Gilbert, Ilitch pitch Detroit to real estate convention
Christopher llitch, President & CEO, Ilitch Holding Inc. and Dan Gilbert, Founder & Chairman of Quicken Loans Inc., discuss Detroit's resurgence. Clarence Tabb, Jr. / The Detroit News
Christopher Ilitch started his pitch about Detroit by pointing out decades of institutional racism faced by African-Americans and calling Interstate 75 a “psychological and physical barrier that had created big problems.”
Dan Gilbert described the city’s past 20 to 60 years as “radioactive” and said the only way to overcome it was a “big-bang approach” to development.
But the two billionaires, whose separate interests in downtown Detroit totals more than $8 billion of investment, told a packed crowd of real estate types this decade is the turning point for the Motor City.
“Only literally seeing, touching, feeling for yourself the excitement, the opportunity, the growth, the reality that is Detroit 2018,” Gilbert said, was the best way to convince others the city’s on a rebound.
Gilbert and Ilitch, who are reshaping downtown Detroit this decade like few others have in any decade, touted the potential of Motor City developments Wednesday afternoon to a national group of real estate and land use professionals.
The pair shared a Cobo Center stage at the Urban Land Institute’s Spring Meeting, a May 1-3 convention of an estimated 4,000. It’s the first time the organization has had a national meeting in Detroit since the 1970s. Local boosters say it’s more evidence the city’s development scene continues to be on the upswing and is attracting more potential outside interest.
Conference attendees are from various sectors — private, public and academic — in the real estate industry who came mainly to network and keep abreast with current issues and trends. One attendee was Taylor Mammen, an executive for Bethesda-based RCLCO. Mammen, based in Los Angeles, helps manage institutional investors such as pension funds.
“Investors want to come and see for themselves,” Mammen said of Detroit. “People are certainly curious.” Whether the conference will lead to further Detroit investment will be seen over time, he said “Greater familiarity with the place maybe leads to you open a package for a deal that you might come across.”
Gilbert and Ilitch are the driving forces behind two separate efforts that aim to overhaul downtown. Among their plans are building the city’s tallest skyscraper, revamping 50 blocks around key Ilitch holdings, getting a Major League Soccer expansion team and reviving dozens of historic buildings, many of which had been empty for years.
Gilbert is founder and chairman of Quicken Loans Inc., the nation’s largest retail mortgage lender. It originated $20.5 billion in home-loan volume during the first quarter of 2018. Gilbert is also founder and chairman of Rock Ventures LLC, the umbrella entity for his portfolio of business and real estate investments, and majority owner of the Cleveland Cavaliers. Since 2010, Bedrock and its affiliates have invested more than $5.6 billion in acquiring and developing more than 100 commercial properties in the city’s central business district, essentially the 48226 ZIP code. More than 17,000 employees affiliated with Rock are based downtown, the company says.
Gilbert told the crowd that his deep investments — “to think big” — in downtown since 2010 was the only way to overcome Detroit’s decades-long decline.
Some have expressed concern Gilbert is going too fast, that a rapid gentrification downtown is forcing out longtime businesses and residents, especially lower-income people. It’s an issue Gilbert has acknowledged should be dealt with in “a humanitarian way.”
Christopher Ilitch and his family, namely his parents Mike and Marian Ilitch, have taken the long game approach. Mike, who died last year, and Marian founded the Little Caesars pizza chain. Christopher Ilitch is now president and CEO of Ilitch Holdings Inc.
He tied his parents’ commitment to Detroit with the city’s downtown rebound. Mike Ilitch bought the Tigers and Red Wings and kept both downtown. Marian Ilitch owns MotorCity Casino and Hotel, an important source of tax revenue for the city.
The Ilitches have scored spectacular downtown victories that continue to be vital downtown draws. In the late ’80s, they moved the Little Caesars headquarters to the historic Fox Theatre on Woodward. It was the start of the Ilitches owning Detroit developments that attract millions of people downtown every year.
More than a decade ago, entities linked to the Ilitches began to secretly buy land for a new sports and entertainment complex on the northern edge of downtown. Little Caesars Arena opened in September and is the start of ambitious development to overhaul 50 blocks of the city. That plan is called District Detroit. Christopher Ilitch described the efforts to overhaul the district as ways to overcome the obstacles created by the building of I-75 by once again creating dense, walkable districts in the city. The Ilitches continue to buy property in the area.
During the years, the Ilitches have sometimes enraged preservationists for demolishing historical buildings and keeping some buildings vacant for years. Even some of their defenders acknowledge they have contributed to downtown blight.
The Wednesday panel between Gilbert and Ilitch was moderated by Robert Taubman, president and CEO of Taubman Centers, Inc., which owns, manages and leases a number of regional malls in the U.S.