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Dan Gilbert Taking Detroit to Overdrive

By Tom Walsh

If it feels like Dan Gilbert has taken Detroit’s development surge and thrust it into hyperdrive, get ready to buckle up and brace for more.

ISMs Day, July 2015., Dan Gilbert speaking to team members about the Quicken Loans and FOC culture and ISMs.

Borrowing a Winston Churchill quote, after a pivotal World War II battle turned the tide for Britain, Gilbert said, “This is not the end. It is not even the beginning of the end. But it is,perhaps, the end of the beginning.”

Translation: Detroit’s revival, with QLine streetcars to debut this spring and plans underway for a dazzling 52-story skyscraper on the old Hudson’s site – on the heels of news that a Shinola Hotel is coming, Microsoft moving downtown and a major neighborhood development in Brush Park breaking ground – is still at an early stage.

“We’ve got a lot more to go. I don’t think you’re ever really done as a city. You’re either growing or dying, nothing in between,” said Gilbert, Quicken Loans founder and chairman, whose family of companies has acquired more than 95 properties and grown to 17,000 employees in the city since Gilbert moved Quicken headquarters with 1,500 employees downtown in 2010.

Gilbert’s Quicken and Rock Ventures teams have led development of the QLine project and Detroit’s blight removal task force, are investing $20 million in community projects this year, and and are planning to renovate the David Stott building, Book Tower and the old Detroit Free Press building downtown.

But Gilbert is also reaching out to CEOs from Silicon Valley, Wall Street and elsewhere to peddle a much bigger vision for his hometown.

“Detroit is going to be the center of the world in the next 10 or 15 years, with technology changing the whole world economy. Detroit has a real chance to be THE city where it’s all centered. It’s right there for us,” Gilbert said.

Gilbert recently sat down with the Detroiter to discuss his impact on Detroit’s revitalization and plans for the future.

You have talked about the need to “go vertical” as the next stage of Detroit’s growth in the city core. Why? Where? How soon? And how high?

If we don’t grow vertically, we can’t grow anymore because we’re full (downtown). There are companies that want big chunks of space, 50,000 square feet, and we have nowhere to put them. So we have to build, and that’s the focus of the next few years for sure. Hudson’s will be the tallest building in Detroit, 52 stories, 734 feet high. The tower will be residential. There will be retail on the street and the first floor will be like a showcase — there will be a gap on Woodward, so cars can come in and drive out to do a reveal or something. We plan to showcase the best in technology in a civic space. We’ll also be building on the Monroe blocks and Brush Park.

The QLine streetcar is getting ready to roll. What do you expect the impact to be?

I think it’s going to have more of an effect than anybody believes. The fact that most of QLine is curbside – which I really fought for, big time – will make it easy, logical to use. I don’t know if there’s a street in the world like Woodward Avenue, from Grand Boulevard to the river. It has a beautiful river and a riverwalk and then QLINE-Streetcaryou come up through parks and retail developments, new construction, and this huge entertainment district that’s got four stadiums … and then you have all the museums. It’s got everything. I think the QLine already has an effect on the real estate market. There are numerous real estate developers who have jockeyed and bought along the route. One of the most impressive things about the Ilitches’ development of The District Detroit is, look at where they put that stadium: right up to Woodward. I was so excited when I saw that. I don’t think that happens without the QLine.

Tell us about your fellow NBA team owner Tom Gores and his decision to move the Detroit Pistons downtown. He is partnering with you on a bid for a pro soccer team, which you would like to build on the unfinished jail site downtown. What will his impact be?

Once the Sacramento Kings opened their new arena downtown last year, the Pistons had the only one of 29 NBA arenas not located in the city – not only not in the city, but 35 miles away. When LeBron James went to Miami for four years and our (Cleveland Cavaliers) team wasn’t doing well, we were at about the same record as the Pistons. I don’t think we’re any better marketers than them; I don’t think there’s any greater appetite for basketball in Cleveland than in Detroit – but we were getting 18,000 fans and Pistons were announcing 9,000 but getting 5,000 in the seats. Why is that? We have the same kind of team, both rebuilding. But you know you’re going to go downtown, have dinner, go to a casino and walk around (in Cleveland).

In Detroit, am I going to drive 35 miles, park 300 yards away on asphalt and freeze my tail off to watch a team that’s not competitive, and then walk out and have nowhere to go to dinner? In the city, you have more chance of drawing fans when the team is not so great, right? I also think that (Tom Gores) genuinely wants to participate in Detroit’s turnaround.

The big private investors in Detroit’s resurgence have been native Detroiters who built successful businesses: the Ilitch family, yourself, Peter Karmanos. What about big money from other states and countries? Are we on the cusp of a major investment influx from outsiders?

I think if you go to Midtown, a significant portion of the developers are out-of-state people. Now, the big investors, there’s no doubt in my mind they want to do something. But they don’t want to do little deals, they want do something big.

Next year, the Urban Land Institute (ULI) is bringing its national 2018 Spring Meeting, about 4,000 people from all over the world, top real estate developers and experts to Detroit. It’s going to be huge. The REITs (real estate investment trusts) are very interested in Detroit. That’s why this ULI convention is a big one, because almost every big real estate developer or owner participates in it.

What is the solution to the oft-cited “two cities” dilemma of a thriving Detroit downtown surrounded by struggling neighborhoods? How will people across the city benefit from Detroit’s resurgence?

When we moved downtown, we had 75 people that lived in the city of Detroit. Now we have 3,500 and we would have 2,000 more if there was product for them to move into. They live in nearly every neighborhood
in the city. You absolutely have to have commercial neighborhood services and jobs. But most of the jobs are going to be in downtown and Midtown for the people in the neighborhoods. That’s just a fact. And the best thing you can do for the neighborhoods is to have jobs, period. We opened up a company named Rock Connections, a call center, just a few years ago. Of the 850 people there, most are Detroit residents. Our CEO, Victor You, wants to hire 2,000 more. We have nowhere to put them; we have no space. In my opinion you need these sort of entry point-type jobs. They get $12 to $15 an hour, plus incentives based on sales sometimes, but full benefits, and the the good ones move onto other businesses. I’m so high on the call center. I’m trying to get everybody that outsources that service – whether it’s to India or the Dakotas or Nebraska – let’s get your call centers in Detroit.

Where does the rapid evolution of self driving cars and other technologies fit into the Detroit development story?

I have to tell you, this is not something I could have predicted, that car technology – what they’re calling autonomous vehicles – was going to take off so fast. I went to CES (Consumer Electronics Show) in Las Vegas the last two years and it’s like THE car technology show. It’s all they talk about. The technology guys want (mobility and self-driving cars) here and the car companies want it here. There’s a case to turn one urban core into the premier place. In Michigan, the governor and legislature already passed the best law in the country for sure, allowing autonomous vehicle testing. And now, the next phase in my view, is turning Detroit into the city where you go to see how this works. You get ahead of the curve.

Tom Walsh is a former columnist for the Detroit Free Press.

Read more from this issue below: 

Under Construction: Michigan’s Build-To-Suit Market

The Ilitch Touch: Transforming Detroit’s Downtown

Detroit: A City on the Rise