The list of development successes in Detroit has increased in recent years, with particular attention being paid to the 1.4-square miles of downtown. New retail, apartments and sports complexes have been built or revitalized, bringing clout to those developers who got the job done. But Dave Blaszkiewicz knows Detroit is nothing without its neighborhoods. "I feel like we've got great momentum in the Midtown, downtown areas with the stadiums and arenas, really placing themselves there on a permanent basis." he said "But Detroit is built on its neighborhoods, and if we can't stabilize those we're not going to be long for the world." Blaszkiewicz is President and CEO of Invest Detroit, a major player in Detroit development, providing financing to a host of projects around the city. The organization earlier this month received its largest-ever award, $50 million in New Markets Tax Credit funds from the U.S. Department of the Treasury's Community Development Financial Institutions Fund. And even though he has his hands in just about every new development in Detroit, Blaszkiewicz will always count Invest Detroit's efforts in the city's 10 Strategic Neighborhood Fund Zones among the work he is most proud of. And there's a reason why these areas get the focus over others. "I wish we could create a template where we just go from place to place. But the reality is each one is different," Blaszkiewicz said. "We look for what we would call tipping neighborhoods: these are the neighborhoods that are right on the bubble where if we put our shoulders into them we can get them to tip in the right direction." New Markets Tax Credits are targeted at low-income areas and geared toward bringing investment into things like new real estate development and businesses. The program was authorized by Congress in 2000 and is currently allowed to dole out $91 billion through the end of 2025, according to the Congressional Research Service. Typically, in a leveraged structure, an investor like a bank or other financial institution combines both a loan and equity into a fund it majority controls that then invests that capital in what's known as a community development entity — in this case, Invest Detroit. In exchange, the investor-controlled fund receives tax credits totaling 39 percent of their total investment applied against their federal income taxes over seven years: 5 percent of the investment for the first three years, and 6 percent the remaining four years. The CDE then takes that capital and invests it, either as equity or a loan, in real estate projects and businesses in low-income areas. Invest Detroit says that it has received $163 million in NMTC allocations since 2009, which have gone to 16 projects in Detroit. As for what's next, Blaszkiewicz says he believes the most significant project on the horizon in Detroit is the 27.5-mile Joe Louis Greenway. The recreational pathway of biking and walking trails will connect 23 neighborhoods in the city to the Dequindre Cut, Detroit Riverfront, Highland Park, Dearborn and Hamtramck. Named after the legendary Detroit boxer Joe Louis, the transformational pathway was first envisioned in 2007 and is estimated to cost $240 million to complete. "This is much more than a bike path. This is an opportunity to leverage public spaces across the city...Having the attention on a targeted geography is always a benefit because it gets everybody focused around particular areas," he said. "I can go back to things like the Super Bowl, the lower Woodward strategy, transit-oriented development strategy, all things that got folks focused around targeted geographies and development. Everybody kind of brought their own pieces to the table and helped to lift up Midtown and Downtown over the years. We're trying to take on the same approach in the neighborhoods today, and I think Joe Louis Greenway is the next opportunity going forward."
1:03 - His ambitions for Invest Detroit
2:05 - What he plans to do with the New Markets Tax Credits Invest Detroit was just awarded.
A breakdown of the episode:
5:45 - How the changing economic environment impacts his organization
7:45 - Why he’s concerned about the future of commercial real estate in the next few years
9:30 - Where the next wave of investor interest will be in Detroit
13:35 - How Invest Detroit is expanding in target neighborhoods
15:30 - When he would get involved on the developer side of commercial real estate
16:45 - Why Invest Detroit created the Ebiara fund
18:55 - What development tools does he wish were accessible in Michigan that aren’t yet
21:10 - Why he supports reform on tax policy
24:10 - How has development financing changed in the last decade
30:30 - His biggest failure in business and how he overcame it