State of the City addresses serious revenue challenges

Fracassi addresses challenges, business growth in State of the City address

By: Kayla Dimick | Southfield Sun | Published March 20, 2015

 Acting Mayor Donald Fracassi speaks to the crowd March 13 at the Westin Southfield Detroit Hotel during the State of the City address.

Acting Mayor Donald Fracassi speaks to the crowd March 13 at the Westin Southfield Detroit Hotel during the State of the City address.

Photo by Donna Agusti


SOUTHFIELD — Despite the recent challenges facing Southfield during the economic downturn, acting Mayor Donald Fracassi said during the State of the City address that the city is getting back on track.

“The city of Southfield has focused its energy on delivering premier city services, attracting new businesses, and providing the resources and infrastructure for businesses to compete and win in the global market,” Fracassi told the crowd at the Westin Southfield Detroit Hotel March 13. “We have vision, we have the desire, we have the ability, we have the innovation, and we have a plan to make Southfield competitive, clean, safe and secure.”

The event was hosted by the Southfield Area Chamber of Commerce, and audience members packed the large event space. Prior to the speech, networking and a breakfast buffet were provided.

Fracassi addressed the city’s serious revenue challenges, stating that the property tax base has decreased by 50 percent over the last five years.

“This is important to understand, because no comparable city of our size in the state of Michigan has been hit harder by the recent downturn,” Fracassi said.

Fracassi attributed the financial troubles to declining housing values, stagnant business growth, crumbling roads, a lack of funding from the federal and state governments, and legislation removing the personal property tax, which cost the city millions of dollars in revenue, he said.

Despite the challenges, Fracassi said, the city is moving forward via careful planning and fiscal responsibility.

Part of moving forward, Fracassi said, is fixing the roads. Through careful planning, the city was able to introduce four major road projects, including the complete reconstruction of Evergreen Road. As soon as the weather breaks, he said, construction on the city’s streets will begin through a voter-approved $99 million road bond.

Another way the city is moving forward is by reducing the use of its fund balance for operating expenses through the aid of a five-year financial plan introduced in 2004, he said.

Although attrition reduced city workers by 50 percent and a hiring freeze helped to save the city money, Fracassi said no cuts were made to public safety, thanks to the voter-approved $5 million safety bond introduced in 2011.

Fracassi said that in 2014, violent crimes decreased by 25 percent, and over the last eight years, they have decreased by 72 percent.

“I would also like to add (that) residents and visitors can take comfort in the fact that the average response time to emergencies in Southfield is among the most responsive in the nation, typically under four minutes,” Fracassi said.

He reported that the Southfield Fire Department went on a record-high of 13,470 runs in 2014, and EMS transport service provided the city with an additional revenue of over $2 million.

The city is making a name for itself as Michigan’s Business Address, Fracassi said, thanks to the 30 million square feet of office space and improving occupancy.

Covisint Corp. announced plans in December to relocate over 250 employees from Detroit to Southfield, resulting in a $6 million investment in the Travelers Towers I and II and the creation of an Industrial Development District.

Fracassi also addressed the recent establishment of Durr Group at the former DTE property, resulting in an overall investment of $40 million and 485 new jobs. The relocation will combine the company’s operations in Plymouth, Auburn Hills and Wixom into a North American headquarters in Southfield.

The various educational institutions located within the city’s borders were also discussed, namely the $55 million Alfred Taubman Engineering, Life Sciences and Architecture Complex at Lawrence Technological University and the recent expansion of Oakland Community College.

“Southfield is becoming the center of advanced education,” Fracassi said.

Despite the recent closure of Northland Center, Fracassi said the Downtown Development Authority is thriving.

In addition to the growth of the health care sector of the DDA, PeachWorks — an app development company — and William Beaumont Hospital have announced plans to relocate within the city’s borders.

In remarks prior to Fracassi’s speech, Lathrup Village Mayor Frank Brock also addressed recent DDA developments through the PlacePlans project, sponsored by the Michigan Municipal League, which will update the village’s City Hall.

“(The project) proves we have the plans and processes in place to foster strategic redevelopment,” Brock said.

Fracassi said that although much has been done to improve Southfield, there still is a lot of work to do.

“We still have much to do, and as you’ve heard today, we’re making terrific progress,” Fracassi said. “The state of our city is strong. The state of our future is unlimited, and we will continue to get better.”