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There are few businesses tougher than pawnbroker. And there are few places tougher to run a business than Detroit. So when Detroit pawn shop owner Les Gold, star of truTV’s reality series "Hardcore Pawn" says his city is on the comeback, it certainly gives that assertion some credence.
Detroit is on the uptick. We are really going strong….We have so many people dying to drop money on us. It’s really unbelievable. Downtown is growing….people are really coming in droves. You can’t imagine. We have busloads of people coming.”
That includes foreign investors, Gold says. The state recently won approval for a federally designated center to expedite a visa program specifically designed for foreign investors:
United States Customs and Immigration expedited and approved Michigan's application to run its own EB-5 Regional Center, the Snyder administration announced this week, citing support from the governor, the state's entire Congressional delegation and Detroit Mayor Mike Duggan.
The federal EB-5 visa program is designed to attract "entrepreneur aliens" by offering them a green card in exchange for domestic investments that produce at least 10 new jobs in the U.S.
Immigrants can qualify by devoting $500,000 to a project in a high-unemployment or rural area, of which there are 433 in Michigan, or $1 million in a more affluent part of the state.
Despite the city’s financial woes, there is a reason for optimism, the U.S. Chamber of Commerce Foundation noted in its’ recent Regulatory Climate Index. Among the 10 cities under review, the 2014 Regulatory Climate Index ranks Detroit in sixth position in terms of most efficient regulatory environment.
“While no other major American city has experienced recent decline like Detroit has, a community of entrepreneurs and start-ups are reenergizing and revitalizing the city and its future prosperity.”
Among the 10 cities under review, the 2014 Regulatory Climate Index ranks Detroit in sixth position, with the first place (Dallas) representing the most efficient regulatory environment.
Where Detroit is doing well, according to the report:
- Detroit requires the lowest number of procedures and waiting time in the area of Starting a Business. The city requires an administrative fee that ranks as one of the lowest of the 10 cities assessed in the report. As a result, Detroit ranks just behind Los Angeles and San Francisco for Starting a Business.
- Detroit ranks second in the area of Paying Taxes, which translates to a low tax burden for entrepreneurs and small businesses. Detroit and other cities in Michigan have a moderate corporate tax rate and a low unemployment tax rate in comparison with other cities. Further, the city has the lowest sales tax rate across the 10 cities covered in the report.
Where Detroit needs improvement:
- Detroit ranks near the bottom in Dealing with Construction Permits, a position driven by its high number of procedures, waiting time for permits, and overall cost. The total cost of construction permits is 1.3% of total construction costs, which is on the higher end of the cities covered in this report.
- Detroit ranks poorly in the area of Registering Property, which is a result of longer waiting times and higher costs for businesses. Local professionals noted that accessing property records at the Register of Deeds in Detroit is often unpredictable, with inaccurate and out-of-date records. As a result, many title companies must purchase commercial databases. Additionally, the city has a high real estate transfer tax compared to those of the other cities covered in the report. Both of these factors contribute to Detroit’s performance in this area.
- While Detroit has the lowest administrative costs for Enforcing Contracts, the city has some of the highest numbers of procedures and waiting time for the business area. Entrepreneurs and small businesses can expect to wait an entire calendar year before the final enforcement of judgment on a contractual dispute in Detroit.