The Making of the District Detroit

In summer 2014, the Ilitch organization, owners of Little Caesars Pizza, the Detroit Tigers Major League Baseball team, and the Detroit Red Wings National Hockey League team, dropped a public bombshell, unveiling what would become a $1 billion–plus project in downtown and Midtown Detroit. The plan, called the District Detroit, included a new glitzy, state-of-the-art, 20,000-seat hockey arena, along with a massive commercial, residential, and entertainment component spanning a 50-block, 385-acre (156 ha) area.

The District Detroit encompasses old gems like the Fox Theatre performing arts venue, the Fillmore Detroit concert venue, the Tigers’ Comerica Park, and Ford Field, home of the National Football League’s Detroit Lions. The district will include restaurants, bars, retail shops, offices, housing, and the new home for the Mike Ilitch School of Business at Wayne State University, which is expected to bring 3,500 graduate and undergraduate students to the area.

The District Detroit is connected by sidewalks and streets and will include improved light poles, planters, landscaping, and medians. The district is regarded as an ongoing development effort, and at this time, there is no scheduled completion date.

The urban sports/entertainment district in Detroit is not the first in the country. But the District Detroit, which is being developed in part by Olympia Development, an Ilitch-owned development company, is being billed as one of the largest of its type in the nation, with eight world-class theaters, five mixed-use neighborhoods, a 250- to 300-room hotel, restaurants, bars, and three professional sports venues to host the aforementioned baseball, hockey, and football teams, plus the National Basketball Association’s Detroit Pistons. Two of the stadiums, Ford Field and Comerica Park, were built more than 16 years ago, and some of the entertainment venues to be part of the District Detroit have been around for decades. The new hockey and basketball venue, Little Caesars Arena, opened in September 2017.

The company’s website boasts that the project will link “downtown and Midtown into one contiguous, walkable area, where families, sports fans, entrepreneurs, job seekers, entertainment lovers, and others who crave a vibrant urban setting can connect with each other and the city they love.”

Data from the University of Michigan project that the District Detroit will account for an economic impact of more than $2 billion by 2020, plus create more than 20,000 construction and construction-related jobs and 3,000 permanent jobs. It has already generated more than $700 million in contracts for Michigan companies and created 836 apprentice jobs.

Among the developments under construction are the Mike Ilitch School of Business, for which Marian and Mike Ilitch contributed $40 million toward the $50 million total cost.

In addition, Google will take up nearly 30,000 square feet (2,800 sq m) on the second and third floors of a new mixed-use structure being built next to the Little Caesars Arena, and a new nine-story, 234,000-square-foot (22,000 sq m) headquarters building for Little Caesars Pizza is being built at a cost of $150 million. Little Caesars will be moving to the new building from Fox Office Center, which is connected to the Fox Theatre, a grand entertainment venue. That building will continue to be used for employees of Ilitch Holdings, Olympia Development, and others.

The Ilitch Family
At the core of Ilitch Holdings is the Ilitch family. Mike and his wife, Marian Ilitch, started it all. Friends would say that Marian, a mother of seven, had the financial acumen while Mike had the creative genius and salesmanship. Mike, affectionately known as “Mr. I” among employees and athletes on the Red Wings and Tigers, died in February 2017 at age 87. In 2004, as his health was declining, Ilitch passed the baton to his youngest son, Christopher Ilitch, 52, who is the chief executive officer of the parent company, Ilitch Holdings. Marian, well into her 80s, is still involved in the company.

The elder Ilitches made their initial fortune from Little Caesars Pizza, which allowed them to bankroll their ambitious Detroit projects. It became quite evident that there was plenty of dough to be made in the pizza world.

They started in May 1959 with a store in Garden City, a working-class suburb of Detroit with a population of nearly 40,000. The pizza shop grew into a franchise that has thousands of stores worldwide.

Ilitch’s entry into Detroit and the entertainment industry began decades ago.

“This is not an overnight sensation,” says Robin Boyle, professor of Wayne State’s Department of Urban Studies and Planning. “This is something that starts actually more than a few decades ago. Mike Ilitch decides to really invest in an entertainment strategy.”

In 1982, Ilitch, a former minor league baseball player in the Detroit Tigers farm system, bought the Red Wings, which played hockey in the Joe Louis Arena along the Detroit River.

The purchase came as Detroit was on a continuing downward slide, which had been accelerated by the 1967 riot that decimated many commercial and residential communities in the city. More than 50 years later, some neighborhoods have yet to recover.

Signs of the city’s slippage were pervasive. In 1983, the city’s last department store, Hudson’s on Woodward Avenue, closed its doors, leaving another building carcass downtown. It was razed in 1998.

In 1987, Ilitch surprised locals by announcing he was buying the iconic Fox Theatre, about a half mile (0.8 km) north of the Hudson’s site, and would move his headquarters from the suburbs to an office building attached to the theater. The Ilitch family invested $12 million in an 18-month restoration to bring back the theater to its glory days.

In 1992, Ilitch bought the Detroit Tigers from another pizza baron, Tom Monaghan, then owner of Domino’s Pizza, one of Ilitch’s competitors.

Ilitch’s grand vision continued to expand. In 1996, Wayne County voters gave the green light to a 2 percent car rental tax and a 1 percent hotel room tax to finance construction of a new baseball stadium across from the Fox Theatre. Eventually named Comerica Park, it opened in April 2000. Two years, later, the Lions, owned by the Ford family, moved from Pontiac, Michigan, north of Detroit, to a new a stadium right next door— literally a few footsteps from Comerica Park.

Slowly, things were taking shape in a concentrated area on the northern edge of downtown. The Ilitch organization’s next major acquisition took place in 1999, when Marian Ilitch became a partner in the MotorCity Casino Hotel, one of three casinos in Detroit. It is housed in a space off Lodge Freeway once occupied by a Wonder Bread factory, about 1.5 miles (2.4 km) from where Little Caesars Arena now stands. In 2005, she got the green light from the Michigan Gambling Control Board to buy out her partners.

Things appeared to be quiet for the Ilitch organization as it continued to operate its sports teams and pizza empire, but then a new kid appeared on the block: Dan Gilbert, who grew up in the Detroit suburb of Southfield and founded Quicken Loans, a national online mortgage company.

In 2010, Gilbert moved his suburban headquarters and 1,700 employees to the Compuware Building downtown. He shared the building with Compuware, whose cofounder Peter Karmanos Jr. had constructed the impressive, 15-story office building in 2003 in what had been considered until then another dead zone downtown.

Gilbert started snapping up tall downtown office buildings and eventually bought the Compuware Building. He also moved more employees into the city and in 2013 bought the Greektown Casino Hotel downtown. For the next few years, Gilbert, who also owns the Cleveland Cavaliers, became known as the person who was spearheading downtown Detroit’s comeback.

But the Ilitch organization, which had been relatively quiet for years, roared back in 2014 with its announcement of the District Detroit and jumped into the front seat alongside Gilbert in the drive to lift downtown and Midtown Detroit into a new era.

Housing Shortage Downtown
In recent years, as more young people have moved to the city, a housing shortage has developed in downtown and Midtown Detroit, and real estate prices and rents have risen quickly.

Detroit residents saw the average rent for a one-bedroom apartment rise 30 percent, from $765 in 2013 to $995 in 2016, according information from Rent Jungle and the U.S. Census Bureau’s American Community Survey, but rents in the trendy areas of downtown and Midtown rival those in other major cities like Chicago. A three-bedroom apartment in the downtown neighborhood of Grand Circus Park averages $2.25 per square foot, or $4,250 per month, according to a recent report from Broder & Sachse Real Estate, which specializes in property management and development.

The District Detroit hopes to capitalize on that demand with new residential offerings. The company says 20 percent of the units would be designated as affordable housing.

“Olympia Development’s plan to preserve several historic buildings and bring hundreds of new residential units into the heart of the city is a clear sign of the demand for housing in Detroit,” Detroit Mayor Mike Duggan said in a statement last year. “The fact that they are including nearly 140 units of new affordable housing across these six developments aligns perfectly with our efforts to build a city that includes everyone.”

Part of the development includes Columbia Street, located about three blocks south of the arena, which will have nearly 40,000 square feet (3,700 sq m) of new retail space, plus a number of dining options and a European-style promenade with cobblestone paving, festooned with lights and offering outdoor dining space. Retail tenants are expected to begin operating this fall.

“It accomplished a major planning goal for the city,” Mark Rosentraub, director of the Center for Sport & Policy at the University of Michigan, says of the District Detroit. “It now establishes a link between downtown and Midtown. You have two distinctive districts doing well, but there was not a strong link.”