Driving People to the Motor City

Posted on April 12, 2018

It has become a common news flash in Detroit—the announcement that Dan Gilbert has bought another downtown building.

The properties have varied in size and age, but many were dilapidated, vacant structures or a city block left empty because an icon from the city’s heyday had been demolished. Since 2010, when the Quicken Loans founder relocated his business and 1,700 employees from the Detroit suburb of Farmington Hills to the downtown core, Gilbert’s entities have acquired or redeveloped about 100 properties in and around the downtown area.

Gilbert and his real estate empire promote historic preservation and have enhanced streetscape detail to add a playful note and attract young professionals. In the warmer months, porch swings and movable chairs are placed on city sidewalks in front of Gilbert properties. There are outside portable pianos, and a sandy beach emerges on a plaza for volleyball games—just another way to engage some 17,000 employees who now work for Gilbert entities. Over the last winter holiday season, heated pop-up encampments sheltered small merchants and strolling shoppers. Linking downtown with the city’s cultural center in Midtown and beyond is the 3.3-mile (5 km) QLine urban rail streetcar, co-piloted to completion with Gilbert’s support. The rail’s moniker is a play on Quicken Loans. Gilbert paid $5 million for naming rights and $11.5 million toward the line’s $182 million cost, which also reflected government revenues and philanthropic and business contributions.

Five years after Detroit filed for the largest municipal bankruptcy in U.S. history, downtown Detroit has been transformed at a speed and intensity that observers say is unequaled for a major American city. And Gilbert’s vision has been one of the drivers.

Gilbert’s Rock Ventures and Bedrock Real Estate teams have “set the bar on what we want from urban development,” says Maurice Cox, the city’s planning director. “For Detroit to go from the bankruptcy, which is the lowest point, to this transformational recovery in such a short time is just unprecedented.”

The 800-foot (244 m) tower that will rise from the former Hudson’s department store site will be the tallest building in Detroit. (SHoP Architects)

Cox says he received as many condolences as congratulations for taking the job in the oft-maligned Motor City in February 2015. But he now directs 35 urban planners, up from six when he arrived. And downtown Detroit’s remake has garnered accolades. The Lonely Planet tour guide included Detroit in its list of top ten places to visit in 2018, and the New York Times included the city when it issued its top travel destinations list in 2017.

“It’s one thing to buy a bunch of real estate downtown, but it’s another thing to buy it and fill it with your own people,” says Cox. Gilbert’s “employee base started to drive demand for restaurants, drive the demand for walkable places to gather, drive the demand for housing options that are close enough to work to walk. You’ve created an ecosystem that animates the public realm, and that fills square footage.”

Robin Boyle, a Wayne State University professor of urban planning in Detroit, says he has queried a nationwide network of peers seeking other examples of how one wealthy, determined developer can reshape cities. Among other municipal game-changers, he cites Paul Allen, a cofounder of Microsoft, who has been behind many Seattle developments, and Kevin Plank, founder of Under Armour sports performance gear, who is bankrolling large projects in Baltimore.

“But I haven’t found anything on this scale, in terms of one owner and one developer like Gilbert having an impact on one downtown,” says Boyle. “It’s outstanding. It took somebody with ambition, understanding, and resources. There was a golden opportunity and he took it.”

Detroit Roots

Forbes magazine identified Gilbert as Michigan’s richest individual in 2017, with an estimated net worth of $5.9 billion. Gilbert, 56, grew up in the Detroit suburb of Southfield, graduated from Michigan State University, and became a real estate agent to help out his parents, who became agents after his dad got out of the bar business. Gilbert also earned a law degree from Wayne State University. He has grown Quicken Loans into the largest online mortgage lender. He also owns casinos such as the Greektown Casino Hotel in downtown Detroit and the Cleveland Cavaliers National Basketball Association team.

Since its founding in 2011, Bedrock and affiliates have spent more than $5.6 billion for more than 100 properties, mostly in Detroit but also some in Cleveland, totaling more than 16 million square feet (1.5 million sq m), according to statistics provided by a company spokeswoman.

When asked about what is behind the development frenzy, Gilbert cites his family’s multigeneration roots in Detroit. “It’s our hometown. If there was any way we could help make an impact . . . we wanted to do it,” Gilbert told an audience in 2016. But, he also noted that it was a long-term investment, and his success depended on recruiting and keeping high-quality professionals expecting big-city vitality and amenities. “It also has to be good for business. If it’s not, then nothing’s sustainable.”

On the immediate horizon, Gilbert is aiming high with skyline-changing projects. “We’ve got a lot more to go. I don’t think you’re ever really done as a city,” Gilbert said in a 2017 interview for the Detroit Regional Chamber. “You’re either growing or dying—nothing in between.”

Going Vertical

Legions of Detroiters cherished childhood visits to the J.L. Hudson Company department store in downtown Detroit, a block-long, 25-story behemoth. Families made pilgrimages to visit its Santa Claus and Christmas displays, and for decades the store sponsored the city’s annual Thanksgiving parade. The store closed in 1982 and the building was imploded 20 years ago. Now Gilbert, as he has said, is “going vertical” to fill the symbolic and structural void.

On the Hudson’s site, Gilbert’s team plans to build Detroit’s and Michigan’s tallest building.

“We always had big intentions for that site, and we knew the history behind it,” says Jim Ketai, cofounder and chief executive officer of Bedrock, Gilbert’s real estate firm. “We had to put something there that was iconic and would be a new experience for people to come to. It’s been a missing tooth on Woodward Avenue.”

Topping out at 800 feet (244 m), the 1 million-square-foot (93,000 sq m) development will include about 330 residential units, plus 240,000 square feet (22,000 sq m) of office space, 100,000 square feet (9,300 sq m) of retail uses, underground parking, and a skydeck open to the public. The design teams are Detroit architect firm Hamilton Anderson Associates and SHoP Architects of New York City.

Detroit’s downtown recovery, says Cox, “would not be complete until this hole in the heart of downtown was mended.”

The Shinola Hotel will have more than 130 rooms, plus restaurant and retail space. (Bedrock)

Shinola Hotel

In January, the last piece of 875 tons (794 metric tons) of steel was maneuvered onto the Shinola Hotel, a 130-plus-room boutique hotel being built along downtown’s Woodward Avenue. Gilbert’s Bedrock and Shinola, the company best known for its upscale brand of watches manufactured in Detroit, partnered on the development. The hotel will also include retail and restaurant space.

The hotel is going up behind a red, eight-story building exterior from 1915, originally a hardware company. The 62,000-square-foot (6,000 sq m) building most recently was a wig store. Bedrock bought it in 2013 for $2.7 million, according to Crain’s Detroit Business. The hotel’s footprint will also include a four-story building constructed in 1936 for Singer Sewing Machine Company. Detroit-based Kraemer Design Group designed the Shinola Hotel, and its interior is designed by the New York–based firm Gachot Studios. NoHo Hospitality Group, whose partners include James Beard Foundation food award winners, will manage its restaurants.

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