Gilbert finalizes purchases of more buildings

[Flintoid]

Looks like Gilbert now has finalized 1520 and 1528 Woodward and owns 4 buildings in the 1500 Block. With these buildings being across the street from the David Whitney and down the block from the Broderick, this will be an exciting set of developments to watch. Maybe he is actually intent on filling Merchants' Row with.....merchants! Keep it up Dan!

http://www.crainsdetroit.com/article...ue-of-michigan

[DetroitPlanner]

The Good: With him buying so much downtown he will control the market similar to how a mall owner controls its environment. This means a standardization of things like management policies or retail store hours. It also means being able to share staff between buildings, reducing his overall operating costs.

The bad: It freezes out the little guy who may want to purchase and open businesses in downtown.

[downtownguy]

The bad: It freezes out the little guy who may want to purchase and open businesses in downtown.

The little guy? These properties, of 40,000 and 42,000 square feet sold for $337,500 each, less than many suburban McMansions, even in this depressed economy. The little guy has had ample time to purchase these buildings. There are still plenty of deals downtown. But if you snooze, you lose, and while I wish there was more interest in downtown properties from big guys and little guys alike, at least Dan Gilbert is not some bottom feeding idle speculator. It's all good, DP.

[SteveJ]

We don't need a little guy. We need someone with a lot of money that can sustain losses at the beginning.

[mikefmich]

When it comes to any actual and finished development in DD in these times, there ain't no bad IMHO.

[313WX]

I am getting a little worried of course that only one or two guys own all the significant real estate in downtown.

In the long term that's never good.

Gilbertown anyone? How about Illitchville?

[gameguy56]

I am getting a little worried of course that only one or two guys own all the significant real estate in downtown.

In the long term that's never good.

Gilbertown anyway? How about Illitchville?

Who else but Gilbert? Other billionares like Penske, Taubmann, Ford, or Mouron don't seem to be all that into investing into the city. Illich doesn't seem to be moving all that fast on things either. Gilbert is extremely pro-development which I'm very happy about.

[Packman41]

Who else but Gilbert? Other billionares like Penske, Taubmann, Ford, or Mouron don't seem to be all that into investing into the city. Illich doesn't seem to be moving all that fast on things either. Gilbert is extremely pro-development which I'm very happy about.

This was discussed on a thread here back in June when it was announced that Gilbert was buying the Dime Building.

One of the major reasons that ONLY Gilbert is on a buying spree is that he is the ONLY guy that received $200+ million in taxpayer subsidies. If anyone else received that kind of subsidy they might give him a run for his money.

In the thread last June, Dan Duggan [[Crain's real estate writer) confirmed that saying, “…the tax breaks WILL pay for all these deals”

I think that his commment sums it up rather well.

In other words these building are free to Gilbert. He will not have any of his own money at risk – only OPM or Other Peoples Money.

[downtownguy]

In other words these building are free to Gilbert. He will not have any of his own money at risk – only OPM or Other Peoples Money.

Or, he could put it in his pocket and still have no risk.

[Gistok]

Wait a second... I saw this little ditty in the Crain's article.....

"If the project is not completed in 18 months, a fine of $550 per day will be assessed, up to $675,000 per building, according to DDA purchase documents approved in September."

Isn't that "some" risk for Gilbert?

[mwilbert]

I don't know if tax breaks will pay for everything if things go as planned, but I would be very surprised if they paid for anything if he just sat on the buildings. Such credits are almost always based upon money being spent on rehab of some kind.

[stasu1213]

The Good: With him buying so much downtown he will control the market similar to how a mall owner controls its environment. This means a standardization of things like management policies or retail store hours. It also means being able to share staff between buildings, reducing his overall operating costs.

The bad: It freezes out the little guy who may want to purchase and open businesses in downtown.

The little guy could rent space from the big guy. Sometimes the little guy didn't have enough money to play. Sometimes they are shut out from buying a building

[canuck]

Great follow-up to all the other Gilbert investments. I hope this all means he will try and inject some small and medium retail in the area. This is nothing but good news.

[Danny]

Gilbert is taking control of all Downtown Detroit buildings! Give it about 20 years and Gilberttown is born.

[Flintoid]

I'd say its going way too far to say that Gilbert is taking over the area as the only real investor. The Broderick, Whitney, and 3 Capitol Park buildings are all non Gilbert investments, not to mention everything in Midtown, Corktown, Eastern Market, and anywhere else in the city. I say keep it up Dan!!

[DetroitPlanner]

Who else but Gilbert? Other billionares like Penske, Taubmann, Ford, or Mouron don't seem to be all that into investing into the city. Illich doesn't seem to be moving all that fast on things either. Gilbert is extremely pro-development which I'm very happy about.

Maroun has tried to buy city hall many times... Nyuk Nyuk Nyuk, I'll be here all week folks, don't forget to tip your bartenders and wait satff.

[Scottathew]

The bad: It freezes out the little guy who may want to purchase and open businesses in downtown.

I don't agree. Finding vacant property in Detroit isn't exactly hard. Gilbert, being a shrewd businessman is probably hoping on the best opportunities first, but if the CBD comes back there's still plenty of space to rent and buildings to buy.

But as to the buildings being cheap, yes, they're not expensive, but doing renovations, keeping the building up, and lining Merchants' Row with tenants will take the power of Gilbert... at least at first it will! Once people see the opportunity to make money they'll be running downtown.

[Hypestyles]

what types of businesses are needed/wanted downtown that are not there already or in scarcity?

[Huggybear]

I'm not going to defend Maroun [[he has an army of lawyers to do that anyway...), but it is a little asinine [[no, sorry, a lot) to act as if the other people on your list aren't investing.

- Penske brought in the Grand Prix, and got Clean Detroit going - with his own money and no direct benefit to him.

- Taubman built a grad school for CCS [[and is one of the biggest donors to our cultural organizations).

- Ford paid to name [[and had some role in building and financing) a stadium [[that also has had positive spinoff to places like Eastern Market).

- The Ilitches are, ahem, very deliberative, but I think everyone knows what they want to do. And as much as people like to deride their investment in Comerica Park, that and the other money they have put into their empire is nothing to laugh at.

And let's keep some perspective on Dan Gilbert - it's great that he's investing and has faith in Detroit [[in fact, it is exciting and positive to have him here) - but he has business reasons for doing what he is doing - just like everyone else who buys property. As Coleman Young said about GM, "he ain't running no f**king charity."

I also note the irony, given DetroitYes' predominant "I'm against big business" bent that people are so easily bought off by whatever promises to be the next corporate deus ex machina. These organizations bring tremendous investment [[and are really the only thing that has any chance of rebuilding the tax/employment base before Detroit utterly implodes), but they also bring their own rules and their own unique problems.

HB

Who else but Gilbert? Other billionares like Penske, Taubmann, Ford, or Mouron don't seem to be all that into investing into the city. Illich doesn't seem to be moving all that fast on things either. Gilbert is extremely pro-development which I'm very happy about.

[stasu1213]

what types of businesses are needed/wanted downtown that are not there already or in scarcity?

A mjor sports apparel store, a Radio Shack or another electronic store, a good clothing retail store for men, women, and children. An Office Max or any store that sells goods and equipment for the office rather work or home. coffee shops or cafes. movie theatre. Do I need to go on?

[mikeg19]

If a Target, Kohls, or some other major retailer came downtown, that would be a huge statement. But at this point, any type of business downtown is a positive. I don't think you can just go "we need to have a Macy's" and that will be the end all and spark everything. You need the Mervin's, but you also need the no name coffee shops and mom and pop stores. It has to be intermingled, a patchwork of major retailers to bring in people and the smaller tenants with innovative products or ideas that gives the area a separate identity. Anyone can walk into Oakland Mall and find everything they need. What is unique about Detroit that will drive people to come downtown? I think Gilbert understands that. And lets make no mistake about it, the guy is investing to make money, as is any other investor. Nobody can blame him for that, but he's bringing a positive attitude and hope with it, so let him run with it.

[davewindsor]

what types of businesses are needed/wanted downtown that are not there already or in scarcity?

Reasonably priced second hand stores and pawn shops. Windsor has a ton of them. I go to that antique shop across from the RenCentre and it's like wow, five grand for a chandelier. How about a place that sells used chandeliers for ten bucks or used plates and dishes for a quarter a piece? How about a used sporting goods store? Even a low cost book store that sells used books for a couple of bucks. I go to King's Books and books are like $30 bucks for a used book. Even Eastern market is expensive. Are the rents and taxes that high in downtown that this doesn't seem to work? If I want new, I go to Oakland Mall. Having an inexpensive second hand store discount tax/rent zone would be pretty cool in downtown. I'm surprised that the Kresge flea market couldn't inspire those kinds of entrepreneurs to set up shop there. Everybody loves hunting for bargains every now and then.

[Gistok]

Reasonably priced second hand stores and pawn shops. Windsor has a ton of them. I go to that antique shop across from the RenCentre and it's like wow, five grand for a chandelier. How about a place that sells used chandeliers for ten bucks or used plates and dishes for a quarter a piece? How about a used sporting goods store? Even a low cost book store that sells used books for a couple of bucks. I go to King's Books and books are like $30 bucks for a used book. Even Eastern market is expensive. Are the rents and taxes that high in downtown that this doesn't seem to work? If I want new, I go to Oakland Mall. Having an inexpensive second hand store discount tax/rent zone would be pretty cool in downtown. I'm surprised that the Kresge flea market couldn't inspire those kinds of entrepreneurs to set up shop there. Everybody loves hunting for bargains every now and then.

Well you probably won't be seeing any Pawn Shops downtown. When Casinos opened in Detroit, the city made Pawn Shops one of the most highly regulated businesses around. They didn't want them clustered around the casinos, and the shops in the city already are heavily regulated from relocating.

As for other stores... John King is a great place to browse... I've averaged about $7.50 for most books I've purchased there. The more popular ones [[such as W. Hawkins Ferry's "Buildings Of Detroit") will naturally cost more. I haven't been there in about 3 years, so have prices gone up that much?

As for resale shops... it would be nice to have a "Bohemian" section of the city with all different kinds of stores catering to the secondary market. But isn't that what the Russell Industrial Bazaar already caters to?

[Huggybear]

Anyone can walk into Oakland Mall and find everything they need. What is unique about Detroit that will drive people to come downtown?

Let's turn this around - I'd say that downtown and midtown have constrained growth potential in general because they do not presently deliver a household-friendly mix of hard retail. And that doesn't mean that we're set because there is one place that sells any given type of item [[for example, buying a dress shirt at Joseph A. Bank) and ordering the rest from Amazon [[talk about anti-communitarian...). It means having a reasonable selection of mainstream products with arguably competitive pricing. The lack of "normal" retail is only going to resonate [[in the wrong way) with suburbanites who want to move to the city but keep hearing their Oakland County superegos asking them where they will shop.

HB

[stasu1213]

Well you probably won't be seeing any Pawn Shops downtown. When Casinos opened in Detroit, the city made Pawn Shops one of the most highly regulated businesses around. They didn't want them clustered around the casinos, and the shops in the city already are heavily regulated from relocating.

As for other stores... John King is a great place to browse... I've averaged about $7.50 for most books I've purchased there. The more popular ones [[such as W. Hawkins Ferry's "Buildings Of Detroit") will naturally cost more. I haven't been there in about 3 years, so have prices gone up that much?

As for resale shops... it would be nice to have a "Bohemian" section of the city with all different kinds of stores catering to the secondary market. But isn't that what the Russell Industrial Bazaar already caters to?

John King is an excellent used bookstore. It is still out of the way. A smaller version of John King would fit perfectly on streets such as Library, Grand River, or even Griswold. Those locations are not too far from the main retail distrct