Driving People to the Motor City

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.”

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 walk to work. 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.”

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.

Shinola was founded by Tom Kartsotis, the Texas entrepreneur behind Fossil watches. Shinola’s brand gets its cachet from Detroit’s gritty, blue-collar manufacturing roots and current cool factor. Before a 2016 Detroit audience, Kartsotis recalled a 2011 visit when he looked out from his downtown hotel window and noticed that “I didn’t see a car or a person. And I’m [thinking]: ‘What am I doing here?” The transformation since then, said Kartsotis, is “amazing—I’ve never seen anything like it.”

Behind the Shinola Hotel will be an active alley to enhance the connection to two neighboring hotels. In mid-March, developer ASH NYC opened the 106-room Siren Hotel in the 14-story Wurlitzer Building, boasting a rooftop bar with a view. Built in 1926, it was once home to the company that made pianos and organs and had been a crumbling eyesore for decades. Scheduled to open in mid-summer is the 14-story Element Hotel at the Metropolitan Building, a $32 million project of Detroit-based developers the Means Group and the Roxbury Group. The Element will feature 110 extended-stay units and resuscitate a 14-story building, erected in 1925 and vacant since the 1980s.

Detroit planning director Cox says that Gilbert’s attention to historic details and placemaking also raise the bar for other developers.

“Instead of doing an addition that would take away from that scale, there’s a context sensitivity that is very skillful,” says Cox about the Shinola Hotel. “It’s sophisticated and it’s respectful to the historic terra-cotta building and to the street.”

Neighborhood Next Door

A short walk or QLine rail line ride away from Gilbert’s portfolio of downtown properties is the Brush Park neighborhood, once home to Detroit’s Victorian-era rich and famous.

Gilbert’s team won a competitive bidding process to develop a one-and-a-half-block pilot project named City Modern. Plans call for 400 residential units composed of townhouses, carriage homes, and apartment flats, interspersed with still-standing Victorian houses. The architects are Christian Hurttienne Architects and HamiltonAnderson of Detroit; Studio Dwell of Chicago; and LOHA: Lorcan O’Herlihy Architects, Los Angeles. Merge Architects of Boston is debuting “Duplettes”—two-story, two-bedroom units with shared green rooftop space. The residential mix is under construction now across the street from four Victorian mansions. Bedrock spokesperson Gabrielle Poshadlo says that some of the first homebuyers will move in later this spring. One of the mansions, the historic Ransom Gillis House built in the 1870s, is already a completed showpiece. Shortly after the project was awarded in 2015, HGTV show Rehab Addict star Nicole Curtis restored the turreted treasure before a TV audience under Quicken Loans’ sponsorship.

Cox says that one of Gilbert’s most significant contributions “is giving us the template for what urban neighborhoods adjacent to downtown should be.”

Citing the project’s collaboration and sophistication in uniting different eras of design, the Congress for the New Urbanism awarded City Modern its Grand Prize Charter Award in 2016.

Monroe Block Project

Detroit has been trying to gussy up the Monroe Block, anchored by the historic 1911 National Theater, for a long time. For the 1980 Republican National Convention in Detroit that nominated Ronald Reagan as its presidential candidate, the city fenced off the theater and plastered over the since-demolished adjacent buildings with signs declaring “Historic Restoration.”

Four decades later, that long-awaited improvement is near.

Bedrock’s $800 million Monroe Block project is designed to include 810,000 square feet (75,000 sq m) of office space, 170,000 square feet (16,000 sq m) of new retail space, and 900 parking spaces underground to complement 482 apartments above, featuring multilevel rooftop terraces. Green space and public plazas are charted out at 48,000 square feet (4,400 sq m). The project will provide density to a prominent, long-empty stretch of parcels downtown. Bedrock is aiming to break ground in 2018. The theater’s facade—a swirl of design from the Moorish, Beaux-Arts, and Baroque movements—will remain part of the streetscape, according to Bedrock.

The street-level component may reflect what Dan Mullen, president of Gilbert’s Bedrock Real Estate division, experienced on a recent trip to Copenhagen, home of Monroe Block design team member Schmidt Hammer Lassen. Detroit’s Neuman/Smith Architecture also is on the design team. Mullen’s job is all about placemaking, imbuing projects with amenities that encourage social connection. Mullen promises great spaces in which to hang out once the Monroe Block is finished.

“We went over there to see how they think about space and placemaking and it’s totally inspiring,” says Mullen, who started working for Quicken Loans in 2003 after meeting its former president when Mullen mowed his lawn as a teenager. Copenhagen street corners showed “curation” touches, says Mullen. Even in the dead of winter, Danes sit outside under heat lamps and blankets.

“They turn the buildings inside out, year-round,” Mullen says. “There are simple things that don’t cost tons of money, but they bring people together.”

Both the Hudson and Monroe Block projects speak to Gilbert’s goal of creating density and attracting new residents. Gilbert’s family of companies is now Detroit’s biggest employer. In a news conference in September, Gilbert said that 4,000 of his employees live in Detroit, compared with 75 before the relocation.

Bedrock aims to invest $2.1 billion to build the Monroe Block, the Hudson site, and two other projects in the next few years. To help pay for it, Bedrock has applied for the newly legislated Michigan Thrive tax incentive. Gilbert helped lobby for the “MiThrive” tax breaks, which were approved in 2017. The incentives are aimed at jump-starting “transformational brownfield projects” across the state. The incentives allow developers to keep up to 50 percent of state income tax generated by those who take new jobs or live in units at the sites, and sales tax created by construction.

The incentives could return “an estimated $618 million to Bedrock over the next 30 years,” Detroit Free Press business columnist John Gallagher wrote in December 2017. But Gilbert has to spend “roughly $2 billion of his own and his partners’ cash to qualify. If he doesn’t do what he’s promised, he gets nothing from the incentives.”

Ketai says the incentives do not take money from Detroit’s coffers, will generate more tax revenue in the long run, and aid other developers as well. Some 200 businesses now operate in Detroit in Gilbert buildings that were not there before.

“We’re never quite done with our acquisitions,” says Ketai. The Bedrock team stands ready, he says, to move quickly in its commitment to attract—and keep—employers and workers in Detroit. It was evidenced, he says, in one of his toughest Bedrock deals: Ally Financial, formerly known as GMAC, was going to move employees from downtown and consolidate them in the suburb of Southfield. To stay in the city, Ally needed 331,000 contiguous square feet (31,000 sq m) of office space.

Ketai’s team suggested One Detroit Center. But “it wasn’t our building and it wasn’t contiguous space,” says Ketai.

“We went after that building and it wasn’t even for sale,” he says. The Bedrock team convinced the owner and closed the building’s sale on the same day that Ally signed a new lease to relocate there. “They’re very happy, and they love their space, and they love being downtown.

“It’s all part of driving this whole development of the city forward,” says Ketai. “I doubt that we’re done, and I know we’re not done in convincing other people to join in.”