In 2000, Downtown Detroit was a bombed out hell hole.
Then someone decided to bring MLB and the NFL back downtown. Then enhanced street lighting, wayfaring signage and the construction of Campus Martius Park. Around the same time GM and Compuware moved their headquarters from the burbs, back into the core, creating a market for smaller shops and restaurants like CVS, Border's Books, Hard Rock Cafe and Au Bon Pain to open up.
After the Super Bowl, two years ago, the new public improvements have been properly maintained and the city has worked to fix up the waterfront. It now looks like that commitment to concentrate on improving public infrastructure, lighting and the appearance of downtown to enhance it's image continues to pay off. Its not too late to take a few notes from the Rustbelt's poster child of a city.
QUICKEN MOVING TO DOWNTOWN DETROIT
Livonia based Quicken finally takes the plunge, moving to downtown Detroit.
Quicken Loans Inc., one of Michigan's fastest-growing companies, will move its suburban headquarters to downtown Detroit, Chairman Dan Gilbert and Mayor Kwame Kilpatrick told me today.
The move, pending year-long studies of the so-called Hudson's site on Woodward and vacant Statler Hotel site, would consolidate at least 4,000 employees in the new Quicken headquarters from sites in Livonia and other suburbs. It also would turbocharge a corporate revival of downtown led by General Motors Corp., Compuware Corp., Ilitch Holdings Inc., new casino-and-hotel complexes and a vibrant entertainment district.
Gilbert and Kilpatrick envision the downtown headquarters as the centerpiece of a mega development combining retail, condominiums and a technology park -- the cornerstone of an initiative they're calling "Detroit 2.0."
"This is big," Kilpatrick said, describing a package of state and local incentives that could total as much as $200 million over the next 20 years. "This is a done deal. We've signed the development agreement. This is the largest package that we -- the city and state -- have put together to bring a company to downtown Detroit."
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A news conference to announce the deal -- expected for months but delayed by protracted negotiations and a spreading mortgage industry meltdown that appears to have largely missed Quicken and its Michigan unit, Rock Financial -- is scheduled for noon Tuesday at Rock Financial Park on East Larned in Detroit.
The development agreement is only the first step. After the one-year study period, set to expire on Nov. 13, 2008, Quicken would have an 18-month "due diligence" period to finalize plans for either the city-owned Hudson's or the Statler site, controlled by the quasi-governmental Detroit Economic Growth Corp.
It's hard to overstate the economic and political significance for Kilpatrick and Detroit of Quicken's planned move downtown, a process likely to take at least three years before the first shovels go into the ground. This is a proverbial shot in the arm for a region desperate for some good news amid an almost weekly barrage of plant closings, restructurings, jobs cuts and public budget woes.
Gilbert's 'big-bang' in Detroit
Depending on the month, Michigan vies for national leadership in high unemployment, low job creation and rising home foreclosures and struggles with its enduring image as the epicenter of Old Economy America.
Add Detroit's reputation, much of it historically deserved, for urban decay, residential blight, anti-business sentiment, failing schools and violent crime and the Quicken decision seems all the more encouraging because it suggests real change is occurring amid brutal economic times.
That an Internet-driven lender touted as one of the country's best places to work, with operations in Cleveland and Arizona, with a business model spanning the entire country is choosing Detroit for its new headquarters says as much about the city as it says about Gilbert -- and it's all good.
"It's a Big Bang approach," said Gilbert, co-founder of Quicken and majority owner of the NBA's Cleveland Cavaliers. "You can't have jobs until you have the companies. You can't have retail until you have jobs. We need to locate more and more entrepreneurs in a centralized hub that feeds off each other."
Quicken's development agreement ties up for one year two prime downtown sites -- Hudson's and the demolished Statler site on Grand Circus Park. The idea: Planners would be free to consider designs, engineering and the interests of entrepreneurs and other technology companies interested in joining the Quicken complex.
"Until we went public with this," said Gilbert, who notified Quicken employees of the company's decision by voice-mail late this afternoon, "it was very difficult to have discussions with other parties. This isn't about going out and raiding the suburban locations of companies."
He called Detroit "a great alternative now" and said a driver behind Quicken's downtown gambit is to jumpstart economic growth. "This is much bigger than a headquarters. We're calling it Detroit 2.0."
Postive tipping point reached
The mayor's right: This is huge, however much the move could be dismissed as a) simply a move from a near western suburb to downtown and b) the city's embrace of a mortgage lender whose industry is in turmoil amid declining home prices and the subprime mortgage meltdown.
But such a cynical view would be too simplistic. Quicken sells the vast majority of loans it writes, almost all of which are "non-recurring" and thus cannot end up back on Quicken's books. Think of it and its Rock Financial unit as loan marketers and originators, not loan holders and servicers, who may be affected less by a slowing housing than rivals.
"We've avoided 98 percent of the catastrophe that others have stepped into," Gilbert said. "As far as castrophic incidents that just does not exist."
If it did, why would Quicken's founder choose now -- as equity markets continue their swoon over, among other things, massive write-downs on mortgage-backed securities by such financial giants as Citicorp, Merrill Lynch and others -- to confirm the most open secret in the Detroit economic development game?
"For them to do this, they feel very strongly they will be a strong, viable company in the future," said George Jackson, president of the Detroit Economic Development Growth Corp. and a key negotiator in the deal. "This shows confidence in Quicken Loans' future. This shows confidence in Detroit. This is a real, favorable tipping point for downtown Detroit."
