Detroit native Dan Gilbert bets big on the city's rebound
DETROIT (Reuters) - Long an emblem of urban decline, Detroit is suddenly being marketed as America's comeback kid.
The campaign's most vocal salesman is Dan Gilbert, the 49-year-old founder and chairman of Quicken Loans and the majority owner of the Cleveland Cavaliers basketball team.
Gilbert, a Detroit native, isn't content to just talk up his hometown. In the last year, he has snapped up so many downtown properties he is now one of the largest private landowners in the city.
In all, Gilbert controls 1.7 million square feet in Detroit, including four office buildings and two parking platforms in a four-block area of Woodward Avenue.
His plan: To leverage his wealth and connections to create a cluster of entrepreneurial companies in downtown that will lure other start-ups away from Chicago, New York and Silicon Valley. He calls his vision "Detroit 2.0."
Last year, Gilbert moved 1,700 Quicken employees from the suburb of Livonia into the Compuware building downtown. He plans to move another 2,000 workers into his newly renovated office buildings by year end.
Gilbert won't disclose what he paid for the properties. But he doesn't dispute reported estimates of $50 million. He spent millions more renovating the top four floors of the Compuware building, which overlooks what once was the busiest pedestrian intersection in America, according to local historians.
"We think we're buying at the bottom," Gilbert said. "But we can affect the outcome as well. We look at ourselves as operators. We're not just waiting and seeing what the market does."
He gutted the top five floors of the Compuware building, moved executive offices to the interior to give all employees window views of downtown and the Detroit River, and added inviting social lounges, recreation rooms and a basketball court.
He has also pumped money into a local venture capital group -- Detroit Venture Partners -- whose mission is to invest in Michigan start-ups and move them downtown."
It's about transforming a city that has lost its way," said Josh Linkner, CEO and founding partner of DVP. "Dan is a visionary, and he's investing heavily. He's putting his money where his mouth is."
DVP, which just got a big financial and publicity boost when it added basketball legend Earvin "Magic" Johnson to its board, moved into the long-shuttered Madison Theater Building in October.
The building, more than 90 years old, has been completely gutted and rebuilt from the inside out. Its anchor tenant will be Skidmore Studio, a 52-year-old advertising and design firm -- and Quicken vendor -- which is relocating from the suburbs.
One of Skidmore's neighbors will be Are You A Human, a young technology company that received early seed-funding from DVP. Started by a group of University of Michigan students, Are You A Human was courted by Silicon Valley investors but identified with Gilbert's message.
"It's more exciting to be a part of the resurgence in Detroit," said Tyler Paxton, one of the company's co-founders. "We put feelers out on the West Coast, but all four of us are from the Michigan-Detroit area and we wanted to stay."
Skeptics question whether Detroit, with its failing schools and traditionally weak leadership, can be reborn according to Gilbert's vision. Half the urban population is illiterate and only a quarter of students graduate from high school. Can a place with such bleak education outcomes be taken seriously when it talks of becoming TechTown?
Gilbert is quick to point out that Detroit 2.0 is not a vision he can achieve alone. But he likes the challenge. And he likes his public partner, Detroit Mayor Dave Bing, a former NBA point guard whose pro-business rhetoric represents a marked change from past administrations.
"He's the right mayor for the right time," Gilbert said. "He's no-nonsense and as honest as they come. He's open and a great listener."
(This version corrects the seventh paragraph corrects from top five floors to top four floors)
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