DETROIT (AP) — Quicken Loans founder and chairman Dan
Gilbert said Monday his venture capital firm is buying Detroit’s
historic Federal Reserve Building, the latest acquisition in a drive to
create a technology-focused entrepreneurial hub downtown.
Gilbert
said he hasn’t landed a tenant for the 176,000 square-foot building but
believes it’s an ideal space for one occupant. The original building was
constructed in 1927 and an eight-story annex was added in 1951. The
purchase price wasn’t disclosed for the building, which has been vacant
since 2004 when the Detroit branch of the Federal Reserve Bank in
Chicago moved into a new, secure facility a few miles away.
In the
past year, Gilbert’s Rock Ventures LLC has bought nine buildings, three
parking structures and one lot with an aim to reverse the region’s
brain drain of college graduates. Other holdings include the Chase Tower
and First National Building.
The Cleveland Cavaliers owner made
the announcement from the M(at)dison Building, a five-story structure
Rock Ventures bought and spent $12 million renovating. Gilbert called
the building "the showcase" of his holdings, a business incubator whose
tenants include a film production company, an online interior design
firm and mobile application developers.
M(at)dison contains nearly
a dozen startups funded by Detroit Venture Partners, of which Gilbert
is a principal. The building, constructed in 1917 as part of the
now-razed Madison Theatre complex, is designed to attract young tenants
with its "urban chic" architecture and design — featuring reclaimed barn
wood, exposed steel beams, original clay ceiling tiles and some of the
graffiti found when the building was acquired. The roof is even decked
out with a full bar and grilling area for private parties.
"It’s
very much a launch pad for new startup companies," Josh Linkner, the
venture capital firm’s chief executive and managing partner. He added
that it’s designed to have an "up and out strategy," meaning once the
companies outgrow their space they can move into one of several other
Rock Ventures properties nearby.
Linkner said many employees of
the portfolio companies have moved downtown or are at least considering
it, and the companies themselves have either transplanted from outside
Detroit or didn’t have a prior address. He said none is reliant on the
auto industry — a break from decades of past practice in the area.
Still, despite the cash infusion and cultural shift, Linkner said it’s "early innings" in the
Motor City’s diversification game.
"This building doesn’t make economic sense yet," he said. "It’s a commitment to
entrepreneurialism in Detroit."
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Copyright 2012 The Associated Press.