Housing USA, Detroit

6 min read

One man remakes downtown

Detroit, MI—This struggling city has a land mass of 138 square miles. And about dead-on 7.2 miles of it is certifiably “back.” A section encompassing downtown, Midtown, and some adjacent residential areas now have the underpinnings of a legitimate, and in some cases stellar, urban neighborhood. The story of its emergence is a quintessentially Detroit one. The area has grown very quickly, driven by a few prominent businesspeople, and government engineering. The result so far is a city-building initiative that’s astonishing in scale, yet unproven in durability.

The remaking of downtown Detroit, namely by Dan Gilbert, is astonishing to me, at least. When first visiting downtown in 2007, I was shocked by its conditions (not to mention the bombed-out-looking neighborhoods just beyond). After leaving a matinee Tigers game, I spent the afternoon wandering streets that were desolate, even menacing. By nightfall, the only place still open to hang out in was a large, mostly empty hot dog shop.

But during my most recent trip to Detroit in December—and my first since 2013, when the city went bankrupt—I found the downtown had totally transformed. There are slick coffee shops, bars, even luxury retail, including a John Varvatos and Texas de Brazil. There are far more people on the street, including a stylish, racially-mixed professional class that was largely absent before. According to Realtor.com, Detroit is one of America’s leading downtown comeback stories, with a residential population that increased by 15 percent, and home prices by 150 percent, since 2012.

Some might credit Detroit’s targeted revitalization strategy, which has been to “downsize” the city by ending services in many neighborhoods, and subsidizing grand-scale projects within these 7.2 square miles. But downtown continued stagnating years after many of these projects were built. The true changes came from private investments by Gilbert, a Detroit-area native and billionaire who owns Quicken Loans. In 2011, Gilbert moved his company’s headquarters to downtown, settling his employees into a high-rise overlooking Campus Martius Park, the de facto heart of downtown. His business empire has since expanded to include over 100 companies, a majority of them in Detroit. Rock Ventures is the real estate company that manages his Detroit building portfolio. In just these few years, it has snapped up 95 properties—almost all of them in the CBD—and has either redeveloped them, or plans to.

Gilbert has already completed various office and residential projects, along with partially financing a streetcar that goes up and down Woodward Avenue. Future projects include restoring the Book Tower, a 38-story, historic neo-classical masterpiece that has long sat empty; building several luxury hotels; building a micro-apartment project; and an 800-foot residential tower that broke ground in mid-December, and will become Detroit’s tallest building.

Perhaps more impressive is Gilbert’s larger vision, which was described to me during a recent tour of the Quicken Loans headquarters given by Jeffrey Brown, a Rock Ventures staffer. Brown showed me a built simulation of downtown Detroit that included special markings on all the buildings Gilbert now owns. While they encompass a lion’s share of the overall properties in Detroit’s CBD, Brown also pointed to unmarked structures that Gilbert doesn’t yet own – but has plans for. This includes redeveloping a site that now holds the city jail; bringing a MLS team to Ford Field; and spearheading the effort to attract Amazon HQ2. Gilbert’s overall point is not to own all of downtown, but to attract a diversified ecosystem that, as he explained at the recent groundbreaking, “is going to build wealth in the process” for the entire city. This is why Rock Ventures also lauds the growth occurring just north in Midtown, on properties owned by the billionaire Ilitch family.

Gilbert’s undertaking is thus a spectacular modern example of urban renaissance. A billionaire who could’ve remained in his comfort zone has instead risked capital to develop in his impoverished hometown. And the local government, recognizing its need for growth, has, unlike many U.S. cities today, accommodated him. The hope from both is that this prosperity eventually spreads across Detroit, to still-declining areas.

But this could also prove to be one giant failed experiment, since it imitates the top-down, even oligarchical model of Detroit’s past. The city rose because of big auto companies that dictated growth and land-use. Even following their exit, the city has been suspicious about replacing its economic base with anything resembling bottom-up entrepreneurialism. Detroit is notorious for inflicting regulatory cobwebs and random stings onto small businesses, while subsidizing large factories, offices, stadiums and casinos. The Gilbert growth spurt, which began more organically, is starting to mirror this cronyism. In May, the Michigan state legislature passed bills that, according to a Detroit Metro Times report, could help Gilbert pocket up to $1 billion in taxpayer money for further redevelopment. Rumors have also surfaced about subsidizing Gilbert’s soccer venture – as happened with Detroit’s other sports arenas.

Of course, that would add an asterisk to a downtown revival that isn’t viewed positively by everyone here. Various people I’ve spoken with, including some downtown small business owners, view this rebuild-the-core strategy as a case of government-driven gentrification. Certain amenities get subsidized and others don’t, meaning there is a perceived bias as to which demographics the city wants to attract. Others question whether propping up just one area benefits the whole city, or is a corporate welfare scheme that strips from neighborhood services, while burdening the taxpayers who still live in those neighborhoods. It has angered homeowners such as Gary Schwartz, a local artist who lives in Woodbridge, on the outer edge of the 7.2-mile boundary, just a block from where urban prairie takes hold.

“The majority of people it does not help,” said Schwartz, of the downtown revival. “We pay very high taxes, and we get very little back.”

Then there’s the question of whether, given all the subsidies, downtown’s revival is even real, or is a Potemkin Village that will stagnate once the subsidies stop. Time will tell, regarding this mass foray into city building by the government, and by Gilbert. But for now, it’s made, at least, a small slice of The D livable again.

Story Contacts:
Jeffrey Brown
Detroit Ambassador, Rock Ventures LLC

Tracy Evans
Events and Promotions Manager, Founders Brewing Co.

Gary Schwartz
Adjunct Faculty, University of Michigan School of Art & Design