- The Washington Times - Saturday, January 28, 2006

The hundreds of thousands of people expected to descend on Detroit for Super Bowl XL are a dream for economic development officials in the city and in the state of Michigan. They’re predicting hundreds of millions of dollars in positive effects, and a hastening of broad redevelopment efforts in the city.

But that excitement is set against a backdrop of a local economy that has gone virtually nowhere during the past five years. While Super Bowl organizers boast about money being pumped into southeast Michigan, officials are fighting to reverse nearly a half-decade of job losses brought on largely by the struggling automotive industry.

“Michigan is in an economic crisis. It’s not just a funk,” said Patrick Anderson, principal of Anderson Economic Group in East Lansing, Mich. “It’s a state whose signature industry has had problems and whose government has tread water while other states have been improving their business models.”

Consider: Michigan is expected to experience its sixth straight year of job losses in 2006, according to economists at the University of Michigan. More than 300,000 jobs have left the state since 2001, with another 9,600 expected to be lost this year. In 2005, Michigan was one of only three states to experience a net loss in jobs, and the other two — Louisiana and Mississippi — were ravaged by hurricanes. The unemployment rate in Detroit and Michigan is about 7 percent, compared with less than 5 percent nationally.

The automobile manufacturing industry, long a staple of the Michigan economy, is struggling. General Motors Corp. on Thursday reported a net loss of $8.6 billion for 2005, and Ford Motor Co. announced earlier in the week that it will lay off 30,000 workers. Delphi Corp., the nation’s largest auto parts supplier, filed for bankruptcy in October.

“There’s no question the Michigan economy and Detroit metro economy have been lagging because of continued exposure to the auto sector,” said Dana Johnson, chief economist for Comerica Bank in Detroit.

While no one is predicting that the Super Bowl will fix economic problems statewide, event organizers credit the game with helping to revitalize a once-desolate downtown area.

The awarding of the game helped spur more than $3 billion worth of investment in Detroit’s core, including a $500 million renovation of the city’s waterfront and a $20 million upgrade to Campus Martius Park, near downtown.

The Super Bowl will be played next Sunday in Ford Field, a new domed facility in downtown. Blocks away, the Tigers play in Comerica Park, a baseball-only facility that opened in 2000. The game itself will bring in $302 million in spending, $124 million in income and 5,560 jobs, according to a study performed by Lawrence Technological University in Southfield, Mich., at the request of the Super Bowl XL Host Committee.

“It’s difficult to overstate the impact this has had on the community,” said Matt Cullen, a general manager with GM and chairman of the Detroit Metro Convention and Visitors Bureau. “We’ve taken on tons of projects in downtown that might not have been done otherwise. It’s created a big spin-off of retail activities.”

During Super Bowl weekend, organizers hope to attract visitors to the “Motown Winter Blast,” which will feature a series of entertainment zones with ice skating, dog sledding and a 200-foot snow slide. By embracing the winter, organizers are taking head-on a hurdle that promoters in previous Super Bowl cities didn’t face: persuading fans to walk the streets and spend money while temperatures dip below freezing.

But their projections for economic effects have been met with skepticism.

Mr. Anderson said the city’s figures are optimistic at best — and at worst, completely bogus. He said the projection failed to consider that many area residents will avoid the city altogether during the Super Bowl, and did not include many costs associated with holding the event. He also criticized organizers for touting the figure without publishing a full analysis of the findings.

“It seems like there’s no semblance of support for these numbers,” Mr. Anderson said. “They’re escalating these numbers into the stratosphere.”

Mr. Anderson pegged the economic effects at between $20 million and $40 million, which he conceded is still a significant figure. The larger unknown, however, is whether any of the money pumped in by the Super Bowl can flip the economic prospects for the city and state.

“An event of this magnitude — and it is enormous — will have some significant impact on southeast Michigan,” said George Fulton, an economist at the University of Michigan. “The big question is whether it will have any long-term impact on this economy that’s been battered.”

To many observers, it will come down to how Detroit and Michigan are portrayed during the game, which will be broadcast to nearly 1 billion people worldwide.

“The image of Detroit and the image of Michigan are closely linked,” said George Zimmerman, a senior vice president with the Michigan Economic Development Corp. “If the Super Bowl is as successful as we think it can be, it will be a catalyst for a shift in the image of Michigan.”

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