I think Detroit's reputation is pretty bad nationwide, but I don't think it's worse than the local perception. I also think it's the suburban perception that has helped drive the national perception of Detroit. The suburban perception of the city may be slightly more nuanced [[i.e. differentiate between Comerica Park and everywhere else in the city), but not much.
From my perspective living outside of Detroit, a lot of people view Detroit as a hell-hole and measure the state of Michigan by their perception of Detroit. I even have friends who wouldn't give serious consideration to attending U-M because of their perception of the state of Michigan... which is tied to the image of Detroit.
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