18_Kalamazoo - Michigan

A city using "community capitalism" to restore itself

The downturn in manufacturing and consolidation in the drug industry have hit Kalamazoo, Michigan. Hard. Now the city is mobilizing local wealth to make investments for the future. Southwest Michigan First, an economic-development group, has raised a $50 million venture fund expressly for financing life-sciences startups. The same group has rallied local resources to keep Western Michigan University's engineering school in town. Then there's the Kalamazoo Promise, a program funded by anonymous area donors that gives full college scholarships to every child who attends city schools from kindergarten through 12th grade. This year, it boosted enrollment by nearly 1,000 kids, which even heated up the housing market. Now other cities are calling to find out how they can replicate Kalamazoo's "community capitalism." "They all think there's some magic pill or angle," says Southwest Michigan First CEO Ron Kitchens. "It's money."

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