Detroit Mayor-Elect Duggan Sees Key Role Amid Bankruptcy

Photographer: Bill Pugliano/Getty Images

Detroit Mayor-elect Mike Duggan celebrates his victory at a party at the Renaissance Center in Detroit, Michigan, on November 5, 2013. Close

Detroit Mayor-elect Mike Duggan celebrates his victory at a party at the Renaissance... Read More

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Photographer: Bill Pugliano/Getty Images

Detroit Mayor-elect Mike Duggan celebrates his victory at a party at the Renaissance Center in Detroit, Michigan, on November 5, 2013.

Detroit Mayor-elect Mike Duggan rescued a county, a bus system and a 14,000-worker hospital network, served as a prosecutor, plotted Democratic campaigns and coached his four children’s soccer teams.

Now, Duggan, 55, is back-seat driver of a city under state control and seeking to become the largest U.S. municipal bankruptcy. He wants to take the wheel sooner rather than later.

“The only authority I’m going to have is the authority I can convince the governor and emergency manager to assign me,” Duggan, a Democrat, said last week by telephone. “I’m attempting to persuade them. We’ll see.”

With plans to combat blight, crime and population losses, Duggan must remake a dysfunctional government that’s in the hands of Emergency Manager Kevyn Orr, a former classmate at the University of Michigan law school. Orr can be ousted by Detroit’s City Council -- with the mayor’s approval -- as early as September 2014, though Duggan said he hopes to manage operations well enough to take control even sooner.

Duggan will be sworn in Jan. 1 with the city under the cloud of more than $18 billion of obligations, understaffed police and fire departments and a cityscape scarred by blight and more than 70,000 vacant buildings. The home of General Motors Co. (GM) had 1.8 million residents in the 1950s, a figure that has dwindled to 700,000 scattered across 139 square miles (360 square kilometers).

Transformative Figure

Duggan brings energy and experience, and Orr should let him improve city operations, said Doug Rothwell, president of Business Leaders for Michigan, an organization of executives.

“We’ll see more change than we’ve seen, with Mike there,” Rothwell said. “For the first time, it feels like maybe this really is turning the corner.”

Duggan was elected mayor Nov. 5 in a nonpartisan race to succeed Dave Bing, a Democrat, and will become Detroit’s first white leader in 40 years -- a label that he says irks him. He beat Wayne County Sheriff Benny Napoleon, who labeled Duggan an outsider who moved to Detroit in 2012 from suburban Livonia solely to run. Duggan won with 55 percent of the vote.

More white suburbanites than black Detroiters expressed doubts he could be elected in a community that’s 83 percent African-American, Duggan said.

“People in the city are tired of living in the dark, they’re tired of living in fear because police don’t come,” Duggan said. “They’re tired of living in blight because the city can’t get rid of abandoned houses.”

“Most people think I can do something about those things.”

Local Operator

Private by nature, Duggan brings corporate and political savvy to an office that’s been wracked by racial discord, scandal and ensnared by city bureaucracies. He’s been managing facets of the area’s affairs since 1987.

Duggan’s support was evident in the August primary, when he was forced to run as a write-in candidate because he didn’t meet residency requirements. He still beat all other candidates by more than 20,000 votes.

He was backed by business leaders in and out of Detroit, and the $1.7 million his campaign raised was more than twice what Sheriff Napoleon took in. His election-night victory celebration drew a racially mixed crowd of hundreds, entertained by a 16-piece band.

Duggan said he attended 250 house parties in Detroit during the campaign. Though a recently returned resident, he has spent his entire career in Michigan’s largest city, which lost a quarter of its population from 2000 to 2010.

Moving Out

He lived in the Motor City until age 5, when his family moved to Livonia, a mostly white suburb with a median household income of $69,887, compared with Detroit’s $27,862, according to the 2010 U.S. Census. Duggan said his first taste of politics was at age 7 handing out fliers for his father’s campaign to become a local judge. His father, Patrick Duggan, a U.S. district judge in Detroit, was appointed to that job by President Ronald Reagan.

Mike Duggan first worked in Detroit at a law firm in 1981, and went on to work for the Wayne County prosecutor.

He was right-hand man to County Executive Ed McNamara, riding herd on a political apparatus that eliminated a $130 million deficit, built a $1 billion airport terminal and helped craft deals for two professional sports stadiums in Detroit. McNamara was Livonia mayor when Duggan managed his election campaign for county executive in 1986. McNamara took office the next year and Duggan became his chief deputy at 29.

Civic Institutions

He swiftly became influential. In the 1990s, he stepped in as general manager to turn around a regional bus system that had a $12 million budget deficit and was cutting services.

An authority Duggan led built and financed Comerica Park, home of Major League Baseball’s Detroit Tigers. The agency also developed Ford Field to house the National Football League’s Detroit Lions.

Duggan was elected Wayne County prosecutor in 2000, a post he held before becoming chief executive officer of the Detroit Medical Center in 2004.

He said he transformed the eight-hospital nonprofit health-care provider from a money-loser into a cash-generating, customer-friendly system that Nashville, Tennessee-based Vanguard Health Systems bought for more than $365 million in 2010. Tenet Healthcare Corp. acquired Vanguard last month.

The hospital network serves a city where 36 percent of residents live below the federal poverty level, and is Detroit’s largest employer, Duggan said. The statewide poverty rate is about 16 percent, Census figures show. As the hospital’s CEO, he guaranteed emergency-room waits of 29 minutes or less or patients would receive free tickets to Tigers games.

Everyone Knows

“We treat 300,000 patients a year in the emergency room,” Duggan said. “In a city of 700,000, virtually everyone has a first-hand opinion of how the DMC operated before I got there. They remember when the average wait in the emergency room was three hours.”

Duggan is a tenacious, impatient, shrewd manager who can build coalitions and instill loyalty, said former Michigan Governor Jennifer Granholm, a Democrat.

“Mike won’t take no for an answer,” Granholm said by telephone from California, where she teaches law and public policy at the University of California at Berkeley. “He’s determined. He’s going to make things happen.”

Granholm owes her political ascent in part to Duggan, who provided the strategy for her 1998 election as attorney general. Four years later, Granholm became the first woman to win the governor’s office.

She said Duggan had a reputation as a pugnacious manager, though he has a whimsical side. Duggan’s dog won a local “stupid pet tricks” contest in 1986 by retrieving beer from a refrigerator.

Rethought City

Before moving back to Detroit, Duggan and his wife of 27 years, Lori Maher, lived in the same four-bedroom Livonia house for 18 years. Duggan said his 2010 Ford Taurus turned 150,000 miles (241,000 kilometers) last week, and acknowledged getting 10 speeding tickets in the past five years.

“The car moves pretty good,” he said.

Among his goals: A city-run auto insurer to bring down rates that he says drive people out. He also wants to attract residents from less-populated areas to more robust neighborhoods, and make seizing abandoned buildings easier.

Duggan told reporters this is the last elected job he’ll hold, dismissing speculation that he’ll run for governor someday. He said his election accomplished something an emergency manager can’t.

“The politics of racial divisiveness in Detroit is probably over,” he said.

To contact the reporter on this story: Chris Christoff in Lansing at cchristoff@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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