Dan Gilbert already had a fortune from founding the mortgage company Quicken Loans. Now he stands to make even more by buying office buildings on the cheap in Detroit's economically depressed downtown and convincing tenants to move into them to help the ailing city. It's working, he tells Bob Simon, and for anyone who would say he's a greedy capitalist, his answer is he is essentially doing a lot of good for a city that's seen a lot of bad. Simon's story about Detroit, the largest American city to ever file for bankruptcy, will be broadcast Sunday, Oct. 13 at 7 p.m. ET/PT.
After three years, when Gilbert moved his company's headquarters to downtown, the billionaire has managed to lure 90 major tenants in addition to his own workers. Using more than a billion dollars of his own, he has revitalized the downtown, buying buildings as cheap as the cost of one year's rent for a similar space in New York, refurbishing and then renting them to the likes of Chrysler and Twitter. But it's not just another case of the rich getting richer, says Gilbert. "I know that sometimes there's Hollywood movies that, you know, describe every investor and profit-making capitalist as somebody very greedy," he tells Simon. "But in our case, you know, I think it's doing well by doing good. And I think that fits very nicely together."
Prospective tenants are thinking along the same lines, apparently taking a stake in the future of what was once a capital of U.S. heavy industry. "You can impact the outcome in Detroit," he says he tells them, "And that sells. It's crazy, but it sells...But here you can actually see-- what you do affect a great American city, and its hopefully historical comeback."
He says hopefully because his downtown is an oasis in a 139-square mile city that contains nearly 80,000 devastated buildings and neighborhoods rife with abandoned homes. The decline of America's once world-leading auto industry, political corruption and other factors have contributed to the economic crisis and a mass exodus in Detroit, which has lost nearly two-thirds of its population over the last 60 years. Simon visits a neighborhood where the remaining residents can't depend on fire or police. The challenge is to bring back those neighborhoods, but can Detroit do it with a government $18.5 billion in debt?
The books will have to be balanced to go forward and bankruptcy is the first step on that path. In that scenario, there will be painful consequences. Pensioners will take less money, as will the city's creditors. Benefits for city employees will be trimmed. That task falls to Kevyn Orr, a bankruptcy attorney, who was put in charge of the city.
"I'm sorry. This is unfortunate. I recognize how severe it is," he tells Simon. "You know, I come from pretty common stock. I by no means am insensitive to the human cost, but we don't have a choice. These choices have been made for us a long time ago."