Just to the right of the lobby of the brand-spanking-new Shinola Hotel in downtown Detroit, there’s a casual, inviting space called the Living Room. Filled with long couches and comfortable chairs and coffee tables thoughtfully curated with coffee-table books, the Living Room does, in fact, look like a living room, albeit a large and trendy one. Visitors, most of whom are tapping away on their laptops—the rooms at the Shinola don’t have desks, so you have to work somewhere—can order food from waitresses who look exactly like the guests. A “truffle dog” costs $17, an absinthe-and-champagne cocktail called “Death in the Afternoon,” $24. Young, fit, well-coiffed, ethnically diverse, most of the laptop-tappers look like they jetted in from the Faena in South Beach or the Ace in New York. This is not what a newcomer to Detroit might expect—or, for that matter, a longtime resident. The Shinola seems to have taken everyone by surprise.
Just six years ago, hammered by decades of racial conflict and white flight, then a distressed automotive industry and the financial crisis, Detroit filed for bankruptcy—the largest municipal bankruptcy filing in American history. The city owed an estimated $18 billion to $20 billion that it couldn’t pay. You would never guess it to look at either the inside of the Shinola, handsomely appointed in leather and wood that invoke the Americana aesthetic of the Detroit-based watch company, or the outside. For one thing, the Shinola’s location is a statement; it’s at the intersection of Grand River and Woodward Avenue, an iconic street for Detroit and the first paved road in the country. There’s been a lot of history here—and a lot of change. For many years the Shinola building had housed a Rayl’s department store, then a jewelry store, then a wig shop. Now the nearby stores include Warby Parker, Lululemon, John Varvatos and, naturally, Shinola, one of whose seductive ateliers is attached to the hotel.
Across the street there’s a massive hole in the ground known as the Hudson’s site. It was once the location of the flagship Hudson department store, a local institution that closed in 1983. Coming soon? A 912-foot-high, mixed-use office building, the tallest building in the state. And finally, just past that is the Compuware building where about a decade ago Dan Gilbert, the billionaire founder of Quicken Loans, moved some 1,700 of his employees in from suburban office parks—a different kind of turning point for Detroit.
“Dan was a huge catalyst [for Detroit’s turnaround], seeing the opportunity in distressed real estate where others either didn’t see the opportunity or weren’t willing to take the risk,” Shinola CEO (and former Detroit Lions president) Tom Lewand says.
“Quicken Loans, and the region, needed to stop the brain drain of educated young people leaving the state to work in cities like New York and LA,” Gilbert told me via email. “We needed to give them a reason to stay.”
Gilbert is, in fact, the common denominator of all these Detroit pivot points. His real estate company, Bedrock Detroit, partnered with Shinola to build the hotel, which opened in January. It’s also building that skyscraper across the street. Bedrock, which now employs over 17,000 people in the city, owns over 100 buildings in downtown Detroit, an astonishing and unprecedented concentration of private ownership in the heart of an iconic American city.
Gilbert and Bedrock have attracted national attention for their investments in Detroit, and rightly so: What the billionaire entrepreneur has accomplished for the city where he was born is an incredible story. But it’s really part of a larger story: How over the past quarter century the massive rise in private wealth has allowed billionaires across the country to acquire huge chunks of land in American downtowns, literally rebuilding and reshaping the map of the country.
Our goal is to help build the city that our kids will want to move back to.
What has happened piecemeal in our cities has, as a collective phenomenon, gone largely unnoticed by the media. And, to be sure, it takes many players to influence the course of a city—politicians, philanthropists, community activists. In Detroit, for example, folks are quick to point out that you can’t give all the credit to Gilbert, you have to talk about General Motors, the Ford family, the Ilitches of Little Caesars fame and the leadership of mayor Mike Duggan.
But the billionaires among them have an outsize influence. Their impact will endure for decades, probably centuries. For much of our lives, and for generations to come, many of us will live and work in buildings, eat in restaurants, watch sports events or concerts and gather in public places that were all imagined, created and owned by a handful of extraordinarily wealthy men.
That reality may sound concerning—so much influence over people’s lives in the hands of so few—and perhaps in the long run it should be. Maybe after a while, when we forget somewhat how bleak were the circumstances of many U.S. cities, we’ll grow resentful of such concentrated ownership and its unintended consequences. Yet here’s the truth at the moment: So far, these investors are doing a pretty good job of elevating the cities they’re buying into. Yes, there are exceptions: New York’s Hudson Yards—when the revolution starts, this place is in trouble—is probably one. But there’s ample evidence that American cities are significantly better off because of this wave of investment from the ultrarich.
