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RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne at NPR West.

STEVE INSKEEP, host:

And I'm Steve Inskeep, taking in a classic view here in downtown Detroit. It's the electric lights of the Fox Theater, which is a historic building downtown, and it's visible from blocks away because downtown Detroit has so many vacant lots. This city has lost about a million people since its decline began in the 1950s, and ever since then, people have been trying, usually without success, to bring the city back. Those efforts take on special urgency now because the auto industry is in trouble.

And today, we continue our look at Michigan's effort to diversify its economy by talking with some of the people who are still, even now, trying to make money in Detroit's real estate.

(Soundbite of cars)

Mr. BOB KRAEMER (Architect): The insides of some of these buildings are just spectacular.

INSKEEP: We walked downtown with Bob and Maureen Kraemer, who've invested in a vacant Detroit skyscraper.

Mr. KRAEMER: The Broderick Tower that we're walking to was actually built for a steel company.

INSKEEP: The Kraemers are the architects on a project planned here. A man working in the tower's lobby pointed us to a stairway in the gloom.

(Soundbite of banging)

Unidentified Man #1: The stairs go all the way up to six.

(Soundbite of laughter)

Unidentified Man #2: Did you say go up to 36, is that what you said?

INSKEEP: You know those TV programs where an underwater camera peeks inside a shipwreck? That's what it feels like as we climb past the open doors on each floor.

Mr. KRAEMER: Feel like I'm walking upstairs in the Titanic. A refrigerator, rounded edges, old-style icebox.

INSKEEP: We paused to talk in the light of a window. The Kraemers say they've grown their company during good and bad times by taking any work available.

Ms. MAUREEN KRAEMER (Architect): When we started, we were doing high-end interiors for dotcoms. Once all the money fell out of that market, we started doing historic rehab.

INSKEEP: Not to mention hotels. Even a client's tree house. Now, they want to turn this building into luxury apartments - which matters, since cities tend to recover only when people want to live in them. The Kraemers are putting their own money into this skyscraper, alongside the tower's investors.

Can you just give me an idea, ballpark, how much of your money is in the pot?

Mr. KRAEMER: We've probably committed about $100,000 worth.

INSKEEP: Is that a lot of money to you guys?

Mr. KRAEMER: It's a tremendous amount of money for us, and it's the first, true real estate investment that we have done.

Ms. KRAEMER: Participated in.

INSKEEP: They think the project can pay off partly because it's a historic building. Tax credits may pick up more than a third of the construction cost. And the Kraemers are not the only people expecting a benefit.

(Soundbite of banging)

INSKEEP: Two men are easing radiators down the steps we just walked up. They're hand-trucking 200 pounds of steel. The men work under the eye of Stewart Beal, who wants the radiators for a different building. His demolition firm is salvaging Detroit's ruins, doing legally what many people do illegally.

Mr. STEWART BEAL (Demolition Firm Owner): They break into buildings, strip copper out, strip metal out, and then the most egregious cases, they actually will cut down active light poles.

INSKEEP: Many people want to salvage what they can from Detroit's real estate market, some in large properties, some in small.

Mr. ANDREW FOX (Home Renovator): Hey, how ya doin'?

METRISSA(ph): Alright, how you doin'. Metrissa…

Mr. FOX: Metrissa, hey, how you doin'. Andrew Fox, nice to meet you.

INSKEEP: A man named Andrew Fox has bought 45 modest homes and he's still buying. He renovates and rents them.

Mr. FOX: Well, I don't know if you got a chance to see them, but you know, you got the three bedrooms here.

METRISSA: Uh-huh.

Mr. FOX: You got your bathroom here.

INSKEEP: He showed a house to a woman who said she wanted to rent it today.

Mr. FOX: Why do you have to move so soon?

METRISSA: Because the house I'm living in right now, it keeps getting broken into. My kids haven't been staying with me right now because they're scared.

Mr. FOX: Yeah, okay.

INSKEEP: Andrew Fox is 32, raised in Detroit. He used to work for a company that made car seats. Then in 2002, he bought his first house for $32,000.

Mr. FOX: Two years later, I sold that property for 78,000.

INSKEEP: More than double what he paid. My introduction, he says, to the power of real estate. He kept an eye on that house after he sold it, and the market collapsed. What happened to that house is a reminder that Detroit real estate is not depressed, it's suicidal.

Mr. FOX: It hasn't just gotten worse, it's dramatically gotten worse. Matter of fact, that house isn't even there any more. It was burned down.

INSKEEP: And isn't it a neighborhood where you wouldn't ever buy a house now if you had an opportunity?

Mr. FOX: No, I wouldn't. I wouldn't even drive past it. If we have enough time, I'll take you by, but I wouldn't — I wouldn't even drive in that area anymore.

(Soundbite of car door)

INSKEEP: A little later, he did take us past - and found the next three houses down the street all burned out at as well.

Mr. FOX: Oh, wow. This is just crazy. My house that I owned was this lot right here.

INSKEEP: Andrew Fox tries to buy homes in neighborhoods that seem at least a little more stable than that.

(Soundbite of door creaking)

INSKEEP: He took us to the house he bought just last week - a tiny little bungalow for $5,100.

Mr. FOX: So this is what you have, before we wave our magic wand.

INSKEEP: Ceilings collapsing.

Mr. FOX: Ceilings collapsing, horrible paint, awful-smelling carpet. I mean, I don't know how you guys feel in here, but you know, you guys probably say, well, man, this is - you know, it's a dump. Well, it is. But I think what we do is bring things back to life, and I think we understand it.

INSKEEP: I wonder if that's what it requires to make money in any business in Detroit right now, is to see an opportunity that is just not obvious and take it.

Mr. FOX: I think so.

INSKEEP: And as we peer out the windows of this home, an opportunity comes into view.

Across the street, there's a house where it seems like the door was kicked in.

Mr. FOX: Really? Oh, yeah.

INSKEEP: Over there.

Mr. FOX: That looks like a nice house, too.

INSKEEP: A nice-enough house that he wants to look inside. That broken door means somebody else took the plumbing and even the furnace. But Andrew Fox might still want to buy the home. Fox crosses the street and gets ready to shove aside the wreckage of the door.

I guess the most unbelievable thing is that somebody's put one of these advertising fliers on the door, and it's attached to the doorknob and the door's been kicked in.

(Soundbite of banging)

Mr. FOX: Hello?

INSKEEP: Sometimes, opportunity doesn't even have to knock.

Mr. FOX: Hello, hello.

INSKEEP: We've been reporting this week on Retooling Detroit, and you can find all this week's stories at npr.org.

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