July 06, 2024

How Ford Motor Company is reshaping Detroit into the next great tech hub

For decades, the once-elegant Michigan Central train station loomed, abandoned and decaying, over Detroit’s oldest neighborhood. The Beaux Arts beauty opened in 1913 at the height of Detroit economic and industrial power. 

But public transportation was never big in the Motor City, and Detroit’s economic woes meant increasingly lighter traffic through the palatial station. The last train departed Michigan Central in 1988. As the building was left to molder, it became an international signifier of Detroit blight, the romanticized icon of the city’s former but faded glory.

All that changed on June 6, 2024, when the new Michigan Central opened to the public with a massive, star-studded concert that drew tens of thousands of jubilant Detroiters to the newly refurbished building. After more than 40 years of neglect, Michigan Central is now the 30-acre site of Ford Motor Company’s ambitious new mobility campus. With buy-in from large companies like Google and new models for talent growth like venture platform Newlab, the new campus might just be Detroit’s chance to rewrite the playbook for how Midwestern cities can attract top tech talent. 

The city’s new “microeconomy,” centered around the Michigan Central campus, isn’t looking to be the next Silicon Valley. Instead, business and civic leaders are banking on Detroit’s long history as a hub of innovation to build a new kind of industry that has the potential to dramatically alter the neighborhood’s—and greater Detroit’s—outlook. 

Once-Sleepy Neighborhoods, Revived

The neighborhoods surrounding Michigan Central are home to some of the city’s most vibrant and diverse populations. Corktown, the oldest neighborhood in Detroit, was established by Irish immigrants fleeing famine in their home country in the 1840s. It remains one of the few remaining intact Victorian neighborhoods in the city. Nearby Southwest Detroit boats a vibrant Mexican-American community. 

As with much of the rest of the city, Corktown and Southwest Detroit residents were hit hard by the Great Recession: Michigan experienced the highest unemployment during the recession in October 2009, at 15.3%. But both neighborhoods showed early signs of recovery. By the mid-2010s, Michigan Avenue in Corktown became a locus for bars and restaurants as younger residents moved in. When Matt Buskard opened his restaurant Bobcat Bonnie’s in 2015, he says it was a different time in Corktown. “The idea that Ford would buy [the train station] and make it what it is now, people would have said, ‘That’ll never happen,’” says Buskard. On the night of The Concert at Michigan Central, Bobcat Bonnie’s sales were up 300% over the previous week’s as visitors streamed into Corktown to see Jack White, Diana Ross, and Eminem perform in front of the old train station. Since then, his business has continued to boom. “It’s like a shot in the arm,” he says, with the following weekend netting Bobcat Bonnie’s double its usual summer weekend sales numbers.

Tipping the Scales

At the center of Detroit’s industrial heritage has always been automotive manufacturing. With its history of automotive entrepreneurship, paired with a relatively low cost of living, Detroit began to attract startups in larger numbers after the recession, and gradually built steam. In 2022, Startup Genome’s 2022 Global Startup Ecosystem Report ranked the city as the number one emerging startup scene globally. 

A crucial component in the mobility campus is Newlab Detroit’s presence in the former Detroit Public Schools book depository, which is tucked behind the looming train station. Open just over a year, Newlab now hosts 100 member companies from all around the world. These startups, 40% of which are from outside the state or the country, have injected fresh energy into Corktown. Combined, Ford and other companies in the area  are expected to create 5,000 new jobs by 2028. Newlab Detroit’s member companies have collectively raised $ 616 million in venture capital—equal to half of all the venture capital raised in Michigan in 2022.

That’s just the beginning, says Mark de la Vergne, director of economic innovation and policy at Michigan Central. “We don’t look at this as a linear growth,” he says. “We look at this as an exponential growth.” Michigan Central and Newlab are focused on recruiting hard tech companies in need of comprehensive support for manufacturing and logistics. “We’re focusing on very early stage companies,” says de la Vergne. “For them, $ 20,000 or $ 50,000 matters a lot. That will help them move the company here and tip the scales.” Such a small investment from a venture capitalist or in the form of high-tech equipment has a large impact for these small businesses, he says. 

De la Vergne relies on Michigan Central’s relationships with existing startups in Detroit to spread the word. “Word of mouth from entrepreneurs,” he says, is crucial. “One company here called Bloom was focusing on integrating micro mobility supply chain and essentially building the supply chain for that industry here in Detroit. [Now] they’re out grabbing companies from Brooklyn nonstop right now” to bring them to Michigan Central. 

Michigan Central relies on partnerships with universities like Wayne State, the University of Michigan, and the University of Michigan Center for Innovation, as well as Detroit incubator Tech Town, to “build the community and programming that’s going to be be necessary to make this a great place for entrepreneurs to succeed,” says de la Vergne.

These very early stage mobility companies benefit from Detroit’s fast-tracking policy on innovative new projects located in the Transportation Innovation Zone, which is centered around the train station building. The City of Detroit’s Office of Mobility Innovation first introduced the zone in 2023 to expedite the permitting process for transit technology trials. So far, the office has issued permits for pilots for a crossing guard robot, a computer-vision-based sensor that monitors vehicle and pedestrian traffic, an air quality monitor, and an autonomous food waste pickup system. 

Partners in an economic ecosystem

The public-private partnerships that helped shape the Michigan Central campus extend beyond the 30-acre footprint. Galvanized by the mid-2000s boom of restaurants and retail in Corktown and nearby neighborhood Southwest Detroit, more and more businesses are looking to become part of the mobility corridor’s vibrant scene. “It’s this entire ecosystem beginning to work together to build the community and programming,” says de la Vergne, “that’s going to be necessary to make this a great place for entrepreneurs to succeed.” 

Since 2018, Ford and Michigan Central have held a series of community outreach events, and have kept an active social and traditional media campaign to engage residents of the neighborhoods and greater Detroit in the progress and plans for the campus. That’s an approach that the leadership of Detroit’s Division II soccer league, Detroit City FC, is taking, as well. Just three blocks west of the train station in Southwest Detroit, DCFC announced on May 16 that it had acquired the 5.5-acre site of an abandoned hospital to build its new USL Championship League stadium. 

At a May 20 meeting to DCFC’s fans and faithful, co-owners Sean Mann, Todd Kropp and Alex Wright stressed their community ties. All three are longtime residents of Corktown or Southwest Detroit. COO Todd Kropp stressed their dedication to helming a stadium project with community input that is “executable, attainable” and “on a scale that makes sense for this site in this neighborhood.” 

By June 6, the buzz around Michigan Central’s first stage of activation was electric. At nearby restaurant Alpino, owner David Richter noticed the change in the neighborhood even from a year ago, when he first opened his restaurant. “Fifty to seventy percent of the folks in the room were going down the street to the concert,” he says. Since then, his walk-in traffic has increased steadily, to the point where he’s frequently fully booked even on a Monday or a Tuesday. 

That’s not every week, of course, but Richter has seen a marked increase in business in the weeks since Michigan Central had its concert and began offering public tours of the station. “If you walk around on a Monday, it still feels like the same old Corktown,” he says, “kind of quiet and sleepy, but on the weekends, it comes alive.” Richter has also seen a solid uptick in reservations for corporate groups—not just Ford Motor Company, but from companies all around Detroit and other parts of the country, in town for meetings. 

Detroit is the next Detroit

Every few years, a new splashy article touts Detroit as “the next Silicon Valley.” Software entrepreneur Brian Mulloy affectionately begs to differ. Born and raised in metro Detroit, he spent 12 years in Silicon Valley and founded the data company Swivel before he returned to his roots in 2011.

Since then, he’s quietly assembled a tidy corner of real estate just a few blocks from the Ford campus and right across the street from Alpino. Ballet Real Estate has completed three historic renovations and three new builds, combining retail, restaurant, office and residential space. Mulloy sees an opportunity to “monetize the hype” around the historic train station’s reopening. “We’ve seen a lightwave of visitors to Corktown” since the 2018 announcement, he says. 

Still, he doesn’t quite buy the “next Silicon Valley” title. “Detroit doesn’t need to be the next Silicon Valley,” Mulloy says. “We just need to have a nice little healthy business ecosystem, with capital flowing in and value being created. I think that is totally possible.” 

De la Vergne doesn’t buy the Silicon Valley comparisons either, or the “Detroit is the new Brooklyn” hype from a few years back. “It’s not a zero-sum game,” says de la Vergne. “The idea is to grow the pie. Detroit is the next Detroit.”

(7)