Rod Lockwood - Could a Freedom City save Detroit?

A Michigan developer wants to transform Detroit’s Belle Isle into a privately funded special economic zone with its own tax structure, governance model, and economic rules. Could a Freedom City attract investment and revive one of America’s most challenged urban areas?

Rod Lockwood is a developer and former chairman of the Michigan Chamber of Commerce board. He joins the show to discuss his proposal to turn Belle Isle into a special economic zone, why he believes lower taxes and fewer regulations could attract residents and businesses, and whether the Freedom City concept could become a model for urban revitalization across America.

Transcript

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Welcome back to the Lars Larson Show. It's a pleasure to be with you. I've been looking forward to this interview for a while. Rod Lockwood is a developer and former chair of the Michigan Chamber of Commerce bo uh board. Uh Mr. Lockwood, welcome to the program. Well, thank you for having me, Lars. So you want to turn, if I'm pronouncing it right, Belle Isle, which is a neglected island in the Detroit River, into a special economic zone, and then have a bunch of private investors bring in private money and to turn the thing into a jewel right next to Detroit. Is that about right? Uh yeah, you got it right. It would be um the first special economic zone in the United States, and uh uh it would serve uh two purposes, uh two primary purposes. One it would uh definitely save Detroit by having uh this uh magnet for capital within the stones through the mainlands. And the other, it would serve as an example for uh the rest of the country is what could be done if you have the right uh taxation regulatory system. Now, what it when it would have a low tax, low regulation city. So it'd be kind of a laissez-faire city, right? Uh yes. The uh tax uh arrangement which is being proposed is to uh align well, you might say align with human incentives and characteristics. Uh if you if uh one wants to incentivize work, don't tax income. Yep. If you want to incentivize investment, don't tax investment. So those are the two basic parameters. Uh there is a taxation that uh the island would have uh which would produce actually some excess revenue to be shared with Detroit and with Michigan. Oh, so the a little bit of a cash cow. That one makes me a little queasy, Mr. Lockwood. But if you said Well, just because if you had if you said we're gonna have enough taxes to pay for the absolutely necessary government services, but anything, and I realize I'm dating myself by saying anything you can find in the yellow pages, government will not do. Uh we're only gonna do the things you can't find in the yellow pages. We'll we'll do policing, we'll take care of the streets, we'll make sure the street lights turned on, uh, we'll maybe ha make minimal public parks, but basically everything else can be done by the private sector. The city will only have the services that are absolutely necessary for a city and not all this DEI garbage and everything else that consumes all these other resources. Does that seem fair? Yeah, that that is uh essentially uh essentially correct. Uh one of the uh call novel taxation aspects of uh of the proposed Bell Isle is to have a um a land taxation tax, and land taxation, land taxation only, as opposed to taxing the uh land plus building in front of us. And the idea there again is to align with human nature and human incentives, and if you want to encourage people to build on their land, then don't tax the uh the building. Uh the uh service that the uh government provides is basically to uh have safe streets, safe, clean streets, and so forth, and it gives brings a value to the land only. So that would be one of the bases of the taxation system. Okay, so if I have if I have not an in in a downtown, not an acre, but if I had a you know standard city-sized block in Belle Isle and I build a a 20-story building on it, I I pay the same taxes as the guy or gal on the block next to me who has the same block but only builds a three-story building on it. The the taxes are just on the land, not on the improvements, right? Exact yes, exactly. Yes. Now you're the situation that you uh outlined is probably is improbable. There would be uh higher density areas and lower density areas on that one. That one's about uh a little bit less than a thousand acres, it's quite small. Oh, it would have enough to have a downtown plus uh you know more outside areas. Is that one and a half square miles? I mean, 640 is a mile, right? So you're talking about one and a half square mile. That's not that's not very big at all. Yeah, it's not very big, and I and that's one of the uh call the selling points, is it's not big enough to really drain resources, but yet it's big enough for 50,000 people, 20,000 residences, and uh hotel space, convention center, medical center, over a hundred restaurants, retail, so forth. So it's big enough to be a good example, but not so big as to uh you know to say all the rich people in the country are gonna migrate there and and and drain federal taxes. I'm talking to Rod Lockwood. He's a developer and former chair of the Michigan Chamber of Commerce Board. He's got the idea to convert Belle Isle, which is in the Detroit River adjacent to Detroit. And at a thousand acres, can you build the thing as basically all waterfront? It sounds like no matter where you stand on that island, you're going to be somewhere near waterfront, right? Yeah, you're close to water. The uh from a developer standpoint, you would uh wanted to have your lower uh height buildings near the water and the higher ones in the middle, so everybody's got a view, you know. So that would be let's say the development uh uh protocol. The other is uh that the the vision which I've put into a book called uh Bell Isle Detroit's game changer is to have it be a walking community and therefore achieve the density uh that we're talking about. So actually the density of this proposed Bell Isle is less than the density of Brooklyn. So it's very, very feasible. Well, now let me ask you so no vehicles at all except perhaps emergency vehicles and and the police and fire department, or would there be vehicles allowed on Belle Isle? Well, uh yeah, you hope that's a good idea. It would be like Mackinac Island without the horse odor. Without the horse. Exactly. I'm sure that Detroit will be happy to give you enough horse odor. There's it sounds like the the politics of Detroit will will drift across the river to Belle Isle, right? Well, you know, that's an interesting point you make, but we uh we commissioned a uh a uh first-class poll by one of the leading polls here in Michigan, and we were pleasantly surprised, even shocked, that 68% of Detroiters would like to have the project go forward. And the reason they do is because of the job creation aspect. There'll be uh a huge amount of construction uh jobs created during the expression process, and then uh almost 50,000 permanent jobs to service the city. Now, would there also be the possibility that let's say the capitalism of Belle Isle will start to infect the mainland of Detroit? Oh, for sure it will. The um uh we're gonna we're gonna market residencies all over the world, I mean major spots, and to attract not only people from the United States, but from people from other countries. And I envision that we'll have young entrepreneurial class come in there with perhaps a manufactured product they've tested in the in their markets and been successful. Now they want to move into the biggest market, the biggest economy of the world. And Detroit is sort of in the epicenter of that. But they won't be able to build a manufacturing plant on Bell Island because the land would be much too expensive. But right across the river, uh a stone's throw, if you have a good arm, is very, very inexpensive land that's largely vacant because of Detroit's uh problems. So you're gonna have uh a little bridge that goes from old Detroit to Belle Isle, and then another one that goes from Belle Isle over to the uh the promised land on the other side? Well, there's an existing bridge right now. It's a it's a active park, and there's uh a bridge that's been there for a long, uh long period of time from the mainland to Belle Isle. The only thing sorry, sir, go ahead. I'm just going to mention the Belle Isle is in the middle of the Detroit River, which is an international river, has Detroit on the north side and Windsor, Canada on the outside, on the south side. You know, if if we could just get some of the capitalism to go upstream, maybe it could contaminate the uh the socialist country of Canada. Maybe we get them to drink from the same glass. That is Rod Lockwood. He's a developer and former chair of the Michigan Chamber of Commerce Board. His idea is Detroit's Bell Isle, and you're listening to the Lars Larson show.