economic Club.

“We need to create an environment for private sector jobs to flourish. It starts with balancing budget and tax reform,” Snyder said. “We have a strong state.”

The Tax Foundation released some preliminary numbers, Snyder said, which also showed the state moving from 18th to 12th in terms of the state’s overall business climate. It’s also 7th in terms of the sales tax.

Snyder also noted that the state’s unemployment rate has gone from 14.1% to 9.3% and while the state had a $1.5 billion deficit last year, there is a multi-million-dollar surplus this year.

“We’re improving faster than the rest of the United States,” Snyder said. “More than 80,000 private sector jobs were created last year. We’re making a great comeback there.”

DMC and Vanguard are working with Royal Oak officials on the project proposed on a vacant parcel just north of Interstate 696 and between Woodward and Washington avenues and Main Street, said Lori Mouton, vice president of marketing for DMC Children’s Hospital of Michigan.

Two-thirds of the DMC Royal Oak Center would provide pediatric specialty care services, with the remaining third handling adult outpatient service, Mouton said. It would include an emergency room to treat children and adults, create about 155 jobs and add about $1 million annually to the tax rolls, she said.

“We want to be in Oakland County, and this is our first choice,” she said.

“We think this is a great spot because it’s really centrally located and accessible right off the highway.”

Last year, nearly 200,000 Oakland County residents received treatment at a DMC facility.

Royal Oak’s Downtown Development Authority owns the 4-acre parcel. There is no offer yet for the property, but the DMC is scheduled to make a presentation Wednesday to the city’s DDA, said Tim Thwing, Royal Oak’s director of planning and DDA executive director.

Construction could begin this fall if approvals are secured, according to the DMC.

The site is three miles from Beaumont Hospital, Royal Oak, which has an emergency room and its own children’s hospital. Beaumont declined comment.

Vanguard’s proposed investment goes beyond its pledge to spend $500 million in new DMC construction and $350 million in routine capital over five years. The DMC became part of Nashville-based Vanguard a year ago.

“In case anybody in your community was wondering about Vanguard’s commitment to the greater Detroit metropolitan marketplace, they shouldn’t be wondering anymore,” said Sheryl Skolnick, managing director of CRT Capital Group in Connecticut.

Vanguard also is spending $43.45 million on a five-story Children’s Hospital outpatient center that will open this spring across from Children’s Hospital of Michigan in Detroit.

Skolnick expects Vanguard within five years will have built more new facilities or made acquisitions as part of its growth strategy in Metro Detroit.

“Vanguard continues to support that Children’s wants to bring outpatient specialty care close to home,” DMC’s Mouton said.

Children’s Hospital has other suburban outpatient facilities, including a building it opened in March 2008 in Clinton Township.

By Melissa Burden, Detroit News

Inflation-adjusted median household income increased 4%, from $49,434 to $51,413, from August to December, according to a study released Thursday by Sentier Research. That’s the biggest jump since the start of the recession in December 2007, according to an analysis of Labor Department data by the economic research firm.

The rise coincides with stronger job growth, modest wage increases, a longer workweek and easing inflation. “We seem to have had a turning point,” says Gordon Green, co-author of the report and a former economist at the U.S. Census Bureau.

The study is consistent with other government reports that show rising national income in recent months. But those reports reflect aggregate or average U.S. income, which may be skewed by wealthier Americans. The Sentier study is more indicative of a typical household, says Dean Maki, chief U.S. economist for Barclays Capital.

Real median household income is still 7% lower than it was in December 2007 and 3.9% lower than in June 2009, when the recession officially ended, the study says. Americans’ income continued to fall in the recovery, Sentier data show, as more workers sought fewer jobs and many of the unemployed took lower-level positions to get by.

The recent rebound in inflation-adjusted income does not mean employers are doling out more generous raises. Average hourly earnings in January were up about 2% from a year ago and have been increasing at about that pace for two years.

But as economic growth accelerated to a 2.8% annual rate in the fourth quarter from less than 1% in the first half of 2011, the average workweek increased from 34.3 hours to 34.5 hours. Meanwhile, inflation slowed substantially late last year as gasoline prices eased, though gas prices have ticked up recently.

Maki expects 2.5% inflation this year, down from 3.3% in 2011, leaving Americans more disposable income. As a result, he estimates inflation-adjusted consumer spending will increase 2.7%, up from 1.6% last year. Consumer spending makes up about 70% of the economy.

Meanwhile, stronger monthly job gains — an average 183,000 the past five months, vs. 143,000 the previous eight months — should mean bigger raises for employees, but probably not until 2013, Maki says.

Kris Roudebush, 39, a U.S. postal worker, has been working 12 extra hours a week since December because of the Christmas and income tax mailing seasons, providing her an extra $400 or so a month. Roudebush, of Wichita, hasn’t boosted her spending because she anticipates her hours will soon be cut and gas prices could rise .

If that happens, “Any disposable income is going to be eaten up pretty quick,” she says.

By Paul Davidson, USA Today

Hosting the NHL Winter Classic on Jan. 1 provides another opportunity for this city and all southeastern Michigan to pop a little optimistic light through the darkness of its continued economic malaise. The main event — Red Wings vs. Maple Leafs — will be at Michigan Stadium, ensuring a world record for the most to attend a hockey game. But everything else involved in the spectacle will emanate from downtown Detroit.

It’s not a bad consolation prize.

I would have preferred Comerica Park as the home for everything. It’s the quirkiness of a hockey game played in a ballpark that has added to the excitement of the spectacle — merging hockey with baseball was connecting winter with spring. What made the Wings’ first Winter Classic three years ago truly special wasn’t simply that it was played outside, but that it was held at one of the more fabled baseball venues in history — Chicago’s Wrigley Field.

But the Winter Classic has become a significant moneymaker for the NHL as well as a prominent brand recognition vehicle. So the probability of getting more than 115,000 people — maybe even half of them Leafs fans from Ontario — was too tempting to resist.

Give Michigan athletic director Dave Brandon credit. U-M became a landlord, renting out its most iconic physical symbol for $3 million. That’s a nice payday. And although this won’t officially be a university-sponsored event, U-M will reap all the ancillary accolades as the home for the largest single-game mass of hockey fans.

But it’s important to remember this is Detroit’s event. Even though the principal game won’t be played there, the entire calendar of events and the vastness of its scope is a celebration of this city’s unyielding love for the sport that’s the national treasure of our neighbors to the north.

Well, in Detroit, actually, it’s our neighbors to the south.

That’s why there’s no better pairing than the Wings and the Leafs. Emotions are never contrived when it involves two of the NHL’s oldest franchises.

“It’ll be Hockeytown vs. the center of the hockey universe,” declared Leafs general manager Brian Burke.

How’s that for dropping the gloves?

And the event is still almost 11 months away.

NHL commissioner Gary Bettman spoke of how giving Detroit this event was in some ways a heartfelt thank-you to the man he called one of the greatest owners the league had ever had.

Mike Ilitch said he was so fired up in anticipation that he wanted to lace up his skates.

“Except that I can’t skate,” he later deadpanned.

Marian Ilitch acknowledged the family’s initial disappointment in not having the main event at Comerica Park. But the NHL more than pacified them with the creation of an overall showcase, dubbed the Hockeytown Winter Festival. It will include a Wings-Leafs alumni game, the very popular holiday tradition Great Lakes Invitational, minor-league games and junior games, as well as youth games. There will be skating for the public.

Long before the Ilitches purchased the Wings almost 30 years ago, they were at the forefront of youth hockey.

“Although Detroit isn’t hosting the main game,” Marian Ilitch said, “the fact that the city will be the central focus of the entire spectacular with all the other events should be very exciting. And it’s also a great source of pride because of our long standing commitment to youth and amateur hockey.

“Having this now does kind of bring things full circle.”

Increasingly, loan servicers that specialize in distressed situations are agreeing to large principal reductions in loan restructurings. These so-called “special servicers” represent investors that purchased pieces of mortgages that were carved up into commercial mortgage-backed securities.

Take the case of a deal between a special servicer and the owner of a pair of distressed three-story suburban office buildings on Long Island, N.Y., known as the Fountains at Lake Success. To get it done, the servicer, LNR Property LLC, agreed to take a hit and accept $83 million to pay off the $110 million.

But the bondholders represented by LNR weren’t the only ones to feel some pain. The Fountain’s owner, New York real-estate investor Craig Koenigsberg, had to bring in an equity partner to pay off bondholders and pump about $12 million of capital improvements into the building. That investor, Rockpoint Group, got a controlling majority stake in the property.

“It was a very large check we needed to write,” says Mr. Koenigsberg.

This year analysts expect more borrowers to have similar successes wrangling cuts in principal that allow them to hold on to their properties. A growing number of five-year loans made during the boom are coming due, forcing lenders to confront the reality that properties aren’t worth the amount of their debt loads.

Also, after more than three years of economic stress in many markets, debtholders are becoming resigned that values aren’t going to bounce back any time soon. The willingness of special servicers and banks to take discounted payoffs “is going to be the most important story line this year in commercial real estate,” says Harris Trifon, global head of commercial-real-estate debt research at Deutsche Bank Securities Inc.

LNR’s vice chairman, David Levin, declined to discuss specific loans. But he said in an emailed statement that “each case is different, and each decision we make is tailored to a set of circumstances that is unique to each asset and borrower.”

Mr. Koenigsberg has mixed it up with LNR before. In 2010, he owned a distressed portfolio of 32 smaller office properties in nearby Woodbury, N.Y., with about $250 million of debt, including $220 million in securitized senior debt controlled by LNR and nearly $30 million in mezzanine debt held by Scott Rechler’s RXR Realty.

In that case, RXR took over the property and assumed the entire first mortgage of about $220 million, which was extended until 2015. By that time, if values have risen enough, debtholders will get all their principal back.

Mr. Koenigsberg founded his company, CLK Properties, with his father in 1980. It owns about 2.7 million square feet in office properties mostly on Long Island and about 22,000 apartment units in New York and other states such as Georgia and Illinois.

The Lake Success story started in 2006 when CLK acquired the Fountains office complex, which is set in a busy corridor anchored by Long Island Jewish Medical Center. But its vacancy now stands at about 30%.

Boston-based Rockpoint has had a long history with the Lake Success buildings. In 2004, Rockpoint and a partner bought them for $107 million. Two years later, the Rockpoint venture sold it to CLK for about $162 million.

In the latest restructuring, the new ownership team of Rockpoint and CLK are financing its $83 million payment to LNR partly with a new $47 million loan from M&T Bank Corp., of Buffalo, NY. The rest of the money is largely from fresh capital Rockpoint is putting into the venture.

M&T has been increasing its commercial real-estate lending thanks to stabilizing values, according to Gino Martocci, M&T’s regional president for New York City and Long Island. “It allows for buildings to once again trade and for progress to be made in clearing distress,” he says.

Rockpoint has ridden real-estate cycles up and down before. The firm was founded in 2003 by a group that included several former Morgan Stanley executives. Rockpoint’s real-estate portfolio, which includes many properties in New York City and California, is valued at more than $6 billion.

Since mid-2009, it has placed big bets on Manhattan’s lodging industry, making debt and equity investments in more than 3,000 Big Apple hotel rooms, including the Milford Plaza Hotel. Late last year, Rockpoint made more than $70 million when Manhattan’s Park Central Hotel sold and it got repaid for debt it acquired at a steep discount in 2010. But the firm was part of a group that lost the Riverton Houses rent-stabilized apartment complex in Harlem to foreclosure in 2009.

By Maura Webber Sardovi, Wall Street Journal

“They hope to persuade high-tech, skilled applicants to return home to a state that is in need of both young and experienced talent in the IT, engineering and defense industries,” Central Florida News 13 reported Wednesday. Imagine that: The alleged epicenter of industrial decline is recruiting on the Space Coast.

Nearly a dozen Michigan companies — including Chrysler Group LLC, Quicken Loans Inc., SAIC Nexteer Automotive, Urban Science and Gentex Corp. — this week are taking part in the latest of several MichAGAIN jobs fairs in conjunction with the Michigan Economic Development Corp. Other recruitment sites include Boston, Chicago, Austin, Texas, and, later this year, Washington and Los Angeles.

Yes, you read that right. The Big Mitten, home to an estimated 70,000 job openings, is plumbing high-tech corridors on the coasts for talent to meet demand from expanding employers in the automotive, IT and engineering spaces, to name three. And that’s not all.

Slowly, a series of programs organized by the MEDC to benefit established Michigan companies is beginning to deliver meaningful results — and doing it without the huge taxpayer subsidies and politically correct preferences favored by the administration of former Gov. Jennifer Granholm.

Nearly 800 companies based around the state are now part of the Pure Michigan Business Connect initiative, a public-private partnership launched by Gov. Rick Snyder less than a year ago at the Detroit Regional Chamber’s annual Mackinac Policy Conference.

Instead of building an economic development strategy around the high-stakes game of “hunting” for trophy plants, research centers and corporate headquarters, the program aims to leverage indigenous expertise and regional financial institutions to help existing Michigan businesses grow.

That means matching legal acumen, accounting services and financial capability with local companies seeking any or all three and, second, helping to bolster the supply chains of large Michigan-based companies with suppliers from inside the state.

“My experience is you can absolutely make the market and increase your (Michigan) content,” Gerry Anderson, chairman of DTE Energy Co., said in an interview. “You can’t do uncompetitive things or source from companies that are not prepared to do it in the marketplace. We want to get people to match or beat the market.”

By the sound of things, DTE is succeeding. When the governor announced the program in the middle of last year, DTE pledged to boost its $475 million purchasing from Michigan companies by $50 million in the first year. It more than doubled the goal, spending $597 million with Michigan companies in 2011.

“The intent is to keep doing this,” Anderson said. “It’s not a one-time shot. It’s like a lot of things: What you watch, manage and focus on changes.”

Yes, it does. Under the program, DTE also is working with prospective suppliers vying for contracts and sometimes encouraging “them to sharpen their pencils.” Over the next few years, the utility expects to buy up to 60 percent of its roughly $1.5 billion in annual purchasing (excluding fuel and natural gas) from Michigan-based suppliers.

That creates jobs and expands payrolls, grows top lines and fattens bottom lines, stabilizes property values and boosts depleted state and local tax revenue. And it’s an example worth emulating.

If our “Lost Decade” and Detroit’s automotive unraveling taught anything, it should be that economic competitiveness supports jobs and jobs support quality of life and all of it is supported by the individual economic decisions made by CEOs and individuals alike — not politicians convinced they can pick the next new thing.

None of these state initiatives, or the purchasing decisions made by DTE Energy or any other major corporate player, will restore Michigan’s economic luster. The Big Lie was thinking, as too many implied, that they could, that any new industry (gaming?) or sector (alternative energy?) would deliver the state from its self-imposed economic purgatory.

They didn’t. But minding the fundamentals and giving those already here help and reasons to stay and prosper? That’s another question entirely.

Daniel Howes, The Detroit News

So part of the glass-covered mall is being converted into a vegetable garden.

“I look at it as space, I don’t look at it as retail,” said Vicky Poole, a Galleria executive. “You can’t anymore.”

Malls, over the last 50 years, have gone from the community center in some cities to a relic of the way people once wanted to shop. While malls have faced problems in the past, the Internet is now pulling even more sales away from them. And as retailers crawl out of the worst recession since the advent of malls, many are realizing they are overbuilt and are closing locations at a fast clip.

The result is near-record vacancy rates at malls of all kinds, both the big enclosed ones and the sprawling strips. Sears Holdings is closing up to 120 stores, Gap Inc. 200 stores and Talbots 110. Abercrombie & Fitch closed 50 stores last year, Hot Topic, almost the same number. Chains that have filed for bankruptcy in recent years, like Blockbuster, Anchor Blue, Circuit City and Borders, have left hundreds of stores lying vacant in malls across the country.

Most cities, looking at shrinking budgets, cannot afford to subsidize or knock down ailing malls, and healthy retailers that are expanding — like H&M and Nordstrom Rack — generally will not open at depressed locations. So, as though they were upholstering polyester chairs from the 1960s with Martha Stewart fabric, urban planners and community activists are trying to spruce up and rethink the uses of many of the artifacts.

Schools, medical clinics, call centers, government offices and even churches are now standard tenants in malls. By hanging a curtain to hide the food court, the Galleria in Cleveland, which opened in 1987 with about 70 retailers and restaurants, rents space for weddings and other events. Other malls have added aquariums, casinos and car showrooms.

Designers in Buffalo have proposed stripping down a mall to its foundation and reinventing it as housing, while an aspiring architect in Detroit has proposed turning a mall’s parking lot there into a community farm. Columbus, Ohio, arguing that it was too expensive to maintain an empty mall on prime real estate, dismantled its City Center mall and replaced it with a park.

Even at many malls that continue to thrive, developers are redesigning them as town squares — adding elements like dog parks and putting greens, creating street grids that go through the malls, and restoring natural elements like creeks that were originally paved over.

“Basically they’re building the downtowns that the suburbs never had,” along with reworking abandoned urban malls for nonshopping uses, said Ellen Dunham-Jones, a professor at the College of Architecture at the Georgia Institute of Technology.

The efforts reflect a shift in how Americans want to shop today: rather than going to big, overwhelming malls, many prefer places where stores can be entered from the street, featuring restaurants, entertainment and other Main Street mainstays. Also, as commuters in urban areas shift to public transportation, the giant parking lots are no longer needed.

The Simon Property Group, a large mall operator, is remodeling 15 to 20 malls a year, said its chief operating officer, Richard Sokolov. It is adding amenities like electric-car charging stations and stadium-seating theaters, and scheduling 20,000 events a year, like cooking demonstrations. Malls today have to “provide a unique set of shopping, dining and entertainment experiences,” Mr. Sokolov said.

Westfield, another large operator, has added dog runs and ice rinks, and, in Toledo, Ohio, the Wait Room, a lounge where customers can drink a beer and check their e-mail “while their significant other shops,” said Katy Dickey, a Westfield spokeswoman, in an e-mail.

While some malls can afford to change with the times, many cannot, and over all, there are too many malls today, urban planners say. The vacancy rate at shopping centers and strip malls was 11 percent in the last quarter of 2011, the highest level since 1991, according to the research firm Reis. Larger regional malls fared better, with a vacancy rate of 9.2 percent.

There are about 108,000 shopping centers in America, according to a 2009 survey by the International Council of Shopping Centers. Just a few years ago, developers competed to build malls, betting that continued growth would support them, but the recession threw those plans off course.

A new enclosed mall has not opened in the United States since 2006, according to Professor Dunham-Jones, and many ambitious projects, like New Jersey’s Xanadu just west of Manhattan, have lain half-finished for years.

“In the aggregate, we have more than we need at this point, and it can have a blighting influence on communities,” said Patrick Phillips, chief executive of the Urban Land Institute. “You see that all over the country, these endless commercial strips that are completely underutilized.”

That is leading to a variety of creative solutions that “would help make ’60s and ’70s suburbia a bit more sustainable,” said Rob Shields, director of the City-Region Studies Center at the University of Alberta, which held a design competition over the last several months that attracted the Detroit and Buffalo proposals.

But putting the theory into practice is requiring unusual city-developer liaisons. Mall owners often need regulatory clearance or financing help from a city to make major changes, and cities can sometimes seize malls that they believe are a hindrance to economic development. And malls were usually built at busy intersections with good access to public transportation — a combination that still works, even if the mall itself doesn’t.

In Seattle, city planners are looking at reworking a still-thriving mall as a focus point for more development.

“We’re at this interesting moment, because in cities, land is very scarce,” said Marshall Foster, city planning director for Seattle, which is trying to make Northgate Mall, a popular mall built in 1950, a center for urban life. “We can’t afford to overlook these opportunities any longer.”

The city is adding transit and trying to increase jobs and living space there. It has restored a creek originally covered by a parking lot, and is pushing the mall owner and retailers to add a street-grid layout and remodel stores so they are accessible from the street.

Cleveland, too, has given over some plots of land to the greenhouse effort at the Galleria mall.

The shift to gardening began with the carts that used to sell jewelry or candles, where Ms. Poole, the director of marketing events, had herbs planted in the disused retail carts inside the mall. She learned how quickly aphids proliferate indoors (solution: release 1,500 ladybugs into the mall).

The garden now produces lettuce, strawberries, basil and other crops, which are sold to visitors and used for the mall’s catering business. An unexpected benefit has been an influx of visitors, which has prompted related retailers to open in the mall, like a company that sells rainwater collection barrels.

“This has been sustaining us throughout these hard years, but now we’re looking at the potential of turning things around,” said Ms. Poole while preparing kale and spinach seeds for spring planting.

Stephanie Clifford, New York Times

The money now will pay for an examination of the Woodward corridor from the Detroit River to downtown Pontiac, the nonprofit Woodward Avenue Action Association said in a statement today.

The shift comes in the wake of the $528 million, 9.3-mile Detroit light rail plan being scrapped in December in favor of a regional high-speed bus system proposed by Gov. Rick Snyder with backing from Detroit Mayor Dave Bing and the federal government.

The light rail project, now entirely in the hands of a private investment consortium, would run from just Hart Plaza to New Center.

The Federal Transit Administration awarded the $2 million alternative analysis grant for the suburban extension study to the Southeast Michigan Council of Governments regional planning agency in mid-October.

SEMCOG is managing the money for the Central Woodward Corridor Alternative Analysis Steering Committee, which is made up of six Oakland County cities, SEMCOG and the Michigan Department of Transportation. The committee’s intent is to study improving transit along Woodward, which is expected to boost economic development.

Detroit, Highland Park, Bloomfield Hills, Bloomfield Township and Pontiac have been invited to join the group.

The steering committee is working on the study with the Michigan Suburbs Alliance; Wayne State University, which plans to contribute researchers to the project; and the Woodward association.

The corridor analysis is expected to begin in the spring. Public opinions will be sought, the association said.

By Bill Shea, Crain’s Detroit

Today, Michigan Central Station still looks Roman, but it’s a Roman ruin. Closed since 1988 and stripped of valuables by vandals, or “scrappers,” the empty hulk symbolizes my old hometown’s decline, buckling beneath crime, corruption, and events such as the 1967 riots, the 1970s gas shortages, and the rise of Asian auto imports. My family, like others, moved away. A city of almost two million residents in 1950 shrank to 713,777 in 2010.

To visitors, Detroit’s attractions verged on the desperate: Three new casinos corralled gamblers inside windowless rooms; a desultory monorail circled downtown. The city’s collapse actually created a new business in “ruin porn,” as locals escorted tourists eager to experience the postapocalyptic atmosphere of decaying factories and abandoned offices.

But Detroit has been down so long, any change would be up.  And “up” is why I’ve returned. Something’s happening in Michigan’s southeast corner. Call it a rising, a revival, a new dawn—there’s undeniable energy emanating from Detroit. America noticed it first at the 2011 Super Bowl. Chrysler debuted a TV commercial with rapper Eminem, star of the film 8 Mile (named after the road that serves as Detroit’s northern border). The ad crystallized the city’s spiky, muscular pride and won an Emmy, but Detroit was the real winner.

“This is the Motor City,” Eminem declared, “and this is what we do.” And, increasingly, Detroiters are doing: Working-class Latinos in Southwest, recent college grads in Midtown and New Center, and African-American professionals in Boston Edison are improving their neighborhoods. An expanding Detroit RiverWalk edges downtown, where corporations like DTE Energy, Quicken Loans, and Blue Cross Blue Shield have moved in thousands of workers. A favorite 1960s-era restaurant, the London Chop House, has announced its reopening. And that badge of gentrification, Whole Foods, plans to build a store in the inner city.

Even outsiders have started arriving, drawn by a sense of adventure. A new resident had told me: “If you visit Detroit, you’re an explorer. Be prepared for a rich, very soulful experience.”

A flashing red light jolts me back to the train station’s razor wire and rubble. A fire engine pulls up alongside me.

“Anything wrong, officer?” I ask, nervously. Maybe they think I’m a scrapper.

“Naaah,” says Ladder 28’s Capt. Robert Distelrath, with the backslapping, broada’s of the Midwest. “Just checking things out. What are you doing?”

I tell him I’m here because I hear Detroit is coming back.

Distelrath grins. “There’s more to us than this train station. Go to Slows Bar BQ,” he says, pointing into Corktown, the neighborhood bordering the station. “The owner, Phillip Cooley, he’s at the center of a lot of things. He’s trying to bring Detroit back all by himself.”

It’s only 11 a.m., but Slows is full up for lunch. Customers crowd tables made of reclaimed timber. Waitresses serve sandwiches, the bun tops tilted backward to accommodate the pile of brisket heaped under them. Pints of beer and platters of waffle fries slathered in melted cheddar follow. No shy portions here.

“Detroiters don’t like fancy-pants food,” a local tells me. True that. It’s a town where you can still score a plate of eggs and hash browns for $2.50 (at Duly’s Place, a 24-hour diner on West Vernor), and where restaurants selling Coney Island hot dogs—invented in Michigan, despite the name—inspire intense loyalty.

Cooley isn’t around, but I can’t resist ordering a pulled pork. Afterward, I continue my search for the urban pioneer. I eventually find him down the street at a just opened coffeehouse called Astro.

Cooley, 33, is an unlikely city savior. The Michigan native and former Louis Vuitton model traded Milan’s fashion runways for Detroit’s pockmarked sidewalks to start a new life. He and his family opened Slows six years ago.

“We’ve got lots going on,” he admits. He’s lent his expertise to Astro and to Sugar House, a craft cocktail bar next door. He’s even helped finance and build a community parking lot.

Each new attraction becomes another beam for shoring up Corktown, a neighborhood of sagging factories, revitalized gingerbread Victorians painted in bright colors, and empty lots transformed into vegetable gardens.

“We’re a scoot-up-to-the-bar-we’ll-make-room sort of place. Everyone’s welcome,” Cooley tells me as we finish up our americanos. He’s talking about Slows, but he could be describing the city. “Detroit’s authentic,” he says. “It is a very unique city.”

I DISCOVER THE TRUTH OF COOLEY’S STATEMENT the next day, visiting Dearborn, the suburb that’s home to both automaker Ford’s world headquarters as well as a burgeoning Arab-American community. After touring the Arab American National Museum with my guide, Fay Saad, a native Michigander of Lebanese descent, I’m welcomed at Habib, a lavishly furnished Middle Eastern restaurant that does a brisk business in wedding, graduation, and birthday banquets.

“Our families are just like everyone else’s,” Saad says in the same hearty Midwest accent as fire captain Distelrath’s. She invites me to accompany her to Dearborn’s Islamic Center of America, the largest mosque in North America. She dons a head scarf as we enter the holy building. It’s quiet. Services aren’t being held. We head back downtown via busy Warren Avenue.

“It’s like a mini Beirut,” Saad says as we pass an Arab coffee roastery that fills the air with the smell of toasted beans. “And a mix of everything,” she adds, as I point to a sign touting the “Best Halal Pizza in Town!”

We stop at her favorite bakery, Shatila’s, where the counters groan with abundant varieties of baklava and honeyed dates and other sweets from Yemen, Syria, and Lebanon, and where the attendants chat sociably with the customers. Though many women wear head scarves and the conversation is often in Arabic, it’s as much Middle America as Middle East.

In fact, non-English migrants enjoy a long tradition here. Travelers often forget that Detroit was born as French as New Orleans. Founded in 1701 by Antoine Laumet de La Mothe Cadillac, Detroit shows its Gallic roots in street names such as Livernois, Cadieux, and Gratiot.

I visit another religious spot—the redbrick Ste. Anne de Détroit church, founded by Cadillac’s settlers and the second oldest continuously operating Roman Catholic parish in the United States. The church and its exterior plaza exude an Old World charm that mixes with the growl of the semis rumbling over the Ambassador Bridge to Windsor, Canada.

Such contrasts make up the Detroit terroir, the French concept for the characteristics of a region that impart a distinct flavor. Detroit is a welter of opposites—like Slows’s old-school smoked barbecue dished out in a hip setting. I visit Midtown, site of many of Detroit’s cultural gems, to tour the Detroit Institute of Arts. The DIA is a classical, white-frosted cake of a building that harbors Diego Rivera’s dynamic, colorful murals of the auto assembly lines. The murals were commissioned by Edsel Ford in 1932. Ford may have been a wealthy industrialist, but he hired a Mexican Communist to paint his workers.

While some of the city’s buildings are scruffy, others are gleaming again, especially the prewar skyscrapers. Detroit’s art deco towers make those in Miami’s South Beach look like anthills.

To get a feel for them, I take a tour with architectural historian Dan Austin. “Detroit has one of the largest collections of Roaring ’20s architecture anywhere in the country,” Austin says. “You’ll find them downtown, in the neighborhoods, in the suburbs.” He ticks off a series of greatest hits: “Fox Theatre, the Fisher Building, the Penobscot. And it’s not just art deco buildings, either—a town house development, Lafayette Park, is the largest collection of mid-century modernist Mies Van Der Rohe residences in the world.”

Austin is explaining this as we approach the 40-story Guardian Building. Built in a damn-the-expenses manner, this 1929 tower is machine-age bravado in stainless steel, marble, and nearly two million tangerine-colored bricks. “I like to call it ‘holy cow’ architecture,” says Austin, as we push through the heavy glass doors and enter the lobby. “You see it and say—”

“Jesus!” I gawk at the vaulted space rising five stories above the 60-foot-long lobby. This interior would not be out of place in Oz. The ceiling is finished in an Aztec-inspired design of Technicolor tile hexagons. The walls and floors are clad in rare Numidian and travertine marbles. A decorative metal grill with a Tiffany glass clock in its center separates the lobby from the onetime banking hall. I make a feeble attempt to capture the dazzling beauty on my iPhone’s camera. But not even Apple’s ingenuity can do this place justice.

Other architectural beauties are getting makeovers as well. DoubleTree by Hilton has reopened the Fort Shelby hotel. The revamped, 34-story Broderick will rent apartments to downtown office workers.

“It’s an art to update an old building yet stay true to the spirit of the original,” says Bradley McCallum, who helps manage the Westin Book Cadillac, one of Detroit’s premier hotels, which reopened in 2008 following a $200 million renovation.

McCallum and I are dining later in the day at Roast, chef Michael Symon’s restaurant in the Book Cadillac. I’m working on a Rock City burger, topped with bleu cheese, caramelized onions, and the restaurant’s signature savory “zipp” sauce, and keeping tabs on the hive of activity. An elegant couple, the woman in silvery lamé, swan past us to their table in the buzzing main room. Outside, on Washington Boulevard, a Hollywood film crew is shooting a scene. Klieg lights dazzle like diamonds. “I think New York has a bit of a crush on Detroit,” McCallum remarks. Hard to believe nightlife in this town was once so moribund visitors would drive to Grosse Pointe, a plaid-and-preppy suburb, for fun.

I end up at Café d’Mongo’s Speakeasy with McCallum and an ever growing crowd of hipsters, artists, and night crawlers. The bartenders serve up ribs and cocktails that mix Captain Morgan rum with Faygo, a local soda pop that Detroiters seem to guzzle with everything.

It’s the far side of midnight. Maybe it’s the rock-and-roll shaking the speakers, or maybe it’s the Faygo cocktail. I’m tired. I say my goodbyes and head for bed. I have a big day tomorrow. I am going to circum­navigate an emerald.

The jewel is Belle Isle, Detroit’s grandest, greenest park, designed by Frederick Law Olmsted, who also designed New York’s Central Park. I’m exploring Belle Isle’s 5.5-mile ring road by bike, an easy choice given the city’s flapjack-flat topography and the creative tours by Wheelhouse, a start-up bike shop located on the city’s new River­Walk. Co-owner Kelli Kavanaugh rattles off the list of guided rides: “We do automotive heritage, haunted Detroit, architecture tours—did you know we were a huge station on the Underground Railroad? We’ll take you to historic districts like Indian Village on the east side. Detroit’s got great things, and it has problems. We show you both.”

I set off with 15 people around the 982-acre island, pedaling a tough single-speed Kona. Set in the middle of the Detroit River and connected to the city by a single bridge, Belle Isle looks a bit scrubby. Tour guide Pat Ahrens talks frankly about the park’s lack of money but also tells about the groups working to solve that. We glide past steamship enthusiasts coming to the Dossin Great Lakes Museum, South Asians playing cricket, and picnickers grilling their burgers to hip-hop. The island’s charms—a botanical garden and conservatory, an art deco marble lighthouse, the prestigious Detroit Yacht Club, and the stunning views of Canada and downtown—explain the draw.

Returning to RiverWalk, we take the Dequindre Cut Greenway, a 1.35-mile-long below-grade railroad track the city has turned into a bike path stretching from the river almost to Eastern Market. I make a note to myself to visit the market later, on a Saturday.

I was just a kid when I last saw Eastern Market, but it’s very much alive—thriving, in fact. But it’s no temple to precious foodstuffs; it’s a working produce and meat showroom, supporting 250 independent merchants and vendors whose offerings attract 40,000 shoppers every Saturday morning (and Tuesdays in the summer and fall).

It’s already crowded when I arrive at 9 a.m. The smells of melon and cider hang in the air as I weave my way past forklifts trundling bags of onions. Chalk-lettered signs tout smoked lake trout and white perch, Red Haven peaches, green wax beans, and sweet corn. As I walk past Dave Wilson, the hirsute flower seller in stall 468, he calls out in a voice so clear it cuts through the hubbub: “Good morning! Good morning! Oh yeeeaaah!”

Wilson sounds like a herald for a new city. Detroit’s problems are still big ones. I heard plenty about corruption and red tape, but it’s the context of the complaining that’s important. People are trying to get things accomplished, rebuilt, reborn.

In Detroit it seems natural I fall into conversation about these things with a friendly stranger in the market parking lot. Thomas Page, 62, is a retired Los Angeles cop wearing a T-shirt that says, “Detroit: The Fun Side of 8 Mile.”

Born and raised here, he left southern California to move home. After my discoveries, I’m not surprised when he tells me he hasn’t looked back.

“Detroit’s never going to have the weather,” he admits. “But in the last six months I’ve seen more change than what’s taken place in the last five years. We’re revving our engines. Detroit’s moving again.”

“Good morning!” I hear the flower seller, his voice rising above the din. “Oh yeeeaaah!”

By Andrew Nelson, National Geographic Traveler

The hardware store chain seeks a rezoning of property at 12701 Middlebelt in Livonia from light manufacturing to general business.

A public hearing on the matter is scheduled for Feb. 14 at Livonia’s City Hall. The rezoning request then will go before the Livonia City Council.

The family-owned company, founding in 1960, operates more than 250 Menards stores in Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin and Wyoming, according to its website.

Its nine Michigan stores are primarily on the west side of the state and in the Lansing area.

Menard sought a rezoning request in Pittsfield Township in December 2010, but the township denied the request last spring, saying it was inconsistent with the township’s land use plan.

Rather than locate along major corridors and intersections to the north of I-94, Menard sought rezoning for a parcel on Carpenter Road in an area the township had assigned for light industrial because it is removed from residential areas.

The “Go Red for Women” movement, which aims to empower women to live longer, stronger, healthier lives by taking charge of their heart health, is encouraging women to learn the risk factors associated with heart disease and take action to prevent it.  “We’re turning the Penobscot building red on Friday as a giant reminder for women to take control of their heart health,” said David Friedman, President & CEO of Friedman Integrated Real Estate Solutions.  “The Penobscot’s landmark red beacon has historically served in the past as a guide for aviators looking to find their way. We’re hoping it can now serve as a reminder to women to make it their mission to learn more about this silent, hidden and often misunderstood disease.”

In addition to the Penobscot lighting, Friday’s “Go Red for Women Day” serves as the launch of  Friedman Integrated Real Estate Solutions’ collaboration with the American Heart Association to help improve the cardiovascular health of its employee’s and its communities across the nation.  “Heart disease is the No. 1 killer of women, and one in three women have some form of cardiovascular disease, often undetected,” said Melissa Thrasher, spokesperson for the American Heart Association. “To help change those statistics, it is imperative for companies such as Friedman to take part in Go Red for Women events in the hope of helping women learn about their personal risk of heart disease and give heart healthy tips that may lead to a healthier heart.  We’re extremely excited to have them on-board and look forward to their collaboration on such events as our Metro Detroit Heart Walk in May.”

About the Penobscot Building

Rising forty-seven stories tall, the Penobscot Building remains one of Detroit’s most striking architectural landmarks.  Designed by architect Wirt C. Rowland of Smith, Hinchman & Grylls the Penobscot stands as a striking symbol of the popular Art Deco decorative style of the 1920s featuring Native American motifs designed by famed sculptor Corrado Parducci.  The H-shaped floor plan elegantly rises for thirty stories, with a series of cubed step-backs, culminating in a 12 foot diameter red beacon originally designed by the Claude Neon Company in 1928.  Restored in 2011, the twelve feet in diameter red beacon is visible from forty miles and was historically used by aviators to find their way.  The building is leased and managed by Friedman Integrated Real Estate Solutions.

About “Go Red for Women Day”

Go Red For Women®, powered by the American Heart Association’s research,  educates and connects millions of women of all ages.  With one out of three women still dying from heart disease, we continue to fight this No. 1 killer by helping women turn simple choices into life-saving actions.  Whether it’s eating healthier, exercising more, reducing our cholesterol or quitting smoking, Go Red helps women make these choices for themselves and each other.

Fortunately, manufacturers across the U.S. are investing in their capacity to be competitive, recession notwithstanding. From January 2008 to November 2011, nearly 750 new R&D facility projects were announced — the majority of which appear to be advanced manufacturing-related — according to data tracked by Conway Data. (Looking back since January 2008 is particularly instructive as economists point to December 2007 as the start of the recession.) These projects reflect reported plans of $15.5 billion in new investment. From aerospace, automotive and alternative energy to computer systems and software, biotechnology, and pharmaceuticals, the portfolio for R&D investment is a diverse one. These announced projects also reveal diversity in terms of location: 44 states had at least one announced R&D project during this time period. With this said, certain states have shown dynamic leadership in terms of supporting and growing the industrial R&D sector.

Michigan, Ohio, Pennsylvania, Indiana, and North Carolina led the nation in R&D facility project announcements from 2008 to 2011. These states were also in the top 10 for the reported investment and job creation plans associated with these projects. Why have these states become the states of choice for new and expanded R&D activity in recent years? To help answer this question, it helps to highlight some key features in each state’s supportive infrastructure.

Michigan

“Access to talent is the most important factor in being an R&D state,” said Michael Finney, CEO of the Michigan Economic Development Corporation (MEDC). Finney cited Michigan’s deep bench of engineering talent as its number one asset for R&D, noting that all 15 of the state’s public universities offer engineering programs. The state houses two of the nation’s top engineering schools at the University of Michigan and Michigan State University. As a result, Michigan is producing new engineers by the thousands. According to the National Center for Education Statistics, the state ranked fifth in the nation in 2008-2009 for its graduates with a bachelor’s degree in engineering (4,689).

A critical mass of engineers, coupled with the “very transferable” capabilities these individuals are equipped with, has enabled Michigan to become a hotbed for R&D activity in a variety of industry sectors, noted Finney. Recent R&D announcements include Nexteer Automotive ($413 million), MPI Research ($330 million), the Toyota Technical Center ($187 million), General Electric Co. ($100 million), and ConAgra Foods ($73 million).1

While Michigan is seeing R&D activity in diverse sectors, the automotive sector continues to be a significant contributor. The Big 3 domestic automakers remain key economic players for Michigan in manufacturing as well as R&D. In addition, Michigan has been successful in locating R&D facilities for the foreign-based automakers who have built U.S. plants in recent years. Finney pointed to the U.S. Environmental Protection Agency’s National Vehicle and Fuel Emissions Laboratory in Ann Arbor as the main draw. The fact that all products launched in the U.S. have to pass emissions testing through this facility has motivated a number of these automakers to plant their R&D facilities nearby.

In 2006, Michigan’s three largest research universities (Michigan State University, University of Michigan, and Wayne State University) joined forces to create the University Research Corridor to foster invention, innovation, and technology transfer. This is not the first time these universities have partnered — for example, in 1999, they created the state’s Life Sciences Corridor. Together, these partners draw in nearly $2 billion in federal academic research dollars and engage in significant industry sponsored research partnerships. In 2011, they were joined by three other leading research universities to launch the “Michigan Corporate Relations Network,” a statewide university network to foster business growth, attraction, and development. These efforts — supported with $1.8 million from the MEDC and Michigan Strategic Fund Board — will focus on generating university projects with companies.

The state is also channeling other funding to support its lead strategy — that is, to grow industry from within. For example, in 2012, it will invest another $6 million in incubator development. Over the years, Michigan has invested millions of dollars toward such activities. According to Finney, many of the state’s efforts to foster technology-led growth began in the early 2000s when Governor Rick Snyder served as chairman of MEDC.

He described this as a “line in the sand” when the state decided that “we have to be more than a state that assembles automobiles.”

Another major component of Michigan’s tool box is its SmartZoneSM Network, launched by MEDC in 2000 to foster a dynamic collaboration among universities, industry, and government to commercialize technologies. Today, Michigan has 15 SmartZones across the state, including several that house technology accelerators, incubators and support services for start-up ventures. Michigan’s Pre-Seed Capital Fund is designed to aid SmartZone companies in developing technologies in advanced manufacturing and certain other sectors.

Ohio

Ohio’s support of R&D dates back to the mid-1980s and includes a combination of historic and recently created programs, according to the Ohio Department of Development’s Chief of Business Services Division David Zak and Norman Chagnon, Ph.D., deputy chief of the Office of Technology Investments and executive director of Ohio Third Frontier. They cited the economic downturn (and “rust belt” image) affecting Midwestern states as the catalyst for Ohio’s efforts, prompting the state to create the Ohio Thomas Edison Program on the heels of Pennsylvania’s Ben Franklin Technology Partners. Chagnon describes the Edison program as “all about advanced manufacturing” to leverage an already prominent manufacturing base and resulting in seven Edison Technology Centers created to foster R&D in this sector.

Applied research has long been a part of the university culture in Ohio. The Ohio State University, Ohio University, Case Western University, The University of Cincinnati, Kent State University and The University of Akron are just some examples of universities engaged in industrial R&D.

Today, efforts focus on open innovation where companies look outside themselves for strategic partnerships in advancing research, noted Chagnon. He pointed to 2002 as the year when Ohio created the Ohio Third Frontier program, a $1.6-billion program which includes $700 million for research and commercialization activities, to foster such collaboration. In addition to providing continued support for the Edison centers, according to Chagnon, the state has funded 13 Wright Centers of Innovation (at $15 to 30 million each) and invested $60 million at the Cleveland Clinic to create the Global Cardiac Innovation Center. All Wright Centers are closely aligned or embedded within universities or medical centers. In May 2010, voters approved an additional $700 million in bond initiative to continue support for the program for another four years.

Chagnon described Ohio as providing pipeline support from laboratory to marketplace. Through its Technology Investment Tax Credit, Ohio investors may reduce their state taxes by 25 to 30 percent on the amount they invest in qualified, technology-based Ohio companies. To qualify, companies are vetted by a committee to determine eligibility. Through Invest Ohio, individuals holding their investment in a company for two years may qualify for a 10 percent credit off personal income taxes. In addition, the state’s Targeted Industry Attraction Grant program provides grants directly to companies for R&D after they receive a third-party validation of the technology potential by an expert consultant. For companies in business for three or more years, funding is available through the Innovation Ohio Loan Fund.

According to Zak, Ohio has also tied other incentive programs to R&D goals where dollars are awarded for projects which meet the requirement for industry research collaboration. In addition, through the Industrial Research and Development Center program, the state provides funding to cover up to 15 percent of the costs of the project (up to $5 million) if the company is willing to include an R&D center (meeting certain criteria) as part of its project.

The state has also made some significant changes to its tax structure, noted Zak. For example, Ohio eliminated personal property tax on machinery and equipment and certain other categories, and replaced this with a commercial activities tax on sales inside Ohio for companies earning beyond $1 million in sales. In addition, the traditional job creation tax credit is now based on new payroll rather than new jobs created. Ohio was reported to have the third lowest tax rate on new investment in the country according to a 2011 study by Ernst & Young.

Pennsylvania

Tom Palisin, acting deputy secretary of technology investment for the Pennsylvania Department of Community and Development, pointed to the state’s 10 percent R&D tax credit as a major factor for the Commonwealth’s success. Last year, 500 companies participated in the program. The program received a boost in 2011 when Governor Tom Corbett increased the cap on available credits from $40 to $55 million, shared Palisin. While R&D tax credits are now employed in several states, Pennsylvania also enables companies to sell unused credits for cash in a secondary market to help start-up and early stage manufacturers. According to Palisin’s office, sold unused tax credits generated a total of $34.4 million in new capital from 2003 to February 2010.

The Commonwealth’s higher education infrastructure is another major factor. The U.S. Department of Education reported Pennsylvania to have 257 degree-granting institutions in 2009-2010, the third highest among states in the U.S. In addition to the Pennsylvania State System of Higher Education (with 14 universities) and The Pennsylvania State University (with 20 campuses), Palisin pointed to private universities — such as Carnegie Mellon, Drexel, Lehigh, and Temple, to name a few — as being significant players in the state’s R&D landscape in terms of work-force development as well as federally funded and industry sponsored research. The state ranked fourth in the nation for its number of engineering graduates (with a four-year degree) in 2008-2009.2

“We have a very strong advanced manufacturing sector,” said Palisin, noting that R&D is a natural component of this sector. He cited the Ben Franklin Technology Partners (BTFP), created in 1983, as a key resource for developing a diverse sector over the years. Through BFTP, the state provides early stage and established companies with funding, business and technical expertise, and connections to expert resources. Palisin estimated that the BFTP received approximately $24 million from the state for the past 10 years. The partnership includes four regional headquarters centers and 10 satellite offices. BFTP makes direct investments in technology companies — which are selected after a vetting process that fosters confidence for other investors — and serves as an investor in select seed and early-stage state venture funds and angel investor groups.

Another asset Palisin identified as important to advanced manufacturing R&D is the state’s Industrial Resource Centers (IRCs) which deploy technologies to hundreds of manufacturers each year. The IRCs are part of the national Manufacturing Extension Partnership supported by the U.S. National Institute of Standards and Technology and state government.

Indiana

According to Secretary of Commerce and CEO of the Indiana Economic Development Corporation (IEDC) Dan Hasler, the Hoosier State’s success can be largely tied to a pro-business environment fostered by Governor Mitch Daniels in the last seven years — one characterized by lower taxes (corporate income and property), a quick and predictable regulatory environment, and fiscal stability. While the state offers incentives, they are performance-based and provided to the company after the jobs are created or investments made, shared Hasler, noting how the state is achieving economic wins while maintaining its AAA bond rating.

In terms of R&D in particular, Hasler said the Hoosier State has attracted advanced manufacturing not because “it is cheaper to operate” but because they can “park themselves nearby a ready source of engineering talent.” He pointed to major research universities such as Indiana University, Purdue University, and the University of Notre Dame as critical assets. Indiana is home to 21 technology parks adjacent to university branches initiated by IEDC or local government which create a bridge between industry and university, shared Hasler. He noted how this has fostered significant industry-sponsored research on campus.

Hasler also highlighted Ivy Tech Community College of Indiana — which specializes in providing two-year certification programs in advanced manufacturing and is the largest private training institution in the state — as a critical factor. “It’s pretty hard to be in Indiana and more than an hour away from a school providing engineers … or, an Ivy Tech simulated training facility,” he said.

Hasler attributed the success in R&D to the state’s support of specific industry clusters rather than R&D specifically. Pointing to life sciences as an example, he noted how central Indiana is not only home to Eli Lilly but also to a number of smaller and mid-sized firms that are connected in customer-supplier relationships within a strong cluster, something recognized recently by The Wall Street Journal. Attracting and fostering R&D becomes a natural component of the cluster, he explained. As one example, he shared how a significant portion of the world’s manufacturing for the orthopedics industry in Indiana has fostered R&D in medical devices and other areas. Some recent announcements in R&D include Abengoa Bioenergy of Indiana LLC ($169 million), Energy Inc. ($100 million), American Institute of Toxicology ($74 million), Elona Biotechnologies ($26 million) and Biomet Inc. ($26 million).1

North Carolina

Dale Carroll, deputy secretary of the North Carolina Department of Commerce, pointed to the state’s strong manufacturing heritage and access to talent as key assets for fostering R&D. “Our work-force delivery system is a real strength for us,” he said, explaining how companies benefit from the state’s “three-legged stool” approach. With the University of North Carolina (UNC) system (16 institutions) serving as one leg, private colleges such as Duke and the state’s community colleges serve as the other two legs. Customized technical training is rooted deep in North Carolina’s toolbox, shared Carroll, noting it has become the pattern for others to follow.

Another key asset is what Carroll called the “global significance of the Research Triangle Park (RTP).” Created more than 50 years ago, he referred to RTP as a model for how to create engagement with universities through strategically developing parks nearby. RTP provides direct access to Duke, UNC Chapel Hill, and North Carolina State University. North Carolina has developed variations of RTP over years — Millenium Campus at Western Carolina University, Gateway University Research Park at UNC Charlotte, and Centennial Campus at North Carolina State University in Raleigh are examples. Another difference maker, according to Carroll, is UNC’s system level attention toward R&D. In addition to employing a vice president focused on technology commercialization at its administrative headquarters in Chapel Hill, technology commercialization officers are also employed at some of the larger UNC member institutions.

An Ecosystem for R&D: Key Ingredients

It is clear that these states are seeking to reinvent their future by making R&D a priority. While each state’s approach differs, following are some commonalities in their respective ecosystems.

1) They provide companies with significant access to talent, especially engineers. All five of these states ranked among the nation’s top 12 for graduates with a four-year degree in engineering in 2008-2009.2 They also each have a strong two-year college infrastructure for producing R&D technicians.

2) They have engaged universities successfully as a lead partner for fostering collaborative research with industry, for commercializing technologies, and for fostering entrepreneurship — and have made substantial investments to support such activities within or in close geographic proximity to the universities or their branches.

3) They have worked to significantly increase access to capital for business development. And, when offering incentives, they are performance-based.

4) They have focused on developing a pro-business environment, one which makes it easy for existing and future businesses to operate. Tax reforms, regulatory changes, and process improvements are examples of efforts some have employed. Each state also has some form of a certified site program to help companies easily identify sites ready for development.

5) They have shown highly proactive economic development leadership at the governor, legislative, and state agency levels. Also, they have been generally consistent with their efforts (and associated funding) for several years — and, in some cases, decades, regardless of changes in administration.

MSNBC this week trumpeted the state’s economic growthduring an interview with Gov. Rick Snyder who addressedCongressional panels withMichael Finney, President and CEO of the Michigan Economic Development Corporation. They appeared before Congress to testify on job creation and how Michigan can serve as a role model for other states.

Detroit, Grand Rapids and Lansing all recently ranked in the top 10 for growth in manufacturing and other sectors. Just last week, President Obama similarly touted Michigan’s national leadership in advanced manufacturing and research and development. Bloomberg Businessweek also spotlighted the state’s growth.

They also said spoke of unleashing “the Era of Innovation” by empowering talented people through the ‘Three Cs: Connecting, Collaborating and Creating.’

Michiganders who left the state and were drawn back by Pure Michigan opportunities are featured in a new Pure Michigan MiAdvantage video out today.

“I am who I am because of the education in this state, growing up in this state,” notes Jonathan Seyferth, a Central Michigan University graduate who moved to Wyoming and was recently drawn back. “I wanted to make sure that if I had the opportunity to have a positive impact, I was going to take advantage of that.”

With a renewed focus on attracting and retaining talent, the MEDC Talent Team is looking to attract talented former residents in hard-to-fill or growing fields to MichAGAIN. The next event is slated for next week in Orlando, Fla.

Amy Cell, MEDC Vice President for Talent Enhancement, calls MichAGAIN a way to connect this valuable pool of talent to employers who are currently seeking to fill critical jobs.

Through partnerships with universities and alumni associations, the MichAGAIN program seeks to appeal to former residents, educating them on growth opportunities.

The MichAGAIN team also has plans to be in Austin, Texas March 9-13 and San Francisco May 8-10.  For a complete listing and up to date information visit them at www.michagain.org.

Other upcoming talent-focused events and initiatives highlighting great Michigan opportunities are also in the works, including:

MiVirturalCareerFair: The very first state-sponsored virtual career fair aimed at filling the hottest IT and high tech positions.  On February 15, job seekers will have the opportunity to interact with Michigan businesses, actively recruiting highly-skilled candidates through a live, 3-D virtual environment. Search jobs, submit resumes, and network from the comfort of your own home or office. Register today!

LiveWorkDetroit: Detroit is one of the hottest places in the country to live and work.  LiveWorkDetroit gives college graduates and young professionals the opportunity to see it in person.  Hear directly from employers eager to hire the best and brightest.  New events are scheduled nearly every month, find out more at www.mitalent.org/LiveWorkDetroit.

Opportunity Spotlight: Features a list of in-demand jobs, rapidly hiring employers and key training programs for people in transitions, provided by the Michigan Economic Development Corporation and Workforce Development Agency.

Pure Michigan Talent Connect: Featuring nearly 80,000 current jobs along with career exploration tools. The site serves as the gateway for employers to find talent and job seekers to find new career opportunities.  Begin your search at www.mitalent.org.

The Michigan Economic Development Corporation, a public-private partnership serving as the state’s marketing arm and lead agency for business, talent and jobs, focuses on helping grow Michigan’s economy. For more on the MEDC and its initiatives, visit michiganadvantage.org

The plan is to provide a minimum investment of $350,000 and a maximum of $500,000 to companies that already have secured $700,000 to $3 million of investment funding from other sources. Companies must have their outside investment before applying for state funding.

The Venture Match fund is intended to get venture capital funds both inside and outside the state to consider more investments in early-stage and pre-revenue companies.

“Innovative early-stage companies often need venture capital to help finance critical stages of their development and commercialization,” MEDC President and CEO Michael Finney said in a press release. “We are aiming to bridge this capital gap and help entrepreneurs develop promising technologies to grow into new innovation companies.”

The hearing will be from 10 a.m. to noon at the MEDC headquarters in Lansing. After the hearing to answer questions and hear comments, formal fund guidelines will be presented to the strategic fund board for approval.

The state hopes to launch the program March 1.

That lyric from the 1965 song “Ballad of a Thin Man” runs through my head as I look at three events on the calendar in Michigan this week:

• On Monday it’s the grand reopening of the historic Madison Building in Detroit, bought and renovated last year by Quicken Loans founder Dan Gilbert and now home to Skidmore Studio and a cluster of technology start-ups anchored by Detroit Venture Partners.

• On Tuesday in Grand Rapids, Rick DeVos, instigator of the ArtPrize competition and grandson of Amway founder Rich DeVos, hosts the next in his series of monthly 5X5 Nights — where five would-be entrepreneurs get five minutes each to present ideas and compete for $5,000 in start-up cash.

• And Wednesday in Ann Arbor, Scott Case, the founding chief technology officer of Priceline.com and now CEO of the Startup America Partnership, will be on hand for the launch of Startup Michigan, a high-powered effort to accelerate the creation and success rate of high-growth companies in the state.

Maybe it’s wishful thinking, but can Michigan really be morphing from its long economic dependence on giant companies and big labor unions into a hotbed of entrepreneurial activity?

Believe it, says Paul Glomski, 36, a Flint native who left Michigan and returned in 2005 after earning an engineering degree and an MBA from the Massachusetts Institute of Technology.

“I’m really shocked at what I’m seeing around me here,” says Glomski, CEO and co-founder of Detroit Labs, a mobile applications developer with 11 employees, one of eight outfits in the Madison building. Others include mobile news reader FLUD and online home décor and design company Doodle Home.

“We’re seeing 20-something and 30-something entrepreneurs from Philly and San Francisco touring this space and saying wow, they can’t believe what’s going on,” adds Glomski, whose firm is currently basking in the success of its Chevy Game Time app developed as part of General Motors’ Super Bowl promotional effort.

Rick DeVos is feeling a similar vibe in Grand Rapids. “We’re getting over 200 people at these monthly 5X5 events,” he says. “The real value is getting these young people up on stage, presenting ideas and networking.” DeVos is also backing Momentum, a 12-week boot camp for entrepreneurs.

Paula Sorrell, managing director, entrepreneurial services for the Michigan Economic Development Corp., sees the same groundswell around the state. She remembers going to Annual Collaboration for Entrepreneurs (ACE) meetings in Ann Arbor a decade ago when there were 10 or 12 company tables and 50 to 80 people attending. At the ACE meeting this week, in conjunction with the Startup Michigan kickoff, “they’re expecting 1,000 people,” she says.

Obviously, Michigan is no Silicon Valley yet and we have a long way to go to reach the critical mass of talent, capital and collaboration that breeds such a hub. “I still spend time introducing different groups around Michigan to one another,” Sorrell says.

Still, it does feel like something is happening here, Mr. Jones.

Tom Walsh, Detroit Free Press

A price wasn’t disclosed for the building that housed the former Detroit Branch of Federal Reserve of Chicago at 160 W. Fort St., at the corner of Fort and Shelby. The 176,000-square-foot structure has been empty since 2004, when the Federal Reserve moved its Detroit branch office to Warren Avenue in Detroit.

“Today’s announcement is a great start to what looks to be a very busy and exciting year,” said Matt Cullen, CEO of Rock Ventures, an umbrella company that coordinates and integrates investments by Quicken Loans’ family of companies.

The company will be “making additional building purchases where it makes sense,” he added in a statement.

It is the ninth building in downtown that Gilbert’s real estate unit has purchased in the past year. He is now credited with being the second largest private owner of office space in Detroit’s Central Business District behind General Motors Co., which owns the Renaissance Center.

Gilbert’s revelation came during a tour of what was described as “the crown jewel” of the downtown collection of Quicken Loans founder’s building purchases, the $12 million renovation of the Madison Theatre in Grand Circus Park.

The five-story historic building, empty for years, has undergone a vibrant, high-tech renovation and now serves as an incubator for venture capital firms, media companies and start-ups.

The open, loft-like spaces are full of Detroit photos, big-screen televisions and stunning downtown views.

“We want this to be the launch pad for new companies,” said Josh Linkner, CEO and managing partner of Detroit Venture Partners.

The firm occupies one and a half floors of the building now dubbed the M@dison. Quicken Loans, the nation’s largest online home mortgage company, was ranked No. 10 among Fortune magazine’s recent list of top places to work. Quicken Loans earned the highest ranking among Michigan companies.

It isn’t clear what kind of tenant would be interested in the former Detroit Federal Reserve facility, which was built in 1927 and has an eight-story glass and marble annex.

Louis Aguilar, The Detroit News

The U.S. new vehicle market is expected to grow 41% from 2010 to 2015, forecasting firm IHS Automotive says. That’s second only to China’s 48%.

“The American auto industry is back,” President Barack Obama said Tuesday night in his State of the Union address.

He is partly right.

General Motors, Ford and Chrysler all plan to add jobs in Michigan, which stands to benefit more than any other state. Nissan, BMW, Honda, Toyota, Kia and Mercedes-Benz also are hiring. Suppliers are looking to add engineers and technical people, but at a more gradual pace.

About 15,000 auto-related Michigan jobs could be created this year, said Sean McAlinden, economist at Ann Arbor’s Center for Automotive Research. That would double the jobs added from 2009 to 2011. Even so, it would all represent just 15% of the 203,800 Michigan auto jobs lost from 2000 to 2009.

Landing one of these jobs won’t be easy. Chrysler has 10,000 applications for 1,100 jobs its Jefferson North Assembly Plant in Detroit will add next year. Autoworkers need more computer and other technical skills than ever before.

“There are jobs out there,” said Anthony Harrison, 41, a laid-off skilled tradesman from Saginaw. “I just want to make a decent wage and work.”

Technical skills a roadblock as auto industry looks to hire

Automakers plan to hire new workers amid growing concerns that many applicants lack the required technical skills needed in today’s leaner manufacturing environment.

Job growth for the Detroit Three — which promised last fall to create 20,500 jobs — is driven by more flexible and cost-competitive labor contracts with the UAW. But finding enough skilled workers is proving to be a challenge. Honda, BMW and Nissan also plan to hire workers.

Neil DeKoker, president of the Original Equipment Suppliers Association, said suppliers are having a hard time finding engineers with the right background.

Thousands of engineers and line workers were laid off in recent years, but many took buyouts and moved out of Michigan. Other available workers often don’t have the blend of industrial and mechanical engineering skills that companies seek.

“We’re definitely in need of some engineers and are having a difficult time finding the right people out there,” said James Voeffray, vice president of sales and marketing for GKN Driveline, which has a research center in Auburn Hills.

Suppliers cautious

In Michigan, automakers and suppliers could add as many as 15,000 jobs this year, said Sean McAlinden, senior economist for the Center for Automotive Research in Ann Arbor.

The bulk of those jobs will come from suppliers operating many factories at full capacity as they scramble to hire skilled workers.

Americans bought 12.8 million cars and trucks in 2011, up 10.3% from 2010. This year, analysts expect sales will increase another 8%, to about 13.8 million.

Even so, suppliers, which had to rapidly downsize during the recession, are reluctant to hire more workers and risk another downturn.

Lear, the Southfield-based manufacturer of automobile seats and other components, added about 700 employees in Michigan last year, bringing its Michigan payroll to about 3,100. That’s a sizable chunk of its 7,500 employees in the U.S. and Canada. Lear has its headquarters, technology center, six plants and two joint ventures in Michigan.

Further growth for the company is dependent on the economy, contracts from automakers and how well vehicles that use Lear seats and other components sell, spokesman Mel Stephens said.

In Michigan, suppliers and automakers are looking to fill engineering and other technical positions.

Hyundai plans to hire 50 people to staff a new environmental testing center at its technical center in Superior Township. Nissan plans to hire 150 employees at its Farmington Hills research and development center, and it expects to hire a total of 1,000 hourly and salaried workers in the U.S. this year.

Fierce job competition

With the national unemployment rate at 8.5% and Michigan’s rate at 9.3%, competition for auto jobs is fierce.

Ford was overwhelmed last July when more than 16,000 people showed up at the Kentucky employment office seeking 1,800 jobs at the Louisville plant.

In Detroit, Chrysler is planning to add 1,100 workers at its Jefferson North Assembly Plant in early 2013 and has recently reopened its Conner Avenue Assembly Plant. But Chrysler already has more than 10,000 applications for those jobs.

Politicians of all stripes seem to agree that attracting back manufacturing jobs that were lost to China, India and other emerging markets is a laudable goal. But robots and computers that have made U.S. manufacturing so competitive also have eliminated many of those jobs.

For example, in 2001, General Motors’ Willow Run Customer Care and Aftermarket center employed 380 people to distribute parts to dealers, said Barbara O’Leary, bargaining representative for UAW Local 174.

Today, with the flow of parts returning to pre-recession levels, the plant is operating with only 150 people. Bar-code scanners and dealers’ ability to order parts online have transformed the jobs to something similar to those found in a Walmart or Amazon.com warehouse. Even though the workers there make the UAW’s second-tier wage of about $15 an hour, workers uncomfortable with the new technology are potentially in jeopardy.

“The automation is destroying our jobs,” O’Leary said. “We’re dealing with an aging work force that is being pushed out. And no one from the (UAW) international is giving us any support.”

The company, which hangs an “Outsource to Detroit” banner on the side of the building facing Woodward, wants to hire another 200 workers.

The property is at 7 Mile and Haggerty roads. A portion of the site will be developed into a retail area, scheduled to open in 2013, and a University of Michigan hospital facility, scheduled to open in 2014.

“You’ve got a major U of M hospital facility, you’ve got a future retail lifestyle center, and you’ve got a park that would be Northville’s version of Central Park,” said township resident Joe Vig, a commercial contractor specializing in green building who volunteered to work on the park’s development committee.

Vig and his family, which includes three children, live in the Northville Trails subdivision just south of the property. The unveiling is the culmination of months of planning by township officials, residents, architecture students and a Canadian-based planning firm.

Township residents approved a $23.5-million bond in August 2009 for the township to buy the land.

Jennifer Frey, the township community development director, said the park plan calls for demolishing the psychiatric hospital, which has been a draw for trespassers since it closed in 2003. The township hopes to have people using the park by 2021, Frey said, with some areas possibly becoming accessible sooner.

Frey said the plan includes attributes most wanted by residents, but she declined to release specifics or a map of the park before the unveiling. In a November online survey, residents said they wanted hiking trails, naturalistic ponds, running trails, ice skating and paved multipurpose paths.

The plan also avoids the least-desired attributes ranked by the survey’s 918 respondents: architectural features, baseball and soccer fields, and a community building or other revenue-generating features, Vig said. Those are already offered in the area, he said.

“I think that people are going to be very happy with it,” Vig said. “It has a real focus on passive recreation, in terms of walking trails, bike trails, that sort of thing. But it’s such a large piece of property, it’s adaptable over time.”

The U-M Board of Regents on Thursday approved a $39-million, 100,000-square-foot health center near the intersection of 7 Mile and Haggerty roads.

Planning is expected to begin in March. In addition to primary and specialty care, the health center will offer musculoskeletal, eye, radiology, cancer and medical procedure areas.

“I’m pleasantly surprised,” Frey said, describing the hospital proposal a natural transition from the retail development to the park area.

“I think it’s a good use for that property,” she said. “And certainly the University of Michigan will be a good corporate resident in the community.”

The hospital will be part of the 550,000-square-foot project that includes retail shops and restaurants, developed by Livonia-based Schostak Brothers & Co., according to the firm’s website.

Quicken has covered the exterior windows of the buildings with images of merchandise. To purchase the merchandise, people can just scan the imagewith their smartphones.

“Instead of actual merchandise, virtual retail features product images with a QR (quick response) code that shoppers can scan using their smartphones to either buy the item or obtain additional product information,” Quicken said in a press release.

The images will be in the storefront windows at 1520 and 1528 Woodward, buildings recently purchased by Gilbert through his real estate company, Bedrock Management.

Working on the project is Detroit-based Resultco, owned by Jeff Freedman, as well as Gilbert-ownedFathead LLC.

The storefront at 1528 Woodward features an image of Detroit’s Joe Louis fist sculpture “wearing” 47 watches from Detroit-based Watchwear.com.

Store windows at 1520 Woodward also have supersized images of custom watches flanked by images of a vintage Chevrolet and a new Ford Mustang.

The images, which are Fatheads, were created by Resultco.

“The ultimate goal for virtual retail is to show the need for ‘in-person’ or tangible retail shops, while enhancing vacant buildings and helping prospective tenants visualize Detroit’s endless creative and entrepreneurial opportunities,” Quicken said in the statement.

Other retailers slated to be featured for virtual retail include Expedia.com, Match.com, Shoebuy.com,Clothesbuy.com and Bagbuy.com.

The windows of the Gilbert-owned First National Building are scheduled to feature virtual retail next, followed by the Dime Building and possibly others.

The Creative State Michigan report is based on data gathered from 10% of Michigan’s nonprofit arts and culture sector. It shows that 211 organizations generated $462,791,322 dollars in economic activity.

Mike Latvis is with ArtServe Michigan, the group behind the report. He says the plan is to take the findings to lawmakers in Lansing, and show them the creative sector needs to be part of Michigan’s revitalization:

“We really want to show that arts funding isn’t just a handout; we have a significant impact on Michigan’s economy. And an investment in the arts is an investment in the state.”

The report looks at data from 2009, when state arts funding was around $8 million. Today, state arts funding is much less, around $1.5 million.

Jennifer Goulet is president of ArtServe Michigan. She says what they’re trying to do with the report is “really demonstrate that the arts have a powerful economic return. There is a smartness in investing in the arts. It’s not a nice thing to have that you can simply toss aside when you know times are tough.”

The report also shows that more than $2 billion in tourism dollars are spent on arts and culture, more than golf, skiing, hunting, fishing and boating combined.

The apartment project at the corner of Cass Avenue and Canfield Street will bring 58 new apartments to the Wayne State University area by this fall. The $12 million project will also bring spaces for up to 11 businesses on the ground floor of the three-story building.

“The steel will be erected throughout the next two weeks,” Peter Van Dyke, a spokesman for the Auburn, wrote in an email. ”The Auburn is still on schedule, with the estimated completion date as the end of this October.”

Downtown Detroit-based The Roxbury Group is developing the building. The 58 living spaces will feature both studio and one-bedroom apartments with rents starting at $675. They will feature French balconies, individual parking spaces and two shared outdoor common spaces; one with glass garage doors and a built-in outdoor fireplace.

The Auburn will also feature groundfloor retail spaces. A grant from the Ford Foundation will allow the developers to offer them to would-be entrepreneurs a lower point of financial entry. The 11 first-floor spaces will be reserved for  independent retail only.

Jon Zemke, Model D

So far during this real estate cycle, developers have been extremely conservative in delivering new product to the market. In 2011, less than 40,000 units came on line, the lowest figure in more than 30 years, according to Reis Inc., a New York City-based research firm. Marcus & Millichap Real Estate Investment Services, an Encino, Calif.-based brokerage firm, estimates that multifamily construction completions last year totaled just 35,000 units.

Yet going forward, construction activity in the sector will undoubtedly expand.

In October, 47 percent of respondents to a quarterly survey administered by the National Multi-Housing Council (NMHC), a Washington, D.C.-based trade group, reported a substantial pick-up in land acquisitions, financing deals and permit applications for multifamily properties in their local markets. In 2012, Reis expects to see between 72,000 and 85,000 newly completed units, while Marcus & Millichap anticipates 85,000 new unit deliveries.

Given the abundance of demand for new apartments, that still won’t put the sector in danger of overbuilding in 2012. In 2011, the national vacancy rate for multifamily properties declined 120 basis points from the year prior, to 5.4 percent, Marcus & Millichap reports. Effective monthly rents rose 4 percent, to $995 per unit. This year, multifamily vacancy should fall another 40 basis points, to 5 percent, in Marcus & Millichap’s estimates. Effective rents will likely rise 4.8 percent.

About 43 percent of respondents to the NMHC survey said that multifamily development is near the right level given existing demand, while 54 percent said that demand continues to significantly outstrip supply, even with the expected ramp-up in new construction.

“It is improbable that we will face overdevelopment in 2012 because strong demand should remain in place through the coming year,” says John Chang, vice president of research services with Marcus & Millichap. “For example, the prime renter cohort, aged between 20 and 34, will continue to grow significantly and enjoy an outsized share of job gains. Although employment is not expected to grow at an exceptional pace, it should outpace 2011 performance in the coming year, generating significant housing demand.”

“Almost all markets will experience vacancy declines in the coming year as demand outstrips supply additions,” he adds.

Jubeen Vaghefi, managing director and national leader of the multifamily practice with Jones Lang LaSalle, a Chicago-based real estate services firm, echoes Chang’s sentiments. He anticipates that in core markets, multifamily rents will grow between 5 and 8 percent in 2012. In secondary markets, rents might rise another 3 to 5 percent.

“If you look back over the last five years, there hasn’t been much in the way of new supply, and most people are leaning toward renting versus buying,” Vaghefi says. “Occupancies in most markets are up, so in 2012, we see a continuation of last year.”

BEYOND THE BEND

Things might get trickier, however, once 2013 comes around.

The NMHC reports that 22 percent of its survey respondents said that apartment market conditions in their regions were looser than three months ago, compared to only 3 percent in July. About 51 percent said that conditions remained the same, compared to 30 percent in July, and another 27 percent reported that conditions have tightened, compared to 67 percent in July.

The NMHC Market Tightness Index in October stood at 56, down from 82 in July and a peak of 90 in April. A reading above 50 indicates that market conditions are getting tighter; below 50 shows that market conditions are getting looser.

Even with substantial demand for new apartments, net absorption in the multifamily sector decreased significantly in 2011, to 153,000 units from 225,000 units in 2010, according to Marcus & Millichap. With less than 40,000 new units added to the market last year, lower absorption levels haven’t threatened to become a problem so far.

But as the number of new construction units spikes to between 105,000 and 250,000 in 2013, over-building may become a legitimate concern, according to Victor Calanog, vice president of research and economics with Reis. In the past 20 years, new multifamily construction peaked at 188,870 units in 1999.

As of October, permits for apartment buildings containing at least five units increased 45 percent year-over-year, to 232,000 units, reports Marcus & Millichap. Given a 12-to-18-month construction window, that means the industry might begin to see an imbalance between supply and demand starting in 2013.

“We’ve been bringing up the possibility [of overbuilding] for more than a year now,” says Calanog. “In terms of timing, we don’t think much of the supply will hit till late 2012—that doesn’t even account for the usual delays we experience in commercial real estate construction. If there is indeed a deluge of new buildings coming to the market, the sector will probably feel the brunt of any pain it might cause in 2013.”

That’s because the commercial real estate market in this state is on the rebound, and redevelopment efforts in the key city of Detroit are having an impact.

Friedman expressed optimism about his state in a recent question-and-answer witht Midwest Real Estate News. His optimism is well-received. After all, few states have suffered as much during the country’s economic downtown as has Michigan. To see the commercial real estate market starting to bounce back here is definitely a positive sign for other Midwest markets.

As Friedman puts it in his q-and-a: “It is hardly news that our state was perhaps the hardest hit market during this recession. The Detroit office and industrial markets took quite a beating over the last couple of years, but we’ve weathered the storm and are finally seeing slow and steady growth in the office, industrial and multi-family markets.”

Friedman told us that last year the Michigan office market saw its largest single-quarter gain in absorption since 2005. At the same time, he said, large chunks of industrial space are seeing increased leasing activity as automotive suppliers and manufacturers continue to boost the country’s economic recovery.

“While we still have a ways to go, we’re now seeing positive indicators to support the view that the worst is behind us as we continue a path of slow but steady growth,” Friedman said.

If you want to read more about Friedman’s hopes for Michigan and Detroit, you’ll have to pick up Midwest Real Estate News’ February issue. In it, Friedman discusses the reasons behind Michigan’s recovering commercial real estate market and the positive changes taking place in Detroit.

Dan Rafter, Midwest Real Estate News

The new 200,000-square-foot building will become the home of the DMC’s Cardiovascular Institute on its main campus, bringing together cardiologists, cardiac surgeons and vascular surgeons to treat patients and conduct research in one location.

“This is the first heart hospital in our state,” Dr. Theodore L. Schreiber, Cardiovascular Institute president, said at a Tuesday morning ceremony. “It’s going to be … beyond cutting edge.”

The DMC Heart Hospital is among the larger construction projects pledged by owner Vanguard Health Systems Inc. Vanguard, when it bought the DMC on Jan. 1, 2011, pledged to spend $500 million over five years on new construction and expansion projects, including the Heart Hospital.

The DMC Children’s Hospital of Michigan Specialty Center, a five-story outpatient center project, may open in April, and at least two more groundbreakings for projects at Harper University Hospital and Sinai-Grace Hospital are scheduled for March.

Melissa Burden, The Detroit News

That was 11% higher than Volkswagen, which last week reported 2011 global sales of 8.16 million.

Toyota, which held the symbolic title from 2008 through 2010, has not yet reported its final 2011 sales, but last month, the Japanese automaker estimated it sold 7.9 million vehicles globally last year.

Toyota’s sales were constrained by production cuts caused by the March 11, 2011, earthquake and tsunami in northeast Japan, and later in the year by flooding in Thailand.

GM’s 2011 sales rose 7.6% from 2011. GM’s two largest markets in 2011 were China, where sales, with the help of joint venture partners, rose 8.3% to 2,547,203 vehicles, and the U.S., where GM sold 2,503,820 vehicles, up 13.0% from 2010.

Chevrolet led the way in the U.S. with sales of 1,775,812 vehicles, up more than 13%.

Chevrolet’s sales in China reached a record of 595,068, up 9.5% from the previous year.

Last week at the North American International Auto Show in Detroit, GM CEO Dan Akerson downplayed the importance of global sales leadership.

“I like profitability more than I do market share,” Akerson said. “I don’t think we’ve set the goal to be the largest manufacturer in the world. I think the lead is going to trade off.”

Some analysts have said that VW is the world’s biggest automaker because GM’s figures include vehicles made by its Wuling joint venture in China.

Many don’t count Wuling because GM doesn’t have controlling interest in the company. GM will report its earnings for the fourth quarter and all of 2011 in mid-February.

GM shares rose 31 cents to close at $24.82, $8.18 below the $33 of its November 2010 initial public offering.

Matt Wise, CEO of ePrize, says the Cellit purchase will help drive growth of 25% in ePrize revenue to around $70 million this year. ePrize expects to add 80 or 85 jobs this year, on top of 80 added in 2011, “and the vast majority of them are here in Detroit,” Wise says.

Cellit, a mobile marketing outfit launched in 2005, currently has 17 employees. David Wachs, its founder and president, will join ePrize as a senior vice president of mobile operations and general manager of Cellit, which is to combine office space with ePrize’s Chicago team later this year.

The ePrize-Cellit combination fits neatly into the digital growth strategy being pushed in Detroit by Quicken Loans founder Dan Gilbert and a growing cluster of affiliated companies. Gilbert and several partners invested $32 million in ePrize in 2006. Josh Linkner, ePrize’s founder and former CEO, now heads Detroit Venture Partners, a Gilbert-backed fund that invests in early stage technology firms.

Ever since Gilbert announced in late 2007 that Quicken’s headquarters would relocate from Livonia to downtown Detroit, there has been speculation that ePrize would eventually move to Detroit, too. Wise says he’s watching with interest the growth of a technology corridor along Woodward Avenue in Detroit, but says ePrize will stay put in Pleasant Ridge for the immediate future.

When Linkner was rapidly building ePrize a half-dozen years ago, the firm invested lots of cash into converting an old brick structure into a quirky creative work space and expanding it for a staff of 400 people. After shrinking to 250 people during the economic slump of 2008-09, ePrize is just now approaching its pre-slump employment peak, so there has been no need for new headquarters space — not yet, anyway.

Wise isn’t saying how much ePrize is paying for Cellit, only that it’s a cash transaction, as was last summer’s purchase of the customer relationship management (CRM) division of Apollo Data Technologies, a Chicago-based predictive analytics firm.

“We’re seeing a dramatic change in our product set,” Wise says. “Whereas three years ago, 90% of ePrize revenue was from websites built for a contest or loyalty program, this year 35% will come from mobile applications and social networks. And we’re also adding analytics, social listening and media buying.”

ePrize already had created mobile applications for the Michigan Lottery, the National Hockey League and other clients, but Wise says having Cellit will triple ePrize’s mobile revenue as mobile components become part of 80% of all ePrize campaigns this year, up from 20% in 2011.

For a city and state where people are constantly bemoaning the loss of young talent and jobs to Chicago, Boston or Silicon Valley, it’s a welcome twist to see a Detroit outfit doing the growing and acquiring.

CORRECTION: In a column Thursday by Tom Walsh about ePrize’s acquisition of Cellit, it was incorrectly stated that ePrize had also purchased Apollo Data Technologies, of Chicago, last summer. EPrize did acquire Apollo’s customer relationship management (CRM) division, but not the entire company.

This year, Detroit will be in the spotlight at the prestigious event in Park City, Utah. “Detropia,” which has its world premiere Saturday, portrays the Motor City as a canary in the coal mine of America’s economic future.

The feature-length documentary is one of many films playing at Sundance that reflect what’s playing out across the country, in terms of the growing focus on corporate greed, poverty and income disparity.

“Detropia” could be among the standouts of the 2012 festival.

“It was a slam dunk for me the second I saw it,” said David Courier, senior programmer for the festival. “It is definitely about Detroit, of course, but it is also using Detroit as a microcosm of America today. If there’s one trend that we saw in films across the board, it’s a reexamination and reinvention of the American dream in the wake of the economic collapse.”

The city’s struggles have had no lack of attention recently. There have been other documentaries, as well as national TV reports, photo books, art exhibits and references in pop songs.

But “Detropia” seems different, for a couple of reasons. One, it’s made by Oscar-nominated documentary filmmakers Heidi Ewing, who grew up in Farmington Hills, and Rachel Grady. They are best known for the controversial 2006 documentary “Jesus Camp,” which focused on an evangelical Christian summer camp. Two, it frames the story from the perspective of the decline and collapse of America’s manufacturing base, with Detroit being at the epicenter.

“Our intention is not that somebody point the finger and say, ‘Man, Detroit’s really got problems.’ If that’s what happens, then we’ve failed at our job,” Ewing said this week. “We want people to say, ‘Man, that’s happening in my city, too. How did we let it go this far? What is our American identity when we’ve allowed a city to come to this point? And what are our priorities?’

“Really, we want the story of Detroit to boomerang back to the viewer and reflect upon what’s going on around them and their part of the country.”

With evocative music and hauntingly lovely cinematography, “Detropia” conveys some of the emptiness and beauty of the city while delving deeply into the economic battering it has taken.

The villain of the piece could be the shift of manufacturing power from the U.S., where making things fueled the rise of the middle class, to countries such as Mexico and China, where the costs of producing goods can be much cheaper.

The movie, which took two years to plan and complete, doesn’t shrink from harsh realities. There are familiar scenes of an abandoned house being torn down, people scavenging for scrap metal amid ruined buildings and community meetings filled with pain and resentment.

In one sequence, anxiety over the future is expressed by Raven Lounge owner Tommy Stephens, who asks some tough questions while visiting the North American International Auto Show after comparing the costs of the Chevy Volt to a Chinese competitor. “This global economy stinks!” he says.

“Detroiters get it; they really get it,” Ewing said. “They can articulate our place in the global food chain more than any people I’ve ever met, including most politicians.”

Stephens is one of three main recurring voices in the movie, which weaves together a multitude of images and includes a large number of people. The other two are Crystal Starr, a 28-year-old blogger and barista, and George McGregor, president of the UAW Local 22.

Starr, who has seen the movie, said she enjoyed it, but she wanted to see much more covered. Although many portraits of Detroit anger those who really know the city, she doesn’t think that will be the dominant reaction this time.

“Maybe people will get pissed off, but I don’t think that will be the initial response from viewers,” Starr said.

McGregor, who is seen at tense meetings with union members, is enthusiastic: “They did a great job. They told the story of Detroit, point-blank. I feel in my heart, it was in divine order. It goes beyond us. It’s going to help others.”

Another big presence in the movie is the Michigan Opera Theatre, which symbolizes the vibrancy of the arts in the city (and which Ewing’s family has long supported). In one scene, a young tenor, Noah Stewart, is shown singing inside a People Mover car.

Ewing said it was important to her to remind audiences of Detroit’s rich and diverse cultural life, including its growing community of young artistic types. “This is a state-of-the-art city with state-of-the-art arts institutions,” she said.

The film’s co-directors — as well as producer Craig Atkinson, a former Detroiter — were acutely aware of the pitfalls of overdoing the emphasis on Detroit’s physical decay. When they shot empty or decaying structures, Ewing said, their effort was “to photograph them in a way that made you feel like you’d like to see that structure rebuilt, or you’d like to see that building repainted or renovated, or you’d like to see people inside it.”

Sundance can be an important venue for documentaries such as “Detropia.” Past conversation launchers include 2006′s “An Inconvenient Truth,” which spread Al Gore’s warning about global warming, and 2009′s “The Cove,” which shed light on dolphin hunting.

Ewing wants a wide audience to take this message away: “Detroit must be helped. It must be propped up. It must be encouraged. You want the audience to walk away with the feelings of pride in Detroit. That’s a lot to accomplish in a film, but you can always hope.”

“Michigan’s largest job providers are getting downright bullish on the state’s economic prospects and backing it up with increased hiring and investment,” said Doug Rothwell, president & CEO. “Business leader optimism about the state’s long-term economy is at a three-year high and nearly a third of the largest job providers are planning increased hiring and investment in the next six months.”

Highlights of the survey of Business Leaders for Michigan include:

* Business leaders are beginning to feel more positive about the economy’s near-term outlook, reversing a trend of increasing pessimism that began at the start of last year. However, business leaders are far more optimistic about Michigan’s economy over the next 6 months.
* Business leaders are more optimistic about the long-term economy for both the United States and Michigan. The 18-month forecast for Michigan is the highest it’s been since BLM started compiling these forecasts in 2010.

In this quarterly economic survey, BLM members were also asked about the impact of the new Michigan Corporate Income Tax, job growth and investments in Michigan.
* Fifty-three percent of Michigan’s largest employers predicted they will pay “about the same” or more under the new Michigan Corporate Income Tax. Some will pay as much as 20 percent more.
* Sixty-seven percent added jobs in Michigan last year. Many of these jobs were full-time engineering and skilled manufacturing positions.
* Seventy-five percent invested in Michigan in 2011. Much of the investments came as infrastructure and capital investments.

“Most of Michigan’s largest companies didn’t get a tax break under the new state corporate income tax but supported it because it was the right thing to do to create jobs,” said Rothwell.  “Two thirds of our members either added jobs or increased investment in Michigan over the past year demonstrating the importance of large and small job providers to the state’s economy.”

The results reflect a survey of Business Leaders for Michigan’s 80 executives, the state’s largest private sector job providers that represent nearly one-quarter of the state’s economy.

Quarterly Economic Outlook Reports are available at this link.

Business Leaders for Michigan is dedicated to making Michigan a “Top Ten” state for job, economic and personal income growth. The organization is composed exclusively of the chairpersons, CEOs or most senior executives of Michigan’s largest companies and universities, which contribute nearly 25 percent of the state’s economy and provide over 320,000 jobs in Michigan, generate over $1 trillion in annual revenue and serve over 135,000 students.

Matt Roush, CBS Detroit

But she had no idea she’d one day become “Mayor of Midtown.”

It took more than 20 years to reach a tipping point in revitalizing the key Detroit neighborhood.

But Mosey’s slow and steady approach to community development has helped to attract tens of millions of dollars in investment, people and businesses back to Detroit’s Midtown neighborhood.

Her work reached a tipping point when Whole Foods Market Inc. signed on to bring its first Detroit store to Midtown last year. But the neighborhood is still a work in progress, Mosey said.

“You have to put things in perspective — everything is not going to happen in a short time period, but as long as you’re moving forward … the neighborhood improves.”

The work requires patience and an aggressive approach in seeking projects, collaborators and resources, as well as an integrated vision, Mosey said.

“And I think you need to celebrate the good projects along the way with your partners and neighbors.”

Rebranding the neighborhood

The progress in Midtown didn’t happen overnight. It’s been an evolution over the past 20-plus years that Mosey has led community development there.

“There’s not enough funding for any neighborhood to have a quick turnaround in a difficult, disinvested city,” Mosey said.

Under her direction, University Cultural Center Association, a predecessor organization to Midtown Detroit Inc., did a lot of things early on to set the stage for community development.

That included forging relationships with developers, businesses and funders, among others, and rebranding the area that includes a number of smaller neighborhoods, including the ill-reputed, seedy Cass Corridor, as “Midtown” 12 years ago, with help from Detroit-based Lovio George Communications and Design
Inc.

Those things helped, but there have been obstacles, Mosey said.

Financing real estate development is always a major challenge in Detroit, and there is some percentage of property owners who are just not motivated to improve property, don’t manage it well or are not motivated to sell.

“There’s missed opportunities with that,” Mosey said. “But we have a lot less of that today than we did when I started here.”

Before Mosey launched community development in Midtown, there wasn’t much of it happening there.

She joined UCCA in 1987 as planning director after four years as director of the Ypsilanti Downtown Development Authority and working on both residential and commercial revitalization in Southwest Detroit in the 1970s for the Michigan Avenue Community Organization.

In 1990, she took the reins of UCCA as executive director.

It would be another eight or nine years before UCCA rebranded the area it was working in as Midtown to help people identify with the neighborhood and to give them a frame of reference.

“There are still some hardcore people who live in the neighborhood, who said we shouldn’t have changed it,” Mosey said. “But the reality is Midtown is a much larger area than Cass ever was.”

The area designated as Midtown is bounded by Euclid Avenue to the north, M-10 to the west and I-75 to the east and south.

Still, Mosey and Midtown Detroit encourage the various neighborhoods, including Cass Corridor, Art Center and Brush Park, to continue to use their neighborhood identities, she said.

Most major cities have a midtown, and the brand aptly described the location of the larger neighborhood, so it stuck. But rebranding by itself won’t bring a neighborhood back, she said.

If it’s not done in concert with work to improve the physical environment through housing stabilization and upgrades and bringing in new commercial services, “it doesn’t really work,” Mosey said.

Visible investment in the neighborhood also has helped spur additional progress.

“When you drive the neighborhood, you see new businesses, construction, things happening here,” Mosey said. “That’s probably the most important thing for anyone looking at investment opportunities.”

Mosey spends much of her time talking to developers, small-business owners, institutions and funders to keep them abreast of the development happening there and to encourage them to rally around the neighborhood and participate in its development.

She introduces people to the neighborhood, helps others find residences or locations and funding sources for developments there, and continuously educates people on future plans for Midtown.

Funders see area’s potential

Hudson-Webber Foundation, which has supported UCCA/Midtown Detroit for more than 30 years, and others have seen the neighborhood’s potential. The Community Foundation for Southeastern Michigan,Kresge Foundation and Masco Corp. Foundation began supporting it about a decade ago and the New York-based Ford Foundation three years ago, Mosey said.

The Michigan State Housing Development Authority also has provided significant support, she said, as have Skillman Foundation, Invest Detroit, Detroit Development Fund, NCB Capital Impact, Detroit Micro-Enterprise Fund and others.

The merger of UCCA and New Center Council last year focused more attention and enhanced investment in the neighborhood, such as $22 million in loans, program-related investments and grants from local and national funders through the New York-based Living Cities.

Midtown Detroit led development of the neighborhood’s application for the funding and has taken over administration of the funds, which are meant to bring businesses back to the Woodward Corridor.

Such investment is helping to propel more development, Mosey said.

Funders and public entities recognize Woodward Avenue as a key corridor because of its assets, which include Wayne State University, TechTown, Henry Ford Health System and Detroit Medical Center, Mosey said.

“You’ve got some real opportunities here for job growth, innovation, (and) residential growth as more and more people want to live closer to where they work.”

Mosey has not only been working to attract new development to Midtown, she’s protected the area from further decline over the past 20 years, said Katy Locker, vice president of programs for Hudson-Webber.

“There were periods of time when we could have lost historic buildings, where businesses that have long served Midtown could have left,” Locker said. “(Mosey) has worked quietly to keep those here.”

Mosey also makes sure neighboring businesses and property owners are informed and comfortable with new developments, and where possible, she finds a partner for every project, Locker said.

“I think that’s the heart of community and economic development: that one person and organization can’t do it (all) and sustain it.

“An organization that works with partners and ensures shared vision has a much better chance of sustainable success.”

Still a long way to go

Whole Foods’ decision to bring its first Detroit grocery store to Midtown was a tipping point for the neighborhood, Mosey said. It will bring an amenity that will appeal to the new residents moving into the city through the “Live Midtown” and “Live Downtown” programs that Mosey and Midtown Detroit are administering for the anchor employers, Kresge, Hudson-Webber and MSHDA.

But there are many amenities that are still missing, such as green space, Mosey said. And the neighborhood needs more residential to keep pace with demand, given that 95 percent of available housing in the neighborhood has been taken.

The “Live Midtown” program alone has brought 254 new residents to the neighborhood, Mosey said.

“Our priority will always remain building housing, especially when we’re deploying these residential incentive programs,” she said. “We need to have the product for all the people considering moving here.”

The Auburn LLC, a mixed-use development now under construction, will help address the immediate need for housing and small-business storefronts.

Also on tap are projects including Midtown Detroit’s redevelopment of the former Agave Restaurant space on Woodward into a new restaurant with housing on the second floor, a coffee/wine bar with an outdoor patio at the corner of Woodward and Alexandrine Street in collaboration with Great Lakes Roasting Coffee Co., and the rehab of the former Sassy Cat, a former pornographic theater, into a reputable theater space.

When will Midtown once again be considered a fully revitalized neighborhood?

When property values rise, more people are walking around Midtown and there are many flourishing small businesses, Mosey said.

“We have some of that, but clearly we have a long ways to go in all of those areas.”

But the excitement people are conveying about what’s happening in Midtown is proof the neighborhood is on its way back, she said.

“I think that tells you the brand is helping people to imagine a corridor that is really becoming more vital and offers more opportunities to work, live and recreate here.”

Sherrie Welch, Crain’s Detroit

Blue Cross Blue Shield of Michigan took over most of the office space in Towers 500 and 600 of the Ren Cen (the smaller ones just east of the main structure) last year as part of its plan to consolidate much of its Metro Detroit workforce in downtown Detroit. The health-insurance provider is creating an urban campus between its new offices in the Ren Cen its headquarters a few blocks away. More than 6,000 Blue Cross Blue Shield employees will be working on its campus by the time the move is finished later this year.

“One of the things we’re really excited about is our employees are really happy to be here,” says Tricia Keith, vice president, corporate secretary & services forBlue Cross Blue Shield of Michigan.

Blue Cross Blue Shield of Michigan has been renovating the offices on its new urban campus to create a vibrant, walkable area between Greektown and the Detroit River it’s branding the Blue Path. The non-profit has rebuilt the Jefferson entrance to Ren Cen Towers 500 and 600, making it more aesthetically pleasing and pedestrian friendly.

The health-insurance provider is also renovating the exterior of its smaller office buildings at the corner of Jefferson and Beaubien Street next to the DuMouchelle Auction Gallery. The building that serves as a base for 800 of Blue Cross Blue Shield of Michigan’s IT and business-intelligence workers. The plan calls for renovating the ground floor exterior, installing more windows and adding lighting. The idea is to make put more eyes on the street, making it pedestrian friendly and to turn it into a gathering place for employees.

“We think it is the linchpin of our united campus downtown,” Keith says. “We’re trying to get our employees to embrace the city and our architecture is helping us do that.”

Blue Cross Blue Shield of Michigan expects to finish moving its employees into the Ren Cen and renovating the ground floor of its IT building by this summer.

The multilisting service reported a total of 51,531 residential sales in Wayne, Oakland, Macomb and Livingston counties last year, about a 2.2 percent increase from 50,433 in 2010. The average time on the market also decreased, to 90.4 days per property from 94.7 — down almost 5 percent.

But modest recoveries for median sale price in Oakland and Livingston were not enough to offset larger drops in Wayne and Macomb. The median declined almost 1.5 percent for the region as a whole, to $66,896.

Foreclosure sales also dropped slightly across metro Detroit, to 21,597 from 22,685.

Sales for the last half of 2011 were up 9 percent from the same period in 2010. In the first half of 2011, sales declined 4.22 percent compared with the year-ago period, when the residential market was still enjoying a tailwind from federal tax incentives.

All four counties posted sales increases in December compared with a year earlier, and all saw the median sale price increase over the year-ago period except Livingston, which was off 6 percent.

Total metro Detroit sales for the month were up 5.6 percent compared with one year earlier.

The Norcross, Ga.-based bimonthly also cites Detroit as the fastest-growing market in the U.S. for high-tech jobs.

The state’s high rate of engineering graduates — Michigan ranks fifth in the country, according to theNational Center of Education Statistics — has helped boost growth in the tech sector.

“Access to talent is the most important factor in being an R&D state,” Michael Finney, president and CEO of the Michigan Economic Development Corp., said in the article.

The automotive industry remains a key player in R&D, Finney said. Other important vehicles for growth include the University Research Corridor, a partnership involving Michigan State University, Wayne State University and the University of Michigan that encourages collaboration between businesses and intellectual talent. Also contributing is the MEDC’s business incubators and startup support services.

Companies such as Detroit-based Quicken Loans Inc. and Compuware Corp. have moved to Detroit’s Woodward Avenue corridor, increasing the number of available tech-related jobs in the area.

Notable R&D upgrades and new construction in Michigan since 2008 include investments by Saginaw’sNexteer Automotive Corp. ($413 million); MPI Research Inc. in Mattawan, near Kalamazoo ($330 million); and Ann Arbor’s Toyota Technical Center ($187 million).

The magazine bases its rankings in part on the December 2011 “MetroMonitor” report from the Brookings Institution, a Washington, D.C.-based public policy think tank. The report analyzes the post-recession economic recovery of metropolitan regions.

Both Detroit and Grand Rapids feature in the nation’s top 20 most improved, thanks in large part to gains in manufacturing and the automotive industry.

“You’ve heard of outsourcing. Well, these companies are insourcing,” Obama said Wednesday in a speech, surrounded by business executives, state and local officials and union leaders.

Ford plans to invest $16 billion in the U.S. by 2015, he said. “And that includes bringing back about 2,000 jobs” into the country.

Small firms also can contribute, Obama said, citing GalaxE.Solutions, a New Jersey health care IT company headed by chairman and CEO Tim Bryan.

“They’ve already hired 150 workers with their ‘Outsource to Detroit’ program, and they plan on hiring up to 500,” Obama said. “Tim was quoted as saying, ‘There are some really talented people in Detroit, and we’re putting them back to work.’”

In the next few weeks, the Obama administration will present tax proposals to reward companies investing in the U.S. and creating jobs. The measures also would eliminate tax breaks for companies shifting work and jobs abroad.

“I don’t want America to be a nation that’s primarily known for financial speculation and racking up debt buying stuff from other nations,” Obama said.

The White House highlighted its efforts to create jobs at the high-profile event on the day after GOP front-runner Mitt Romney won the New Hampshire Republican primary.

Romney has targeted Obama as a foe of free enterprise, and Obama’s forum aimed to counter that message.

Speaking afterward with reporters, United Steelworkers President Leo Gerard said his union had dealt with firms owned by Bain Capital when it was headed by Romney. “Obama’s focused on working people and has been focused on them for quite some time,” Gerard said.

Mark Fields, president of Ford’s Americas region, said the automaker was glad to be “doing its part” to create American jobs.

He said Ford couldn’t have succeeded without the cooperation of the United Auto Workers, represented at the event by UAW President Bob King.

Ford and the union forged a competitive labor accord that made it possible for Ford to build small cars profitably in the U.S., invest $16 billion, and add 12,000 jobs in U.S. plants by 2015.”We are insourcing jobs from China, Japan and Mexico,” Fields said.

Instead of expanding production in Mexico to make the Fusion car, Ford is bringing that work to its Flat Rock plant in Michigan, he said. That will ensure the plant’s viability and add more than 1,200 jobs.

Ford also plans to bring back the production of F-650 and F-750 commercial trucks from a joint venture in Mexico to a plant in Avon Lake, Ohio, and retain nearly 2,000 jobs there.

Among the other examples praised by the White House, the Canadian company AGS Automotive Systems agreed to invest more $20 million in Michigan to manufacture part of its bumper impact assemblies. The new business, obtained with the help of state and federal incentives, will enable AGS to retain around 50 jobs and create more than 100 new jobs in Michigan.

The White House says the president will propose $12 million in his 2013 budget to promote business investment from overseas in the U.S., according to the Associated Press. The White House didn’t provide details of the tax changes he’ll propose.

Christine Tierney, Detroit News

The Commerce Department said Thursday sales edged up 0.1 percent in December to a seasonally adjusted $400.6 billion. It was the second straight month that sales have topped $400 billion. Never before had monthly sales reached that level.

The government revised the November performance to show a stronger 0.4 percent gain, double the original estimate. That pushed sales in November to $400.6 billion on a seasonally adjusted basis.

For all of 2011, sales totaled a record $4.7 trillion, a gain of nearly 8 percent over 2010. It was the largest percentage increase since 1999.

The project is expected to cost $7 million. Phase 1 of the project is expected to cost $3.9 million. In total, $4 million has been raised with $1.5 million pending. That leaves another $1.5 million to be raised.

Walter Robb, co-CEO of Whole Foods Market Inc., said Detroit is a hub for knowledge about urban agriculture, and renovations to Eastern Market will help keep it that way. Whole Foods, which is building a story nearby on Mack Avenue, is a sponsor of the renovations.

“You can travel this country — and I have — and you will not find a place like this,” Robb said.

Some sponsors of the renovations are the W.K. Kellogg Foundation, The Kresge Foundation, the Ford Foundation, the city of Detroit and the Erb Family Foundation.

“Eastern Market means so many things to so many people,” said Detroit City Council President Charles Pugh. “It is an experience that we need.”

Pugh said the investment being made in Shed 5 will help improve the overall experience at the market.

Eastern Market renovated Shed 2 in 2008 for $2.1 million and Shed 3 in 2009 for $6.2 million.

Foreclosure filings dropped 34% nationwide and by 26% in Michigan in 2011 compared with 2010, according to data released Thursday by RealtyTrac, an Irvine, Calif.-based foreclosure website.

As a result of Robo-signing and other documentation issues, foreclosure processing has been delayed and it now takes 14% longer to complete a foreclosure, RealtyTrac said. In Michigan, the foreclosure process now takes an average of 283 days, up nearly 37% from 207 days a year ago.

In Michigan, delays were experienced after the state appeals court ruled in April that MERS, or Mortgage Electronic Registration Systems, could not foreclose on behalf of lenders by advertisement. That ruling was reversed by the Michigan Supreme Court in November.

That means 2012 is expected to be another bumpy year in foreclosures as processing issues clear up and lenders are able to process more quickly.

The number of properties with foreclosure filings in Michigan last year was 100,248, down 26.22% from 2010. That represents 2.21% of all housing units in Michigan.

Macomb County showed the biggest decline in metro Detroit in 2011 with 10,694 properties with foreclosure filings, a 33.6% drop from 2010. Wayne County filings were down 29% to 25,996 and Oakland County filings dropped 32% to 13,903.

In December, Michigan had the third-highest foreclosure rate with one filing for every 346 households. That compares with one filing for every 634 households in the U.S., RealtyTrac said.

The 13,128 foreclosure filings last month in Michigan include 4,494 notices of default, 4,776 sheriff sales and 3,858 bank repossessions.

Tricia Raymond, a foreclosure specialist with Keller Williams in Troy, said that though there has been a lull in foreclosure listings, more are expected this year.

“If it was really dried up and there weren’t any more out there looming and people weren’t still losing their houses, then we would be increasing in value,” she said. “Everyone knows things aren’t stable yet, and more foreclosures are coming.”

Raymond said she listed four foreclosures for sale last week and received several offers on each. Lenders have continued to release foreclosures slowly on the market, and there’s still a large shadow inventory of homes that have been repossessed but not listed for sale.

New home building has been stalled in Michigan for the past six years as the foreclosure epidemic and falling demand has made building new homes largely unnecessary.

That has created what Bob Filka, CEO of the Michigan Association of Home Builders, calls “a shortage of quality housing” in the state. That, coupled with falling foreclosures, is a small good sign, he said.

“The overall environment is it is one small sign of the overall market in Michigan improving, and that is good news for builders ultimately,” he said.

States with the top foreclosure rates in 2011 were Nevada, which has posted the nation’s highest foreclosure rate for the fifth-straight year, followed by Arizona, California, Georgia, Utah, Michigan, Florida, Illinois, Colorado and Idaho.

And states with the highest number of foreclosure filings included California, with a whopping 68,689 which accounted for 28% of the nation’s total last month, Florida coming in second with 24,739 and Michigan with 13,777.

By Greta Guest, Detroit Free Press

The new branch is expected to create more than 100 patent examiner and support staff jobs. The Elijah J. McCoy United States Patent and Trademark Office will be on the Detroit riverfront in the building that formerly housed both Parke-Davis Laboratories and the headquarters of the Stroh Brewery Co.

Although a Detroit office was initially announced in December 2010, plans were shelved last April because of a federal cap in agency funding. The project regained momentum last fall after federal legislation changed the patent approval process for the first time since 1952 — most notably switching from a first-to-invent to a first-to-file system.

“The project got back on track when the ‘America Invents Act’ was signed into law by the president last September,” said Azam Khan, deputy chief of staff for the patent office and head of the satellite-office project. “That bill specifically asked us to open satellite offices, subject to available funding.”

The patent office is a fee-funded agency, in that all revenue comes from patent and user fees. The U.S. Treasury Department will maintain a Patent and Trademark Fee Reserve Fund to collect fee revenue that exceeds the agency’s statutory operating costs — but the legislation also imposes a new 15 percent surcharge on patent office fees and a $4,800 fee for prioritized examination starting Sept. 26, which could reduce applications in the short term.

Khan said that, after the bill’s passing, the patent office felt comfortable moving ahead with plans for a satellite location because they’d have secure access to patent fees and revenue for this fiscal year.

These regional offices are being established in an effort to chip into a vast backlog of pending patent applications — more than 700,000 have yet to be reviewed. After the opening of the Detroit office, plans are under way to establish two more satellites nationally over the next three years.

The Detroit office will begin as a relatively small outpost. The patent office in Washington, D.C., employs more than 10,000.

Downtown’s relatively low real estate prices were a key factor in the agency’s choosing Detroit as a strategic hub.

Other factors motivated the patent office to focus on Detroit: the large number of patents acquired by the automotive industry and the region’s recent growth in high-tech business.

A year ago, recruiters set up an email hotline for prospective patent office employees. The organization expects to post job openings this spring.

The Detroit office is named after Elijah McCoy, an inventor and patent-gatherer who made Detroit his home in his later years. He is best known as the inspiration for the phrase “the Real McCoy.”

But the integration of Fiat and Chrysler is nearly complete and some analysts now say it could become a model for trans-Atlantic cooperation in the auto industry. Sergio Marchionne, the chief executive of both Fiat and Chrysler, spoke enthusiastically of the combined company at the auto show in Detroit on Monday.

“We are making all the decisions together as one management team,” Mr. Marchionne said at a media briefing. “There is no question about who runs what. I run one company.”

The first fruits of the integration are on display here, and promise to help Mr. Marchionne achieve his long-term goal of increasing global sales of the two companies to six million vehicles by 2014. Together, Fiat and Chrysler sold about 4.2 million cars and trucks last year.

On Monday, Chrysler took the wraps off the new Dodge Dart, a compact car derived from the chassis and technology of an Alfa Romeo, one of Fiat’s European car brands.

But the bigger introduction comes Tuesday, when Mr. Marchionne will show the Maserati Kubang, an upscale sport utility vehicle based on Chrysler’s popular Jeep Grand Cherokee.

The Kubang is expected to be built alongside the Grand Cherokee in an assembly plant on Detroit’s east side.

The marriage of an all-American Jeep with the Italian luxury heritage of a Maserati is the best evidence yet that Chrysler and Fiat can create products together that they could not afford to make independently, auto analysts said.

“This merger is the closest thing to a truly symbiotic relationship that the industry has ever seen,” said Jim Hall, managing director of the automotive consulting firm 2953 Analytics.

Ever since Fiat took control of Chrysler, Mr. Marchionne has said he planned to leverage the strengths of both companies and operate them as co-equals.

But that goal was questioned by industry analysts who saw how Daimler-Benz dominated Chrysler during their nine-year merger.

“Daimler could never figure out what to do with Chrysler because they had no interest in integrating it into their business,” Mr. Hall said. “But Fiat actually believes it needs Chrysler for mass purchasing of parts.”

In Mr. Marchionne, Fiat and Chrysler have a strong leader who divides his time equally between the two companies. He has also promoted executives from both sides and assigned responsibilities that cut across geographic and corporate lines.

“This management team spends their time traveling and making decisions in the operating regions,” Mr. Marchionne said. “But this thing runs as one house.”

The final step in the integration process will be to increase Fiat’s ownership of Chrysler from 58 percent to 100 percent. That will require either a public stock offering to cash out the remaining stake held by the United Automobile Workers’ health care trust, or a direct purchase of the trust’s stake by Fiat.

“We need to find a way to bring these two businesses together completely,” he said.

Once Fiat takes full ownership, Mr. Marchionne will be faced with the delicate decision of whether to locate its corporate headquarters in Italy, the United States or possibly a neutral location.

The possibility that Fiat might move its corporate offices out of Italy has churned emotions there about the potential loss of an industrial icon. But Mr. Marchionne was coy on Monday on where the combined companies would be headquartered. “All options are open,” he said.

The corporate issues, however, have not slowed down his prime task of bringing profitable new products to market.

The Dart gives Chrysler a competitive product in the important small-car segment of the American market, where the company has had little success.

Production of the car at an assembly plant in Illinois also allowed Fiat to gain another 5 percent stake in Chrysler as part of the overall rescue plan Mr. Marchionne agreed to with the Obama administration in 2009.

The Dart will be Chrysler’s most fuel-efficient model, getting an estimated 40 miles per gallon, and will sell at a base price of about $16,000.

From a marketing standpoint, the Dart should be a big boost to Chrysler’s dealers, who have been hard-pressed to attract younger, first-time car buyers.

“We weren’t competing in this segment,” said Reid Bigland, head of the Dodge brand.

The Maserati S.U.V. is the first of several vehicles with Fiat brands that could be produced in the United States. Mr. Marchionne said that three Chrysler assembly plants could potentially build Alfa Romeo vehicles in the future.

By Bill Vlasic, New York Times

“It’s one of the bonuses of coming here, all this great stuff,” Ms. Robinson, 32, a Detroit poet and habitue of the cafe, said of the dozens of paintings by local and nationally known artists for sale on the walls. “They’ve been rotating them for years, but it seems like what’s been going on the last year or two, all the artsy folks around, more people have been paying them attention.”

Detroit will always be entwined with its automotive heritage, and after a few years in the abyss, the primary industry of the Motor City is looking up. Sales last year were at their highest levels since 2008, and analysts project an even more robust 2012.

The renewed fortunes of the big three automakers is a welcome story here, but a funny thing happened on the way through the recession. The region, which had long suffered the vagaries of a cyclical industry, was forced to rethink its identity and, yes, its dependence on an industry that, despite the improved near-term outlook, is hardly out of the weeds.

Skepticism toward an enduring automotive rebound has fomented a kind of can-do, post-industrial attitude here that embraces Detroit’s lineage and also separates from it. Young people, many from the suburbs, see opportunity in Detroit’s transition and are moving into affordable loft spaces, opening small businesses and generally contributing to a vision, not altogether cohesive, of a city that isn’t so dependent on one income stream.

“A lot of people feel like the auto industry is something that we don’t think about anymore,” said Amy Kaherl, facilitator for Detroit Soup, a two-year-old organization run by volunteers that uses entrance fees from monthly dinners to finance creative projects in and around Detroit. “People in this community are looking for something else, not for the next industry that’s going to save the city, but working toward a lot of sustainable things that can build this community up.”

“We saw a need to encourage people to try things that they’ve always wanted to try, on a smaller scale,” Ms. Kaherl said in a telephone interview.

There are also new-business incubators like Paper Street, based in suburban Ferndale, which leases office space in a building and offers classes ranging from photography to business. “We get more creative types rather than those from traditional automotive businesses,” Andy Didorosi, the company’s founder, said in an interview. “But whoever has a viable idea can get space with us. The idea is to get here, then go on to big things.”

Jacques Driscoll and his wife, Christine, spent years in San Diego before arriving here two years ago. They are opening a restaurant called Green Dot Stables, after the original owners’ equestrian involvement, near the Corktown neighborhood of Detroit. “We came here for a wedding and started talking about all the potential here, all the affordability and the growing cultural community, then how we wanted to live here,” Mr. Driscoll, 30, said.

Gerald Dixon has been at the vanguard of the city’s growing creative class. For nearly a decade, in black-lighted basement gigs in the city’s historic Boston-Edison district, which once sheltered many of Detroit’s auto barons, including Henry Ford, his events have included spoken-word marathons, photo exhibits and a steady stream of concerts.

“We all know that it used to be you could go to the factory if you couldn’t find anything else,” said Mr. Dixon, who is in his late 40s. “Now, all that’s changed. Not only can we not get those jobs, a lot of us can’t get any job. So people come here and to places all over the city as outlets for whatever they’re feeling. Positive outlets. And some of us have been able to make a living at it.”

Two years ago, James Feagin IV lost his job as an economic and community development coordinator for a nonprofit. A chance encounter with an artist resulted in Mr. Feagin leading the marketing and strategic management efforts of BeloZro Visual Energy, a painting and graphic design collective, out of Mr. Feagin’s downtown loft.

“My peers and I see opportunity in everything. We know that there aren’t so many traditional jobs left, so we’ve got to figure out new ways to make money,” Mr. Feagin, 30, said. “When I got laid off, if there was anything less practical than going to work in the auto industry, it was trying to sell original art. But we’re doing it, in new ways.”

Emily Linn, 34, said that the city’s growing sense of community would triumph over any future automotive downturn. She is a co-owner of City Bird, a popular boutique near Wayne State. “The community and other business owners, we support each other more than ever,” she said.

Yet for all these green shoots of urban bohemia, Detroit is still more lunch bucket than Freitag tote. The Detroit Economic Growth Corporation, a nonprofit group that works to attract new businesses to the city, initiated a diversification effort aimed at automotive suppliers and nonauto industries like aerospace.

“We have made the decision to look at clusters that are poised for growth and expansion,” Malinda Jensen, the group’s director of business development, said in a telephone interview. “We know the auto cluster has changed, but it’s not forgotten. That’s part of our roots and that’s not going anywhere.”

Recognizing Detroit’s need to diversify while supporting the auto industry, the Detroit Regional Chamber last week announced the Michigan Automotive Program, which is intended to involve automotive industry representatives in its economic development activities, said Sandy Baruah, the chamber’s president and chief executive. “We also want to make sure that we develop that talent to run factories of today and tomorrow,” he said.

And with companies like LG Chem and A123 Systems coming to the area to produce lithium-ion batteries for electric vehicles, the auto industry has acted as a springboard to lure advanced technology firms to the state.

Mr. Feagin, the manager at BeloZro Visual Energy, says an unwitting convergence of old and new is occurring in the city, and within the confines of Cobo Center. “When you look at it, the auto show is one big art show, and every new car an art project, but on a world stage,” he said.

“And that legacy is cool, isn’t it? We can build upon that.”

By Mary M. Chapman, NY Times

The announcement revives plans for downtown rail that were spiked last month because of the city’s worsening financial situation.

“Light rail is not dead. It’s back on the table,” Bing told reporters outside his office at the Coleman A. Young Municipal Center.

After 90 days, a decision will be made — it was not said by whom — on whether the plan by M1 Railwould pass muster. If it does, the rail project would be merged with a plan for a high-speed regional bus system.

“This project is going to move ahead in a parallel process,” Gov. Rick Snyder said.

A $528 million public-private plan to build nine miles of rail from downtown to the city limit at Eight Mile Road was scrapped in December for a $500 million, 110-mile system of speedy buses for the region. The system would be built and operated by federal funds and money generated for a proposed regional transit authority.

No other details about the plans were disclosed this afternoon.

Before the meeting, numerous political and private-sector leaders met in Bing’s office to discuss the rail and bus situation. M1 Rail’s backers, along with Democratic U.S. Sen. Carl Levin, had expressed displeasure about the abandonment of the rail line.

Bing, Snyder and M1 Chairman Roger Penske spoke with reporters for five minutes.

Among those who could be seen at the press conference were Levin and Michigan’s other Democratic U.S. senator, Debbie Stabenow; U.S. Transportation Secretary Ray LaHood; Federal Transit Administration Administrator Peter Rogoff; U.S. Rep. Gary Peters, D-Bloomfield Township; Quicken Loans Inc. and Rock Financial founder Dan Gilbert, the M1 project’s co-chairman; and M1 CEO Matt Cullen.

Bill Shea, Crain’s Detroit

Colin Langan, an auto analyst with investment bank UBS, came in at the low end of the range. He said one encouraging sign is that Americans still aren’t buying one new car for every old one that reaches the end of its useful life. That is a sign that there is still pent-up demand.

The recent decline in the nation’s unemployment rate, while modest, also could help.

“The consumer is numb. They’ve seen so much bad news that they are starting to ignore it,” Langan said.

Brandon Mason, an analyst with PwC Autofacts, predicted that Americans will buy 13.6 million new vehicles this year. Automakers will make 14 million vehicles in the U.S. this year, according to Autofacts’ data; that would be an increase from 13.1 million last year.

General Motors’ chief economist Mustafa Mohatarem did not offer a specific sales forecast, but he did offer that the U.S. economy will be the world’s bright spot in 2012 as Europe grapples with its debt crisis and that the torrid growth of auto sales in markets such as China, India and Brazil will slow this year.

Finally, Paul Taylor, an economist with the National Automobile Dealers Association, said he expects new-vehicle sales to hit 13.9 million, which would be up from 12.8 million in 2011.

“I also expect that pickup trucks, minivans and luxury cars will sell much better than they did last year,” Taylor said.

David Strickland, administrator of the National Highway Traffic Safety Administration, told the conference that U.S. traffic deaths in 2010 — 2011 data will be released this spring — fell to 32,788, the lowest total since 1949. But he went on to say that is still too high.

NHTSA is working with most major automakers to speed up the installation of electronic stability control and crash avoidance technology in more models. He also warned that the industry has not yet resolved the risks of introducing smartphone, entertainment and voice-activated features.

“Being connected is core” to how young people live, Strickland said, then referred to his set of triplet godchildren. “I have seen them text from one room to another, and even when they are sitting across the table from each other.”

NHTSA’s sister agency, the National Transportation Safety Board, recommended last month that all 50 states ban texting and cell phone use while driving.

Strickland was more conciliatory in discussing driver distraction, choosing to emphasize cooperative efforts between NHTSA and communications providers.

By Greg Gardner,  Detroit Free Press

“It would have been even better without the drag from Europe,” said John Canally, economic strategist at LPL Financial, a stock brokerage firm in Boston. “The Europe situation created uncertainty, and uncertainty was used as a reason not to hire until now.”

It was an even stronger finish to the year than economists had forecast. They had forecast that employers added a net 150,000 jobs last month, according to a survey by Factset. They also had predicted that the unemployment rate ticked up to 8.7% from November’s 8.6%, which was the lowest rate since March 2009.

As it turned out, November’s unemployment rate was revised up in this report, to 8.7%.

The better-than-expected monthly gain of 212,000 private-sector jobs means American businesses have replaced more than 3 million of the 4.2 million private-sector jobs lost the past 13 months. The private-sector jobs gained since employment bottomed in February 2010, in percentage terms, is the strongest recovery since the rebound after the 1990-92 recession, when U.S. businesses added 4.2 million jobs in the same amount of time by late 1993.

Women took only about 89,000 of the new jobs, continuing a trend that has seen men go back to work at a much faster pace than women in the past year. Earlier in the recession, job losses were concentrated in majority-male industries, such as construction and finance, and more recently women have been hurt by cuts in government employment, as well as the greater willingness of men to take jobs in retailing.

Those trends continued in December. Women added 90,000 private-sector jobs, or about 42% of new positions, but a small loss in government work reduced their net employment gain to 89,000 jobs. Women’s representation in the workforce was unchanged at 49.4%.

Among the report’s pluses was that the unemployment rate fell even though participation in the workforce stayed stable, according to BLS. About half of November’s drop in unemployment was caused by a spike in the number of workers who had stopped looking for a job. The report on private-sector employment by payroll processor ADP, released Thursday, also showed strong growth in hiring by small and medium-size businesses, whose owners’ confidence is rising, according to the most recent survey by the National Federation of Independent Business.

Among the negatives is that many of the new jobs were concentrated in a handful of low-paying industries, said Steve Blitz, chief economist at ITG Investment Research in New York. About 44% of new positions were at courier services or bars and restaurants, he said.

President Obama still could face voters in November with the highest unemployment rate of a sitting president seeking election since World War II. Unemployment was 7.8% when Obama took office in January 2009.

But he could benefit if the unemployment rate continues to dip. History suggests that presidents’ re-election prospects depend less on the unemployment rate itself than on the rate’s direction in the months preceding Election Day.

More robust hiring coincides with other positive data that show the economy ended the year with some momentum.

Weekly applications for unemployment benefits have fallen to levels last seen more than three years ago. Holiday retail sales were solid. And November and December were the strongest months of 2011 for auto sales.

Many businesses say they are ready to increase hiring in early 2012 after seeing stronger consumer confidence and greater demand for their products and services.

The government uses a survey of mostly large companies and government agencies to determine how many jobs were added or lost each month. It uses a separate survey of households to determine the unemployment rate.

The household survey picks up hiring by companies of all sizes, including small businesses and companies just getting off the ground. It also includes farm workers and the self-employed, who aren’t included in the survey of business payrolls.

The household survey has shown an average of 321,000 jobs created per month since July, compared with an average of 13,000 the first seven months of the year.

When the economy is either improving or slipping into recession, many economists say, the household survey does the better job of picking up the shift because it detects small-business hiring.

Economists surveyed by the Associated Press project that the economy will generate an average of 175,000 jobs per month this year. That would be a step up from average monthly gains of 130,000 last year and 78,000 in 2010.

The pickup in hiring reflects some modest improvement in the economy. Growth will likely top 3% at an annual rate in the final three months of this year, economists expect. That would be a sharp improvement over the 1.8% growth in the July-September quarter.

Even so, many economists forecast that growth could slow to roughly 2% this year. Europe is almost certain to fall into recession because of its financial troubles. And without more jobs and higher incomes, consumers may have to cut back on spending. That could drag on growth in 2012.

The Associated Press

The luxury shopping center is exporting a smaller version of its Troy Detroit Shoppe to the main entrance at the annual auto show in Cobo Center. It will be open to the media starting Monday, to the public during the black-tie charity event Jan. 13 and during regular auto show hours Jan. 14-22.

The 1,000-square-foot Cobo location will serve as a downtown showplace for the Motor City’s historic brands, such as American Coney Island, Vernors pop and Sanders confections and desserts.

It shows that “shopping can again flourish in Detroit,” said Kelly Breckenridge, manager of the Detroit Shoppe.

The shop will please visitors, especially journalists who have complained in recent years about a lack of retail, grocery stores and restaurants in the city, said Michael O’Callaghan, executive vice president and chief operating officer of the Detroit Metro Convention & Visitors Bureau.

This will be Somerset’s second retail project in Detroit following CityLoft, a 4,000-square-foot collection of pop-up shops on the ground level of the Lofts at Merchants Row development on Woodward Avenue that operated for three days each month in July, August, September and December. That project also was inspired by the success of Somerset’s Detroit Shoppe.

The Detroit Shoppe opened in November 2010 as an experimental two-month holiday pop-up shop. Its popularity has kept it in business for more than a year.

The temporary expansion of the shop is also an opportunity for Troy’s Somerset Collection, one of the healthiest malls in Metro Detroit, to publicly commit itself to promoting Detroit, an effort also spearheaded by QuickenLoans LLC founder Dan Gilbert and Ilitch Holdings Inc.

It’s a savvy strategy, said Farmington Hills-based retail consultant Ken Dalto.

“It will enhance their brand significantly in a short time, as is their intention,” Dalto said. “The money they make at this short-term venture is greatly outweighed by the enhanced branding.”

The CityLoft project served as “a 3-D billboard for Somerset,” Nathan Forbes, managing partner of the Forbes Co., which owns and manages Somerset, said when CityLoft opened in July.

The shop, coupled with the expanded auto show, makes a dramatic statement about Detroit’s potential, the convention bureau’s O’Callaghan said.

“The story this tells them is that that is all changing,” he said.

Flagstar plans to invest in the bank and hire people, said Michael Tierney, Flagstar’s Michigan market president.

“We’ve gone from being a bank with a mortgage focus to a full-service bank, and there’s a lot of things that come with that,” he said. “As a result, we’ve hired a lot of people, and we’ll be continuing to hire this year.”

The bank currently has 366,000 square feet at its headquarters at 5151 Corporate Drive, near Crooks Road and I-75. But as the mortgage servicing department grows and the bank continues to invest in its commercial operations, space in the building has been in short supply.

“We’ve had people doubled up, using conference rooms, training rooms and using every square inch of space,” said Marshall Soura, executive vice president of Flagstar.

And in looking for space for the bank’s mortgage servicing division, Flagstar came across space once used by a competitor — Bank of America — in the Troy Officentre complex along Big Beaver Road near Livernois.

In fact, Bank of America was using the space for its mortgage servicing operations — a contributing factor to choosing the space, Soura said.

“We looked at a number of properties, and this was already laid out very well for mortgage servicing,” he said.

Glenn DesRosiers, a senior vice president of Farmington Hills-based Friedman Integrated Real Solutions, represented the building’s owner, Brighton-based Osprey Management Co.

The leases come on the heels of a strong year for the building, with 215,000 square feet filled in 2011, DesRosiers said. That’s on top of the 383,000 square feet filled since Osprey bought the 745,000-square-foot building in January 2007.

The Flagstar deal, combined with several other deals expected to be signed shortly, brings the building’s occupancy to 71 percent, DesRosiers said.

Garrett Keais, vice president of Southfield-based Signature Associates, represented Flagstar.

The deal is the largest office lease this year in Troy, according to data from the Washington, D.C.-basedCoStar Group Inc.

Last year, Saginaw-based Rehmann LLC leased 40,000 square feet at 1500 W. Big Beaver.

Westlake Village, Calif.-based J.D. Power and Associates also leased 40,000 square feet, moving from the Timberland II building at 5435 Corporate Drive into Building B of the Troy Officentre at 320 E. Big Beaver.

It ends a year when the city of Troy generated more leasing deals than any other office market in metro Detroit, yet finished the third quarter with the second-worst vacancy rate in the region at 34.8 percent, according to data from the Southfield office of CBRE Group Inc.

By Dan Duggan, Crain’s Detroit

The Commerce Department said Tuesday that spending on construction projects rose 1.2 percent in November, following a revised 0.2 percent drop in October. The increase was the third in four months and the largest since a 2.2 percent rise in August.

The November increase pushed spending to a seasonally adjusted annual rate of $807.1 billion, still barely half the $1.5 trillion that economists consider healthy. Analysts say it could be four years before construction returns to health levels.

Home construction has begun a gradual rebound and likely added to the nation’s economic growth in 2011. The chief reason is apartments are being built almost twice as fast as two years ago. Renting is the only option for many people who have lost their jobs, their homes or both.

For November, private residential construction increased 2 percent in November to a seasonally adjusted $522.3 billion. It was the fifth consecutive gain.

Nonresidential construction was unchanged at an annual rate of $243.7 billion, Spending on hotels and hospitals rose but those gains were offset by weakness in other areas. Spending on office buildings dropped 1.3 percent and the category that includes shopping centers fell 0.8 percent.

Spending on government projects rose 1.7 percent to an annual rate of $284.9 billion. That followed a 1.8 percent drop in October. State and local construction gained 1.3 percent and federal building activity increased 5.3 percent. But even with those gains, activity in the government sector was down 5.3 percent from a year ago.

The construction industry was hit hard by the housing bust and has had trouble recovering since the recession ended more than two years ago.

Severe budget problems have squeezed state and local governments while the federal government has come under pressure to get control of soaring budget deficits.

Private builders haven’t fared much better. While their spending increased, they have scaled back on construction plans and are working from depressed levels.

Builders in November broke ground on homes at a seasonally adjusted annual rate of 685,000. That was a 9.3 percent jump from October and the fastest pace since April 2010.

Builders should start at least 600,000 homes this year. That’s up from 587,000 last year and 554,000 in 2009 — the worst year on record. Still, that’s half the number that economists expect in a healthy market.

While construction may be turning around, home sales are still weak. This year will likely end up as the worst for new-home sales in history.

While new homes represent less than one-fifth the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

Builders are struggling to compete with weak demand because of still-high unemployment and a glut of homes on the market because of foreclosures and short sales — where lenders accept less for a house than the mortgage on the home is worth. Those homes are selling for at an average discount of 20 percent, which is lowering neighboring home values.

“Powerful demographic trends, along with changing attitudes about homeownership and tighter mortgage underwriting, continue to drive a shift toward renting,” notes Mark Obrinsky, chief economist at the National Multi Housing Council (NMHC), adding that the industry has responded, after some lag because of tight credit for everyone, with an increase in development.

According to the NMHC’s latest Quarterly Survey of Apartment Market Conditions (released in October), 67 percent of respondents noted considerable activity, either in the planning stage or actual new construction. In particular, 20 percent said developers are breaking grown on new projects at a rapid clip. Yet even with this increased activity, more than half (54 percent) think new development remains considerably below demand.

The demographics Obrinsky spoke of mainly concern the “Echo Boomers” (also known as Millennials), people born between about 1980 and 1995. The leading wave of this group has already started forming households, but seem to be doing so differently from their elders, in that fewer are buying residential property. That’s partly because unemployment is high among adults in their 20s, but also due to a widely noticed attitudinal shift: Owning a home doesn’t quite have the appeal it once did.

Whether that change proves temporary or permanent is impossible to say, but it’s clear that the combination of people who can’t buy a home and the people who don’t want one is driving U.S. homeownership down, to the benefit of the apartment industry. As of the third quarter of 2011, according to the Census Bureau, the percentage of Americans owning their own home was 66.3 percent, off from the all-time peak of 69.2 percent in late 2004.

Those people have to live somewhere. Investment specialist Marcus & Millichap reports that as of the third quarter of 2011, nationwide apartment vacancy was 5.6 percent, down 30 basis points from the previous quarter and 150 basis points from the same quarter in 2010. Asking and effective rents posted annualized gains of 2.1 percent and 2.4 percent respectively during the third quarter. The company also predicts that for the entire year 2011, about 122,000 apartment units will be absorbed–while only 26,000 units have been added by the third quarter.

Will these favorable trends continue? Oliver Chang, an analyst at Morgan Stanley, thinks so, calling 2012 “The Year of the Landlord” in a recent report. “Rents are rising, vacancies are falling, household formations are growing and rental supply is limited,” the report observed. “We believe the demand for rental properties will continue to grow.”

Hessam Nadji, managing director, Institutional Property Advisors, a division of Marcus & Millichap, agrees that 2012 will be good for the industry. “Several macro demand trends will energize U.S. apartment rental markets, including still pent-up demand from the recession, the significant transition from homeownership to rental housing, and demographic strength in the 20- to 34-year-old age cohort,” he tells MHN.

“The cyclical surge in demand that accompanies recovery will transition to a more moderate sustainable expansion in 2012,” Nadji continues. “Higher GDP and stronger employment levels will stimulate immigration—which is critical to rental demand–and Echo Boomers will form new households. The national vacancy rate will approach equilibrium at 5 percent in 2012, as net absorption tallies nearly 106,000 units and overwhelms still-muted supply of 70,000 units.”

He was right.

His next move? Find a market that has a tremendous upside and low cost of entry, blow into town and start buying up the place.

In the past three years, he has purchased the former Detroit Free Press headquarters building and the David Stott Building in Detroit; and two weeks ago, he put in an offer to buy the Penobscot Building.

For a Florida investor with no other ties to Detroit, Uralli said the city stood out as the best value play he could find.

“These are buildings that were built in the 1920s, and I’m buying them for less than what it cost to build them at that time in history,” he said. “There is no better value anywhere in the world. And that’s why I’m here.”

As an investor in town since 2008, he’s been slowly moving his operations to the area. His umbrella investment firm, Luke Investments, remains headquartered in Fort Lauderdale, but Uralli has since moved his family to Grosse Pointe.

Backed by a group of investors from Fort Lauderdale, as well as his own investment capital, Uralli wants to amass a portfolio that exceeds 2 million square feet in the coming years.

His first acquisition was the former headquarters for the Free Press at 321 W. Lafayette, at close to $2 million.

He’s following a plan to redevelop the vacant 16-story building into a mix of retail and residential space. The plan has been moving slowly, but he has picked up incentives for the $50 million project.

Of the $28.6 million in incentives, the Free Press building project has been approved for state brownfield tax credits, tax increment financing and state historic tax incentives.

The David Stott Building, at 1150 Griswold St., is also moving along.

Uralli owns it after purchasing the $700,000 loan against the building. After foreclosing and paying all the back taxes and bills, he’s spent more than $1 million to create the Skybar lounge on the first floor. His sequel to the bar, a 33rd-floor high-rise space, has yet to receive final occupancy permits from the city of Detroit but will be open this year.

Other than operating the 41-story building as a nightclub, he’s started a marketing campaign for its office space.

It’s a unique space because the 5,000-square-foot floor plates mean a small tenant can have 360-degree views of Detroit, said Ryan Snoek, a broker with Farmington Hills-based Friedman Integrated Real Estate Services representing Uralli.

At an asking rate of $12.50 per square foot with two free months of rent for every year of a lease term, Snoek said the space is priced against some of the cheapest space in Detroit.

“There aren’t many skyscraper options that can cater to a small-sized tenant,” he said.

Uralli will continue to build an office portfolio if he acquires the Penobscot Building, which the Horsham, Pa.-based lender Capmark Financial Group has been marketing for sale since October.

His plans for the iconic 1 million-square-foot building would be to consolidate the tenants into one portion and then shut down the rest of the building to reduce operating costs until a more profitable use can be found.

Despite the risks of Detroit real estate, Uralli is positioning himself to make money from the investments, said Paul DeBono, a vice president with Southfield-based brokerage firm NAI Farbman.

“At the prices he’s paid, he should be able to make money on his Detroit investments,” said DeBono, who follows Detroit deals. “The risk is that with those low prices, buildings like these have issues. And those issues are not typically cheap to take care of.”

Uralli has so far done a good job of maintaining the buildings he has purchased, said David DiRita, a principal with the Detroit-based development firm The Roxbury Group.

“As a property owner, I have respect for how he’s administered the short-term challenge of maintaining these buildings while working through a long-term development plan,” he said.

DiRita, who was once a tenant in the David Stott Building, said the building is actually cleaner today than it was when it was an operating office building.

Uralli delights in taking guests through the vacant floors of the David Stott Building and then comparing that space to the posh 33rd floor. He boasts about the crushed-velvet couches and white leather chairs that his wife chose, and he talks up the long-term plans for a members-only club in the space.

Looking outside of the building, there’s room for both an optimistic view and a pessimistic view. Sitting on the city’s Capitol Park district, the small square looks like a bomb went off, leaving vacant buildings behind.

But, at the heart of a city-led marketing campaign to find a developer for three of the other buildings, Uralli takes the positive view on the neighborhood and the city.

“There’s nothing but upside here,” he said, pointing to the vacant buildings. “These are amazing, historic structures. Buildings like this will never be built again. We’re going to bring them back, and with them, the city is going to come back.”

-Daniel Duggan, Crain’s Detroit

The nation’s 20 largest cities saw a 3.4% annual decline in home prices in October. The decreases were down from September, falling 1.2% for the top 20 cities.

Detroit and Washington, D.C., metro areas were the only two in the top 20 to post annual increases in home prices with 2.5% and 1.3%, respectively.

Metro Detroit home prices are still nearly 30% below 2000 levels and were down by 3.3% from September levels, according to the S&P data.

Other cities with home prices below 2000 levels are Atlanta, roughly 9% off; Cleveland, less than a half a percentage point down, and Las Vegas, nearly 8% down.

Metro Detroit along with Chicago, Cleveland and Minneapolis posted declines of more than 1% in October compared with September after strong summer buying seasons.

“There was weakness in the monthly statistics, as 19 of the cities posted price declines in October over September,” said David M. Blitzer, chairman of the index committee at S&P Indices.

Phoenix, with a 0.3% increase in home prices in October when compared with September, was the only top 20 city with a positive monthly change.

Patrick Newport, U.S. economist for IHS Global Insight, said that the data indicates that home prices are in decline again after stalling earlier this year. He has predicted another 5% to 10% in price declines before recovery begins.

“The stall earlier this year probably resulted from a slowing of the foreclosure pipeline after the media reported that lenders had cut corners in processing foreclosures,” Newport stated.

That said, further stalls are likely because the housing picture is still clouded with delinquent and underwater mortgages and high unemployment.

Greta Guest, Detroit Free Press

It’s been more than a quarter century since the maker revolutionized automotive design with the original Taurus sedan. Its windswept styling helped Ford dominate the huge midsize market segment, and led most competitors to migrate to more aerodynamic designs. The new Fusion, which makes its debut at the Detroit Auto Show next month, will borrow many of the visual cues of the recent Ford Evos concept car and, if early reviews are any indication, could help the maker topple the imports that have dominated the midsize segment over the last two decades.

Ford isn’t alone seeing opportunity in one of the largest and most important segments of the U.S. market. Chevrolet is gunning to gain sales and market share with the new 2013 Malibu, while Chrysler will use the Detroit Auto Show to reveal the new Dart, the first major new product developed as part of the U.S. maker’s alliance with Italy’s Fiat SpA.

“We see the Americans coming out with a lot of product that’s not only new but very attention-grabbing,” says Aaron Bragman, a Detroit-based automotive analyst with IHS.

And it’s not just in the midsize segment, he adds. Detroit’s automakers are filling showrooms with an assortment of products that are decidedly more attractive and competitive than the market has seen in years, from the newly-updated Ford Escape crossover to Cadillac’s premium-luxury XTS and entry-luxury ATS sedans.

“It’s a lot of stuff that’s going to make it a lot more difficult for the Japanese to regain market share,” added Bragman.

That’s good news for the so-called Big Three, but a serious headache for Japan’s top-tier manufacturers. Toyota and Honda, in particular, are desperately counting on 2012 to bring a turnaround after several years of unexpected struggles. The outgoing year, in particular, saw them hammered by the March 11 earthquake and tsunami that all but shut down the Japanese auto industry, the two collectively falling about 1 million units short of original production 2011 production plans.

With dealers struggling for inventory sales were down sharply, Honda expected to end the year with a 1.5 point decline in market share, Toyota’s share plunging as much as 2.5 points. The Detroit makers, on the other hand, will end the year with roughly 47 percent of the market, a gain of about 2 percentage points. It will be the first year since 1998, in fact, that all of the Big Three will have posted gains.

The question, cautions analyst Bragman, “is whether they can keep that momentum going?”

The Japanese aren’t intending to make it easy. They’re ramping up production as rapidly as possible. And they’re rolling out plenty of new product of their own — but getting decidedly more mixed reviews than they might have anticipated in the past. The critical Honda Civic, for example, was panned by Consumer Reports magazine. The automaker now rushing an update to market as quickly as possible.

“Some of the sales results (for recent new models) have been quite a disappointment,” acknowledges Tetsuo Iwamura, CEO of American Honda.

Honda isn’t alone. The new Toyota Camry has generated a largely ho-hum response despite the most expensive ad campaign in the Japanese brand’s history.

Significantly, the two Asian automakers are now spending more money than ever on rebates, low-interest loans and other incentives  — a distinct shift in direction for companies that used to lambast their Detroit competitors for having to give away their products.

Detroit makers are still putting plenty of “cash on the hood,” but they’ve steadily cut back on the givebacks this past year as offerings like the compact Chevrolet Cruze and Ford Focus have clicked with consumers.

Even if the incentive wars heat up again, the domestic makers are in a better position to keep up with the competition thanks to recent contracts signed with the United Auto Workers Union. The typical UAW worker now makes a bit over $50 an hour in wages and benefits, down from more than $75 in 2007. Add other concessions and the savings amount to several thousand dollars a vehicle. That’s a critical reason why Detroit’s collective profits for 2011 will likely top $10 billion after decades of devastating losses and the 2009 bankruptcies of General Motors and Chrysler.

On the other hand, Japanese makers have suffered from plunging earnings that are expected to remain in the doldrums for at least the near to mid-term. Complicating matters, the strong yen is not only slashing earnings but forcing companies like Honda and Toyota to shift production off the home islands.

While Detroit may be getting a bit of a reprieve from the relentless onslaught of the Japanese the Big Three can’t rest on 2011 results. Korean carmakers Hyundai and Kia have gained even more share at the expense of the Japanese and are showing a willingness to spend whatever it takes to become dominant global players.

And then there’s Volkswagen, which has shown a newfound strength in the U.S. It may end 2011 as the globe’s largest automaker, toppling troubled Toyota.

Indeed, Detroit can no longer afford to focus on just the American market. With China now a larger national market than the U.S., it is readily apparent that no single market can make or break — or be allowed to make or break — a manufacturer. That’s readily apparent when one considers that nearly two-thirds of GM sales now come from outside the States.

But the turnaround at home will nonetheless help, especially as the U.S. remains the world’s most profitable automotive market. So, if the Detroit makers can maintain the outgoing year’s momentum in 2012 they should be positioned for the comeback they have so long and so desperately sought.

Paul A. Eisenstein, MSNBC

Burnham, who died in 1912, built four downtown Detroit buildings, and three remain; the other called the Majestic was demolished in 1962. Two of his surviving Detroit buildings gained new owners this year, and both plan major upgrades.

The long-empty David Whitney Building in Grand Circus Park is expected to undergo an $82 million renovation and development that may turn a four-story rotunda, with white terra cotta columns, marble floors and a glass roof, into one the city’s trendiest spots. And the real estate unit formed by Quicken Loans Inc. founder Dan Gilbert is restoring the Dime Building, which may soon get Chrysler Group LLC as a tenant. The Dime at 719 Griswold St. is a block away from the Ford Building, the other Burnham-designed building.

“Make no little plans,” is the famous quote from the Chicago architect, and it wasn’t hype. Burnham directed construction of the 1893 World’s Columbian Exposition, commonly known as the Chicago World Fair, that inspired the “city beautiful” movement. He also created plans for Washington, D.C., Chicago, Cleveland, San Francisco and Manila, Philippines — all before the creation of the profession of urban planning, which attempts to shape how and where development will grow.

Burnham is one of the main subjects of the 2004 best-seller “The Devil in the White City,” a nonfiction book by Erik Larson set in 1893 Chicago.

Burnham created more than 500 structures, including such architectural icons as the Marshall Field’s Building in Chicago, the Flatiron Building in New York, the Merchants Exchange Building in San Francisco and Union Station in Washington. His style is described as Beaux Arts, the Chicago School or simply the Burnham style.

“The David Whitney is an excellent Burnham creation,” said David Di Rita, a principal in The Roxbury Group. The Detroit development group, along with Troy-based Trans Inn Management Inc., bought the David Whitney for $3.3 million in March. Earlier this month, Aloft Hotel, part of Starwood Hotels & Resorts Worldwide, announced it will open a hotel in the David Whitney, which is expected to open by July 2014.

The 19-story Whitney building may have been the last Burnham designed before he died, Di Rita said, and much of its interior is intact. That includes the four-story rotunda with a glass roof in the building’s center. The area would serve as both the hotel lobby and location for two bars and a restaurant. The original exterior, which was redesigned in 1959, will be restored.

“To be able to restore this kind of building is a lot of fun,” Di Rita said.

The Dime Building doesn’t need such extension renovation, though Gilbert’s Bedrock Real Estate Services, co-owned by Jim Ketai, is fixing some of the building’s empty 14 floors. The building opened in 1919 and is 58 percent leased, according to CoStar, a commercial real estate information service. Bedrock has purchased eight downtown buildings this year. Gilbert has vowed to fill the buildings with a mix of retail and tech-oriented firms.

Chrysler Group LLC is close to signing a lease for a small office space in the Dime Building, according to a source familiar with the negotiations. Chrysler is said to be interested in leasing about 20,000 square feet, which amounts to about 11/2 floors of space. That amount of space usually accommodates 100 to 120 workers, said John DeGroot, vice president of research for the Southfield office of Grubb & Ellis.

Kalamazoo-based Rehmann, an accounting, consulting and financial services firm, has agreed to set up an office in the Dime Building, but it’s not clear how many workers the firm will have in the space.

By Louis Aguilar – Detroit News

Ypsilanti-based Kalitta Air LLC is one of at least seven companies in the United Parcel Service Contractor Team that will share in an annual contract award from the U.S. Transportation Command Directorate of Acquisition at Scott Air Force Base in Illinois. The companies will provide supplemental passenger and cargo transport for the military through September.

That contract has a ceiling value of $181 million and a floor value of just over $87.9 million, compared with a floor value of $30.5 million and 10 companies named in last year’s award.

The annual contract is to provide supplemental passenger and cargo transport for the military. It is unrelated to a $12.6 million contract that sister company Kalitta Charters LLC received in September to transport the remains of service members from Iraq and Afghanistan out of Dover Air Force Base.

Sterling Heights-based General Dynamics Land Systems also received a $59.9 million contract award from the U.S. Army Tacom Life Cycle Management Command in Warren. That award is for the Army to procure system enhancement packages to modify the M1A2 Abrams battle tank, along with remote operated weapon stations, through June 2013.

Raytheon Co. expects to source 19 percent of its work under a new $49 million contract at an engineering and professional services office in Commerce Township. The Waltham, Mass.-based contractor expects to perform unscheduled maintenance, flight anomaly analysis, engineering support services and recertification on 50-200 Tomahawk missiles by January 2013 under a contract with the Naval Air Systems Command in Maryland. Most of that work is be sourced in Arizona.

Tacom in Warren also announced last week that it had awarded a $10.3 million contract to Oshkosh Corp., which has a technical center in Warren for subsidiary Oshkosh Defense. The contract calls for Oshkosh to supply 465 rocket-propelled grenade “Net Delta” kits for its fleet of Mine Resistant Ambush Protected All-Terrain Vehicles.

The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose almost 10 points to 64.5, up from a revised 55.2 in November. Analysts had expected 59. The level is close to the post-recession peak of 72, which the index reached in February.

The surge in December builds on another big increase in November, when the index rose almost 15 points from the month before.

One component of the index that measures how shoppers feel now about the economy, rose to 46.7, up from 38.3 in November. The other barometer, which measures how shoppers feel about the next six months, rose to 76.4, up from 66.4.

Improving confidence is in line with retail reports of a decent holiday shopping season.

Economists watch the confidence numbers closely because consumer spending — including items like health care — accounts for about 70 percent of U.S. economic activity. Still, the December confidence reading is below the 90 level that indicates an economy on solid footing.

Analysts are cautious about whether the gains are the start of something more sustainable.

“While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement.

Even with the increase in confidence, shoppers are still nervous about their jobs and the overall economy according to the preliminary results of the survey, which ran Dec. 1-14.

Those claiming jobs are “plentiful” increased to 6.7 percent from 5.6 percent, while those claiming jobs are “hard to get” decreased to 41.8 percent from 43.0 percent. Those anticipating more jobs in the months ahead increased to 13.3 percent from 12.4 percent while those anticipating fewer jobs declined to 20.2 percent from 23.8 percent.

That’s because while the job market is steadily improving, unemployment — at 8.6 percent — is still high. And housing remains wobbly. The Standard & Poor’s/Case-Shiller index of home prices, also released Tuesday, dropped in October in 19 of the 20 cities it tracks. It was a second straight declining month, further evidence of a bumpy housing recovery.

Heading into the holiday season, store executives were nervous about consumers’ willingness to spend. Merchants offered big discounts on holiday merchandise and lured shoppers with expanded hours.

After a record spending spree over Thanksgiving weekend, the season’s semi-official start, shoppers retreated for a few weeks. Then stores saw a surge of shopping the week before Christmas as consumers took advantage of better discounts.

The National Retail Federation now expects a 3.8 percent increase in holiday sales, up from its original forecast of 2.8 percent made in September when the economy’s recovery looked more uncertain. More data will be released this week that will offer more clues about stores’ last-minutes sales surge before Christmas

Anna D’Innocenzio, Detroit News

The data center is about 3½ miles from Altair’s headquarters on commercial property the company acquired in 2010. The center was designed to be interconnected with similar centers in the future, Altair said.

The new center was built to enable virtual engineering and house engineering data for clients using Altair’s HyperWorks On-Demand computer-aided engineering system. The data center can support up to 150 large-scale engineering solver jobs running simultaneously.

The center “essentially fits the power of an entire building of high-performance computers into a single room, making it feasible now for medium to large-sized organizations to access substantial computing resources via Altair’s private cloud,” the company’s chief information officer, Martin Nichols, said in a release.

Privately held Altair — which employs more than 1,500 people at offices throughout North America, South America, Europe and the Asia-Pacific region — expects the high-powered data center to be operational by early 2012.

By Sherri Welch, Crain’s Detroit

And like a patient learning to do push-ups and knee bends, Michigan must learn to become better educated and entrepreneurial in its business model as it recovers from this lost decade.

The state will add jobs in 2011 for the first time since 2000. The prolonged period of job losses tells many experts that even the state’s core manufacturing industries require a more educated work force — something the state may have trouble delivering.

David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor, estimated that the minimum education required now even for an assembly-line job is a two-year college degree. Michigan’s below-average performance in producing college grads has many business and civic leaders worried.

“We’re not sure the work force is there,” Cole said.

Charles Ballard, a professor of economics at Michigan State University, echoed that.

“If there’s any lesson that we should take away, it’s that we need to ramp up the skills of our work force,” Ballard said. “All the richest states have one thing in common: They have a high proportion of college degrees.”

What Michigan can learn from its decade of decline

In 1998 and 1999, Michigan’s unemployment rate was almost too low to measure in places such as Ann Arbor and Oakland County. Economists cautioned that the good times couldn’t last forever.

But nobody expected what was ahead: Michigan shedding jobs for 10 years in a row, an unprecedented period of decline for the state. The state lost one in every five jobs overall and nearly half of the state’s factory jobs, the backbone of Michigan’s economy for generations.

Now the trauma appears to be easing. University of Michigan economists forecast in November that Michigan would end 2011 with the first positive net increase in jobs since 2000, with more job growth expected in 2012 and 2013.

But the emotional and cultural legacy of the state’s prolonged plunge into economic misery promises to linger. Leaders and citizens alike are still grappling with the meaning of recent events.

Perhaps the most important lesson: The dreadful decade was not just another cyclical swing but a fundamental break with the past that required Michigan to embrace a more entrepreneurial business model and new ways of thinking.

“We had a significant emotional experience and a significant economic experience to make it clear we need to make changes,” said George Jackson, president of the Detroit Economic Growth Corp.

Today, the Free Press looks at some lessons from Michigan’s lost decade.

Time for a new strategy

For former Gov. Jennifer Granholm, the key lesson is that the state — and the nation — cannot compete with a low-cost, laissez-faire strategy alone.

Rather, she said, America must develop policies that promote manufacturing and other high-end industries.

“We have to decide that we’re going to compete on quality of talent, quality of product, quality of life,” she said. “And you have to makeinvestments in your talent, your education system, investments in your quality of life, and clearly there has to be investments in innovation, high-end technology, high-end manufacturing.”

Not all the lessons have been positive. Charles Ballard, a professor of economics at Michigan State University, notes that income inequality and poverty rates rose throughout the decade.

“I think it’s important to emphasize how uneven the changes have been,” Ballard said in an e-mail. “For an awful lot of CEOs, doctors, lawyers, scientists, engineers (and yes, economics professors), the last decade has been fine. The struggles are very much concentrated in the middle and at the bottom.”

Perhaps the most important lesson is that Michigan cannot hide from the implications of its economic challenges, said Patrick Anderson, an East Lansing-based economic consultant.

“If we’ve learned anything, it’s that denial is not an effective turnaround strategy,” he said.

Manufacturing matters

Some Michiganders entered 2000 thinking that manufacturing was so last century, and that the state could build a future on education, health care and other services. But the loss of almost half of Michigan’s factory jobs since 2000 vividly illustrated the fallacy of that idea, as government revenues plunged and the state’s economic growth was the slowest in the nation.

“Manufacturing still matters,” said Doug Rothwell, president of the corporate group Business Leaders for Michigan. “If you look at what’s driving growth right now in Michigan, it’s our manufacturing base. It generates some of the most wealth. It helps drive innovation. We need a certain base of manufacturing to drive the research and development jobs.”

Careful cuts are needed

The manufacturers that survived the decade did so by learning a hard lesson: Get lean.

David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor, estimated that, entering 2000, the industry operated with a break-even point of 13 million to 14 million vehicle sales a year. Today, that break-even point is down to 10 million to 11 million.

Among the reasons: two-tier wage rates for line workers, the shifting of auto companies’ health care costs to the UAW’s Voluntary Employee Benefit Association and the end of jobs banks in which workers were paid even during lay offs. All those helped make operations at General Motors, Ford and Chrysler dramatically leaner.

“It’s a very strong foundation for the future right now,” Cole said. “It enables them to do things they could never do in the past.”

That focus on lean operations has played out through Michigan’s economy, even in government. Michigan was busily building prisons in the 1980s and ’90s, but now it is rethinking that policy and closing prisons to save money.

“The good news is that even though it was a tough decade, we’re coming out of it with a cost-value proposition that is much more competitive,” Rothwell said. “We’re not only leaner but fitter. We’ve got more muscle to be able to really compete.”

But in cutting fat, Michigan needs to take care that it doesn’t cut into muscle and bone, too. Ballard cautioned against cutting back government so much that Michigan becomes a less desirable place to live.

“I don’t think crummy roads and crummy schools are the way to a prosperous future,” he said.

Granholm agreed.

“The advent of globalization is this enormous wake-up call that the old solutions of just smaller government, lower taxes are completely and wholly inadequate for us to compete,” she said.

“For those who think that you should be competing solely on cost, well, you’ve got to wake up and smell the roses because we’re not going to be paying people a buck a day, and we’re not going to be chasing this race to the bottom.”

Working together helps

Tight times forced more cooperation and new ways of problem solving, seen, for example, in efforts by local government to share services.

“The old Michigan divisions of geography and race and class and all those things, we paid a high cost for those divisions over the last few decades,” Rothwell said. “No city stands as an island, no place stands as an island, and we don’t have the resources anymore to afford anything but unified solutions to our problems.”

Karla Swift, president of the Michigan AFL-CIO, the state’s biggest union coalition, said the recent round of contract talks between the UAW and GM, Ford and Chrysler illustrate the benefits of working together.

“Collective bargaining works,” she said. “There are positive outcomes for everybody when those relationships are fostered and nurtured, and the collective bargaining process is respected and used as a key process for both managing the business and protecting workers and their families.”

There is no easy fix

Michigan has tested out a number of potential silver bullets for its problems, from big developments such as casinos to single-shot public policies such as tax cuts. Many people now understand that Michigan needs to advance along many fronts at once, from education to generating entrepreneurial businesses.

“I think it’s going to be a large number of tiny slivers that’s going to get us there,” Rothwell said.

The big question that remains is whether Michigan as a whole — its people, its culture and its leaders — will actually take any of these lessons to heart.

“I hope so,” Granholm said. “If this crisis didn’t wake people up, I’m not sure what will.”

John Gallagher, Detroit Free Press

Auburn Hills
Chrysler’s (F:IM) 2011 net profit is expected to be $600 million, just one year after posting a loss. In May, it paid back $7.6 billion in government loans, six years ahead of schedule.

City Hall
Detroit is still in dire straits. In November, Mayor Dave Bing said that without layoffs and drastic cuts in pension and medical costs, the city will run out of cash by April.

Comerica Park
For the first time in the lifetime of most residents, none of the city’s major sports teams are terrible—in fact, most are pretty good. The Tigers reached the American League Championship, and each post-season game brought the city between $5 and $7 million in ticket, travel, food, beer, and memorabilia sales.

Corktown
One of the city’s oldest and most devastated neighborhoods has become a magnet for artists, musicians, and hipster entrepreneurs. Slows Bar B Q, a restaurant founded in 2005 by former model Phillip Cooley, has quickly become a city institution.

Dearborn
In October, Ford (F) posted a $1.6 billion third-quarter profit. A new labor accord will allow the company to invest $16 billion and keep it on track to increase its U.S. market share for the third year in a row.

Downtown
Detroit is in the midst of remaking five and a half miles of its industrial waterfront, complete with paths, pavilions, fountains, cafe, and a butterfly garden.

This year Blue Cross Blue Shield of Michigan moved its corporate headquarters and 3,000 workers downtown. Quicken Loans moved 2,000 more employees into the headquarters it built in 2010.

Fisher Building
Tax breaks have attracted big-budget Hollywood productions. The Fisher Building, a 1928 landmark, showed up in the movie Transformers: Dark of the Moon (at a cost to the state of $6 million in tax breaks). In 2011, Governor Rick Snyder capped film incentives at $25 million.

GM Renaissance Center
GM (GM) this year regained the title of world’s biggest carmaker, taking it back from tsunami-battered Toyota (TM). The company boasted its biggest profits in 20 years and is the sales leader in the U.S. and China. The Chevrolet Cruze is the top-selling compact sedan in the U.S. GM has sold more than a million of them worldwide.

Midtown
Whole Foods (WFM) in 2011 announced it would open a store in the city. Right now downtown Detroit doesn’t have a single national chain grocery store.

Wayne State
TechTown is a research and technology park created by GM, Wayne State University, and the Henry Ford Health System. Tenant Bizdom U, a business incubator founded by Quicken Loans founder Dan Gilbert, gives selected Detroit-based startups training and funding.

By Drake Bennet, Bloomberg Businessweek

The four-week moving average, considered the more reliable predictor of employment trends, was 380,250, a decrease of 8,000 from the previous week’s revised average of 388,250.

The advance number of actual initial claims under state programs, unadjusted, totaled 418,466 in the week ending Dec. 17, a decrease of 17,256 from the previous week. There were 495,548 initial claims in the comparable week in 2010.

Michigan’s unemployment claims decreased 2,683 last week compared to the previous week due to fewer layoffs in the manufacturing industry, state officials reported.

The total number of people claiming benefits in all programs nationwide last week was 7,149,769, a decrease of 299,738 from the previous week.

Some analysts say the gains, though coming off extremely low levels, suggest the depressed housing industry may have reached a turning point.

Economists now say 2011 will be the first year since the Great Recession began in 2007 that home construction will have helped the economy grow. Before this year, the industry endured two of its worst years ever.

“Home building is through the worst and is now steadily improving,” said Paul Diggle, a property economist at Capital Economics.

Builders broke ground on a seasonally adjusted annual rate of 685,000 homes in November, a 9.3% jump from October, the government said Tuesday. It’s the highest level since April 2010.

Still, the rate is far below the 1.2 million homes that economists say would be built each year in a healthy housing market.

Construction of single-family homes rose 2.3% in November to a seasonally adjusted annual rate of 447,000. Apartment construction jumped 32% to a rate of 238,000 units. Single-family homes account for about 70% of home building.

For the year, work is expected to have begun on 430,000 single-family homes and 185,000 apartments. Those figures remain far below the roughly 840,000 single-family homes and 360,000 apartments that would be started in a healthy economy.

Patrick Newport and Michelle Valverde, U.S. economists at IHS Global Insight, said the better-than-expected figures show that the housing industry is “finally getting off the mat.”

“It’ll keep getting better through next year,” said Jared Franz, an associate economist at T. Rowe Price.

Last year, builders began work on roughly 587,000 homes. That barely surpassed the 554,000 homes started in 2009, the industry’s worst year ever.

Though new homes represent just 20% of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

Renting has become a preferred option for many Americans who lost their jobs during the recession and were forced to leave their houses. The surge in apartments has provided a lift to the beleaguered housing market but has not been enough to completely offset the loss of single-family homes.

Permits rose 5.7% last month to a seasonally adjusted annual rate of 681,000, boosted by a 16% jump in permits for apartment buildings, to 246,000.

Builders typically begin construction on single-family homes six months after getting a permit. With apartment projects, the lag time can be up to a year.

Over the past year, permits for apartment buildings with five or more units have surged more than 80%. Permits for single-family homes have risen much less: just 3.6%.

Demand for new homes is weak.

By Derek Kravitz, Associated Press

By the end of this year, Quicken and many of the other companies owned by Dan Gilbert were fully housed in Detroit. The headcount is now close to 4,000.

With the move, Gilbert also bought a significant portfolio of office buildings through his Detroit-basedRock Holdings Inc.

He purchased the Chase Tower, the Madison Theatre Building, the Two Detroit Center parking garage, the First National Building and the Dime Building.

The real estate portfolio now comprises 1.7 million square feet and roughly 3,500 parking spaces in Detroit, making Gilbert the second-largest private owner of office space in the city’s central business district behind General Motors Co.

And the spree continues down Woodward just south of Grand Circus Park.

As of mid-December, his group had purchased the title from the Wayne County treasurer to the building at 1550 Woodward for $176,000 in back taxes. He also had the buildings at 1520 Woodward and 1528 Woodward under contract to be purchased from the Detroit Downtown Development Authority for $337,500 each.

The group has long-term plans to create a residential development on the portion of the former J.L. Hudson department store site immediately north of the Compuware Building.

Gilbert’s real estate group also disclosed on its website that it has plans to redevelop the building at 1500 Woodward Ave. Purchase price was not disclosed.

The redevelopment of historic buildings up and down Woodward Avenue near the central business district is likely to continue, but not at the density level that mass transit would bring.

“Investors and developers need the assurance of a permanent station and a permanent rail before they pull the trigger on a larger project,” said Robert Gibbs, managing principal of Birmingham-based Gibbs Planning Group. “Rubber wheels are too unpredictable, and it’s easy to worry that some day the routes will stop.”

Also at risk is the ability to attract the 20-something crowd of new employees looking for an urban environment.

“The people in their 20s brag about not owning a car — it’s the new status symbol,” said Gibbs, who also teaches a course at Harvard University on urban retail. “To attract that group, you need to have the ability to give that to them.”

Bus systems don’t bring the same effect, Gibbs said.

“Those systems tend to be planned out by people who drive SUVs and golf carts,” he said — “the folks who have never been on a light-rail line in their life.”

One way to stimulate retail with a bus system could be to build large bus stations that can act as an anchor for retail and residential development, said Jim Bieri, president and CEO of Detroit-based Stokas- Bieri Real Estate, which specializes in retail.

“Maybe there is a way to bring a special zoning designation to the areas surrounding permanent bus shelters in a way that can build density, attract retail and residential development,” he said.

Bieri expects that there still will be ways to redevelop Woodward Avenue and downtown without a fixed rail line.

“Is it a death sentence for Detroit not to have this? No,” Bieri said, “even though it is depressing at the moment.”

Another thing to keep in mind: Detroit’s development is contingent on large-scale projects unrelated to light rail, said Robin Boyle, a professor and chairman of the department of urban studies and planning at Wayne State University.

Those projects include a potential new arena for the Detroit Red Wings, the current investment in theDetroit Medical Center campus and future investment by Henry Ford Health System in the New Center area.

“In the short term, it’s easy to have a fairly visceral reaction to the transit-oriented development model,” Boyle said. “It needs to be digested, however, and we all need to take a breath. And we need to remember that there are things other than transit that will effect the Woodward corridor.”

By Daniel Duggan, Crain’s Detroit

University of Michigan’s initiative to invest $25 million of its $7.8 billion endowment into its own startups has officially begun.

The U-M Board of Regents on Thursday gave the nod to President Mary Sue Coleman’s initiative and, according to Executive Vice President and Chief Financial Officer Timothy Slottow, the investing process can begin immediately.

Coleman announced the Michigan Investment in New Technology Startups initiative in early October, much to the glee of the Michigan venture capital industry, which has been lobbying the university to fund entrepreneurial companies for years.

During the regents meeting Slottow praised U-M’s investment office for “really working through this breakthrough project and fund” and said the school will “start investing as soon as we can.”

He highlighted that the program was the first of its kind.

Such a program “really doesn’t exist in any other universities,” he said.

In a memo to regents, Slottow said the MINTS program will not only hopefully yield competitive investment results, but will also make university startups more visible.

In early October, Coleman said that U-M actually lost out on significant investment returns by not investing in its own startups sooner.

“Analysis shows that if we had, in fact, invested in these startups, the returns would have been healthy, the returns would have been competitive with our VC portfolio,” she said. “Simply put, University of Michigan startups are a good financial opportunity.”

The university produces an exceptionally high number of entrepreneurial companies each year. The Tech Transfer Office, the university entity that commercializes intellectual property created by faculty members, facilitated 11 startup companies in fiscal 2011, 10 startups in fiscal 2010 and eight in fiscal 2009.

In the last 11 years. the office has spawned a total of 104 startups.

That level is one point above the average this year and two points above the average for 2010. The index is 17 points above the cyclical low.

“The Michigan economy is showing more signs of stability, holding on to gains from rebounding auto production,” said Robert Dye, the bank’s chief economist, in a press release.

“The Michigan economy is still somewhat patchy with regional unemployment rates elevated and house prices soft,” but national data since September bodes well for future indexes, he said.

The index equally weighs nine seasonally adjusted indicators of economic activity, including the construction, manufacturing and service sectors, as well as job growth and consumer spending.

In October, Gov. Rick Snyder proposed a network of high-speed buses in dedicated lanes that would operate separately from the Detroit Department of Transportation and the Suburban Mobility Authority for Regional Transportation. The system would operate as part of a regional transit authority, bills for which are expected to be introduced in Lansing.

Although details are few, the basic system could include routes along Gratiot, Woodward, Michigan Avenue and M-59 corridors with connections to Detroit Metropolitan Airport. There’s been no talk of cost or how it would be paid for.

That plan, apparently, will replace the more expensive rail effort that has attracted federal, state and private funding commitments. Crain’s broke the news of the proposed light-rail project in 2007.

Matt Cullen, CEO of M1 Rail, the consortium of local private sector investors in the project, declined to comment tonight. The group previously had expressed skepticism of the city’s ability to fund and manage the project.

M1 has sent a letter to Bing and Snyder proposing a 3.2-mile rail line from downtown to the New Center Area, saving some level of train service instead of losing the entire nine-mile-long project.

Peter Rogoff, administrator of the Federal Transit Administration, also had publicly questioned Detroit’s plan to fund the rail system but had sent staff to the city to work on a plan.

The city of Detroit expects to run out of cash by April. By the end of the fiscal year in June 2012, the shortfall is estimated to be $45 million. The city has an accumulated deficit of about $180 million in its $1.2 billion general fund.

The state has ordered a review of the city’s finances, widely seen as a step toward Snyder’s appointing an emergency financial manager who would have near-dictatorial powers to open union contracts and institute other austerity measures.

It was revealed this week that Bing, Snyder and U.S. Transportation Secretary Ray LaHood had a conference call Monday. Snyder’s office told Crain’s this week that the city’s financial situation in relation to federal transit dollars for the rail project was not discussed, and it’s unclear whether the three had talked about the rail project situation at another point.

LaHood’s office issued this statement: “Secretary LaHood is committed to working with Governor Snyder and Mayor Bing to help find safe and reliable solutions to the transit challenges facing the residents of the greater Detroit region. The Department of Transportation applauds their efforts to work together on a regional transit solution that will offer residents safe, cost-effective ways to reach their schools, jobs and churches.”

The rail project was being overseen by the quasi-public Detroit Economic Growth Corp. after Bing stripped it away from the beleaguered Detroit Department of Transportation. The DEGC already had a relationship with M1 Rail. The agency is contracted by the city to act as staff for a number of authorities — including the Downtown Development Authority, which had committed $9 million to the rail project’s funding through the private investment group.

The M1 consortium, which initially tried to build a small version of the rail line without government involvement, had pledged $100 million in cash and tax credits toward the project’s capital costs.

Its members are deep-pocketed, powerful Detroit advocates with downtown business commitments: Penske Corp. founder Roger Penske, who is chairman of the project; Peter Karmanos Jr., founder of Detroit-basedCompuware Corp.; the Ilitch family, owners of the Detroit Tigers, Red Wings and Little Caesar Enterprises Inc.; and Quicken Loans Inc./Rock Financial founder Dan Gilbert, the project’s co-chairman.

The four have committed $3 million each for the display advertising rights to a station along the route. Henry Ford Hospital and Wayne State University also have committed $3 million each for a station. The Troy-based Kresge Foundation has pledged $35 million, part of which already has been spent.

M1′s funding represents nearly half of the $210 million local funding match required to leverage $318 million in Federal Transit Administration money needed to build the system. That’s the plan under the New Starts’ 60-40 match program.

The rest of the local funding match is coming from several sources, including $74 million from the sale of $125 million in Capital Grant Receipts Revenue Bonds by the city, $12 million from previously received federal transportation grants and $25 million from a federal Transportation Investment Generating Economic Recovery grant.

Some of the funding crafted by the city diverted DDOT bus funding for the rail project — something that worried the feds, who sought to craft a new financing plan. It’s unclear whether another plan was ever produced.

On Nov. 18, President Barack Obama signed a $182 billion stopgap spending bill that will keep the federal government operating until Friday — a piece of bipartisan legislation that included language approving the local matching funds for the light-rail project.

Megan Owens, executive director of Detroit-based transit advocacy group Transportation Riders United, was shocked when she learned that the rail project was doomed.

“It’s outrageous. Mayor Bing just threw away a $3 billion economic development opportunity that should have been the centerpiece of Detroit’s revitalization,” she said.

By Bill Shea, Crain’s Detroit

The only goal missed was the creation of a transportation innovation center, a sort of super research incubator for transportation research and development, which failed to become a reality because of the lack of government subsidies.

But the group said in its final report on Road to Renaissance that five other goals were met. Launched in 2006, the Road to Renaissance helped connect efforts from a wide variety of business, civic, academic and nonprofit organizations. Many of the initiatives envisioned operate with various partners overseeing them.

“This effort has had stunning levels of involvement, complexity and reach,” said Doug Rothwell, president and CEO of Business Leaders for Michigan.

“Countless hours, people and significant amounts of energy were dedicated to growing our economy in Greater Detroit.”

Among the specific progress points cited in the final report:

Aerotropolis. A Detroit Region Aerotropolis Development Corp. (ADC), composed of nine stakeholder governmental units, the Airport Authority and some private organizations, has been created, and legislation to provide incentives to locate within the Aerotropolis zone passed in 2010.

Creative economy. Virtual operations of the Detroit Creative Corridor Center (DC3) Business Accelerator launched in 2010, and the physical Acceleration Studio opened in summer 2011 in the Taubman Center of the College for Creative Studies in New Center.

Incubators. A new business accelerator, or incubator, opened recently in Macomb County, joining Ann Arbor SPARK, TechTown at Wayne State University and others that have grown significantly in recent years to offer counseling and other services to start-up entrepreneurs.

The News Hub. Business Leaders for Michigan launched the Detroit Regional News Hub to promote positive stories about the region.

Grow talent. The various partners in Road to Renaissance have focused on a number of educational initiatives to help prepare students for technical and entrepreneurial careers. Clearly, the regional economy needs to make more progress. But Rothwell said hitting five of the six Road to Renaissance objectives laid a foundation for the future.

“By taking time up-front to identify our areas of strength and opportunity, we are able to know with certainty which assets and resources our region can most readily capitalize upon,” Rothwell said. “With that solid base, our footing is more certain as we move into the future.”

He added, “You never declare total victory with these things. It’s an ongoing effort.”

The former nurses school at the corner of Willis and John R was designed by Elijah E. Myers (who also designed Michigan’s State Capitol building) and opened in 1898. Zachary and Associates rescued it after years of neglect and near demolition with a design hand by Quinn Evans Architects. It’s about to open as a 28-unit apartment building that provides a high-end living environment by combining both historic preservation and green building.

“People are going to love living here,” says Diane Van Buren, who works in sustainable planning at Zachary and Associates.

There is a long laundry of green features throughout the project, chief among them are geothermal heat, energy star appliances, blown-in insulation, an ultra-energy-efficient elevator and sky lights. The developers even used recycled hardwood floors salvaged from a disassembled house in Hamtramck in the lobby restoration of Newberry Hall. The biggest gold star for tree huggers is the reuse of a historic building, and recycling many of the architectural touches that set it apart.

The developers kept and rebuilt the original windows, including the leaded glass on the first floor. Many of the original bricks were recycled back into the building, often featuring stamps from the original manufacturer. The main lobby’s wood paneling and coffered ceilings were also restored, creating a substantial ‘Wow factor’ for everyone who walks through the building’s front door. All of these factors have ensure that each resident has a unique living experience.

“Every one of these units is different,” Van Buren says.

An open house will be held between 5-8 p.m. Thursday at Newberry Hall, 100 E Willis. For information on the event and development, send an email here.

Jon Zemke, Model D

That’s because most of the work so far has been of the back-of-the-house variety — extending loading docks, upgrading electrical and temperature control systems, and the like.

Larry Alexander, chairman of the Detroit Regional Convention Facility Authority, said auto show visitors should notice the construction work “not at all.”

“We’ve done a very good job of separating the work that they’ve done from where the customer activities are,” Alexander said Tuesday. “It’s almost come back to haunt us because we’ve got customers who’ve walked in who say they can’t tell there’s any work going on.

But there is, of course, and on Tuesday, Cobo General Manager Thom Connors led a pack of news media representatives on an hour-long, hard-hat tour of the work.

“We’ve come a long way in a short period of time,” Connors said. “People who work here are passionate about making it better.”

One of the more visible changes: About 25,000 square feet of new space has been added on to Cobo’s Oakland Hall by building on an annex on the west side of Cobo. It will house the Pure Michigan exhibit and some auto suppliers during next month’s show.

Over the past year or so, many technical changes have made Cobo a more comfortable, efficient place. Several more loading dock bays have been added, making set-up and tear-down easier. Several escalators have been upgraded, and all will be eventually.

Meanwhile, upgrades allow for better temperature control on the show floor itself. A new trash compacting area permits recycling and cuts down on pests.

All together, about 150,000 square feet of new or reconfigured exhibit and meeting space will be added to Cobo’s 700,000 or so square feet of space over the next couple of years.

The work is the biggest upgrade in a generation for Cobo. The center opened in 1960 and was last renovated in a major way in 1989. Since then, Cobo has been plagued by problems, including roof leaks, while newer, larger centers around the nation have pushed Cobo farther down the list of premier facilities. The latest upgrades should help address all those issues.

The biggest changes are yet to come. In perhaps the most dramatic, a new waterfront atrium entrance will be built off Atwater, a project that will begin immediately after next month’s auto show closes. It will be ready for the January 2013 auto show.

That atrium will allow for a new ceremonial arrival point off Atwater, and dramatically open up the interior of Cobo to riverfront views.

In the second project, the adjacent Cobo Arena is being gutted and rebuilt as a two-level exhibition space and ballroom. Demolition crews were hard at work in the arena Tuesday ripping out tiers of seating. The rebuilt arena will be ready for the 2013 show, Connors said.

Normally, Ford uses Cobo Arena to unveil its vehicles. This year, Ford will use Joe Louis Arena, instead.

Patrick Stansfield, a project manager for the Troy-based exhibits firm PRG, met journalists on the tour and explained some of the intricacies of setting up the show. Huge arrays of lighting rigs hovered at various heights as workers prepared to hoist them into place.

“Unlit cars are not very interesting,” Stansfield said. “Unlit cars look like a parking lot. Lit cars pop out at you.”

Plans to redevelop the David Whitney Building in downtown Detroit are moving closer to reality, as a boutique hotel chain has signed on to occupy the lower floors of the historic 19-story skyscraper on Woodward Avenue.

Starwood Hotels & Resorts will join the renovation project, spearheaded by local developer The Roxbury Group and Trans Inns Management, with plans to open its first Aloft hotel in Michigan.

The company has opened more than 55 Aloft hotels in the past three years, promoting it as a “lifestyle brand” for “youthful-minded travelers.”

Detroit plans call for 136 loft-like rooms and a focus on forward-thinking technology. The hotel would include a 24-hour fitness center, banquet space, high-speed internet, industrial design elements, a bar and the “re:mix lounge.”

“I think Aloft if a great fit for this location,” David Da Rita of The Roxbury Group told MLive.com. “It’s in a growth mode, they have a very urban and eclectic style and approach they’re going to bring to the building, which has everything you want for a brand that is developing a cool cache.”

Aloft Detroit will seek LEED certification from the U.S. Green Building Council for what would become the brand’s second adaptive reuse project in the United States.

“Aloft is particularly well-suited for adaptive reuse because of its urban aesthetic,” Brian McGuinness, Senior Vice President of Specialty Select Brands for Starwood, said in a released statement. “Preserving this integral part of Detroit’s history is a priority for us as well, an it’s exciting to meld Aloft’s design sensibility with this spectacular original structure.”

The building, designed by famed Chicago-architect Daniel Burnham and named after local lumber baron David Whitney Jr., first openend in 1915 but has been vacant for more than a decade.

Beyond the hotel, plans call for 108 residential units on the top nine floors of the David Whitney Building. Developers are seeking brownfield tax credits to finance the $82 million project, and the Michigan Economic Growth Authority is expected to hear their request tomorrow.

MLive.com spoke with James Van Dyke, Roxbury’s vice president of development, in August. He said the vacant building is in remarkably good shape and its neo-renaissance features complement redevelopment plans.

“There’s a very beautiful four-story rotunda with terracotta and a skylight at the top,” Van Dyke said. “When you walk in, you really think it should be a hotel lobby even though it never was.”

Combined with redevelopment at the 34-story Broderick Tower, Woodward Avenue at Grand Circus Park could soon be home to hundreds of new living spaces. And local companies are offering incentives for their employees to live there.

“It’s pretty apparent, given the fact that you can’t find living downtown, that there’s a pent up demand for residential units,” Van Dyke said. “These incentives all lend themselves to really strong demand, but the supply isn’t there.”

Alex Villacorta is the Director of Research and Analytics at Clear Capital, a research firm that conducted the study. He said since the housing market’s lowest point in 2009, there has been a 3 percent increase in Detroit home prices. But he added that the figure is deceptive since the housing market has been spiking so wildly over the last few years.

“Overall, Detroit home prices have been very depressed,” he told HuffPost. “In total we saw a nearly 78 percent decline from the peak value in late 2005 to the lowest point in 2009.”

The city appears to be seeing an uptick in home values since that extreme low point. But Villacorta cautioned reading too much progress into the figures; the new 3 percent gain was measured against what was nearly rock bottom. “Prices are now down 75 percent from that peak level, as opposed to 78 percent,” he explained.

Clear Capital assembles its reports by compiling information from multiple public and private data sources. The study’s findings reflect data gathered through the end of November.

“All things told, this market has been showing some signs of stability over the last two years,” said Villacorta. “Even though prices are currently down almost 9 percent for the year and 1.5 percent for the quarter, that’s more of a reflection of the high point we saw this time last year.”

In 2010, Villacorta said, home prices were still improving because of a now-expired tax credit and still had a bit of upward momentum.

Metro Detroit home prices have been severely affected by the large number of distressed homes — houses facing default or foreclosure — being sold in the region. Villacorta estimated the rate of distressed homes in the area is about 45 percent.

This high rate drives down all home prices in the region, because they serve as the basis of comparable sales for other transactions.

Villacorta thinks homeowners can still expect some uncertainty in the market due to the coming 2012 election, potential legislation against the mortgage industry and fallout from the robocalls scandal. But he thinks prices should be relatively stable for the next year.

Among the plans is a mixed-use development with 225-250 units of affordable, high-end and senior housing paired with local and national retailers.

Surprising some real estate insiders are the well-known developers who submitted proposals but aren’t on the short list, including Westin Book Cadillac developer John Ferchill, who had teamed with Quicken Loans Inc. founder Dan Gilbert.

In an emailed comment, Gilbert did not signal any hard feelings.

“We welcome any and all investors who see the opportunities that exist in the city and who want to get in on the ground floor of what is becoming an exciting and dynamic urban core in the heart of downtown Detroit,” he said.

Making the cut is the developer behind the Broderick Tower, Detroit-based J.C. Beal Construction Inc., in a joint venture with Denver-based Tryba Architects. Also on the list, sources said, are the developers behind the Durant Hotel in Flint, Lansing-based Prater Development Ltd. and Lansing-based Karp and Associates LLC.

In an email to Crain’s, Richard Karp declined to comment. Kevin Prater did not respond.

One national developer is also on the short list, according to sources familiar with the process, but the name is not available.

“This process is a long and winding road, with a lot to consider,” said Bob Rossbach, a public relations consultant representing the Detroit Economic Growth Corp., one of the entities making the decision.

Finding a developer for Capitol Park is a process that started in 2009 as a group of government and nonprofit entities bought hree of 17 buildings in the courtyard area.

Once the site of Michigan’s Capitol building, the small courtyard has appealed to developers because it includes so many historic buildings in a cluster.

A request for proposals was issued in August, with a consortium including state government entities, the DEGC, Invest Detroit, the Downtown Detroit Partnership and developer David Di Rita paring the field down to three finalists. The three will be pared to one in the next 45 to 60 days, Rossbach said.

For David Tryba, principal with Tryba Architects, remaking the three buildings is the culmination of a long quest to design a transformational Detroit development.

Tryba’s firm has a specialty of redeveloping historic buildings in Denver, New York and Washington, D.C. and he has spent 25 years exploring Detroit for possible projects while in town to visit his wife’s family during holidays.

He has teamed with J.C. Beal President Fred Beal in creating Capitol Park Partners LLC and has proposed a plan for a retail and residential development that would go beyond three buildings.

“It’s a catalytic opportunity we see here that motivates us,” Tryba said. “This is a moment in time, with a new generation of Detroiters who want this deeply. We have the ability to connect the new renters, the workers of that generation.”

Their plan for Capitol Park includes developing the Farwell Building into smaller, less-expensive units, the 1145 Griswold building into slightly larger units and the former United Way Building into senior-oriented housing. It will also include a larger retail strategy with local and national companies.

The focus is how to make Capitol Park into a community, he said.

“This is more about building a part of the city than it is about any one particular building,” Tryba said.

Financing would be similar to other recent Detroit projects, mixing public and grant-based incentives with equity investors and a limited amount of bank financing.

Tryba wouldn’t comment on the others in the running.

Left off, in addition to Ferchill, is Detroit developer Eric Larson, who recently became non-executive president of Olympia Development, the real estate arm of Mike and Marian Ilitch’s businesses.

“We didn’t get a lot of feedback as to what they did or didn’t like,” said Larson, who was not working with the Ilitch family. “On the whole, this is a good process for the city, and I think it’s important to get a lot of groups involved with this opportunity.”

Other developers who attended the pre-bid meeting for the request for proposals are Bloomfield Hills-based A.F. Jonna Development, Livonia-based Schostak Bros. & Co. Inc., Chicago-based Habitat Co. and Houston-based Hines Interests L.P., according to the sign-in sheet posted on the DEGC website.

Representatives from Schostak, Habitat and Hines said the firms did not make proposals. A.F. Jonna manager Arkan Jonna did not respond to requests for comment.

It’s a place with lots of upside potential and hope for young talented people, they agree.

But it can also be a difficult place for newcomers to navigate.

Tonight at the Madison Building, 1555 Broadway in Detroit, an event called Pollinate! will be held to launch D:Hive, a project designed to welcome new recruits and assist existing innovators in order to grow and keep more young talent in downtown Detroit.

Think of D:Hive as an intensely local manifestation of what Snyder called for last week in his sweeping message about the urgent need to attract and retain talent in order to grow Michigan’s economy.

The ground floor

When I asked Snyder on Wednesday why he would tell a talented young worker to settle in Detroit, he said, “Do you want to be another yuppie in Chicago or do you want to make a difference in Detroit? A lot of young people today say they really want to have impact.”

What better place than Detroit, he asked, to be “on the ground floor of helping to bring back a wonderful urban environment, to be part of a success story, to do all these great things?”

“No disrespect to Chicago,” he added, but “they’ve got lots of young people and you’re just going to blend in and be another person there, most likely.”

Because Detroit is definitely not Chicago in terms of young-adult density, however, it’s more difficult to get acclimated, both socially and in terms of basic needs such as finding a place to live or shop.

McManus was co-founder of a project in Chattanooga five years ago called CreateHere, which has won national acclaim as a catalyst for transforming a run-down, abandoned neighborhood into a vibrant, growing, arts-oriented community.

He began consulting on the D:Hive concept for Detroit last year and moved into the Brush Park area about eight weeks ago.

McManus said Snyder’s response to the why-Detroit question about young talent locating here was “a solid answer.”

A hopeful place

Detroit and Chattanooga have some similarities in that both are “post-industrial cities on a riverfront,” he said, while acknowledging that the scale of Detroit’s challenge is far different. “Where we might have 500 abandoned properties in Chattanooga, Detroit might have 5,000,” he said.

On one hand, McManus said he’s amazed at how many artists and entrepreneurs “are setting up shop in warehouse after abandoned warehouse here. I tell people back home that Detroit is one of the most hopeful places I’ve ever been to, and people think I’m kind of crazy.”

McManus expects to spend about six months spearheading the D:Hive project, which will have storefront space at 1253 Woodward and be funded at first by a $120,000 grant from the Hudson-Webber Foundation. The early focus will be on helping young talent with real estate, he said, partly because resources like Craigslist aren’t nearly as helpful in Detroit as in other cities, and partly to help make new arrivals aware of incentive programs to buy and rent downtown.

“I like to think of D:Hive as kind of an air-traffic control navigation system for talent,” said Hudson-Webber President Dave Egner. Other partners in D:Hive include the Detroit Downtown Partnership, Detroit Economic Growth Corp., Inside Detroit and Quicken Loans.

The space agency is looking for potential future suppliers and partners, as well as companies interested in commercializing NASA technology.

“We’re not here for procurement, we’re here for partnerships and collaborations,”said Ted Mecum, technology manager for the innovative partnerships program office at NASA’s Goddard Space Flight Center in Greenbelt, Md.

Echoed Rheal P. Turcotte, strategic relationships office partnership manager at NASA’s Langley Research Center in Hampton, Va.: “We’re not here to buy parts, we’re here to find partners — potential co-developers of technologies.”

Three NASA centers were represented at the event:

*Goddard Space Flight Center, founded in 1959 as NASA’s first space flight center, studies astrophysics (what’s beyond the solar system), heliophysics (what’s going on with our sun) and geophisics (what’s going on with the Earth). To answer those questions, it builds and manages satellites and information.

* Langley Research Center, which was founded in 1915 and was the nation’s first aeronautics center. It studies aerodynamics and aircraft and spacecraft structures — how aircraft fly in the atmosphere, and how space vehicles leave and re-enter the atmosphere and fly in space.

* Glenn Research Center in suburban Cleveland, which studies aircraft and spacecraft propulsion systems.

The meeting was organized by Connection Point, a Detroit chamber initiative founded in October 2010 with a federal grant. It’s designed to help Michigan companies diversify into new industries.

Trevor Pawl, Connection Point program director, said he got the idea of bringing NASA to Detroit after meeting Mecum at an advanced materials show in California.

Pawl said 81 companies were represented at a breakfast Tuesday in which NASA’s broad technology needs and opportunities were presented. Of those companies, 23 companies asked for one-on-one meetings with NASA Tuesday, and another 10 companies asked for one-on-one meetings with NASA Wednesday.

“We’re here to open dialogue with companies we didn’t know about in the past … with capabilities NASA can use, or who want to license NASA technologies,” Mecum said. “This is NASA’s first foray into Michigan. We think there are some very good matches … We have found several companies that offer products and capabilities that will match what we’re doing.”

Among them might be Nextek Power Systems, an advanced direct current power systems company based in Detroit’s NextEnergy renewable and alternative energy business incubator.

Jeff Daudert, key account manager for Nextek, said his company is both hoping to sell NASA technology that will boost the energyefficiency of their buildings, and get involved in helping power NASA spacecraft, which use direct current, or DC, electricity. Daudert pointed out that the modern office and home contain appliances that consume DC electricity — computers, printers, monitors, TVs. And renewable energy systems like wind and solar produce DC. But under the current grid, that DC must be converted to AC for distribution, then converted back to DC at the point of use. That does nothing but waste power and generate unwanted heat, Daudert said.

“We’re hopeful that if anybody would ‘get’ a DC power system, it would be NASA,” Daudert said. “DC power systems have been employed in space since the beginning.”

To listen to a podcast interview with Daudert, click here.

Another candidate that’s actually already doing business with NASA is Dexter-based Dexter Research Center. This company,  founded by a Wayne State University grad, builds heat and infrared light detectors that are used in a variety of applications. Wayne Baer, director of R&D at Dexter, said the company currently has infrared detectors in an experiment on the International Space Station to determine how fire behaves in space.

To listen to a podcast interview with Baer, click here.

Michigan companies came all the way from the Upper Peninsula to the event, Pawl said.

For example, the study found that in 2010, cargo and vessel activities in the Port of Detroit generated $289.7 million in state and federal taxes. In addition, $255.3 million in wages and salaries were paid to the Port of Detroit system’s 5,622 employees handling cargo such as steel, iron ore, non-ferrous metals, petroleum, stone, cement and salt.

John Jamian, Executive Director of the Detroit/Wayne County Port Authority, said this is the first time a comprehensive review of port activities along the entire Great Lakes System has been done, adding the report shows the vital role the Port of Detroit in the region’s growth.

The broad-sweeping study, which was performed in partnership with the Great Lakes-Seaway system stakeholders and the U.S. and Canadian governments, highlights excellent economic news about jobs and revenue generated by the Port of Detroit.

In 2010, firms that depend upon cargo handled at Port of Detroit marine terminals, along with the industries related to that cargo, contributed $6.4 billion to the national economy, according to the report, The Economic Impacts of the Great Lakes and Saint Lawrence Seaway System.

Nationwide unemployment claims fell by 23,000 to 381,000 in the week ending Dec. 3. This is the fewest claims since February, the U.S. Department of Labor reported this morning.

The four-week moving average, considered the more reliable predictor, was 393,250, a decrease of 3,000 from the previous week’s revised average of 396,250.

The two states with the largest increases in claims last week were Wisconsin (+8,172) and Michigan ( (+2,643). State officials said the increase was due to layoffs in the construction industry.

The number of people continuing to receive unemployment insurance benefits dropped by 174,000 in the week ended Nov. 26 to 3.58 million, the lowest level since the financial crisis in September 2008.

Of the 61 automotive manufacturing plants that have closed in metro Detroit since 1979, more than half have been repurposed for a new use.

Metro Detroit has fared slightly better than the rest of the country in reusing auto plants, with 56 percent of the factories reused, compared with the national average of 48 percent.

Reusing auto sites was the topic of a study released today by the Ann Arbor-based Center for Automotive Research, which studied the status of every automotive manufacturing site closed since 1979.

“It was particularly surprising to learn how many communities have had some success in repurposing former automotive sites,” Valerie Sathe Brugeman, project manager of the Sustainability and Economic Development Strategies group at CAR and the study’s lead researcher, said in a release.

“When an auto manufacturing plant closes, the job and income loss often causes an economic shock. But many communities have found ways to recover and at least partially restore property values and employment.”

Since 1979, 267 of the 447 automaker manufacturing plants in the U.S. have been closed, representing 60 percent of the facilities, according to the report.

Of those that closed, 42 percent shut down between 2004 and 2010.

Of the 267 closed facilities, 48 percent have been repurposed to new uses or are being repurposed.

Groups involved with the study expect it to help government leaders and investors look at past examples, said Jay Williams, director of the federal Office of Recovery for Auto Communities and Workers, one of the entities working on the study.

“While each community with a closed automotive facility faces unique challenges, this report helps shine a light on how community engagement, a focus on flexibility and the involvement of the private sector, nonprofit groups and all levels of government can help them recover,” Williams said in a release.

Finding new uses for large auto manufacturing plants has been a hot topic in metro Detroit, as nearly every real estate firm is marketing a former manufacturing site of some kind.

Large facilities such as the 4.2-million-square-foot Ford Motor Co. Wixom plant are being marketed right now, along with the former General Motors Corp. facilities such as the 5 million-square foot Willow Run plant.

The Center for Automotive Research, a respected Michigan think tank, estimates that automakers and auto parts suppliers will likely need to hire about 200,000 workers by 2015 in Michigan, Ohio and Indiana, the nation’s auto belt that has seen massive job losses in recent years.

While part of that hiring would replace retiring workers, the hiring boom should leave the three states with a net gain of about 150,000 auto jobs.

And it will go a long way to recouping the auto jobs lost during the past 10 years — employment in the sector in the three states has fallen by just over half, or 274,000 jobs, since 2001, according to the Bureau of

The job gains are due to forecasts of a modest recovery in auto production, as well as recent labor deals with General Motors (GM,Fortune 500), Ford Motor (F, Fortune 500) and Chrysler Group.

All three labor deals this past fall included promises to hire new employees to build the next generation of cars and trucks. And that will prompt additional hiring at auto parts suppliers.

GM has promised to add or retain 6,400 workers in its labor deal, whileFord promised to add almost 6,000 and Chrysler 2,100.

12 most profitable cars

The Center for Automotive Research’s estimates for hiring are pretty conservative by comparison, projecting only about 10,250 additional hourly workers at the traditional Big Three. But it also projects the companies will add more than 20,000 salaried workers — plant supervisors, as well as engineers and other technical staff — that aren’t in the United Auto Workers union.

The bigger gains will come from the increased hiring from auto parts suppliers, along with some additions at Midwest facilities of overseas automakers.

Overall, the Center for Automotive Research estimates the industry will need to add almost 170,000 jobs nationwide by 2014, with most in Michigan, Ohio and Indiana. Replacing retirees who leave the industry could require about 50,000 more hires.

That’s not nearly enough to recoup all the jobs lost by the industry in recent decades. But it would represent a significant shot in the arm for the battered auto states — assuming the employers can find the help they need.

Michigan, Ohio and Indiana have about 1.2 million unemployed. But there’s a labor shortage for skilled positions.

“We’re talking to suppliers who are capacity restrained who are having trouble finding the employees they need,” said Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research and one of the authors of the study.

Dave Andrea, head of industry analysis and economics for the Original Equipment Suppliers Association, an auto parts trade group, said he thinks the forecasts are reasonable.

He said his group’s members were forced to cut deeply to survive the crisis of 2009, and they’ve been scrambling to rebuild their staffs.

“You drive around this area, and you still see signs in front of closed factories that are still for sale or lease, but you also see billboards of companies looking for help,” he said.

Dziczek said a big part of the problem is that so many of the people who lost jobs took early retirement packages and many aren’t likely to return to the labor force. And there aren’t as many experienced manufacturing workers sitting around still looking for jobs.

Toyota to export Camrys to South Korea – from U.S.

“It’s like these employers are all looking for these elusive unicorns — people with five to eight years of experience who don’t cost too much, don’t require much training,” she said. “We’re going to run out of unicorns soon, if we haven’t all ready.”

A panel of eight national retailers and developers speaking at the International Council of Shopping Centers’ (ICSC) New York National Conference and Deal Making, held on December 5-6, agreed that, for a wide variety of reasons, urban retail “is not the last frontier, but an evolving and continuing one,” in the words of moderator Ken Narva, co-founder and managing partner of Street Works, a White Plains, N.Y.-based development and planning consultancy.

The challenges urban retail presents for developers and retailers depend on the location of the stores, the availability of mass transportation, trade area population and store product.

It’s important to remember that New York City is “the ultimate urban location, it isn’t American and the rules of Manhattan don’t apply to the rest of the U.S.,” said Peter Ripka, partner at Ripco Real Estate. “No place else has 30 million people all living within 50 miles.”

For urban retail to be successful, there must not be any disparity between function and urban space, said G. Lamont Blackstone, principal of G.L. Blackstone & Associates LLC, a Mount Vernon, N.Y.-based real estate development company. He noted that he often finds an “intrinsic tension” between a community’s desire for parking and the operator’s ideas.

Daniel Shallit, Sports Authority’s director or real estate for the northeast region, said that regardless of a store’s location—whether in a suburban mall or an urban vertical location—Sports Authority needs parking because “you can’t buy a treadmill and take it on the bus or train.” The company has tackled the challenge by offering more soft goods in urban locations and focusing on equipment sales in suburban stores. However, Shallit added, Sports Authority does best when located near transit hubs so that commuters taking mass transportation can notice the stores and return on weekends.

Even when a store is accessible by public transportation, having a few parking spaces can’t hurt. When the Skyview Center in Flushing, Queens, which is located near mass transit, offered free parking last summer, it attracted 2,500 visitors each week and 6,000 people on the weekends, according to Larry Rose, principal with RK Realty Advisors.

Operating a traditional store in an urban setting is often a mistake, said Patrick Smith, vice president of real estate for BJ’s Wholesale Club. He said BJ’s has taken its urban stores to two floors despite the difficulties and “it’s been worth it—the volume is there if you work with it.”

The key to creating a successful urban store is flexibility in operation and design, said Michael J. Shanahan, vice president of real estate for Burlington Coat Factory. Adaptive reuse has proven successful for Burlington Coat Factory, but has also presented several challenges, including the presence of wide old-fashioned and unmovable columns in old buildings prohibiting traditional racetracks. In addition, sometimes the retailer has had to fight for or give up street presence when it’s located on the second level of a facility, Shanahan added.

For Shop Rite, the challenge of moving into urban areas has not been so much about creating smaller stores, as about learning to be creative with the spaces that are available, said Dennis Bachman, senior real estate representative for Wakefern Food Corp., which operates Shop Rite. . For instance, refrigerator equipment is typically designed for ground-floor stores. One recent urban integration of a Shop Rite store involved installing equipment in a second-level location which necessitated the use of a crane, the taking out of windows, and getting permits to close down the street, Bachman noted.

In the end, the integration of urban retail is a complex undertaking with a lot of moving pieces, and the biggest problem with it could be that it takes too long to accomplish, according to Rose.

“The rule of thumb for transit-oriented development retail is that if your kids are in elementary school when the project starts, they’ll be in high school when you finish,” he said.

The index was up one point to 87, which is the average for the first nine months of the year and two points above the average for 2010.

Robert Dye, the bank’s chief economist, said auto sales and production this fall bode well for future indexes.

“Michigan is benefiting from increasing auto sales and vehicle production,” he said. “U.S. auto sales increased to a 13.6 million-unit rate in November, and that is good news for the state.

“The climb out of the depths of the recession still looks very uneven, though, as hard-hit areas within Michigan are stuck with very high unemployment rates. … Housing markets in Michigan are still a drag to economic growth and will likely be soft through 2012.”

The index equally weighs nine seasonally adjusted measures of economic activity, including the construction, manufacturing and service sectors; job growth; and consumer spending.

All the DDP’s work was on the table, Blaszkiewicz said. This included such programs as 211 On The Go, which helps the homeless become equipped to seek employment and permanent housing; Clean Downtown, the DDP’s signature downtown street-cleaning program; and the annual Christmas tree-lighting ceremony in Campus Martius Park.

While the DDP is keeping all those programs, it’s also venturing into new territory under Blaszkiewicz’s leadership.

Blaszkiewicz’s DDP is a more hands-on economic and community development agency, filling the same role that Sue Mosey’s Midtown Detroit Inc. plays.

Since Blaszkiewicz came on board, the DDP has announced Live Downtown, a residential incentive program funded by private and nonprofit employers in downtown Detroit; has participated in the development of a transit-oriented development plan to align with the proposed M1 Rail project; and is working to assist redevelopment of downtown’s Capitol Park.

“We want to drive change,” said Cynthia Pasky, founder and CEO of Detroit-based Strategic Staffing Solutions and chairman of the DDP’s board of directors.

“We’re about safety, lighting, economic development,” Clean Downtown and then “the social elements,” she said. At Campus Martius, Pasky said, the DDP does the tree lighting, “making sure we have an ice-skating rink, having concerts in the summer.

“But for the city to grow and thrive, we need to have a strong safety element, the city has to be well-lit, it has to be clean, it has to have a strong economic development arm, and then you can have the programming.”

Choosing Blaszkiewicz to fill the role advanced those priorities, she said.

“He’s the perfect person,” Pasky said. “He has a lot of capacity, he’s very smart, he knows how to work with other agencies, engage corporations … he is hands-on but he’s hands-on in a way that he has other people” involved in the work.

Blaszkiewicz is also president of Invest Detroit, a job he’s had since 2001. Invest Detroit is a loan fund that finances business, residential and other economic development in the city. He’s still president of that organization but doesn’t participate in decisions that could pose a conflict of interest. Loans, for example, are granted with approval of a board, not on one person’s say-so, he said.

Pasky said there was some talk on the DDP board of merging the organizations, but the board agreed that one person could lead both.

It was important to determine how the DDP could boost economic development without duplicating the work of the Detroit Economic Growth Corp., the city’s quasi-governmental economic-development arm, Blaszkiewicz said.

Part of Blaszkiewicz’s work has concerned developing a new framework for the DDP’s work. The organization has two priorities: physical enhancement through making downtown safe, clean and inviting; and economic development targeted and coordinated with other agencies — but they’re linked, Blaszkiewicz said.

Within the framework, it’s easy to see how the organization’s two focuses support each other: Code enforcement and the Clean Downtown program make downtown more attractive to applicants to the Live Downtown program; lighting and landscaping connect to the transit-oriented development plan, he said.

But safety is necessary for a successful downtown, Blaszkiewicz said. Without a safe downtown, economic development, social programs and recreational programming don’t matter.

The DDP is working with the DEGC, the Detroit Downtown Development Authority and the city’s Public Lighting Department to install 1,077 new LED street lights in the downtown area, Blaszkiewicz said.

“This will lighten the load on the grid — they use 40 percent less energy — and will reduce replacement costs and labor” because LED street lights last 10 years, rather than the three or four that conventional street lights can last.

The DDP is also working to boost stakeholder engagement, with regular meetings and participation in broader DDP decisions, and has hired retail recruiter Heather Kazmierczak to attract businesses to the downtown.

The Capitol Park project recently received proposals from developers to renovate three buildings on the park in Detroit’s west downtown. The park, once a transfer point for many city bus routes, was rehabbed in 2009 after the lines were routed through the nearby Rosa Parks Transit Center.

The project is justified, Blaszkiewicz said, in part by the Live Downtown incentives, set to run for five years. He said developers should see the incentive program as a sign that there’s a market for housing downtown.

“Dave is a very effective leader who is working to develop a comprehensive, integrated approach to revitalizing the downtown district in concert with the DEGC,” Mosey said.

“District planning, prioritization of downtown services and infrastructure needs, new security initiatives and other place-making programs such as the Live Downtown program are already under way and gaining traction under the new DDP.”

The deal brought the 800,000-square-foot building from 35 percent occupancy to 87 percent occupancy, according to a statement from Farmington Hills-based Friedman Integrated Real Estate Solutions, which represented the owners in the lease transaction.

Chrysler will now use the space for parts distribution.

The building near Telegraph Road and I-96 was once used by Dearborn-based Ford Motor Co. for logistics. However, it has been largely vacant for the past few years.

The largest industrial deal of the year was the renewal of 632,000 square feet of space by U.S. Manufacturing Corp. in Macomb Township, according to Washington, D.C.-based CoStar Group.

However, the Chrysler deal represents the biggest new lease of the year, topping the 320,000-square-foot lease by Tognum America Inc. in Brownstown.

By Daniel Duggan, Crain’s Detroit

Townsend Energy Solutions LLC pitched the idea to state legislators Wednesday, seeking a $50 million tax credit for the project. Townsend Energy is a subsidiary of the Hunt Valley, Md.-based private equity firm Townsend Capital LLC.

Townsend’s proposal comes on the heels of the recent unraveling of a joint venture that had been planned for the site since 2009. That plan also involved a company in which Townsend Capital is an investor.

Texas-based Xtreme Power was to redevelop the Wixom plant in a joint venture with Santa Barbara, Calif.-based Clairvoyant Energy. Xtreme Power is one of the many energy companies in which Townsend Capital invests, according to the company website.

Townsend Capital founder Dennis Townsend did not respond to a Crain’s request for an interview made with his secretary.

Ford Motor Land Development Corp. has been marketing the site for almost a month and will continue to look at users for the former assembly plant, said Stefanie Denby, marketing and communications director for Ford Land.

“We’re delighted that they have expressed interest,” she said of the Townsend proposal, “and we’ll continue to work with them and other interested parties. “We’ve had a lot of interest at that site.”

Ford stopped production at the plant in 2007.

Under the plan shown to Michigan legislators, Townsend would create a plant in Wixom to manufacture and develop automotive batteries, creating 875 direct jobs, according to materials supplied to the Senate Committee for Economic Development.

Townsend would create power stations that can charge electric vehicles. It would purchase power during off-peak times at a discount, then store the electricity and sell it through the power stations at a premium.

Townsend would work with Burlington, Vt.-based Dynapower Corp. to build the vehicle charging stations.

The project would take 400,000 square feet of the 4.2 million-square-foot Wixom building.

Under Senate Bill 855, the $100 million in state tax incentives offered to the failed Xtreme-Clairvoyant project would be scaled back to $50 million for the Townsend venture. The number of new jobs needed to qualify for funding would be increased from 500 for the past project to 750. If the project creates fewer than 750, the credit would be reduced $65,000 for every job not created.

The bill was referred from the economic development committee to the Senate’s Committee of the Whole with no date set for a vote.

This is far from the first energy project involving Townsend. The private equity firm has a subsidiary,Townsend Ventures LLC, that invests in energy-oriented projects.

Among those projects, according to the Townsend website, is Dow Kokam LLC. That joint venture involves multiple companies, primarily Midland-based Dow Chemical Co.

Townsend also invests in the Korean battery company Kokam Co. Ltd. and Encelium Technologies, which develops lighting control systems for commercial buildings.

Similarly, Townsend invests in Lumenergi, which develops “intelligent lighting technology” that can reduce lighting costs 50 percent to 70 percent.

Still, 13.3 million Americans remain unemployed. And a key reason the unemployment rate fell so much was because roughly 315,000 people had given up looking for work and were no longer counted as unemployed. Employers added 120,000 jobs last month. And the previous two months were revised up to show that 72,000 more jobs added — the fourth straight month the government revised prior months higher.

Private employers added a net gain of 140,000 jobs last month. Governments, meanwhile, shed another 20,000 jobs, mostly at the local and state level. Governments at all levels have shed almost a half-million jobs in the past year.

More than half the jobs added were by retailers, restaurants and bars, a sign that holiday hiring has kicked in. Retailers added 50,000 jobs, the sector’s biggest gain since April. Restaurants and bars hired 33,000 new workers. The health care industry added 17,000.

The presidential election is less than a year away, which means President Barack Obama will almost certainly face voters with the highest unemployment rate of any president since World War II.

And Europe’s financial crisis threatens to slow U.S. growth next year. A recession in Europe could reduce U.S. exports, hurt global financial markets and dampen business confidence.

Paul Ashworth, an economist at Capital Economics, estimates that the economy will expand 2.5 percent in the last three months of this year. But he expects growth to slow to 1.5 percent in 2012, partly because of the crisis in Europe. And if Congress fails to extend the Social Security tax cut and long-term unemployment benefits this month, growth is likely to slow even further.

Weak job growth means companies don’t have to raise pay to keep their employees. Fewer jobs and lower pay leaves consumers with less money to spend. That’s holding back economic growth.

In the past three months, the economy has added an average of 143,000 net jobs per month. That’s enough to keep up with population growth and better than the previous three months, when the economy averaged just 84,000.

Other recent economic reports have been positive, too.

Factory output expanded last month. Retailers reported a strong start to holiday sales over the Thanksgiving weekend, consumer confidence surged in November to the highest level since July, and Americans’ pay rose in October by the most in seven months.

Car sales also rose sharply in November, normally a lackluster month for the auto industry. Chrysler, Ford, Nissan and Hyundai all reported double-digit gains on Thursday, compared to a year ago.

“I make a critical mass statement,” Tony Goldman said in a telephone interview Tuesday from Miami. “I’m a neighborhood builder, and an investment in one building is not going to do it.”

The chairman and CEO of New York-based Goldman Properties Co. says he is “about 90 days” away from sealing deals that would make that kind of investment statement in Detroit.

Goldman has been an early investor in depressed urban neighborhoods for four decades, and many of those investments have paid off. The areas include New York’s Wall Street Financial District and SoHo neighborhood, the Center City in Philadelphia and, more recently, the warehouse district in Miami’s Wynwood area.

Goldman’s track record shows he tends to buy multiple properties in an area and often focuses on creating restaurants as well as renovating hotels and housing.

Goldman said it’s too soon to name specific downtown property or properties he is targeting. He added that he has not worked out whether he would work with partners in the potential deals.

Among the deals he’s working on is being “a substantial adviser to some high net-worth individuals who understand the momentum that’s going on in Detroit,” Goldman said.

For several months, Goldman said he has been in talks with the Knight Foundation to increase support for arts projects. Rishi Jaitly, Detroit program director for the Knight Foundation, confirmed that the group has had discussions with Goldman.

“We have been introducing Tony to leaders and organizations across Detroit. We are trying to best understand how the Detroit connection intersects with Tony’s interests,” Jaitly said. “He knows how to activate communities by investing in people, art and heritage.”

The Knight Foundation funds media innovation, community engagement and the arts.

Goldman said the potential Knight Foundation collaboration is “much farther along than the other stuff.”

But he added: “What I will say is one of my favorite public spaces is Dequindre Cut.”

The Dequindre Cut Greenway is a 1.5-mile recreational path that links the downtown riverfront at the RiverWalk near William G. Milliken State Park and stretches to Gratiot Avenue near Eastern Market.

Formerly a Grand Trunk Railroad line, the below-street level path is known for its urban artwork and graffiti. The Dequindre link passes near the boarded-up empty buildings that once were a thriving cluster of riverfront bars and restaurants before the city targeted the area to make way for casinos that were ultimately built elsewhere.

Goldman and the Knight Foundation have not yet made a formal offer to the Detroit RiverFrontConservancy, the nonprofit that oversees the public riverfront area and the Dequindre Cut. Goldman took a two-hour tour of the area in May when he first visited Detroit, said Faye Alexander Nelson, the conservancy’s president and CEO.

“Mr. Goldman seemed to be very struck with the potential of the riverfront and the Dequindre Cut, and we would certainly love to look at any proposal he and the Knight Foundation offer,” Nelson said.

The nonprofit Knight Foundation already works with the conservancy, Nelson said.

Knight Foundation’s vice president of arts, Dennis Scholl, is a former developer and longtime friend of Goldman’s. Both were early investors in South Beach, the tourist destination known for its Art Deco architecture, fashion and art.

In 1985, Goldman bought 18 Art Deco buildings in South Beach when it was considered too risky for investment.

Goldman is currently in Miami attending Art Basel, one of the biggest art festivals in the world. Goldman is unveiling a major addition to his Wynwood Walls project — a series of murals created by international artists and located at a former dump that Goldman bought several years ago.

Now he is interested in the Motor City.

“Why wait” to invest in Detroit, he said Tuesday. “I follow my instincts. Now’s the time.”

From The Detroit News: http://detnews.com/article/20111201/BIZ/112010344/Investor-Tony-Goldman-interested-in-Detroit-properties#ixzz1fJOFQdp5

That compares with a drop of 3.6% for the nation’s top 20 largest cities, according to the S&P/Case Shiller National Home Price Index.

The Detroit area and Washington, D.C., were the bright spots in the report for the third month running. The nation’s capital had an annual increase of 1% in home prices.

Home prices, bumping along the bottom for months, fell back to 2003 levels for the national composite in the third quarter.

Metro Detroit home prices were down 0.5% from August, but improving with a seasonal boost as compared with last summer when homebuyer incentives were skewing the data. Metro Detroit home prices are still at 1996 levels, however.

Three cities posted new index lows in September — Atlanta, Las Vegas and Phoenix, according to the data. Prices dropped by 9.8% in Atlanta from a year ago, Las Vegas prices were off by 7.3% and Phoenix was down by 6.5%.

“The plunging collapse of prices seen in 2007-2009 seems to be behind us,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s. “Any chance for a sustained recovery will probably need a stronger economy.”

Dan Elsea, president of brokerage services for Real Estate One in Southfield, said he expects the home price indices to continue showing gains for the local market for the next three months since there is a lag of up to six months in the data. After that, he expects the data to show declines that the market is experiencing now.

“The dip is really a decline in the rate of increase, as opposed to a true decline in sales. With inventories of salable homes so low, we may see a bit of a strange warp where home sales slow a bit, but prices continue to rise as a result of low inventories,” Elsea said.

Elsea noted that inventories are at 2002 levels on paper, but they are actually much lower, since the condition of many homes for sale now is not enticing buyers because properties are distressed or not maintained or updated.

IHS Global Insight still predicts further price declines of between 5%-10% because of the backdrop of more distress. For example, 12.6% of homeowners with mortgages were delinquent or in foreclosure as of Sept. 30, according to the Mortgage Bankers Association.

Most of the employees will be in the parts sector, said experts from the Center for Automotive Research in Ann Arbor, and the majority will be employed in Michigan.

U.S. auto employment is about 590,000 including 130,000 in Michigan, said Kristin Dziczek, the center’s labor expert. Employment will grow to about 756,800 in four years, the center said.

About 52 percent of U.S. autoworkers are in Michigan, which will increase to two-thirds by 2015, Dziczek said in an analysis of the labor agreements between the United Auto Workers and General Motors Co., Ford Motor Co. and Chrysler Group LLC.

The four-year contracts have been lauded for keeping Big Three labor costs competitive with foreign automakers while committing to plants and jobs.

“Overall they held the line on costs and put more money in workers’ pockets,” Dziczek said.

Next year, the center estimates that U.S. auto employment will increase by 60,000.

Dziczek said about 30,000 additional jobs are for GM, Ford and Chrysler, which are expected to employ about 201,000 in the United States in four years, including 135,000 in Michigan.

Suppliers will need about 150,000 workers to handle demand if annual U.S. sales return to 15 million in four years, the center said.

Top suppliers are operating at 90 percent capacity already, and shortages in production are looming, said David Andrea, vice president of the Original Equipment Suppliers Association.

There also will be an increase of 12,000 salaried workers in the industry, but with a twist.

“Salaried labor costs could exceed hourly next year — a real flip-flop,” said Sean McAlinden, CAR’s chief economist.

Detroit’s labor costs — wages and benefits — were $78 an hour on average in 2007, said labor consultant Art Schwartz.

Today, Ford is at $58 an hour in the U.S.; GM, $56; Toyota Motor Corp., $55; Chrysler, $52; Honda Motor Co., $50; Nissan Motor Co., $47; Hyundai Motor Co., $44; and Volkswagen AG, $38, according to CAR’s figures.

Four years from now, those figures won’t edge much higher. The projections are Ford at $61 an hour in total costs; GM, $60; Toyota, $56; Chrysler, $54; Honda, $52; Nissan, $49; Hyundai, $46; and Volkswagen, at $40.

The UAW still wants to organize transplants but President Bob King has yet to pick a target. Past attempts to organize Nissan and Honda plants failed.

King is “still swimming upstream,” Schwartz said.

None of King’s actions in the Big Three talks hurt his efforts to organize a Japanese, German or South Korean automaker, Schwartz said. “He acted statesmanlike,” he said. “The problem is there is nothing he could have done to make himself more attractive to the transplants.”

Sympathy for Japanese automakers hit by earthquake, tsunami and floods eliminated Toyota, Honda and Nissan as targets, Schwartz said.

They were a tough sell anyway with good safety, quality and productivity, leaving little a union can add, he said.

That leaves South Korean and German sites as candidates.

But McAlinden said the Japanese companies, in a downturn for the first time, could benefit from a union. UAW contracts lay out rules for transferring workers between plants and compensation during temporary layoffs.

When GM has a temporary shutdown, workers get unemployment insurance and the company pays about $370 a week to top it up, he said.

Honda and Toyota keep idled workers on the payroll at a cost of about $1,500 a week, said McAlinden. “If they had a union, they wouldn’t be paying that,” he said.

Alissa Priddle, Detroit News

The federal Jobs and Innovation Accelerator Challenge program selected Metro Detroit for $2.1 million in funding from among 146 applications for its potential in alternative energy manufacturing. The program is part of President Barack Obama’s initiative to create clusters of technological growth nationwide.

The Michigan Economic Development Corp. said it will match up to $500,000 of the federal funding with money of its own for the proposed Southeast Michigan Advanced Energy Storage Systems Initiative.

“This isn’t about a fuzzy, wishy-washy initiative,” Gov. Rick Snyder said at a press conference Monday at Next Energy Center, a nonprofit energy consultancy that is part of TechTown at Wayne State University.

Though electric and hybrid vehicles aren’t yet widely popular, the cluster will capitalize on projections for greater demand, Snyder said.

“A lot of it is making a commitment to weather the hard times,” he told The Detroit News.

Next Energy, the Macomb/St. Clair Workforce Development Board and the Michigan Minority Supplier Development Council are heading the initiative, which includes training courses and contractor workshops.

But similar projects around the country have yielded mixed results, said Olav Sorenson, a professor at Yale University’s School of Management. Companies located near competitors usually grow slower and fail at higher rates, he said.

“Concentration can have real costs as well, since it can create a fragile economy with little ability to adapt to the changing world,” Sorenson said.

“For Detroit, these lessons seem particularly poignant.”

Michigan has a competitive advanced battery sector, with more than 35 companies and suppliers for battery systems and electric vehicles, according to the MEDC.

But the alternative energy business has been rocky for at least one company that has received Michigan tax credits. A123 Systems, a Waltham, Mass.-based firm with lithium-ion battery-making plants in Romulus and Livonia, saw its year-to-date loss through September widen 61 percent.

“We have never been profitable,” read the firm’s Nov. 9 quarterly filing with the Securities and Exchange Commission that also said future expenses “will make it harder for us to achieve and maintain future profitability.”

Energy Conversion Devices Inc., the Auburn Hills solar panel maker, also has seen its losses increase. It is trying to sell its battery manufacturing operation.

But the Obama administration sees clean technology and other economic clusters having economic potential. The 20 awards in its program total $37 million in federal grants and are projected to create 4,800 jobs, retain 2,400 jobs, train 4,000 workers and lead to 339 new businesses.

“This is not about the federal government riding into towns and writing plans for communities,” said John Fernandez, U.S. assistant secretary of commerce. “We’re only going to be competitive as a country if our regions are competitive.”

By Jaclyn Tropp, The Detroit News

Crain’s first reported in November 2009 that such language had been crafted by U.S. Sen. Carl Levinto allow the $100 million assembled by a consortium of private investors to act as the federally required local matching funds needed to trigger the release of money from Washington that would pay for the majority of the project.

The $528 million, nine-mile route with 19 stops between downtown and the city limit at Eight Mile Road needs $318 million from the Federal Transit Authority’s New Starts program that’s aimed at partially funding qualified local transit projects such as rail.

The project is being overseen now by the quasi-public Detroit Economic Growth Corp. after Mayor Dave Bing stripped it away from the beleaguered Detroit Department of Transportation. The DEGC already has a relationship with private investors, known as M1 Rail. The agency is contracted by the city to act as staff for a number of authorities — including the Downtown Development Authority, which has committed $9 million to the rail project’s funding through the private investment group.

The M1 Rail consortium of private investors have pledged $100 million in cash and tax credits toward the project’s capital costs.

Its members are deep-pocketed, powerful Detroit advocates with downtown business commitments: Penske Corp. founder Roger Penske, who is chairman of the project; Peter Karmanos Jr., founder of Detroit-based Compuware Corp.; the Ilitch family, owners of the Detroit Tigers, Red Wings and Little Caesar Enterprises Inc.; and Quicken Loans/Rock Financial founder Dan Gilbert, the project’s co-chairman.

The four have committed $3 million each for the display advertising rights to a station along the route. Henry Ford Hospital and Wayne State University also have committed $3 million each for a station. The Troy-based Kresge Foundation has pledged $35 million (part of which already has been spent).

M1′s funding represents nearly half of the $210 million local funding match required to leverage $318 million in Federal Transit Administration money needed to build the system. That’s the plan under the New Starts’ 60-40 match program.

The rest of the local funding match is coming from several sources, including $74 million from the sale of $125 million in Capital Grant Receipts Revenue Bonds by the city; $12 million from previously received federal transportation grants; and $25 million from a federal Transportation Investment Generating Economic Recovery grant.

However, that was the formula proposed by DDOT. It’s unclear if DEGC will modify that plan, which FTA Administrator Peter Rogoff has questioned in recent months. M1 Rail also has pressured the city to satisfy its desires for the rail line’s route and track alignment.

The FTA previously told Crain’s that funding for the project, which the city must still apply for, wouldn’t be requested from Congress until at least 2013. That would not prevent construction from beginning prior to that because the city also has some funding on hand, and could issue bonds against future federal aid. The line is supposed to be running by the end of 2015 or early 2016.

The rail project got its federal environmental regulatory approval in September.

For details on the project, click here.

Bill Shea, Crain’s Detroit

DeNovo, which rents literally just a few square feet of bench space in the Michigan Life Science and Innovation Center, made its first news in June when it won the Great Lakes Entrepreneur’s Questbusiness plan.

In September, it made bigger news with the announcement that Kalyan Handique, a co-founder of HandyLab Inc., a University of Michigan spinoff medical device company that was sold for $275 million in 2009, had invested in the company and joined it as CEO.

The company has created a prototype micro fluidic chip about an inch square that has passed early tests to see if it can capture cells. It hopes to eventually refine the chip so that it can capture and detect cancer cells that are circulating in the blood before they find a landing site in the body and metastasize.

Most cancer deaths are caused by such metastasis.

Winning $150,000 as runner-up was Fusion Coolant Systems Inc., another UM spinoff that recently moved into an incubator for green tech companies that Focus: Hope created in a vacant building on its Detroit campus.

Fusion Coolant has patented a process for using cooled carbon dioxide to lubricate and cool cutting tools used in manufacturing, promising to reduce costs and pollution and increase tool life.

Are You A Human LLC, a company formed by UM students, won the top prize of $25,000 in the student category. The company, which is developing technology that helps verify that users on websites are humans and not automated programs, recently moved into the Madison Building in downtown Detroit and has received funding from the Frankel Commercialization Fund at UM, the First Step Fund in Detroit and Detroit Venture Partners.

Ann Arbor-based NextGen Metabolomics Inc., whose technology analyzes metabolites in the body, won the AARP Encore Award as best company founded by an entrepreneur, Robert Hodgson, who is over 50.

Mike Jandernoa won the Spirit of Michigan Award for his contributions to entrepreneurship. He is the former CEO of Allegan-based Perrigo Co., the dominant maker of over-the-counter drugs in the U.S., a co-founder of the Grand Angels angel investor group in Grand Rapids and founder of Jandernoa Entrepreneurial Mentoring.

The Accelerate Michigan competition is funded by the New Economy Initiative for Southeast Michigan. This year’s contests awarded more than $1 million in prize money, which drew 312 entrants from emerging companies and another 298 from students.

McElroy’s declaration has proven to be true over and over again by the plethora of new auto industry announcements made mid- to late-2011 that are expected to have a notable economic impact in 2012 — and beyond.

Several months after that industry appearance, McElroy spoke to Area Development about the U.S. auto market’s rocketing upwards ride in an uncertain economy that is still wobbling.

“Despite the woes you hear, the meltdown and uncertainty, the auto industry in the United States — and globally — is doing pretty well right now,” he noted. “For whatever reason, sales are decent in the ‘New Normal,’ but nowhere near where they were four years ago. However, Detroit automakers are now profiting due to restructuring. They closed a lot of factories due to the 2008 sales collapse when the credit markets closed. But now, with more competitive labor agreements, it makes sense for them to build more in the United States, retool and refurbish existing plants, and insource work now that labor rates are under control.”

Domestic Automakers on a Roll
For example, in July, GM announced that its powertrain plants in Ohio and Indiana would get the bulk of a $129 million investment. The plants produce transmissions for Buick and Chevrolet models that incorporate eAssist fuel-saving technology. The monies are part of GM’s $2 billion investment in 17 facilities in eight states that are expected to create or retain 4,000 jobs.

GM also broke ground on its $331 million expansion of its Arlington, Texas, assembly plant in October. The facility will make future Chevrolet Tahoes, Suburbans, GMC Yukons, and Cadillac Escalades. When completed, the company could add 100 jobs to the plant’s 2,500-plus positions.

Recently, GM’s CEO Dan Akerson told Automotive News that he predicts flat industrywide U.S. auto sales in 2012. However, he believes the company can continue to be prosperous due to a low break-even point that came about in part by its new UAW labor contract. The newspaper also reported that GM told analysts it can turn a profit at a 10.5 million-unit U.S. sales pace, which is at least 16 percent under the sale volume number Akerson anticipates next year.

And in mid-October, Chrysler reached a tentative labor agreement with the United Auto Workers (UAW). The accord would add 2,100 jobs and includes $4.5 billion of plant investments that, according to the union, will produce new models plus upgraded vehicles and components by 2015. In particular, it has been reported that three plants in southeast Michigan could attract over $1.2 billion in investment and 250 new jobs, in addition to nearly 2,800 jobs retained.

More good news: If the tentative Ford/UAW agreement goes into effect, plans call for the manufacturer to add a third shift — and 1,100 jobs — to its Chicago assembly plant in 2012. Also, over the next four years, 900 jobs are expected to be added to that facility as well as to Ford’s Chicago Heights stamping plant.

The sputtering economy is even supporting a fairly new “green” American car company: McLean, Virginia-based GreenTech Automotive plans to build a Mississippi assembly plant to produce hybrid and electric cars. In August, it announced a joint venture deal allowing it to produce/sell its “green” cars in China. In September, it announced the plant had successfully completed the certification process to export cars to Europe.

Foreign Vehicle Manufacturers Continue to Invest
However, it’s not only American auto manufacturers that are cautiously preparing for the industry to rebound here and abroad. The “new reality” of industry prosperity also extends to foreign vehicle manufacturers with operations in the United States, as well as to countless suppliers to the automakers that reside near them in bulging clusters. The majority of this activity is taking place in two regions: the Midwest and the South/Southwest.

McElroy noted that — for at least a decade — America has been quite an attractive place for foreign companies to manufacture vehicles. Besides providing market proximity, America provides the foreign automakers with “very good infrastructure,” a dollar that has “weakened tremendously” against the yen and other foreign currencies, and a highly trained and motivated work force. That’s why foreign automakers from Europe, Korea, and Japan “have all established operations in the United States — overwhelmingly in right-to-work states…” Clearly, non-American auto/truck manufacturers are finding that “now” is the perfect time to invest in the United States in preparation for anticipated industry growth, sales, and success.

For example, U.S. production of the 2012 Kia Optima began in September at Kia’s manufacturing plant in West Point, Georgia, after the completion of numerous expansions. The company had recently added a third shift that raised the total jobs created at the plant to over 3,000. That same month — after being operational for just a few months — Volkswagen’s Chattanooga, Tennessee, assembly plant announced its 10,000th Passat had rolled off its assembly line.

Toyota said it would begin rolling out its first Corolla vehicles this fall from its new Blue Springs, Mississippi, manufacturing facility — the carmaker’s 10th U.S. plant. It’s estimated the facility will eventually create 2,000 jobs. In September, the company began four-cylinder engine production at its TMMAL (Toyota Motor Manufacturing, Alabama, Inc.) plant in Huntsville, Alabama, where V6 and V8 engines also are made. It was reported that the additional production increased plant employment to almost 1,000 workers and total investment to $637 million. Combined annual production for all three engines will total about 500,000 units.

Recently BMW announced plans to hire 100 new professionals for jobs at its Spartanburg County, South Carolina, facility. BMW expects to increase production capacity there to 240,000 units by 2012. In 2008 the automaker had said it would invest $750 million for a 1.5-million-square-foot expansion and create 500 more jobs on top of its 7,000-person work force. The German company currently supports over 23,000 jobs in South Carolina and generates $1.2 billion annually in wages/salaries. According to a 2008 university study, each BMW job has a multiplier of 4.3, and the company’s economic impact for the state is pegged at $8.88 billion.

And earlier this year, Nissan announced it would create about 300 jobs at its Canton, Ohio, plant for production of its Xterra SUV and Frontier pickup models. Carlos Tavares, chairman of Nissan Americas said that by 2015, 85 percent of Nissan and Infiniti vehicles sold in the Americas would be built on U.S. soil, up from the current 69 percent.

Indeed, ramping up manufacturing capacity is one big trend now seen in the auto industry, pointed out McElroy. And while experts predict more plants will be built in the next decade, McElroy predicts they won’t be proliferating as much as they are now.

Supplier Side Gains Traction
On the supplier side, McElroy said some of those auto-industry companies “are giant, doing tens of billions of dollars in sales with tens of thousands of employees.” Like the automakers, they too have all been doing extremely well.

“A lot of them went out of business in the last downturn or consolidated. But those companies that survived the huge turmoil are in pretty good positions right now,” he explained. “They’re also investing millions into U.S. manufacturing facilities and technical centers. For example, Japanese company Denso and two German supplier firms — Continental and Bosch’s auto division — all have a presence in Detroit as well as in the U.S. South/Southeast.”

The Midwest, in particular, continues to experience a major uptick in investments in auto technical facilities. “In the last decade, Toyota, Nissan, Hyundai, and Kia have put big tech centers in Michigan,” McElroy said. “And despite all the problems in the auto industry, there is no greater collection in the world of automobile people, resources, and facilities than in this state…The Japanese and Koreans all want to tap into that expertise. Honda has huge facilities [nearby] in Ohio and Indiana, for example.”

Also in Indiana, Wieland Designs, Inc. announced last April that it would spend $1 million to expand its operations in Elkhart County and create up to 120 new jobs by 2015. The company manufactures furniture and transportation interior components for the auto industry and other sectors. CTA Acoustics, Inc. of Madison Heights, Michigan, shared its plans to invest $9 million to lease and equip a 93,000-square-foot facility in Orland, Indiana, and create up to 140 jobs by 2014. The new plant will specialize in under-hood and under-dash insulation for the GM truck and SUV lines in Indiana and Michigan.

And Sunright America, a Japanese manufacturer of automotive fasteners, plans to expand its 170,000-square-foot facility in Columbus, Indiana, and add up to 100 jobs by 2014. It primarily manufactures weld nuts and flange nuts, and supplies its products to nearly 80 customers, including Toyota and Hino.

Further east, Honda Transmission Manufacturing of America plans to invest $50 million in a 75,000-square-foot expansion of its Russells Point, Ohio, plant to boost its capacity for casting aluminum transmission cases. The new assembly line is part of a 200,000-square-foot expansion that will increase the plant’s capabilities to manufacture Honda’s latest transmission technologies.

Moving to the south, in August, Delphi Automotive said it would invest about $15 million to upgrade its Brookhaven, Mississippi, facility in preparation of getting new business with an auto client. The company is a leading global supplier of electronics and technologies for the auto industry. Also, manufacturing firm C&F Group of Galway, Ireland, announced that Kingsport, Tennessee, would be the site for its first U.S. facility. The $12.5 million automotive project will create 450 new jobs over a four-year period. C&F makes decorative and functional trim for the automotive industry, among other products.

Also in August, Hitachi Automotive Systems Americas announced that it had chosen Berea, Kentucky, as the site for its third Kentucky manufacturing facility. The new plant will produce electric-drive motors for next-generation hybrid and electric vehicles. When completed, the $74.5 million project in Madison County will create 130 jobs and increase Hitachi’s Berea work force to over 1,070 workers.

And Bridgestone Americas announced it would make a $1.2 billion investment in South Carolina at two plants. Plans call for building a new 1.5 million-square-foot off-road radial tire manufacturing facility in Aiken County, and expanding its existing passenger/light truck tire plant also located in Aiken County.

Sumter County, South Carolina, will be home to Continental Tire the Americas’ new $500 million tire manufacturing plant, which will create 1,700 jobs; and the company is also investing $4 million to expand its Lancaster County, South Carolina, headquarters, a project adding 80 jobs.

By Lisa Bastian, Area Development Online

(If you haven’t, just look to the center of downtown Detroit for the 10-story sign.)

And as the New Jersey-based IT company, which specializes in the healthcare industry, continues its march toward hiring 500 people for its downtown office, Bryan looks to expand the company’s reach in Michigan.

“We’re looking forward to having a significant Michigan footprint, and we will, but we’ll take the fact that most of the work we’re doing is coming from outside because it’s validating exactly what we said the opportunity was (in Detroit),” he said during a keynote speech at the 2012 Michigan Emerging business conference at Cobo Hall in Detroit.

Almost all the work the company does in Detroit comes from outside of the state and country, according to Bryan. He said the business coming to the Motor City truly “validates” the company’s“Outsource to Detroit” model.

Bryan, as he has expressed previously, said Detroit is the most cost-efficient city in the country to do business. He said the double-digit unemployment rate means there is a ready-to-work workforce, as well as cheap office space and some of the world’s top higher education institutes in the world.

“Because this city has undergone some challenges, because there have been some problems here, it means the cost of business is low,” he said. “But it also means the high-quality individuals and people who are willing to be trained or trainable are available for employment and will represent stability and value in the workplace.”

GalaxE.Solutions has about 140 employees in the Detroit office it opened in April 2010 and is looking to hire about 200 workers now.

“We’re very bullish about what’s going on here,” Bryan said after his keynote speech. “We think we really struck gold here in Detroit.

“And we really think Campus Martius-area is going to be a downtown hub for IT and Galaxe is going to play a permanent role right alongside Quicken and Compuware.”

Bryan has twice met with Obama administration officials about how Detroit workers provide a low-cost but high-quality alternative to overseas information technology workers.

The Michigan-based Meijer grocery chain got approval from the Michigan Economic Growth Authority Tuesday to receive tax breaks for a project on the grounds of the old Redford High School at Grand River and McNichols.

Vacant since 2007, the 25-acre former school lot could potentially house a new $33 million superstore.

The $3.3 million tax credit would go towards the cost of demolishing the school building, cleaning the soil and installing new utilities, the Free Press reports.

The Grand Rapids company has not yet committed to any solid plans for the site.
“All Meijer is confirming at this point is that we are very interested in the site, but it’s early in the process and we are still in the due-diligence stage,” said spokesman Frank Guglielmi in an interview with the Detroit News.

The Detroit Public Schools have announced the district was closer to closing a deal with Lormax Stern Detroit Development LLC to sell the old Redford High School property. Lormax Stern will be develop the property for use by the Meijer store.

According to a press release, the district stands to sell the property for $2 million. “Lormax Stern has been making monthly non refundable deposits to DPS since September 2011 and the agreement was additionally subject to finalization of Brownfield and other development incentives that have since been accomplished, including one this weel,” the release said.

DPS Emergency Manager Roy Roberts is quoted saying, “This is a critical opportunity to put surplus property, which once served the community by educating scores of students over many years earlier, to positive use to benefit current and future residents of Detroit in such a key area as retail development.”

The proposed store would feature full retail, grocery, a garden center and a gas station and would create 83 full-time jobs and 208 part-time jobs, according to MEGA briefing papers cited by the Free Press.

Proponents say a new shopping outlet would be a boon to the impoverished Brightmoor neighborhood.

“This is something the residents of this city have been asking for for years,” George Jackson, president of the Detroit Economic Growth Corp., the city’s quasi-public development agency, told theDetroit News.

If constructed, the Brightmoor store would be the second planned venture for the chain in the city of Detroit. Meijer also hopes to set up shop near the former State Fairgrounds on Woodward, but is waiting on a commitment from another developer before it breaks ground on that project, the Detroit News reports.

If completed, the Meijers stores will face competition from a new Whole Foods grocery store planned for Midtown, which might also qualify for up to $4.7 million in state and city tax credits.

And, like Whole Foods, the Grand Rapids retailer may also face criticism for taking tax incentives, when the City of Detroit teeters on the brink of insolvency.

David Sands, The Huffington Post

WHAT TO WATCH FOR

GM’s revenue is likely to be higher than the $34.1 billion it took in during the third quarter of 2010, mainly because global sales are up. The Detroit company sold just under 1.9 million vehicles in China through September, up 7% from a year ago. U.S. sales are up 16% in the same period, to a little more than 1.9 million. GM is continuing to get strong prices for its cars and trucks in the U.S.

GM earned $5.4 billion in the first half of the year, but that included a $1.6 billion first-quarter gain from the sale of its stake in Delphi Automotive, its former auto parts division.

Barclays Capital analyst Brian Johnson is expecting a decent third quarter and said in a note to investors that he sees increased pretax profits in North America “especially in light of tail winds from pricing.”

But he cautioned that Ford saw its third-quarter profit drop because of a $350 million noncash charge due to hedging on commodities like copper and aluminum, for which prices fell. “We would not be surprised to see a similar headwind at GM,” Johnson wrote.

GM is not expected to announce any share buyback program or the timing of when the government will sell its remaining stake in the company, Johnson wrote. GM has said it wants to assess its underfunded pension plans before returning money to shareholders, he wrote. The pension plans were worth about $9 billion less than their obligations at the end of the second quarter.

If GM posts a profit as expected, it will be the company’s seventh-straight quarter of making money. The company emerged from bankruptcy protection in 2009 and needed a $49.5 billion government bailout to survive.

WHY IT MATTERS

GM, although smaller than before its trip through bankruptcy court, still employs 208,000 people worldwide. Its car sales are a major component of the U.S. economy.

Its results also are being watched closely by the U.S. government, which still holds 500 million GM shares that it got as part of the company’s 2009 bailout package. The government needs $26.4 billion to recoup its full investment in GM, meaning GM’s stock would have to sell for roughly $53 per share. Strong earnings could drive up the share price, which closed Friday at $23.61.

EXPECTATIONS

Analysts polled by FactSet expect net income of $1.58 billion, or 92 cents per share, in the third quarter. Excluding special items, they expect 96 cents per share. Revenue is expected to be $35.88 billion.

LAST YEAR

In the same period a year ago, GM earned roughly $2 billion, or $1.20 per share, on revenue of $34.1 billion.

Over the past 12 months (as of the end of October), payroll employment has increased by an average of 125,000 jobs per month. However, the pace is not fast enough to lower the unemployment rate. As a result, we do not expect employment to return to its prior peak until 2016. Overall, employment growth appears to be strong in health care, high tech and energy, but is disappointing in finance, government and construction.

Commercial real estate performance generally lags in economic growth by about four to six quarters. U.S. commercial real estate fundamentals continue their recovery path. Demand for commercial space and net absorption has increased, although general leasing activity slowed moderately during the third quarter of 2011.

In almost all property sectors, occupancy rates are improving, concessions are declining and effective rents are rising in many markets. On the supply side, with vacancy rates relatively high, financing limited and rents below levels necessary to justify new construction, supply pipelines are well below long-term averages. The next three years should see a limited amount of new deliveries, which is a positive for further real estate recovery.

In this slow growth and uneven recovery environment, we forecast modest rent growth going forward.

Among the four core property types, the apartment sector is leading the recovery. Rent growth is strong in virtually all multifamily markets, with half of the markets already exceeding prior peak rents. Demand for class-A apartments in major markets has been robust, prompting investors to look into value-added and secondary markets. Driven by favorable demographic trends, declining homeownership, a limited supply pipeline and attractive GSE financing, the apartment sector is expected to continue to perform well over the next few years.

The industrial sector has lagged in this recovery, but fundamentals are rapidly improving with five consecutive quarters of positive net absorption (a total of 131 million sq. ft.). National vacancy declined from 14.5 percent in 2008 to 13.7 percent as of the third quarter, according to CBRE-Econometric Advisors.

As business inventory, import/export volumes, consumer spending and manufacturing outputs recover, industrial real estate should offer attractive returns over the next several years. Large warehouses (400,000 sq. ft. and larger) have witnessed the greatest space demand to date, and build-to-suit opportunities are on the rise. Bulk demand is expected to pick up in 2012-2015 as global trade continues to expand and U.S. consumption recovers.

The office sector has experienced a faster than expected recovery with 2011 year-to-date rent growth of 2 percent. The top seven CBDs dominate with 36 percent of the total stock, but 77 percent of total absorption. In addition, 82 percent of CBD and 30 percent of suburban markets are showing positive rent growth, while state and local government markets remain weak in general. With muted supply, a strong office recovery is expected in 2013-2015. Major CBDs, which have benefited disproportionally from the government bailouts and the rebound of the high-tech and energy industries, are expected to recover more quickly than most suburban office markets.

American consumers have emerged from the recession better than expected. Solid consumer spending has been a key part of the economic recovery since late 2009. Although the retail sector is still experiencing negative absorption nationally, rent decline is slowing and vacancy is stabilizing at about 11 percent over the past two quarters. We continue to see bifurcation in retail—necessity and high-end retailers doing well, while middle retailers are being squeezed. The National Retail Federation forecasts a modest gain of 2.8 percent for the coming holiday shopping season.

Capital markets remain relatively strong with transaction volume increasing and the sales pipeline expanding. Investor demand is also bifurcated—very strong for high-quality assets in both debt and equity markets, but less so for non-strategic assets/markets. Private core returns have been compressed over the past 18 months, but remain relatively attractive compared to treasuries, corporate bonds, and REITs. While transactions for non-strategic assets in secondary and tertiary markets slowed significantly as some investors hesitated and lenders retreated, class-A assets in primary markets still, by and large, can obtain attractive financing from a wide range of lenders, including life insurers, commercial banks, and foreign institutions.

The 2011 NCREIF Property Index (NPI) total return through Q3 is 10.9 percent. Looking ahead, we are forecasting strong total returns for the NPI index in 2012-2015, driven by both capital appreciation and rising income return. As more investment capital flows into the commercial real estate sector, we expect cap rates will continue to drift downward over the next few years, albeit at a slower pace. While economic uncertainties remain, our view is that the commercial real estate sector will continue to recover along with the U.S. economy. We expect the delivery of new supply to remain at very low levels for at least the next three years, setting the stage for a potentially rapid recovery in commercial property fundamentals when we experience sustained demand growth.