Written by: Frank Witsil, Susan Tompor, and JC Reindl for the Detroit Free Press on September 20, 2017

Original story published on Freep.com. Click here to view the original story.

New details of a massive $2.1-billion plan for four downtown Detroit developments that could create as many as 24,000 temporary and permanent jobs and transform the city skyline were unveiled Wednesday by businessman Dan Gilbert.

Gilbert, founder of mortgage giant Quicken Loans and a major developer, offered an upbeat assessment of the city’s economic rebound as he detailed his plan during an hour-long news conference held inside downtown’s once-opulent Book Tower, which is undergoing extensive restorations as part of the developments.

He also hinted again at how Detroit may try to urge e-commerce juggernaut Amazon to build a second headquarters here, which could represent a $5-billion investment and bring 50,000 jobs on its own.

Gilbert touched on many themes that Detroit leaders say the city needs: stronger neighborhoods, education and training opportunities for residents, and good jobs.

The four building developments — most of which were previously announced — include:

  • The Book Tower restoration
  • A new skyscraper on the former Hudson’s department store site
  • A 35-story tower to be built on the Monroe block in downtown
  • A building addition to One Campus Martius, the downtown structure formerly known as the Compuware Building

Together, the projects are expected to take about five years to complete and add 3.2 million square feet of office, retail and residential space — plus 2,000 new parking spaces. Downtown Detroit was once awash in office and commercial vacancies, but lately has been running low on move-in-ready space.

The projects are expected to create about 15,000 construction jobs and 9,000 permanent jobs.

“It’s an optimistic time,” Gilbert said. “It’s an environment, a culture, where we can do great things. We’re just starting. We’re just scratching the surface. We have to start things big. We have to make up for several decades.”

But with so many big projects lined up, he acknowledged it may be difficult finding enough skilled trades workers — particularly Detroiters — to complete them.

Contractors for the new Little Caesars Arena had to pay nearly $3 million in penalties after failing to meet a requirement that at least 51% of the construction crews be composed of Detroit residents.

The penalty payments went toward programs aimed at training Detroiters for skilled trades jobs and other employment opportunities.

For these new projects, Detroit Mayor Mike Duggan said that 51% of the construction jobs also must be filled by Detroiters, and training will be provided to help fill them.

Achieving that hiring goal could yield significant public relations gains for Gilbert’s real estate firm, Bedrock Detroit. The firm caused a stir this summer with a poster in the window of a downtown building that said “See Detroit like we do” over a photo of a nearly all-white crowd. Detroit was more than 82% black in the last U.S. Census.

Gilbert had the poster taken down and apologized for his organization having “screwed up badly.”

George Barnes, who founded Detroit-based Heritage Optical in 1975, praised Gilbert and said that including African Americans who live and work in the city of Detroit in the new projects will be key.

The star of Wednesday’s jobs and development announcement was the 38-story Book Tower, which dates to the 1910s and 1920s and is undergoing one of the most significant historic rehabilitation projects ever undertaken in Detroit.

Gilbert’s Bedrock Detroit real estate arm bought Book Tower two years ago and has pledged to invest $313 million rehabilitating the building. The project is to open 180,000 square feet of retail and office space along with 95 residences.

The Book Tower opened in 1926. It was built by the Book brothers — thus the name — and reflected the grandeur of Detroit in that era. The brothers developed much of Washington Boulevard as we know it today.

The old Hudson’s site is to be filled with a landmark building that would be the tallest in the city, surpassing even the Renaissance Center. Plans call for 1 million square feet of restaurant, retail and office space, as well as exhibition space to augment Cobo Center.

The Monroe block will be an $830-million project that fills the space between Greektown and Campus Martius Park. It will include a 35-story, 814,000 square-foot office tower, along with 482 residential units, restaurants and retail space.

And One Campus Martius, which dates to 2003, will soon get a $95-million addition, providing 310,000 square feet of office space. It is likely to be the first project of the four that is finished and could be done within two years.

To illustrate the massive scale of the Bedrock projects, Duggan said that together, they will be 2½ times the size of the new $863-million Little Caesars Arena.

“This is a day we’ve been waiting for for a long time,” he said.

Duggan also recalled doing his Christmas shopping at the old downtown Hudson’s in 1982, shortly before the famous department store closed. The building was imploded in 1998.

“That site,” Duggan said, “has been a hole in Detroit, and a hole in our hearts.”

The projects are expected to be the first in Michigan to make use of new development and redevelopment incentives approved by the state Legislature this year.

The incentives — called the Michigan Thrive initiative, or MIthrive — allow eligible developments to keep a portion of the new state tax revenues that they generate to help close the gap between construction costs and what market-rate rents in Detroit can support.

Specifically, the MIthrive program allows projects to keep state sales and state income taxes from on-site construction work and retain up to 50% of the state income taxes generated from new jobs and residents within the new developments.

Gilbert’s projects must still go before the Detroit Brownfield Redevelopment Authority as the first step in the approval process for the state financing.

Michael Aaron, business manager of Laborers Local 1191, discussed the role that skilled trades workers have had in Detroit’s rebound and called Gilbert’s proposed projects a “win-win for everyone.”

Gilbert said that Bedrock and the Quicken Loans family of companies — now the largest employer in Detroit — has 17,000 workers, with 4,000 now living in Detroit, up from 75  when the company moved its headquarters to the city.

“For us,” Gilbert said,  “it’s jobs, jobs, jobs.”

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