INTRO: Detroit could become a laboratory for urban revitalization in America. So said U.S. Secretary of the Interior Ken Salazar on a recent visit from Washington. Michigan Now’s Chris McCarus reports on why Salazar came and how Detroit teeters between revival and destruction.
For us journalists, cabinet secretaries and billionaires have been easy to find these days in Detroit. Rip Rapson’s not a billionaire. But as president of the Kresge Foundation, he controls $3 billion. In January, Rapson celebrated the Woodward Street car and the regional transit authority. He gestured toward Dan Gilbert, in the audience, founder of Quicken Loans. Gilbert bought about 15 historic buildings downtown in the last year.
“Have people seen you? Do people know who Dan Gilbert is? (applause) I did hear a rumor this morning that Dan is about to buy the city of Grand Rapids…. Why not?”
Gilbert didn’t speak. He doesn’t need to. His money talks. After 60 years of white businessmen taking their money out of Detroit, Gilbert is putting millions back in. Gilbert has so much influence that he got Interior Secretary Ken Salazar to come look at his real estate. Carl Levin joined Salazar.
“Senator Levin, I’m interested in whether Detroit could become a laboratory in what we’re doing in the revitalization of urban America.”
Detroit already is a laboratory. But it still needs the Department of Interior’s Historic tax credit program. Many buildings would be abandoned without it. Developers cut the cost of their projects by 20%. Tax credits have helped Cass Corridor rehab pioneer Joel Landy and Capitol Park developer Richard Karp. They came to hear Secretary Salazar at the Oddfellows Building on Vernor in Southwest Detroit.
“What you have in the downtown of Detroit in this area, in what is Detroit that you don’t have out in the suburbs is the history. And the history is so much embodied in the buildings that you are preserving.”
Right now, a developer can’t cash in two credits at a time, say for historic and renewable energy. He can’t bundle them in one project. According to architects, Gilbert isn’t worried about the money. He just wants to be able to knock down interior walls. His companies have large staffs that need to communicate in big rooms. Current historic standards don’t allow that. Senator Levin said:
“Ok so we saw some examples where there is some bureaucratic impediments. Specific examples that the secretary saw. It’s very helpful.”
Helpful how? More money? Manpower? Levin didn’t say. Secretary Salazar said he and HUD Secretary Sean Donovan have talked about pooling resources targeting cities.
“What we can do here in Detroit is make this the shining example for the country about how it is that you took this city that was in decline and decay and really raised it up again.”
In addition to Dan Gilbert’s buildings, Salazar saw others with Brian Conway of the Michigan State Housing Development Authority. That’s the Michigan version of HUD.
“So should we have a SWAT team that we organize from around the country that helps us make sure that we’re working with the development community and non-profits and others and the city of Detroit to make sure we’re doing everything we can.”
A SWAT team would have to be able to catch thousands of scrappers operating day and night to tear out copper pipes, oak paneling, marble, steel beams and slate roofs. The only thing that stops them is rehabbers. I asked Dan Gilbert about the 11 story Hotel Charlevoix. Built in 1905. Close to Cliff Bell’s and the Fox Theatre.
“How about buying the Hotel Charlevoix?”
“I don’t know anything about that property,” Gilbert said.
“It’s up in Charlevoix,” said Matt Cullen, Gilbert’s real estate strategist.
“No. It’s on Grand Circus Park,” McCarus said.
“Oh I don’t know much about that building. I’m sorry,” Gilbert said.
Troy attorney Ralph Sachs bought it 30 years ago and let it rot. Sachs’ attorney said Sachs tried to sell it to either Mike Ilitch or Dan Gilbert. In January, city inspectors told a judge that the beaux-arts style building is too destroyed to save. The judge said tear it down.
Two forces are at work in Detroit. Creation and destruction. One billionaire is investing in iconic buildings. Another billionaire, Matty Maroun, bought the abandoned train station 20 years and failed to invest. Hundreds of other landlords do like Matty Maroun. The SWAT teams could be used all over the city.