Five Things We Learned This Week At The Michigan Rail Summit

On Monday, Gov. Rick Snyder delivered the keynote address at the inaugural Michigan Rail Summit, an industry conference that examined several topics related to rail transportation in Michigan.

It was a timely speech for Snyder. Last week, he unrolled a major initiative to seek $1 billion for investments in Michigan’s transportation infrastructure. Rail’s portion of that is still to be determined, but Snyder called the rail industry a “lifeline” for Michigan business.

He wasn’t the only speaker at the Rail Summit. Others included John Porcari, the deputy secretary of the U.S. Department of Transportation and Kirk Steudle, the director of the Michigan Department of Transportation, among others.

Here’s five things of interest we learned at the Rail Summit:

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Groupon Goes Public, But Is It Really In Google’s League?

Groupon, the Chicago-based daily discount company, went public today at  a price of $20 a share. (Yes, that only got you one share.)

Groupon CEO Andrew Mason, by Getty Images

Within a few minutes of trading on Nasdaq, the price for Groupon (trading symbol GRPN) had soared to nearly $28 a share, for an overall value of about $18 billion.

That, points out Mashable, would make it the second most valuable technology company to go public since Google did so in 2004. It also gives Groupon a higher value than Xerox, The Gap and Nordstrom’s, according to the Wall Street Journal.

Given Groupon’s tortured path to its initial public offering, Mashable asks, “Is Groupon really worth $18 billion?” You can take its poll here.  Continue reading “Groupon Goes Public, But Is It Really In Google’s League?”

Midwest Memo: Oil Company Buys Detroit Zip Code, Unemployment Rate Declines, Small Growth Ahead For Indiana Economy

Three stories making news across the Midwest today:

1. Marathon Petroleum buys Detroit neighborhood. An oil refinery in Detroit wants to buy all the houses in the entire 48217 zip code as part of an expansion plan. Marathon is offering $50,000 per home to approximately 400 homeowners. The Atlantic writes the move is an unusual one, because the expansion actually won’t be located on the land. It’s more or less a goodwill transaction, in which “the company is essentially saying what few industries or companies will admit: I’m going to be a bad neighbor. I will make you sick.” Zip code 48217 represents one of the most heavily industrialized areas of Detroit.

2. Unemployment rate ever-so-slightly declines. The nation’s unemployment rate ticked down to 9 percent in October, the first time it has fallen since July, the U.S. Labor Department announced today. The nation’s economy added 80,000 jobs and the rate fell one-tenth of a percent from 9.1 percent. Our partner station WBEZ reports economists view the improvement as an encouraging sign, although a survey conducted by financial data provider FactSet showed they had expected a larger gain. The Labor Department also revised data from August and September, and said the economy added 102,000 more jobs in those two months than initially reported.

3. Small growth predicted for Indiana economy. Indiana’s economy is pointed in the right direction, but will not grow at a pace that fixes devastation wrought by the recession. That’s the consensus of a panel of Indiana University economists. They predicted Thursday that in 2012 the state will see a modest unemployment drop, a “slight” uptick in business output and a small gain in payroll, according to the Indianapolis Star. The five-person panel agreed that, like other states, Indiana will largely be at the mercy of national and global conditions. “Our economy is in trouble really, because of a generation of fiscal mismanagement,” associate professor Robert Neal,  a former economist at the Federal Reserve Bank, told the newspaper.

Concentrated Poverty Doubles in Midwestern Cities

CHICAGO – Over the past decade, the Midwest has led the nation in creating the biggest pockets of poverty. That’s the headline from a report from the Brookings Instituition, which was released today.

After a national decline in the 1990s, the population of poverty-stricken neighborhoods rose 30 percent in the last decade. (A poverty-stricken neighborhood is one in which at least 40 percent of the people live below the poverty line. In 2010, that was defined as $22,314 for a family of four.)

In our region, concentrated poverty — meaning people living in these neighborhoods — has doubled. The Great Lakes metropolitan areas of Toledo, Youngstown, Detroit and Dayton have experienced some of the largest increases among all metropolitan areas for concentrated poverty.

The analysis comes from federal data from the 2000 Census and the American Community Surveys from 2005 to 2009.

Changing Gears will be covering this issue in greater depth over the coming weeks. But in the meantime, here’s a video from Brooking summarizing the results. You can read the entire report here.

 

Inform our coverage: How has the shifting landscape of poverty changed your life or attitudes?

Chicago’s Head Tax Will Soon Be History

Last month, we told you about Chicago Mayor Rahm Emanuel’s proposal to eliminate the city’s “head tax” on businesses with 50 or more people. Now, city council has made it official.

Aldermen voted today to cut the tax in half by next July, and eliminate it by mid-2014, according to the Chicago Tribune.

The city charges a tax of $4 per person per month at companies that fall under the definition. The tax generates about $23 million a year in revenue.

Emanuel’s budget plan calls for a number of ways to make up the shortfall, including raising taxes at downtown parking garages and hotels.

“The head tax is a job killer,” Emanuel said in a statement after the vote. He had vowed to win a repeal of the tax during his campaign for mayor earlier this year. Said the mayor: “Eliminating the head tax is the right thing to do for businesses big and small, and it’s the right thing to do to secure Chicago’s future.”

Michigan’s Economy Shows Mixed Signs Of Improvement And Struggles

Some contradictory news emerged on the Michigan economy today.

The state’s economy is recovering from the Great Recession at the second-fastest pace of any state in the country, according to a Bloomberg index that measures the pace of state growth. Only North Dakota outpaced Michigan, which was led by the resurgence of Detroit’s automakers and local manufacturing.

Seventy percent of Michigan employers said they expected the state’s economic outlook would improve over the next 18 months, according to Bloomberg Businessweek, which first reported the results. But the financial magazine also said the improvement reflects the severity of Michigan’s decline – it ranked last in the index through 2010.

Michigan still has formidable challenges ahead. Elsewhere, a report released today by outplacement firm Challenger, Gray & Christmas showed that it ranks as the fourth-highest state or district in number of layoffs to date in 2011. The report said that 29,312 Michigan employees have been laid off so far this year.

Continue reading “Michigan’s Economy Shows Mixed Signs Of Improvement And Struggles”

Midwest Memo: Budget Cuts Concern Chicago Aldermen, Japanese Currency Adjustment Angers Michigan Contingent

Three stories making news across the Midwest today:

1. Chicago aldermen send Emanuel letter. Saying proposed Chicago budget cuts would hurt public safety and quality of life, a majority of the city’s 50 aldermen have called for Mayor Rahm Emanuel to alter his 2012 city budget. Our partner station WBEZ reports that 28 aldermen signed a letter that said the cuts would cause too many layoffs at city libraries, close too many mental health clinics and endanger public safety. Also, the letter stated they have “reservations” about the doubling of fees for city parking stickers for SUVs.

2. Projected layoffs drop across U.S. After planned layoffs across the U.S. hit a 28-month high in September, they dropped 63 percent to 42,759 in October, according to a new report. Government and financial sectors keyed the rebound, said outplacement consulting firm Challenger, Gray & Christmas. But “the two sectors are not out of the woods, by any means,” John Challenger, CEO, tells the Chicago Tribune. Employers have announced a total of 521,823 planned layoffs so far this year, a jump of 16 percent from 2010. The report comes in advance of Friday’s October jobs report from the federal government.

3. Michigan Senator Slams Currency Adjustment. U.S. Senator Debbie Stabenow of Michigan and a trade group that represents Detroit automakers criticized a decision by the Japanese government to lower the value of the yen. “Currency manipulation gives other countries an anti-competitive advantage and directly translates to lost American jobs, especially in Michigan,” Stabenow told the Detroit News. The automotive trade group that the move, the third this year, essentially subsidizes Japanese exports to the United States while weakening U.S. exports to Japan.

EMPTY PLACES: The Economic and Social Cost of Emptiness

This week, Changing Gears kicks off a look at Empty Places across our region. During November, we’ll be looking at empty buildings, empty property — and how we can fill things up again. In the first part of our series, reporter Dustin Dwyer explores the economic and social cost of emptiness. Things may be better in some neighborhoods, he says, but problems still abound.

Vacant homes in Detroit. Photo: Mary's Detroit Photoblog

GRAND RAPIDS, Mich. — There is no one number that tells the story of all the empty houses, storefronts, offices and factories in the Midwest. But there are many numbers that tell part of the story.

Like this: One out of ten. One out of ten homes in Illinois, Indiana, Michigan, Ohio and Wisconsin was vacant in 2010. That’s according to the U.S. Census.

Or these numbers:  Twenty-two percent of office space in the Cleveland area is empty. Chicago offices are 19 percent empty. Metro Detroit: almost 27 percent.

Those numbers are from the real estate firm Grubb & Ellis. Fred Liesveld from the firm’s Detroit office says those numbers have actually been getting better for almost a year. He said of the 27 percent vacancy figure: “We haven’t seen that in a decade. That’s just great news.”

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Midwest Memo: Big Three Report Higher Sales, Toyota Will Export U.S.-Built Siena, Pittsburgh Woos New Residents

Three stories making news across the Midwest today:

1. Big Three sales rise. Detroit automakers posted gains in annual sales Tuesday, although some leaps were not as large as anticipated. Chrysler showed the most significant improvement. Sales of its light vehicles rose 27 percent in October, year over year. Ford sales rose 6 percent overall and General Motors increased 1.7 percent, under expectations of a 5-to-7-percent increase. According to the Detroit Free Press, sales of the 2012 Ford Focus were largely unchanged over the year, but sales fell below the model’s chief competitor, the Chevrolet Cruze.

2. Pittsburgh seeks incoming residents. Upon winning $100,000, reality-show contestant Matt Kennedy Gould once dissed Disney World and proudly declared, “I’m going to Pittsburgh!” He’ll have some company. A promotional arm of the city is offering a $100,000 prize in a contest that aims to woo potential Pittsburgh residents. Officials seek what they call “experienced dreamers,” a euphemism for people 45 and older who are seeking a fresh start in a new city to “realize their dreams.” In New York City, the contest has some appeal. The blog Brokelyn notes, Pittsburgh boasts an unemployment rate below the national average and “the beer is really cheap.”

3. Toyota will export Siena. For the first time, Toyota will begin exporting the Siena from its U.S. assembly plant in Princeton, Ind. Shipments to South Korea are scheduled to begin in November. “We hope to continue boosting exports from our North American operations,” said Yoshimi Inaba, president of Toyota’s North American operations. In a written release, the company said it has exported several models of U.S.-made vehicles since 1988, and that overall, those exports increased 30 percent in 2010 to approximately 100,000 units. Sienna exports to South Korea are forecast at 600 annual units.

The 19 Development Trends That Caused The Recession

As Changing Gears kicks off its look at Empty property and places across the Midwest, here’s an assessment that may help put the problem in perspective.

According to AtlanticCities, 19 types of buildings dominated the post-war landscape, and share the blame for dragging the country into its recession. The list comes from University of Michigan professor Christopher Leinberger, an urban-use strategist.

Photo by Buckeye Impressions via Flickr

They include supermarket anchored strip malls; shopping malls with big stores at the corners; suburban detached starter homes; and self-storage facilities. They’re all designed for suburban communities where driving is required — and don’t suit a nation whose population may be shifting back to cities.

Now, a  number of those places are emptying out, leaving behind headaches for state and local governments. That’s a subject we’ll be exploring in our series, which starts tomorrow. Continue reading “The 19 Development Trends That Caused The Recession”