The most visible and commanding element of Detroit’s riverfront skyline is a tubular 73-story hotel girded by four squarish 39-story office towers, all gleaming with mirrored glass. It’s called the Renaissance Center, or RenCen, but the logo at the top of the complex is “GM” – identifying it as home and world headquarters to the immensely troubled General Motors Corp.
So when GM CEO Fritz Henderson raised the possibility Monday that the giant automaker could vacate the structure and move to the suburbs, joining Ford and Chrysler as absentee figureheads of the Motor City, it raised the threat of both real and symbolic devastation for Detroit.
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Henderson, who made his comments during a press teleconference, took pains to stress that GM doesn’t “have any such plans,” at least as he spoke. Then he added the hook: “But if we did, it would be motivated by business rationale, which would be cost, efficiency and speed.
Renaissance Center
“We’re looking at, frankly, everything within our business, but it’s not like we have that queued up at the top of our list. But as we look at the structure, look at the business, we’re looking at everything.”
Having posted yet another astronomical quarterly loss – $6 billion for the first three months of 2009 – and already operating on more than $15 billion in federal loans, GM has until June 1 to come up with a restructuring plan that meets the approval of the Obama administration.
If that includes a move out of the RenCen as part of those cost-cutting measures, it will take some 4,300 white-collar workers off Detroit income tax rolls and potentially leave yet another vacant office structure in the city’s downtown, which already has a reported vacancy rate of 30 percent. GM also pays the city about $6 million in property taxes.
Mayor Jim Fouts of the blue-collar suburb Warren – Michigan’s third largest city, which borders Detroit on the north and has been home to GM’s one-square-mile Tech Center since 1955 – raised civic hackles last week when he suggested relocating the corporate headquarters to his city as a cost-cutting move. He pointedly dangled a carrot of no city income taxes, “unlike our sister city to the south.”
Fouts told the Detroit Free Press that he brought it up during a private meeting with Ed Montgomery, Obama’s point man in recovery assistance for autoworkers and their communities, and Michigan Gov. Jennifer Granholm.
Detroit’s brand-new mayor, Dave Bing – who is already tasked with finding solutions for his city’s 20-plus percent unemployment, vast residential ruin and commercial blight, multimillion-dollar deficits, epidemic crime, and enough municipal corruption to keep the FBI scurrying in an ongoing investigation – called the possibility of a GM decampment “absolutely horrendous.”
The RenCen had been shopped unsuccessfully for two years when GM bought it for $73 million in 1996, later borrowing $500 million to reconfigure the maze-like interior design that had always frustrated visitors, and to remove massive concrete berms outside the structure that effectively cut off its entrance from the rest of downtown and gave it the feel of a well-defended citadel.
When the complex opened in 1977, it was at an announced cost of $340 million and was the largest private construction project in Michigan history, financed by an alliance between 51 local companies, led by Henry Ford II.
A public contest was held to give it a fitting name, and the winner was Renaissance Center, symbolizing a rebirth that, in more than 30 years since, has never come to Detroit.
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