By Nick Carey
DETROIT Feb 19 Dan Gilbert has a vision for
downtown Detroit that many would find hard to square with the
long, painful decline commonly associated with this city: a
vibrant urban core full of creative, innovative and talented
Yet Quicken Loans, the mortgage lender Gilbert co-founded in
1985, has invested $1 billion over three years, bought some 2.6
million square feet of commercial space in the downtown area and
moved 7,000 employees there in a bid to make that vision a
The company is in talks with 80 to 100 retail outlets and
restaurants to open downtown space, and Gilbert and other
business leaders have fronted most of the money for a $140
million light rail line in the heart of the city. Quicken has
also invested in an incubator for technology startups, which now
Gilbert, who grew up in a Detroit suburb, wants to brake the
exodus of educated young people from the only state in the
country that lost population between 2000 and 2010. Among those
who set up home elsewhere in recent years are two founders of
daily deal marketer Groupon Inc, University of Michigan
graduates from the Detroit area whose startup took root in
"Young people are fleeing the state and we need to give them
a reason to be here," Gilbert, 51, said in a recent interview in
the Madison Theatre, one of many buildings his firm has bought.
Part of his zeal comes from his own need to attract top
talent to Quicken Loans, which runs a nationwide online lending
business that Gilbert says makes it "a tech company that happens
to sell mortgages." Having avoided the subprime mortgages that
crippled many of its competitors in the housing crash, the
company has grown rapidly in recent years.
Quicken Loans moved downtown from the suburbs in 2010. Home
loan volume went from $30 billion in 2011 to $70 billion in
2012; Gilbert sees it rising to $100 billion this year. He
anticipates Quicken will surpass JP Morgan Chase as the
country's No. 2 retail home loan provider during this quarter.
The company gives employees who buy property in the city a
gift of $20,000 on condition they live in the city for five
years. Residential real estate occupancy rates in the downtown
and midtown areas are close to 100 percent.
That's helping to fill in the public services, cut as part
of Detroit's attempt to stave off bankruptcy. Quicken has
installed cameras and hired security teams to ensure employee
'DE FACTO RACISM'
Gilbert's deep pockets have their detractors. In a recent
op-ed in the New York Times entitled "Detroit, the Billionaire's
Playground," author Mark Binelli said residents worried that
Michigan may install an unelected emergency financial manager to
fix the city's finances "shouldn't forget the ways in which
power has already been ceded to an unelected oligarchy, whose
members might, no matter how ostensibly well intentioned,
possess questionable ideas about urban renewal."
There is also some criticism that the downtown redevelopment
is creating an island of prosperity detached from the city's
black inhabitants, who make up 83 percent of the population.
Hard data does not exist for the racial makeup of downtown,
but it is generally whiter and wealthier than Detroit's poor
neighborhoods. "We're focused on downtown - that's where we can
make a difference," Gilbert says.
While there may be security and other menial jobs for
Detroit's African American population downtown, Mayor Dave Bing,
who is black, says the city needs investment in retraining and
educating workers who in the past held automotive or
manufacturing jobs for jobs in the city's new economy.
For others, the focus on downtown is a slap in the face for
Detroit's poor blacks. "This is de facto racism," said Pastor D.
Alexander Bullock, a local leader of Jesse Jackson's Rainbow
PUSH Coalition. "There is clearly a plan to invest in the
downtown area, but there has been no urban reinvestment in poor
Mayor Bing, who is cutting spending to try to avert the
state's takeover of the city's dismal finances, is grateful for
"Downtown is coming back very strong, and that has been
driven by the private sector," he said.
Sarah Brithinee, 26, is one of those who sees a "land of
opportunity" in her hometown of Detroit, the opposite of the
crowded marketplace she found during three years in Los Angeles.
Having returned in 2011, she is chief executive of Wedit,
which rents out digital cameras for wedding parties, then edits
the footage into commemorative videos.
"I feel for the first time in my life I am making a real
difference by coming back to Detroit," Brithinee said.
Gilbert's father and grandfather both owned businesses in
Detroit before much of the city's white population began moving
to the suburbs 80 years ago, where there were federal subsidies
for land. That exodus accelerated after race riots in 1943 and
1968 and was compounded by the slow decline of automotive jobs.
On the walls of some of the office space Quicken has taken
over in Detroit there are giant black and white reproductions of
photos of the city in all its glory, a hustling, bustling city
with a dynamic core.
For Elizabeth Rose those images are part of her childhood in
the 1960s when her father worked as a mortgage banker in the
First National Building downtown, a building Quicken Loans now
owns. Rose runs the first branch of coffee emporium Roasting
Plant outside New York on the ground floor, where beans are
piped up from the basement and roasted.
"For me, coming back was all about Quicken Loans and the
commitment they have made to Detroit," Rose said. "I wouldn't
have come back if they weren't doing this."