Five years in, and Dan Gilbert's just beginning

Billionaire businessman Dan Gilbert, marking the fifth anniversary this month of his move downtown, says he's just getting started with his long-term investment in Detroit and sees "a massive upside."

Along those lines, he believes downtown will attract an Apple store, a retail holy grail, "more likely than not" within five years, he told the Free Press in a wide-ranging interview this month.

Related: Could Detroit be close to getting an Apple Store?

He's also planning his own fresh construction projects, including perhaps office and residential towers, in addition to buying and rehabbing more existing buildings like he has since going on a downtown buying spree in 2010.

The design of a new signature building for the now-cleared Hudson's site — meant to wow internationally with a breathtaking contemporary design — will be finalized soon, he said.

And Gilbert — who now owns or controls 78 downtown properties — said he could be selling some of his buildings soon to companies that want to move downtown but would rather own office space than rent.

"I still think we're just starting," Gilbert said. "Detroit has just a massive upside."

Gilbert storms into downtown

This month marks the five-year anniversary of Gilbert's move of his Quicken Loans company to downtown from the suburbs, a stunning development at the time and a major boost for a downtown real estate scene dealing with fallout from the Great Recession and the managed bankruptcies of General Motors and Chrysler.

At the time, Quicken Loans moved 1,700 employees into downtown buildings. That figure has grown to more than 12,500 — a large portion young and many living in downtown, walking the streets, eating at restaurants and playing at Campus Martius, on the riverfront and at any number of new and reinvigorated venues.

As Gilbert grew his workforce, his Bedrock Real Estate Services bought and filled historic but half-empty skyscrapers and enlivened the street scene with everything from a sandy beach at Campus Martius to bike rentals, food trucks, and basketball hoops.

Through his more than $1.5 billion in private investment, Gilbert has been one of the most potent forces behind a growing downtown Detroit renaissance aided by the positive vibes of bustling streets and sidewalks when just a few years ago downtown seemed a ghost town.

Time line: Dan Gilbert's developments

Detroit has benefited over the decades from a roster of civic-minded business leaders, from Henry Ford II building the Renaissance Center to Roger Penske hosting Super Bowl XL. But perhaps only Mike and Marian Ilitch, who revived the Fox Theatre, built Comerica Park, and mapped plans for an extensive new entertainment district around their new hockey arena, have had an impact to match what Gilbert has accomplished.

And nobody has done it in so short a time as Gilbert.

Who's being left out?

Gilbert acknowledges he has riled critics who object to the extensive security operation that safeguards his properties. And some question whether one man or business entity should control so much of downtown.

Gilbert said it's all in the service of creating a more vibrant city and urban core.

Related: 5 revelations from our Dan Gilbert interview

"We just wouldn't be the company we are in the suburbs. Not even close," he said. "Downtown Detroit's been good to us, and it's not just a one-way thing."

There are also some who feel the renaissance has been a lopsided one, favoring corporations and professionals living and working downtown. Critics stress that the city's neighborhoods and residents, so far, are mostly being left out of the new activity and investment.

And some homegrown business owners who never left the city and stuck it out through the worst of crime waves and economic downturns feel slighted by the good times taking shape in greater downtown.

Linda Smith, director of the nonprofit U-Snap-Bac community group on Detroit's east side and a cochair with Gilbert of the blight removal task force, said she has mixed feelings in the downtown-vs-neighborhoods debate.

"When I was downtown this week it was just, wow," she said Saturday. "I remember when no one was walking around downtown at lunchtime."

But appreciation of the downtown revival for her and others is tempered by the challenges facing many outlying districts in the city still plagued by blight and abandonment.

To be sure, there is much work to be done throughout the city to rebound from six decades of economic decline and mismanagement. But Gilbert and others say it has to begin with investment in housing and business development.

With the neighborhoods in mind, Mayor Mike Duggan and others point to recent efforts to spur entrepreneurial start-ups, remove thousands of blighted buildings in the city, spur urban agriculture, and rehab and sell family neighborhood homes in public auction.

"Some of our neighborhoods are so far gone no matter what you bring" they're almost beyond help, Smith said. "That's not a Dan Gilbert problem, it's not a Mayor Duggan problem, it's just a problem that's developed over years."

Gilbert's shopping spree

Gilbert says he didn't fully realize at the time that Quicken's move downtown presented a near-perfect investment scenario.

"We knew there was a lot of opportunity down here obviously but the extent of it and the speed of it, there was no way of knowing," Gilbert said. "It was sort of like, 'Let's get down and see what's going on.' From day one or two, you could just tell it was going to be something that everyone was going to be very excited about."

In a remarkable shopping spree, his Bedrock Real Estate Services snapped up the Chase Tower, First National Building, One Woodward, 1001 Woodward, and the Dime Building, later renamed the Chrysler House after the automaker took space there. Dozens more properties followed, including the Greektown Casino & Hotel and the One Detroit Center skyscraper.

Today, Gilbert and his partners own or control through leases 78 properties downtown, including much of the retail space along Woodward Avenue in the core of downtown.

​Many of those storefronts and classic skyscrapers were empty or only half-occupied when he got them. As Quicken's mortgage business grew into one of the nation's largest, he moved more of his workers into those buildings, which today are mostly filled. He lured dozens of popular retailers and eateries — Moosejaw, the Bon Bon Bon chocolate shop, the new Townhouse restaurant.

Related: Gilbert welcomes downtown Detroit newcomers

Gilbert grew his workforce at Quicken and many of the dozens of spin-off firms he and partners created.

He portrays Bedrock's buying spree as opportunistic rather than planned.

"After we got here with those first people we realized these beautiful buildings were available," he said. "I just didn't have any kind of clue about it. These buildings were available and obviously inexpensive, and it happened very quickly."

His latest moves include a plan to build hundreds of residential apartments in the Brush Park district and to create his ultra-high-speed Internet service called Rocket Fiber downtown.

Along the way he cochaired the Detroit Blight Removal Task Force and helped guide the Motor City Mapping effort to document digitally the condition of every parcel in the city.

Too much gentrification?

Gilbert's success in animating downtown Detroit has only heightened complaints that the city's hard-hit neighborhoods are still waiting for their own revival.

As downtown's population grows younger and whiter as the core fills up with millennials, many employed by Gilbert, complaints of gentrification or what some have called a "cultural gentrification" have risen. Those complaints also extend to what the Ilitch family plans for its arena district north of downtown and to the revitalization work under way farther north in Midtown.

But, so far, other civic leaders back Gilbert's expansion plans. Duggan, speaking in April when Gilbert announced he had purchased the One Detroit Center skyscraper as a new home for Ally Financial, endorsed his role and said he was not concerned about Gilbert's concentration of ownership downtown.

"I'm excited that somebody successful is acquiring all these properties," Duggan said at the time. "I was here in 2006, a member of the Super Bowl committee, when we painted over those empty storefronts on Woodward so visitors would think they were occupied. I walk down Woodward today, and I see those storefronts filled with businesses, and I couldn't be more pleased with what Dan has done and his contributions to the community."

John Mogk, a longtime professor of development law at Wayne State University's School of Law, takes a wait-and-see attitude toward Gilbert's impact on the city.

"I would worry about Dan Gilbert's increasing control of downtown properties as being detrimental when it is demonstrated that the public well being is not being served," he said. "(But) that does not appear to be the case now or potentially to be the case anytime soon."

From bricks, to digital, to Detroit

Gilbert, now 53, received a real estate license and law degree early in life, but he was always more interested in running his own company. He started his Rock Mortgage in 1985 with his brother and a friend in suburban Oakland County. They grew the mortgage company into more than two dozen storefront offices.

In 1998, Gilbert urged his staff to explore the new online format, and eventually went totally online, eliminating paper forms and storefront offices.

In May that year, Gilbert took Rock public. Software maker Intuit bought the company in 1999 for more than $500 milllion and changed its name to Quicken Loans to match its popular software product. The two firms never quite meshed, and Gilbert and his partners bought it back in 2002 as a private company for a fraction of the earlier sale price, retaining the Quicken brand on a perpetual lease.

By going all-online, Quicken could digitally track every step — from taking the initial call from a potential customer to ordering closing documents. It was a watershed business moment that changed everything.

Quicken shrunk the mortgage approval time to about 30 days from 3 to 6 months — a major selling point for marketing and advertising. Today, at Quicken's headquarters, teams of data analysts sit in "mission control" tracking thousands of loan applications on oversized computer screens.

Urban lifestyle

A company that relied so heavily on technology naturally needed a lot of smart younger workers, and Gilbert began to think about leaving his suburban location in Livonia for downtown Detroit. Although downtown a dozen years ago still suffered from an image of abandonment, Gilbert sensed his young workers hungered for an urban lifestyle, even if it was in Detroit instead of Chicago or San Francisco.

In November 2007, Gilbert announced to great fanfare he would move his headquarters downtown and build his own new headquarters building on one of several sites offered by the city.

But the national real estate crash and Great Recession delayed the move for several years. Gilbert shelved his plan for a new building and eventually moved into leased space in the existing Compuware Building in 2010.

He soon made up for lost time, however. And buying all those half-empty skyscrapers was only part of it.

A sandy beach, like in Paris

Convinced that downtown needed upscale retail and restaurant, he opened the Somerset Collection's CityLoft, a storefront on Woodward offering mini-versions of the tony mall's elite stores.

Other retailers followed: Moosejaw, the Roasting Plant, a New York-based coffee shop, the boutique Bon Bon Bon chocolate shop. Restaurants, too. Such popular eateries as Townhouse, Dime Store, and Punch Bowl Social have opened in Gilbert buildings.

Along the way, Gilbert met Fred Kent, the New York founder of the Project for Public Spaces consulting firm known for enlivening city streets around the world.

The two men mapped a strategy to activate downtown's dormant streets.

Gilbert began to station colorful furniture on the sidewalks and plazas outside his buildings. He attracted food trucks and musicians. He even worked with Campus Martius managers to install a sandy beach there, something Kent showed him had been down in Paris.

"I think he has this innate intuition," Kent said of Gilbert. "He really enjoyed the whole team effort and the discovery of these things and watching them take place. Putting a beach in the center a city is not something you do. It sort of changed the whole discussion. That was a brave thing on the part of Dan Gilbert to do, and I think that changed the discussion a lot."

Gilbert then built the Z Garage, named for its zig-zag footprint, and filled it with murals and streetfront retail. He hired noted graffiti artist Shepard Fairey to create a huge mural on the rear wall of the former Compuware Building.

Gilbert also created a bike rental program for his workers, strung holiday lights along Woodward Avenue, and hired one of the nation's most progressive architecture firms, SHoP of New York, to craft a stunning and still in-progress futuristic design for a building to rise on the old Hudson's site.

Security cameras, no big deal, Gilbert says

Gilbert also has cultivated a security guard force, conspicuously riding in marked vehicles around the Woodward Avenue/Campus Martius area and also walking his properties.

He also installed a network of more than 500 surveillance cameras to watch his properties and the surrounding streets and alleys.

Related: Gilbert dismisses criticism of 500-camera security system

Gilbert's security team monitors the live feeds in a headquarters in the Gilbert-owned Chase Tower. Gilbert's people say the security system has initiated more than 500 calls to 911 for emergency medical service and to help escort more than 1,100 people who needed help getting somewhere. Almost 750 people have been assisted with vehicle lockouts and battery jumps, for example.

Gilbert pushes aside the criticism he has too many prying eyes in downtown. He said the camera system is useful not to spy on people but to go back and examine the tapes after a reported incident.

"The amount of stuff that we contribute to catching is remarkable," Gilbert said.

For example, three teenage girls sprayed names and expletives last year on walls in the back alley of the 1001 Woodward building — which shares an alley with one of Gilbert's buildings. After the vandalism was discovered, security for Gilbert's Rock Ventures scoured through recorded video and found clear images of the girls heading toward their vandalism target.

Gilbert also has security cameras inside his buildings he manages. But the cameras in his buildings are pointed at doors and other areas with valuable equipment, his team has said. The cameras also do not have sound.

Michigan.com, the company the runs the business operations of the Detroit Free Press and the Detroit News, has a contract with Rock Security to monitor the Michigan.com-owned cameras in its new offices at 160 W. Fort St., a building owned by Bedrock Real Estate Services.*

Mogk of WSU Law noted that Gilbert is hardly alone is operating security cameras and guards. He cited Wayne State University, Detroit Medical Center, and the three Detroit casinos as among entities with similar systems. "Unless a pattern of violating individual rights and liberties are involved as they are recognized and protected by law, I am not troubled by the use of security cameras and personnel by anyone," Mogk said.

'It doesn't take much to mess it up'

Pressed about controlling so much of downtown, Gilbert downplays his role.

"We're in the headlines and we're doing a lot but even as a percentage of downtown itself it's not as much as people think," he said.

Among the important properties that Gilbert doesn't own include the Renaissance Center, the Westin Book Cadillac, and the Guardian, Penobscot, Buhl, and Cadillac Tower skyscrapers, and indeed much of downtown beyond Woodward Avenue itself where his properties are concentrated.

And of course the Ilitches are building their own district immediately to the north to rival Gilbert's holdings.

"When we started picking off these buildings, it's not because it's the greatest investment in the world," Gilbert said. "A lot of it is defensive. Somebody puts a use in a block that's completely not in line with what anybody, the community and us, would want. It doesn't take much to mess it up. We say to ourselves we want to control as much of it as possible to get the vision done."

Selling? Building? More announcements to come

If somebody else shares his same vision of a lively downtown streetscape, Gilbert said, he's happy to let them take over.

"Sometimes we even say we'll buy it for temporary until we build our things and then maybe there's a great user who'll come along. It's almost like warehousing," he said. "I think you'll hear a deal or two coming up of something we bought that now we're going to sell, not for a profit but to put it in the hands of someone who wants to own."

Gilbert recently won the blessing of Mayor Duggan to build at least 300 residential apartments on an 8.4-acre tract in the Brush Park district.

He bought the naming rights for the M-1 Rail streetcar line once it's opened, and says that name is still under discussion. He travels to gather new ideas, most recently to Berlin, where he took inspiration from a city devastated by Allied bombing in World War II that has risen in a turnaround as remarkable as what Detroit is attempting.

"It's only gaining momentum," he said. "It's not like the announcements are going to stop."

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.

* CORRECTION: This story was changed to fix the relationship between Michigan.com and Rock Security and the ownership of the security cameras.