New Economy

Finding the Next Groupon or What “Big Bang” investors have planned for Detroit

What would you call a 50-year commitment to making Detroit a place where people want to live, work and play?

If you’re broke, people might call such a commitment deranged. But if you’re Dan Gilbert and you’ve got a couple coins to rub together, you’re a dreamer at worst and a visionary at best.

And I’m leaning toward that latter description after hearing Gilbert’s right-hand man give a full outline Thursday night of “Rock Detroit,” a multi-year, multi-faceted and well-funded effort to reinvent this iconic city.

Let me back up a little.

Here’s the hard news lead to this blog post: Matthew Cullen, president and chief operating officer of Detroit-based Rock Ventures LLC, spoke Thursday to more than 60 members and potential members of the non-profit group Detroit Young Professionals. The meeting, held inside the Detroit Public Library, gave an overview of how Rock Ventures through its leadership and financial investments is changing Detroit one square foot at a time.

Here’s the stuff I want to shout from the rooftops: I’m incredibly excited to see the level of commitment these individuals have to Detroit’s success. And they are committed or should be committed. Time will tell which is true. But when you start a speech with the title “Not Your Father’s Detroit: Reinventing Iconic Downtown,” you know something good is coming.

Some background: Matthew P. Cullen is president and chief operating officer of Rock Ventures LLC, an umbrella entity formed to provide operational coordination, guidance and integration to Quicken Loans and Dan Gilbert’s portfolio of companies and investments. He also serves on a bunch of boards; most significantly, he is founding chairman of the Detroit RiverFront Conservancy, whose goal is to create more than five miles of continuous walkways along the Detroit River.

The Detroit Young Professionals asked him to speak Thursday at its membership drive meeting and foolishly let the public (read: blog writers) attend as well. Hey, I still might sign up for full membership. I’m just thinking I only meet one of those three adjectives in the group’s name.

Back to the news. Here are the highlights of Cullen’s nearly two-hour speech and Q&A session that followed:

  • On Monday, there will be a press conference to announce further investments in the RiverWalk project and to highlight new connections that will make all of the “really big pieces” of this ambitious and world-class project come together.
  • Dan Gilbert has committed himself over the next 50 years to making Detroit a place where people want to start companies, buy property and hang out. In other words…The well-known slogan of “Live Work Play” also translates in business terms into Invest, Build, Energize and Populate downtown.
  • Gilbert has invested more than $300 million in downtown real estate. “We’re betting big. We’re moving a lot of assets onto the table. Because it’s the right thing to do,” Cullen said. Some, like the First National building, Gilbert got for as little as $8 a square foot. But he had to invest something like $100 per square foot to bring this and other sites up to snuff.
  • The “hardware” part of the equation is coming together – Gilbert has bought nearly a dozen sites and is thinking of even building the infrastructure that brings the population down into the Woodward (or WEBward) core. And by building I mean they might “pop” something someday on the old Hudson’s site – a combination of lofts (perhaps as many as 350), retail space and parking. There are renderings, and they are thinking very hard about filling this empty spot, Cullen said.
  • Rock Ventures by summer’s end will have 6,000 people working downtown. Some 2,100 will join the others who have been moving into the core sites in Compuware and Gilbert’s new facilities (buildings known by cute monikers but otherwise really named the Madison, Dime, Chase and First National buildings).
  • Rock also brought in 650 interns this summer. Do you think they need this many? I’m guessing not. But the point is that these college kids will see Detroit, hopefully fall in love with Detroit, want to live and work here and make something of the city. This isn’t altruism, Cullen said. This is an investment in the future.
  • M-1 Rail lives on and it will happen. The goal is to receive the $25 million needed from the federal government in the next few months, get bids sometime in the late winter and break ground on this thing in spring 2013. Opening will take place in 2014.
  • D:Hive is going to be the glue that helps people find where to live, where to work and what they can do to make Detroit better. Its “air-traffic control” functionality will help people figure out how they can fit into the solutions that need to happen around the city.

It was exhausting to hear everything Cullen had to say. And I could go on and on with how much I learned about the plans for Detroit. This is a complex city with huge problems, issues and challenges, Cullen said. You don’t have a city with a population of 700,000 that was built for more than 2 million folks to live in and not have problems.

But it also is a city with huge assets – the Riverfront being one of the most significant. The businesses that have committed to downtown, Midtown and more – GM, Blue Cross Blue Shield, DMC, Quicken – are phenomenal.

Yes, it is easy to get bummed out about the everyday downsides. But Cullen, who has worked downtown for nearly 20 years, jokingly said he remembers a time when the biggest development news in Detroit was when a new IHOP was announced.

“I think we’re making a lot of good progress,” Cullen said. “Five, 10 years ago you didn’t want to walk down Woodward…during the day.”

Now, he was realistic. The redevelopment is slow. It’s not going to be big, huge $500 million investments like GM made with Poletown that take five years to come to fruition, Cullen said. It’s going to be small startups like Detroit Labs – a company that started with one of Gilbert’s IT guys and is now employing a dozen. These raindrops will add up to a storm of change. And it’s going to be like Groupon – a few friends who think up a great high-tech entrepreneurial concept and turn it three years later into a company that hires thousands.

Here’s Cullen’s bottom line: Gilbert is betting big on Detroit, technology startups, assets like the Detroit River and Woodward, a real transportation plan and regional transit authority. He wants the “Big Bang” and he wants all of it RIGHT NOW. He’s got the hardware. He’s working on the software of people, an entrepreneurial culture and regional commitment. He wants neighborhood, city and suburb to work together.

Here’s my summary: We need a vibrant city to be competitive. It will take time to get those wheels turning. Until then…Let’s get behind these 50-year commitments and try to shorten that time frame as much as we can.

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