For Detroit, this may be a real comeback

Despite bankruptcy, Detroit is reviving itself, led by investors and entrepreneurs.

Described as the epitome of dire straits and decimated by financial ruin, the city is actually steeped in a promising revival. Really.

Thursday was, ostensibly, a low point for the city of Detroit — some might even say its lowest since the 1967 riots that killed 43 people, forever scarring the city and changing its demographic for years to come.

Plagued by a massive deficit, burgeoning debt ($18.5 billion) and a dearth of public services (40 percent of Detroit's street lights don't work, and it takes a diminished police department 58 minutes, on average, to respond to calls), the city, via state-appointed emergency manager Kevyn Orr, filed for bankruptcy, the largest municipal filing in U.S. history. (Update: On Friday a state judge deemed the bankruptcy filing unconstitutional and directed the emergency manager to withdraw the petition.)

Orr, Detroit Mayor David Bing and the city's 700,000 remaining inhabitants (1.8 million people lived in Detroit in the 1950s) hope the financial surrender will allow the city to restructure its debt and start anew, to the point it can continue to pay pensions and salaries and make vital improvements to its decaying infrastructure.

The good news is that they have well-founded reasons to be hopeful.

Quietly, while some have sounded its death knell, Detroit is beginning to make a comeback, aided by an diehard group of entrepreneurs who see the city  as a potential tech hub and a cadre of investors who long to witness the bright lights (especially the traffic lights) shine over Detroit again.

Related: Detroit's 'golden years' a distant memory

"Bankruptcy is a mile marker," said Josh McManus, lead inventor at Little Thing Labs, which partners with city governments and nonprofits in Detroit and other post-industrial cities to redesign communities. "Among people investing in the future of Detroit, bankruptcy is seen as entrepreneurship, where local government is now owning up to past debts and realizing that we have to manage cash flows and service the city."

"This is a somber and hopeful event," he said.

Detroit, McManus said, is especially seductive to entrepreneurs because of the city's glut of cheap, available space and leniency with local regulations keen on fostering innovation. 

"People in for-profit and creative and social entrepreneurship fields are taking big risks and mixing things across disciplines, which you don’t see in other cities," McManus said.

Leading the investment drive in Detroit is native son Dan Gilbert, who owns Quicken Loans and is worth $3.5 billion, according to Forbes. Gilbert has made it his mission in recent years to lead the city's revitalization efforts. So far, he's invested a staggering $1 billion, according to the New York Times, in downtown Detroit, purchasing and refurbishing real estate with the intentions of making it home to forward-thinking corporations and tech operations. Gilbert, a hybrid of a father and cheerleader for Detroit, is now the third-largest landowner in the city, behind only the city of Detroit and General Motors, according to Fast Company. He has 7,000 Quicken employees in Detroit, and under his tutelage, Detroit has invited 60 companies, including Twitter, Whole Foods and Uber, into downtown properties Gilbert owns.

Outside of real estate, Gilbert has also helped fund a planned light rail system for Detroit, part of an effort to remake it into a thriving city for young entrepreneurs and thinkers, he says.

"I want to see this city come back in a big way,” Gilbert told Bloomberg in 2011. “Part of it also was for business — we want to create that urban feel, that urban core environment downtown where people in their 20s and 30s really want to be.”

To do this, Gilbert wants to lure the brightest young tech companies to Detroit, where sprawling real estate can be had for a steep discount, and help them build from the ground up. His Detroit Venture Partners invested almost $80 million in 13 companies in 2010,  according to Bloomberg, and those numbers continue grow.  

At a more grassroots level, entrepreneurs have found Detroit to be not only abundantly accommodating in terms of price efficiency, but also a boundless landscape for creative potential. One entrepreneur, Jerry Paffendorf, purchased two blighted homes and a field for $6,000, which he turned it into an arts and performance space called the "Imagination Station," Fast Company reported. Though the Imagination Station burned down, Paffendorf, who cut his teeth in Silicon Valley, also started "Why Don't We Own This?" a website that aggregates data on abandoned properties in Detroit and gives residents a centralized location to view and potentially buy the listings.

Related: Meet one Detroit entrepreneur

Another serial "hip-trepreneur" is Andy Didorosi, a 26-year-old who's founded a bus company that ferries around young transplants to hip areas on weekends and is making inroads into affordable airport transportation. Didorosi has also started a start-up incubator, a WiFi service, a liquidation service and a motorcycle racing series at an abandoned track, Fast Company reported.

McManus believes Detroit is the perfect canvas for innovation. Surrounded by urban blight, entrepreneurs can see before them the potential for growth. "You see the reality of destruction, which is part of creative of process all around you," he said. "People aren’t as afraid of failure because it's omnipresent."

Join MSN News on social

Share your point of view with us on Facebook

Get the latest news and updates on Twitter

See photos and videos on tumblr