Dan Gilbert is single-handedly rebuilding downtown Detroit?!

[stasu1213]

The stores that pop up will be dictated by the market. If a decent anchor store can be lured in, then we will see a higher quality of other stores. If an entrepreneur has a good idea and capital to fund it, they will have the same opportunity as everyone else.

You don't need a decent anchor store but specialty stores such as Birmingham, Royal Oak, and Grosse Pointe have. Anchor stores could come and go and take the others that were holding on to it's coat tail with it.

[esp1986]

You don't need a decent anchor store but specialty stores such as Birmingham, Royal Oak, and Grosse Pointe have. Anchor stores could come and go and take the others that were holding on to it's coat tail with it.

News Break! Detroit is not Birmingham. Detroit does not have the local affluency of Bham, RO or GP needed to support such specialty stores. Given that the city also has very little in terms of centralized population, the stores have to be able to draw from afar. That is where an anchor store comes in. There is a good reason that there aren't more specialty stores downtown... It is a money losing endeavor, and if it can be profitable at all, it is a huge risk. If you want to see more stores in the city, open one, I emplore you. Let's see how long you last. These stores aren't just going to pop up out of nowhere.

[Richard]

detmsp

I would love to continue this discussion but at the risk of either a thread jack or boring everybody else I will leave it at that.

[p1acebo]

...we'll see what happens by the 2017 election, could be interesting if he decides to..

..has Gilbert invested in jobs training programs for area residents..some kind of outreach to the non-college grad population here, something to address the adult literacy obstacles, the returning-citizen [[ex-offender) challenges in urban detroit.. Historically, Detroit has placed an inordinate amount of resources into assuming that the heavy-industrial manufacturing industry would be here forever. There was a time in which various factory and heavy-industry-related jobs were plentiful for locals, whether they were simply a high school graduate, or even a dropout. Of course, that era is long over.

Perhaps not job training programs that I know of, but Dan Gilbert did start the Bizum U, which focuses on educating young people who wish to become entrepreneurs.

[casscorridor]

Detroit needs any stores. Why argue about what kind of stores we need? We need everything. There is no abundance of anything besides empty lots and burnt out buildings, and perhaps liquor stores and parking lots.

Hopefully Dan Gilbert will invest in residential as well as office development. We need more people living Downtown for it it feel like a "real city" that people want to live in.

[esp1986]

Detroit needs any stores. Why argue about what kind of stores we need? We need everything. There is no abundance of anything besides empty lots and burnt out buildings, and perhaps liquor stores and parking lots.

Hopefully Dan Gilbert will invest in residential as well as office development. We need more people living Downtown for it it feel like a "real city" that people want to live in.

This is why an anchor is so valuable. It will bring people downtown, other stores will open to feed off the increased foot traffic, causing property values to rise and rents that landowners can charge will follow. This will make residential projects in the downtown area more viable and we will see more of them. Right now, the property values and corresponding rental rates are just not high enough to cover the significant cost of renovating some of these hulking buildings.

[stromberg2]

Detroit needs any stores. Why argue about what kind of stores we need? We need everything. There is no abundance of anything besides empty lots and burnt out buildings, and perhaps liquor stores and parking lots.

Hopefully Dan Gilbert will invest in residential as well as office development. We need more people living Downtown for it it feel like a "real city" that people want to live in.

And wig shops....you can't forget the wig shops!

Stromberg2

[mikeg19]

If Dan Gilbert knows what he's doing [[and it seems like he does) why not come up with some sort of incentive program for the buildings he now owns in downtown for commercial and retail? I mean like dirt cheap rent or something of that nature where a business owner says "hey, this is so cheap, how can i not take a gamble on this?" I almost think of it as how Mike Illitch lured Pudge Rodriguez here: Bags of money. Maybe he didn't wanna be here, but how could he pass up that kind of offer?

[stasu1213]

News Break! Detroit is not Birmingham. Detroit does not have the local affluency of Bham, RO or GP needed to support such specialty stores. Given that the city also has very little in terms of centralized population, the stores have to be able to draw from afar. That is where an anchor store comes in. There is a good reason that there aren't more specialty stores downtown... It is a money losing endeavor, and if it can be profitable at all, it is a huge risk. If you want to see more stores in the city, open one, I emplore you. Let's see how long you last. These stores aren't just going to pop up out of nowhere.

Last year bloggers had thought that an Apple Store would not work downtown. I guess someone had forgotten to tell Dan Gilbert that. I think that a ballsy move to put specialty stores downtown first such as Men's Warehouse, Ann Taylors Loft, The Gap or some locally owned stores after their sucess an anchor store will come second. You don't want downtown detroit to rely on the sucess of an anchor store.When the anchor store closes due to bankruptcy or the owner decides to cash in his chips then you have an empty building on your hands and the other stores that relies on that anchor stores will close also.Let us not bring that old dusty hat out of the closet to wear it again. Let us buy a new hat and wear that one

[stasu1213]

If Dan Gilbert knows what he's doing [[and it seems like he does) why not come up with some sort of incentive program for the buildings he now owns in downtown for commercial and retail? I mean like dirt cheap rent or something of that nature where a business owner says "hey, this is so cheap, how can i not take a gamble on this?" I almost think of it as how Mike Illitch lured Pudge Rodriguez here: Bags of money. Maybe he didn't wanna be here, but how could he pass up that kind of offer?

Hopefully the Pistons new owner might want to buy an empty building downtown. Not to put the Pistons in but use the building for something else. I think that the city should give away the buildings that it owns downtown. Make the person the building is given to promise to do something positive with the building within a certain time. Investors who are serious such as Gore, Gilbert and others

[esp1986]

Last year bloggers had thought that an Apple Store would not work downtown. I guess someone had forgotten to tell Dan Gilbert that. I think that a ballsy move to put specialty stores downtown first such as Men's Warehouse, Ann Taylors Loft, The Gap or some locally owned stores after their sucess an anchor store will come second. You don't want downtown detroit to rely on the sucess of an anchor store.When the anchor store closes due to bankruptcy or the owner decides to cash in his chips then you have an empty building on your hands and the other stores that relies on that anchor stores will close also.Let us not bring that old dusty hat out of the closet to wear it again. Let us buy a new hat and wear that one

Even Apple will have to have their arms twisted. The Apple Store is not the only one on Gilbert's radar. He is looking at anchor stores too, because companies like Apple will not come unless there is something drawing shoppers downtown. The Apple Store would draw a few, but nothing like the big anchors. It is a tough sell though, as there isn't a building here to even house an anchor, they would have to build anew, which is where the problems begin.

It helps to know the whole story before you jump to conclusions. Yes, the Apple Store has been mentioned. What hasn't been mentioned are a few other ideas Mr. Gilbert is working on. It's all part of the plan.

Even if an anchor store comes here then closes, you are at least left with the building, something we currently lack. It would be much less of a sell right now if there was at least a building big enough to house an anchor store that was in decent enough shape.

Bottom line, the anchor stores are what draw the people in. The smaller stores will follow. There were a number of smaller stores around when Hudson's closed up shop [[which happened for a number of reasons, none of them being profitability of the downtown store), and since there was nothing left drawing people downtown, they all closed too. If there is something here in the first place, people and other businesses will come.

As for Gores, he has no vested interest in the City of Detroit. I find it highly unlikely that he will own any property downtown. All of his holdings are in Oakland County. Status Quo here could change if Mr. Ilitch can convince him to move the Pistons downtown, an unlikely scenario.

[gthomas]

Woodward site is ready for a "Water Tower[[Chicago)" like building, anchor by a Macy then other smaller store will indeed follow and spread up and down Woodward other storefronts. Its a ripple effect of possibilities....the potential is there, have you walk down Woodward between GCP and CMP..? Set, Ready, GO!

[Rocko]

From Crain's Detroit Business:

June 02, 2011 1:15 PM The math on Dan Gilbert's deal


There has been no shortage of buzz among people in Detroit's commercial real estate circles this week surrounding Dan Gilbert's potential deal to buy the First National Building.

Among other things is Gilbert's comment that he already has tenants in his back pocket to fill the vacant half of the 800,000-square-foot building. Many guesses are out there as to who that is, but Gilbert was steadfast in not making a peep on the potential tenants.

And the sale price is another hot topic. He's taking the building down for $8.1 million, according to the purchase agreement filed in bankruptcy court. Closing is set for July.

In doing some "back of the napkin math," the numbers are impressive, though overshadowed by the risky proposition of buying Detroit buildings. Shares of Ford Motor Co. were under a buck at one point, which looks like a great idea now at $14 a share, but it seemed crazy when GM and Chrysler were filing bankruptcy and everyone thought Ford was next.

Is the First National deal a similar story?

At $8.1 million for 800,000 square feet, it breaks down to roughly $10 per square foot — less than one year's rent.

If he wants to make a 10-percent return on his investment, he needs $800,000 in annual revenue, one broker pointed out.

The anchor tenant in the building, Detroit-based Honigman Miller Schwartz and Cohn LLP is taking 180,000 square feet and the second-largest tenant is United Way for Southeast Michigan at 65,000 square feet.

Honigman has been rumored to have a sweetheart deal, having been in that building forever, tolerating some really awful conditions under past owners. So, even if Honigman is paying $5 per square foot, this broker pointed out, Gilbert is taking in $900,000 per year.

There's your 10 percent.

Add United Way's 65,000 square feet, which CoStar Group reports at $13.50 per square foot, and it's another $878,000.

Now, it's no secret that the building needs a lot of work inside. It's old, charming in a historic sense, but needs a lot of money to be updated.

But with Gilbert walking in with the ability to make a 20-percent return out of the box - and we're not even getting into the 48 other tenants CoStar reports that are in the building - and "it's a home run," one broker said.

"And if he's able to get even a small tenant into the vacant portion, it's a grand slam," he said.

How can he take the gambles that he's taking on Detroit real estate? Simple. He's got 4,000 people that he can move into the buildings if he wants to. He uses 150 square feet per person, so that's 600,000 square feet that he can occupy if needed, not to mention the dozen-or-so other companies that he has an interest in.

He can take a risk with the First National Building, even without new tenants, covering costs in rent from tenants and trying to lease out space. Even if he never gets a tenant, he can move his people out of the Compuware Building when the lease turns over and take the space himself.

It's like what he's doing with the recently acquired Chase Tower, which will be used to occupy his people - and maybe, maybe the Apple Store his guys have been chasing.

But filling the rest of the space in the Madison Theatre Building and the space in the First National Building will be THE real estate story to watch this summer if even a whiff of this stuff comes to be.

Stay tuned.

[Hypestyles]

hopefully by the end of the year there will be some exciting new prospects, more tenants, more hiring..

[gthomas]

I love his momemtum and strive to make a thriving district downtown! This guy is serious...take notes to all BIG business owners. Dan Gilbert is investing in the community...creating jobs, bringing job and retail. He understands...Keep it coming...now we need more residents living Downtown. With Broderick Towers and Whitney Building coming soon for residential and hotel, it will most definitely bring more foot trafffic and retail to the area. "Owners" of the Free Press Building, Stott Tower, Farwell Building, Book Building & Tower need to get the ball rolling!

[Coaccession]

Hmmm... Tony Hsieh is single-handedly rebuilding downtown Las Vegas:

http://www.businessweek.com/magazine...-02022012.html

I wonder if Dan Gilbert would appreciate Detroit coming up with a multi-billion dollar arts endowment to help him compete for those startups. Since Detroit already has a multi-billion dollar arts collection at the DIA, it wouldn't be unreasonable for Dan to ask for some help from this wealthy city... and I'm not talking about raising new property taxes to take the pressure off the Funders Society trustees. With Detroit leading the way, the Cleveland-Toledo-Detroit ArtsBelt would have arts commissions and programs to help it compete with the Phoenix-Las Vegas-San Diego SunBelt that lacks this region's long history of art collecting.

The City could also help Dan by using its new revenue source to open its first DIA branch downtown. Combine that with a library branch, and you'd certainly help boost foot traffic.

[detroitmale]

Thank the lord for dan gilbert!

[Flintoid]

Well downtown already has the Skillman Library Branch, but a DIA branch would be fantastic!