Detroit billionaire on real estate buying binge
While the city of Detroit seeks bankruptcy protection, a local billionaire businessman is on a real estate buying binge.
Since 2011, Quicken Loans and Rock Ventures chairman Dan Gilbert has bought more than 40 downtown buildings, and seems to be collecting more each week.
“You can see a lot of them from here,” Rock Ventures President Matt Cullen says as he stands in Campus Martius Park, right in the heart of downtown. And it’s true: you can’t look in any direction without seeing a building owned by Gilbert. The First National Building, the Chase Building, 1001 Woodward, the Dime Building – the list goes on.
The current tally: 8 million square feet of real estate, bought for about $1.3 billion. Cullen’s boss likes to say “Detroit was having a sale on skyscrapers” – many of which were vacant, or near-vacant. Now they’re filling up.
Cullen says Rock Ventures companies have brought some 12,000 workers in downtown Detroit, “and then we’ve been able to recruit nearly 100 companies, including Twitter and Google and Amazon to come down here and join us. So there’s tremendous momentum and as a result, many of these buildings are filling up very quickly.”
Gilbert’s downtown makeover
What used to be a stodgy downtown where bankers and lawyers worked is now a sort of playground for 20- and 30-somethings. Rock music comes out of speakers along the sidewalks. Cartoonish oversized chairs sit in front of buildings.
“When a lot of investors left the city, Dan Gilbert took a chance, and I hope he stays,” said David Crumbie, playing one of the giant chess games outside one of Gilbert’s buildings.
In fact, it’s difficult to find anyone with a bad thing to say about the downtown makeover.
“The building that I work in – of course, Mr. Gilbert owns it, and I have noticed a big difference,” said Detroiter Isher Poindexter. “It’s cleaner. I’ve never seen the building look so nice.”
And some Detroiters say what’s happening here is bound to ripple out beyond downtown.
"When you have a rebirth, it starts downtown,” said Glenda Henderson. “And I think it’ll go into the neighborhoods eventually."
“A lot of power in one man’s hands”
Of course, not everyone is convinced of that. There are plenty of Detroiters out in the neighborhoods who feel like they’re being left out of the much-hyped revitalization downtown.
And even with the downtown development, there are a handful of critics.
“It’s a lot of power in one man’s hands,” said Mark Binelli, author of Detroit City Is the Place to Be: The Afterlife of an American Metropolis. “If you’re going to say, 'well, the city’s broke so we’ll just let a handful of rich guys own and fix downtown,' that’s an oligarchy, not a democracy.”
But aside from some of Gilbert’s questionable aesthetic choices, I had a hard time pinning Binelli down on what exactly Detroit has to fear from a Gilbert real estate monopoly.
Still, it’s a criticism you hear among the chattering class, says Crain’s Detroit Business Publisher Mary Kramer.
“I have heard comments from people saying things like, 'gee, should anybody be allowed to own that much?'" said Kramer. "And it’s the kind of comment from someone who hasn’t invested much, hasn’t risked much of their own capital. Should you penalize a guy who did?"
Absolutely not, says Wayne State University professor of urban planning Robin Boyle. Boyle says Gilbert’s stated goals – to enliven downtown and bring in new businesses – are laudable ones. But he adds there are a lot of important questions to get settled as well. Like: what exactly should downtown look like?
“How do Gilbert’s ideas mesh with the ideas of city government, of other businesses?" Boyle said. "That’s a question we’re still trying to find something about.”
But Dan Gilbert’s broader plan may already be working. At a recent tax auction, he lost out on two buildings after he was out-bid by developers in China and Canada.
Gilbert says he’s happy for the competition, because it shows he’s not the only investor bullish on Detroit’s future.