The push by Quicken Loans to save Detroit is finally getting the attention it deserves
The plight of the city of Detroit has been well chronicled in the last few years. Once the hub of American ingenuity and enterprise, the city took serious body blows with the downfall of the American auto industry and the city itself filed for bankruptcy on July 18, 2013.
But Dan Gilbert, the founder and chairman of Quicken Loans, has invested millions in the revitalization of Detroit, as chronicled in the March 2014 of HousingWire Magazine.
“In order for the region to thrive, you need to have a thriving city of Detroit,” Quicken Loans CEO Bill Emerson said at the time. “So we just felt like it was something that we wanted to do to be engaged and involved in. Some of our philosophies are that if you really want to affect the outcome you have to do something about it.”
Gilbert and Quicken Loans put their money where their mouth is. Gilbert moved Quicken Loans’ offices to Downtown Detroit in 2010 and Gilbert has purchased more than 60 properties in the area, with a total outlay of more than $1.3 billion.
Forbes has a piece on Gilbert in its October 20 issue, further highlighting his efforts to rebuild Detroit. From the Forbes article:
As you’ve likely heard, over the past four years Gilbert has become one of Detroit’s single-largest commercial landowners, renovating the city with the energy and impact of a modern-day Robert Moses, albeit bankrolled with his own money. He’s purchased and updated more than 60 properties downtown, at a total cost of $1.3 billion. He moved his own employees into many of them–12,000 in all, including 6,500 new hires–and cajoled other companies such as Chrysler, Microsoft and Twitter to follow. He recruited 140 tenants, though most are tiny startups and other entrepreneurs his venture firm helped finance. Some 40% of his tenants are his own companies, including Quicken Loans, Title Source and Rock Gaming, which owns Detroit’s Greektown Casino.
The article states that there’s more than benevolence behind Gilbert’s push to save Detroit.
Yes, he’s saving Detroit because he loves the city, and yes, he sees an unprecedented opportunity to snap up real estate on the cheap (he is in the mortgage business, after all). But more than anything else, Dan Gilbert is saving Detroit to help his business.
For Quicken Loans to succeed in the incredibly competitive world of “corporate” headhunting, the company needs to ensure that Detroit is a place that the highly desirable technology and financial professionals want to live and work.
“When you think about our culture and our environment, we are clearly trying to affect the outcome of the brain drain,” Emerson told HousingWire Magazine.
He is speaking of people who would attend colleges and graduate schools in Michigan and then leave for more "exciting" destinations like New York or San Francisco.
“We have to reverse that,” Emerson said. “We have great young talent in this area. We have great universities. How do we get people exposed to what is going on in Detroit.”
One way is by remaking the downtown Detroit area into a more desirable place to be. Another way is by launching an internship program that is thriving.
In 2011, the program began with less than 300 interns. It grew to 600 in 2012, and more than 1,100 in 2013. This year, the program was even more successful.
“We turned down 21,000 kids who raised their hands and said, ‘I want to work in downtown Detroit,’ ” says Gilbert, who got 22,000 résumés for 1,300 internships this summer. “ They were from everywhere. Of all the metrics you’re looking at, that’s the one that makes me the most optimistic.”
And Quicken Loans is doing more than just attracting bright young people to work in Detroit. The company is doing its work very well.
Quicken Loans ranked first in the J.D. Power 2014 U.S. Primary Mortgage Servicer Satisfaction Study.
“Our special and unique culture allows our 10,000+ team members to participate in the process of delivering an outstanding experience for all of our clients, every time, without exception,” Gilbert said at the time.
The collective efforts of Gilbert and Quicken Loans seem to be working for the city as well, as evidenced by the most recent Home Price Index from Black Knight Financial Services, which represents the price of non-distressed sales by taking into account price discounts for REO and short sales.
The latest HPI showed that homes in Detroit saw the highest increase in home price index in July, up 1.1%. The positivity also spread to the entire state of Michigan, as it also ranked number one with an increase of 0.9%.
“Our business is nowhere near what it would have been if we were still spread around the suburbs,” says Gilbert. “On top of it, the creativity, the connectivity. Our people have never been as creative as they are now. There’s a buzz.”
And that buzz may just save the city of Detroit.