A New Day for Detroit
By Guy Logan, Managing Director, Head - Metropolitan Issuers Finance Group, Citigroup March 06, 2015 01:30 PM
I grew up near Detroit, and some of my fondest childhood memories are from the time I spent with my grandmother in Detroit. I was thrilled when many years later my role at Citi took me back to my roots. When I started working with the Public Lighting Authority of Detroit, I was surprised to see how much the city had changed in the intervening years. As I drove through the old neighborhood, and past the places I had known as a child, I was disappointed to see how depressed Detroit had become.
In many ways, streetlights are indicative of the overall health of a city. Without well-lit streets, it becomes difficult for people to go about their daily lives, difficult for students to get to school and difficult for communities to grow and thrive. At one point, 40 percent of the streetlights in Detroit did not work, plunging streets and entire neighborhoods into darkness.
In July 2013, we began working with the Public Lighting Authority of Detroit, Michigan Treasury and Michigan Finance Authority on a project to raise the financing necessary to repair the streetlights across the city. Detroit was the largest municipal bankruptcy case in the history of the United States, which has increased the complexity of the on-going efforts to revitalize the city. Odis Jones, CEO of the Public Lighting Authority, was a vital part of this project, and his dedication to his hometown of Detroit shone through at every turn. His vision and leadership has been critical in getting this project off the ground and continually moving it forward.
Citi’s municipal financing division is among the largest in the country, however, it is one thing to say ‘We’re the biggest and the best,’ but it is another thing to demonstrate that over time. At a time when no other banks came forward, we committed to the project. If we were really going to be true financial partners, we couldn’t just be fair-weather friends. We had to stand up for Detroit.
Citi issued bonds and raised $185 million for the project – enough to pay for 10,000 more lights than the original plan called for. Initially, what we did was use Citi's own balance sheet, and I am proud to say that Citi alone committed $60 million to help get the project off the ground. Ultimately, the city is set to install a system of 65,000-plus energy-efficient LED lights.
The progress thus far is remarkable. Lighting the streets mean that mothers and fathers feel safe letting their kids play in the yard and walk to school. Neighborhoods are being revitalized, young people are moving back to the city, crime is down and businesses are thriving. The downtown area of the city was blighted just a few years ago, but now is home to successful shops and businesses.
I recently brought my children to Detroit, and I showed them the streetlights. It made me incredibly proud to say that my work and the support of Citi has helped create a brighter future for the people of Detroit.