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This paper examines the underlying ideological tensions that shaped the 1999-2005 State takeover of the Detroit Public Schools. This study engages internal colonial theory as a paradigm through which to provide an historical reconceptualization of “darker” cities, specifically Detroit, at the intersection of space, race, class, governance and the global reconfiguration of power and capital. Historical and discursive analysis of the reform legislation, policy documents and critical social exchanges illuminate the relationship between school governance, cities and the formation of the neoliberal State. This study provides an opportunity to assess the new relationship between the role of the State, racial ideology and school reform in the context of urban restructuring occurring distinctively along spatial, racial and class-based cleavages.