Post-emergency management, Pontiac sowing seeds of revival


In 2009, the city of Pontiac was broke. In fact, the situation was worse than that -- the city was millions of dollars in debt. Population had been declining for years, and Pontiac's largest employer, General Motors, had just closed its assembly plant on Opdyke Road.

In March of that year, the city entered a lengthy period of oversight by the state of Michigan when Gov. Jennifer Granholm appointed Pontiac's first emergency manager. Two others would follow. The last and most proactive, Louis Schimmel, was appointed by Gov. Rick Snyder in 2011.

Schimmel brought Pontiac back to solvency, and did so, controversially, by making full use of the powers granted to him under a new Emergency Financial Manager law (Public Act 436) signed by Snyder in 2012. Schimmel reduced the number of city employees from around 500 to 21, disbanded the Pontiac Police Department and outsourced public safety to the Oakland County Sheriff's Department, merged the city's fire department with neighboring Waterford's, and privatized public works, trash collection, and other services. Some of these departments still work out of city hall, despite being privately operated.

The zeal with which Schimmel attempted to correct Pontiac's finances met plenty of resistance, especially in the debate over pension benefits to former city employees. It did, however, succeed in its primary aim of creating a budget surplus.

Not everyone agreed with these tactics, but Pontiac's current leaders aren't dwelling on the past. Empowered by a balanced budget and entrepreneurs' growing interest in the historic city, they're ready to move forward.

In August of this year, Pontiac held a ribbon cutting ceremony for 16 new downtown businesses. Several of those, including Alley Cat Cafe and Mad Cow Custom Leather, are located in buildings recently purchased and renovated by the commercial real estate firm Core Partners.

"I'm very bullish on Pontiac's future," says Core Partners vice president Bob Waun. In addition to the millions of dollars his firm has invested in these buildings, Waun and his family moved from Birmingham to Pontiac. "This is a chance to help remake a great American city into its potential."

West Construction Services, a contracting firm, has also been active downtown, redeveloping the former Sears, Roebuck & Co. department store into Lafayette Market and Lofts. Recently they've partnered with Slows BarBQ on a nearly $20 million renovation of the Strand Theatre, which is set to reopen in 2016.

"There's a bunch of reasons why we're excited about Pontiac," says Kyle Westberg, co-owner of West Construction. Westberg cites newer developments like the city's more secure fiscal situation and the drastically improved police response time since the county takeover, alongside inherent advantages like its historic building stock and location in the heart of Oakland County. "When you have foundational pieces like that to build off, all you're gonna do is grow."

There's been a number of other signs suggesting an economic turnaround is underway. GM invested $200 million in its Powertrain facility, a $180 million mixed-use development planned the site of the failed Bloomfield Park development was announced in April, and St. Joseph Mercy Hospital is investing $41 million in facility upgrades.

Things are even looking up for the Phoenix Center, one of the most conspicuous symbols of Pontiac's struggles. The event plaza and its parking deck is maintained by the city at considerable cost, but government leaders and even Schimmel, who at one point advocated for its demolition, are now saying the city can afford to preserve it.

Challenges remain

While things are looking up for Oakland County's central city, there's still plenty of uncertainty accompanying the signs of recovery.

For one, the Pontiac's government is far from having returned to regular operations, existing in a state of post-emergency management limbo. As one of his last orders before leaving office, Schimmel created the position of city administrator, who is "responsible for day-to-day operations of the city," and appointed his longtime assistant Joseph Sobota to that post. The city administrator also reports to the Transition Advisory Board, a feature of Public Act 436 that oversees and ultimately approves budgetary measures of a local municipality in a state of transition. One of the board's four members is Louis Schimmel.

Deirdre Waterman, mayor of PontiacThis has left Mayor Deirdre Waterman, who took office mere months after Schimmel's departure, in a slightly uncomfortable position. "The city administrator has essentially been given the same authority as the financial manager," says Waterman. "That's problematic for me as mayor."

Moreover, there are no clear benchmarks in either Public Act 436 or Schimmel's final order for returning complete autonomy to Pontiac's elected officials. "It's like trying to play a football game without knowing where goalposts are," says Waterman.

City Administrator Sobota says he needs to see progress in a couple crucial areas for him to step down, including the conclusion of litigation over the cancellation of medical benefits for former city employees, which he thinks the city has mismanaged. "It's important residents know that the way out of receivership is clearly within the hands of the mayor and city council," says Sobota. "There is a plan that has been presented to them that will solve various suits and it's up to them whether to accept it or not."

That said, he thinks the city is in a considerably stronger position than it was prior to emergency management, and that the powers granted by Public Act 436 are largely responsible for this. "When [Louis Schimmel] left we had a two-year balanced budget, eliminated the most litigious departments from city, and were only closing lawsuits instead of fighting new ones," he says. "We have positioned Pontiac to be successful."

Nonetheless, Waterman is poised to take over her normal duties as mayor thanks to a revenue surplus of nearly $11 million that exceeded the state treasury's objective of 15 percent of the total budget. A 2015 report by the Transition Advisory Board stated that, "the working relationship between the Board and Mayor Waterman has...greatly improved and the mayor's confidence and decisiveness continues to grow during her first term in office."

Raised expectations

Because a significant amount of power still rests outside the hands of elected officials, it's fortunate Pontiac has a proactive grassroots organizer in Pastor Douglas Jones of Welcome Missionary Baptist Church. He helped start the Committee of 50, a group composed of representatives of a wide variety of community organizations, around 2003 to get politicians and business leaders to acknowledge the concerns of residents.

Pastor Jones had Schimmel visit his church to have a dialogue with the committee. "Did we agree with [Louis Schimmel] on everything? No," says Jones. "But we challenged him. The voice of the people was heard.

Schimmel and others couldn't ignore the citizens of Pontiac during those gatherings. "Some of the meetings were very heated," Jones says, "but I figured if we held the meeting at a church, people couldn't get too angry and cuss at each other."

One major issue that all parties are working to change is the perception in the county of Pontiac as a place of high crime and low economic opportunity. But advocates are doing what they can to get the word out. "We try to shout from the rooftops that we have a safe downtown," says Westberg. "If you look at crimestats, you'll find that ours is the safest in all of Oakland County."

"Our police response time is down to minutes," says Jones. "The number of unsolved crimes is negligible. Unfortunately the mistaken image that people still have of Pontiac is hampering development, but those who come and visit see that change has occurred."

Much of this prejudice can be explained by mistrust and, arguably, racism. Pontiac is the second largest majority African-American city in Oakland County. "To not talk about race with regards to Pontiac is naive," says Waun. "That needs to be plainly said on both sides."

But through outreach efforts by the Committee of 50 and investors like Waun and Westberg touting the improved business atmosphere, perception is changing. "We've seen a shift in the feelings of the community that says we can bridge this gap by being more inclusive," says Jones. "People have long memories, but what was then is not now."

As Pontiac closes one of the darkest chapters in its history, city leaders have gone beyond hope -- they expect progress. This remarkable change of attitude happened in a mere two years. "We didn't get a grand bargain like Detroit," says Waterman, referring to the hundreds of millions of dollars raised by foundations to save many of Detroit's assets during its bankruptcy. "Instead we're developing own champions and supporters. We're a city that's been through a painful period, but emerging much stronger for it."

Aaron Mondry is a Detroit-based freelance writer. Follow him on Twitter @aaronmondry.

Photos by David Lewinski Photography.
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