Is Dan Gilbert Detroit’s New Superhero?

Stop talking about how to save Detroit. Local billionaire Dan Gilbert is playing up the city’s strengths to make it vibrant once again.

Rock Ventures and Quicken Loans Chairman Dan Gilbert listens to Chrysler Group Chairman and CEO Sergio Marchionne announce on April 30, 2012 that Chrysler will have an office presence in downtown Detroit for the first time.  
National Journal
Feb. 27, 2014, 8:08 a.m.

This art­icle is part of a weeklong Amer­ica 360 series on De­troit.

DE­TROIT — The signs are every­where: “Op­por­tun­ity De­troit.” They hang from light posts, bill­boards, and buses, paid for by the most power­ful man in this city. He’s the cata­lyst for this city’s eco­nom­ic res­tor­a­tion, and some cit­izens are hail­ing him as the sa­vior of De­troit.

And no, he’s not the new may­or.

Dan Gil­bert doesn’t need a polit­ic­al title; elec­ted of­fice could hardly aug­ment his fin­an­cial in­flu­ence over De­troit. The founder and chair­man of Rock Ven­tures, an um­brella en­tity that in­cludes Quick­en Loans and scores of oth­er prop­er­ties, Gil­bert has con­sol­id­ated power in the re­gion in an as­ton­ish­ingly short time. First, he moved Quick­en Loans’ headquar­ters from the sub­urbs to down­town in Au­gust 2010. In the three-and-a-half years since, Gil­bert has es­tab­lished him­self as De­troit’s de facto CEO. He now con­trols more than 40 down­town prop­er­ties — cov­er­ing nearly 8 mil­lion square feet of real es­tate — and his com­pan­ies have shif­ted more than 12,000 em­ploy­ees in­to the city. To date, Gil­bert’s total in­vest­ment in De­troit nears $1.5 bil­lion. (For com­par­is­on, the city’s an­nu­al budget for 2013 was $1.12 bil­lion.)

More than just a CEO, Gil­bert has taken on out­size roles as De­troit’s chief boost­er, de­veloper, and now, se­cur­ity of­ficer. His com­pany squires out-of-town re­port­ers and pro­spect­ive busi­nesses on down­town tours, selling spe­cif­ic points of pro­gress and try­ing to frame De­troit as Amer­ica’s smartest urb­an in­vest­ment. He is re­cruit­ing new busi­nesses (more than 100 so far) and is evan­gel­ic­al about the im­port­ance of cre­at­ing spaces that draw foot traffic in down­town and midtown neigh­bor­hoods.

And, in the ab­sence of a func­tion­ing, solvent loc­al gov­ern­ment, Gil­bert has taken it upon him­self to con­front safety con­cerns by in­stalling a state-of-the-art sur­veil­lance sys­tem down­town to sup­ple­ment an un­der­fun­ded and un­der­manned De­troit Po­lice De­part­ment. The ACLU says it dis­ap­proves of this giv­en the po­ten­tial pri­vacy con­cerns but says it can­not pre­vent busi­ness own­ers from mon­it­or­ing their own prop­er­ties.

In a lengthy in­ter­view, Gil­bert said he is just “filling some of the void” cre­ated by years of fisc­al mis­man­age­ment and polit­ic­al cor­rup­tion. He says he is do­ing for De­troit what the city can­not do for it­self — even if it gives him un­pre­ced­en­ted, un­elec­ted power over Michigan’s largest met­ro­pol­is. “If it serves as some form of a bridge un­til the city gets fin­an­cially health­i­er, that’s OK,” Gil­bert says. “If we have to do that, we’ll do it. We can af­ford it.”

That he can. Gil­bert’s net worth was es­tim­ated at $3.9 bil­lion last Septem­ber by For­bes, up from $1.9 bil­lion one year earli­er. His for­tune is self-made. After start­ing Rock Fin­an­cial, a mort­gage com­pany he launched with sav­ings from de­liv­er­ing piz­zas as a stu­dent at Michigan State Uni­versity, Gil­bert sold it for $532 mil­lion in 1999. Three years later, he bought back the com­pany, re­named Quick­en Loans, for $64 mil­lion. Today it is the coun­try’s largest on­line lender and eas­ily the biggest money­maker for Rock Ven­tures. Among a host of oth­er hold­ings, Gil­bert, 52, owns the NBA’s Clev­e­land Cava­liers and op­er­ates the team’s sta­di­um, Quick­en Loans Arena.

Gil­bert, a shrewd busi­ness­man, is also a nat­ive son. Like his fath­er and grand­fath­er, he was born in De­troit and grew up just out­side the city in South­field. Gil­bert’s gen­er­a­tion largely saw De­troit as a battered city, bleed­ing res­id­ents, yet he says the still-re­cent memory of a majest­ic Mo­tor City cap­tiv­ated him. Dec­ades later, as De­troit’s prop­erty val­ues hit rock bot­tom, Gil­bert watched a parade of col­lege gradu­ates re­ject his of­fers to work in isol­ated sub­urb­an struc­tures.

So, Gil­bert thought he could merge his per­son­al and pro­fes­sion­al goals by re­viv­ing De­troit and tak­ing ad­vant­age of what he calls the city’s “sky­scraper sale.” He saw him­self renov­at­ing down­town his­tor­ic build­ings and filling them with his own em­ploy­ees. At the same time, he could ex­pand his busi­ness em­pire by lur­ing busi­nesses to a newly vi­brant “urb­an core,” where they would then rent space in his prop­er­ties. It was an am­bi­tious and risky move, even for such a rich guy.

“Not every­body has the stom­ach for it,” says Avis C. Vid­al, a pro­fess­or of Urb­an Stud­ies and Plan­ning at Wayne State Uni­versity in De­troit. “There’s a lot of risk go­ing in­to this mar­ket, and [Gil­bert] is either go­ing to be a big win­ner or a big loser.”

Giv­en dec­ades of race and class ten­sion between De­troit and sur­round­ing sub­urbs, some here are skep­tic­al about any­one — much less a white man from South­field — mono­pol­iz­ing the city’s down­town real es­tate. And they’ve seen this movie be­fore, with oth­er wealthy white busi­ness­men and de­velopers — such as Mike Il­litch, own­er of two loc­al pro­fes­sion­al sports teams — hailed as the po­ten­tial her­oes who would res­cue De­troit. Quick­en Loans’ role in the subprime mort­gage crisis and Gil­bert’s cam­paign con­tri­bu­tions to the now-in­car­cer­ated former May­or Kwame Kilpatrick have only provided more am­muni­tion for his crit­ics.

And ul­ti­mately, there is the fact that Gil­bert is a busi­ness­man, not a phil­an­throp­ist. He ac­know­ledges that by pro­mot­ing De­troit’s re­sur­gence, he is also help­ing out his own fin­an­cial self-in­terest, and he makes no apo­lo­gies for it. “We call it do­ing well by do­ing good,” Gil­bert says. “We don’t see any con­flict in that.”

Still, most De­troiters are buy­ing in. Gil­bert is widely viewed as a good cor­por­ate cit­izen, un­like oth­er loc­al ty­coons who have been re­viled by res­id­ents for pur­chas­ing prop­er­ties only to let them sit idle or raze them for flat park­ing lots. May­or Mike Dug­gan, who took of­fice in Janu­ary, praises the im­pact of Gil­bert’s ef­forts in mak­ing De­troit a more at­tract­ive place for young pro­fes­sion­als to live. “This next gen­er­a­tion has an aw­ful lots of folks who don’t want that ‘live in the sub­rbs with a minivan’ ex­per­i­ence. They want to be in the urb­an set­ting,” says Dug­gan. “For a lot of people, Dan Gil­bert has provided that op­por­tun­ity here.”

Gil­bert’s (and the city’s) next big chal­lenge is to spread this suc­cess to De­troit’s sprawl­ing out­er neigh­bor­hoods, many dev­ast­ated by aban­don­ment. De­troit can nev­er re­gain its repu­ta­tion as a world-class met­ro­pol­is while its poorest sec­tions rot around a re­vital­ized down­town. Nor can the city solve its oth­er ma­jor prob­lems like crime, edu­ca­tion, or the lack of jobs without first elim­in­at­ing De­troit’s blight. “Not part of it, not some of it, not most of it, but all of it,” Gil­bert says. De­troit Emer­gency Man­ager Kevyn Orr es­tim­ates that it costs $8,500 to de­mol­ish a house here; De­troit has roughly 78,000 aban­doned build­ings.

Still, Gil­bert re­mains un­daun­ted. As the co­chair of the De­troit Blight Task Force, a privately fun­ded group, he is ex­ecut­ing a vast sur­vey pro­ject. Teams are as­sess­ing 382,000 par­cels of prop­erty to pro­duce a data­base that will al­low the task force to ana­lyze and un­der­stand the scope of the prob­lem. Then, Gil­bert and his team will present the find­ings and de­vel­op a plan by this spring to ab­ol­ish the city’s blight.

It’s likely to be an am­bi­tious and in­cred­ibly ex­pens­ive pro­pos­al, po­ten­tially cost­ing north of a half bil­lion dol­lars if every va­cant struc­ture is razed. And it’s one that may well be­ne­fit Gil­bert in the long run. But if he is known for one thing around here, it is for reach­ing for his wal­let when De­troit can’t cov­er its tab and bet­ting, in the end, that he’ll get paid back in some way.

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