Guest Blogger: The Private Sector Case for Aerotropolis

In 2007, Wayne County CEO Robert Ficano asked me to co-chair the Aerotropolis Task Force, a group of public and private stakeholders dedicated to the idea of economic development around Detroit Metro and Willow Run airports. Having witnessed the power of airport-oriented developments around the world, and recognizing that our airports were under-utilized, I was instantly sold on the idea of advancing the Aerotropolis concept here in Metro Detroit.

Then in early 2008, I participated in a fact-finding mission to Louisville, KY, home of UPS WorldPort. Each night, UPS lands more than 150 planes at WorldPort, sorts hundreds of thousands of packages, and then reloads these packages on planes for delivery the next morning. UPS alone has created more than 20,000 jobs in just their small parcel business, yet the simple presence of UPS has attracted hundreds of additional companies to the airport region – companies that utilize UPS to deliver their time-sensitive goods to the market. The demand for just-in-time delivery of goods led UPS to establish a supply-chain campus just south of the airport where companies including Toshiba and Ikon as well as major pharmaceutical companies service their customers. In total, the presence of UPS at Louisville's airport has created close to 50,000 jobs for the residents of Greater Louisville and, through a partnership with the State of Kentucky, these jobs have helped retain young people in the region, leading to the creation of a vibrant downtown in what could have been a dying rustbelt city.

Now, we cannot expect a company like UPS or FedEx to just pick up and move their headquarters to Michigan. But it is not unrealistic for another major company or several smaller companies to establish Detroit as a regional hub for air cargo operations. We are strategically positioned on the North American trade corridor, right next door to Canada, and accessible to the St. Lawrence Seaway. Unlike Louisville, our airport has direct flights to over 20 international destinations, an additional advantage in attracting international trade. All of the pieces are in place for our region to transform itself into a major hub for air commerce, so why hasn't this taken place already?

Well, we are at somewhat of a disadvantage in terms of our geographic location in relation to the U.S. market. Louisville and Memphis are more centrally located in the U.S., so they can access markets both in the south and the Midwest. Yet we sit halfway between the third largest city in the U.S. (Chicago) and Canada's largest city (Toronto), so we do occupy a strategic position for capturing trade.

The real reason why our Aerotropolis has taken time to develop is a lack of willpower by our leadership in Lansing. Our leaders have created a business tax environment that has acted to discourage the evolution of small and medium-sized businesses. Competition between cities, counties, and regions has created a perception that we are not on the same page when it comes to creating jobs in Michigan. Management and labor have failed to reach a consensus on the need to create jobs, even while our State suffers from the highest rate of unemployment in the country. We must resolve these issues internally if we are to change the outside perception that Michigan is a tough place to do business.

If there is any good news that has come out of this it is that we are at a crisis point and the pressure on our elected officials to act has never been greater. The Aerotropolis partners have introduced legislation in Lansing called the Next Michigan Development Act that is designed to advance regional projects like the Detroit Region Aerotropolis. This legislation would create the necessary incentives to attract companies like UPS and FedEx as well as other companies that are dependent upon freight forwarders to deliver their goods to the market quickly. Incentives were crucial to the expansion of UPS WorldPort, not once, not twice, but three times during the past 25 years. We must put ourselves in a position to compete and make the business case for outside businesses to establish themselves in Michigan.

Regardless of your party affiliation or where you live, I ask our citizens to support the Aerotropolis and the Next Michigan Development Act. Our airport is a regional and State asset, and it is time for our leaders in Lansing to act on a project that promises to create jobs - not a few jobs, but tens-of-thousands of jobs for Michigan.

John Rakolta Jr. is chairman and CEO of the Walbridge Company, an international full-service engineering and construction company founded in 1916 in Detroit, Michigan. Active within the metro Detroit community he serves as chairman of New Detroit, the non-profit race-relations group, the Detroit Police Foundation and is a member of the board of directors for Business Leaders for Michigan, Southeast Michigan Community Foundation and Munder Mutual Funds. He is involved in politics on a national level and currently serves as Honorary General Consul for Romania.