In late October, University of Michigan (U-M) president Mark Schlissel announced plans for the 14-acre Detroit Center for Innovation, a $300 million, 190,000 square-foot research complex that will be the centerpiece of an ambitious multi-building development at the east edge of downtown.
According to U-M, the center will serve up to 1,000 graduate and senior-level undergraduate students, provide Michigan businesses with “a pipeline of talent and offer opportunities for current workers to further their skills” in fields like artificial intelligence, data science, entrepreneurship, and build on Detroit’s growing presence as a center for innovation. Gifts from longtime U-M supporter and real estate billionaire Stephen M. Ross and businessman, investor, and philanthropist Dan Gilbert will support the development of the center. The project will eventually include a hotel, conference center, residential student housing, and incubator space for tech companies.
“The idea of the new center reflects the shared commitment of Dan, myself, the city, the county, the state and the University of Michigan to create a transformative center for innovation that will help fuel the city’s next chapter of growth,” Ross said. “Based on the commitments we already have in hand and the strong interest being expressed by other donors, I am highly confident that this project will come to full fruition.”
In response to U-M’s announcement, students circulated a petition urging the university to reconsider the facility, citing, among other things, U-M’s investment in Detroit Renaissance Real Estate Fund LP, a firm with ties to a string of evictions in Detroit. In addition, faculty members representing U-M’s Semester in Detroit program penned an opinion piece accusing university officials of being “complicit in the dangerous practice of the wealthy and powerful alone determining the direction of development.”
Construction of the center, which is to be located on the site of the aborted Wayne County jail—Gilbert purchased the land from the county last year—will commence in 2021. Other questions also remain, such as how much will Ross and Gilbert each donate, and whether the project will qualify for substantial tax breaks for the billionaire developers.
In the meantime, the announcement underscores the fact that while philanthropy has played a critical role in revitalizing Detroit, a growing chorus of critics argue that the city’s billionaire benefactors haven’t allocated their riches equally. I’ll explore this nuanced line of criticism in greater detail momentarily. But first, a quick review of the center’s two major proponents is in order.
The Most Generous Donor in U-M History
With a net worth of $7.9 billion, Stephen M. Ross is the chairman and founder of global real estate firm Related Companies, owner of the Miami Dolphins, and a philanthropist whose focus areas include education, medical research, and urban planning.
Ross is a major benefactor of his alma mater, the University of Michigan, which renamed its business school the Ross School of Business after he made a $100 million gift in 2004. In September 2013, Ross gave $200 million gift, the largest in U-M’s history. Half of the commitment was earmarked to the business school; the other half went to Michigan athletics. Ross said he hoped the gift would inspire other alumni to give to U-M’s $4-billion “Victors for Michigan” campaign, which he spearheaded. (Spoiler alert: It did.)
In 2017, Ross gave U-M $50 million to the business school that already bore his name. That gift, which brought Ross’ total pledged giving to the university to $378 million, made him the largest donor in the university’s history. That same year, the Victors for Michigan campaign, which kicked off in 2013, surpassed its $4 billion goal. In October of 2018, it became the first American public university to eclipse the $5 billion threshold. In February, U-M officials announced that the campaign, which wrapped up at the end of 2018, raised a total of $5.28 billion.
Ross has also given $1.2 million to Republican candidates for federal office and political action committees since 2015. In August of 2019, angry celebrities urged a widespread boycott of Related Companies subsidiaries after news broke that Ross planned to host a fundraiser for President Trump. Around the same time, 600 U-M alumni urged the school to remove Ross’ name from campus buildings and “solicit student and alumni input into whether and how to reconsider his philanthropic contributions to the university.”
Ross defended the Trump fundraiser in a statement to Politico, saying his support for the president should not negate his record as a “champion of racial equality, inclusion, diversity, public education, and environmental stability.” U-M, in turn, said it had no plans to condemn Ross for hosting the fundraiser or scrub his name from buildings on campus. “We don’t exclude or include people from our university community based on their political views,” said university spokesperson Rick Fitzgerald. “That’s true in admissions, in hiring, in patient care, in campus speakers or visitors and in our donor community.”
In 2017, Ross announced a $7.5 million investment in a $27.5 million initiative with the Ford Foundation and the Platform LLC to bring affordable housing to Detroit neighborhoods. “I mean, hey, it’s where I’m from,” Ross told reporters at the time, before adding,“I want to see the city come back. It’s all about that.”
Detroit’s “Unparalleled Benefactor”
Dan Gilbert is the cofounder of Quicken Loans, the owner of several sports franchises, including the NBA’s Cleveland Cavaliers, and the founder of Rock Ventures, a Detroit-based holding company for his vast portfolio of companies, investments, and real estate. In June, Forbes named Gilbert Michigan’s richest resident, pegging his net worth at $6.8 billion.
In 2012, Gilbert and his wife Jennifer are part of the Giving Pledge. In 2016, Gilbert donated $5 million to Wayne State University Law School, where he earned a Juris Doctor. The gift represented the largest donation in the law school’s history. That same year, Gilbert donated $15 million toward the $50-million Breslin Center renovation project at Michigan State University, where he earned his bachelor’s degree.
Gilbert’s son Nick was born with neurofibromatosis, or NF, a genetic disorder that causes the spontaneous growth of tumors on nerves throughout the body. To that end, the Gilberts established NF research clinics at the Children’s National Medical Center in Washington D.C. and at the Dana Children’s Hospital at the Sourasky Medical Center in Tel Aviv. As Gilbert and his wife Jennifer explained in their Giving Pledge letter, “Had our son not been born with NF then we never would have known about the condition nor been in any position to help other kids with the disease.”
Dubbed by Forbes’ Dale Buss as Detroit’s “unparalleled benefactor,” Gilbert has seemingly single-handedly revitalized the city’s downtown area. In 2011, Gilbert relocated Quicken Loans and its 1,700 team members from the suburbs to downtown Detroit with $50 million in incentives from the state. Bedrock Detroit, Gilbert’s real estate firm specializing in the strategic redevelopment of Midwestern urban cores, currently owns more than 100 properties in downtown Detroit, while Gilbert-owned businesses employ more than 17,000 people in the city. Over the last decade, his Quicken Loans/Bedrock/Rock Ventures empire has allocated nearly $6 billion into rebuilding Detroit.
“In many ways, too, he’s just been getting started,” Buss wrote, citing Gilbert’s plans to build Detroit’s tallest building as well as his efforts to lead legislative reform of the most expensive auto-insurance structure in the nation. In May, Gilbert suffered a stroke and Detroit held its collective breath. Five months into his recovery, his donation to the Detroit Center for Innovation affirms Buss’ prediction.
With their ambitious plans to transform Detroit into a tech hub, Ross and Gilbert have joined a growing cadre of funders doubling down on cutting-edge research as a way to attract students, create jobs, and boost economic development in a Midwest city located far from the usual coastal hubs.
The announcement, I wager, would have generated universal approval from residents six years ago when Detroit declared bankruptcy. But things have changed dramatically since then. The launch of the Detroit Center for Innovation comes at a time in which residents are expressing a familiar line of criticism in cities being reshaped by philanthropy: For all of the money sloshing around the city, the rising tide isn’t lifting all boats.
Writing last year in Business Insider, Richard Feloni spoke with activist Shea Howell who argued that Gilbert’s developments are creating “‘white island’ downtown” in a majority-black city. “I heard variations on this theme repeatedly,” Feloni wrote. “Gilbert is making a big difference downtown, but it’s not just downtown that needs it.”
William Davidson Foundation’s Ethan Davidson picked up on this theme earlier this month after music impresario Berry Gordy announced a $4 million gift to the Motown Museum’s expansion campaign. “The resurgence of Detroit,” he said, “needs to move further away from the core and touch on more of the neighborhoods.”
Gordy’s gift came a year after the Kresge Foundation, which has worked tirelessly to revitalize blighted Detroit neighborhoods, announced a $50 million commitment aimed at rolling out a “cradle-to-career” educational model at Marygrove College, located about 12 miles north of downtown. The foundation has also developed Detroit’s QLine streetcar. Since its launch, however, some critics have labeled the project a form of “transit gentrification” that serves businesses and its employees more than neighborhood residents.
Kresge president Rip Rapson has acknowledged these concerns, calling attention to the emergence of “Two Detroits,” a “burgeoning, ever-more-prosperous downtown and Midtown, juxtaposed with talk about the rest of the city falling further behind.” By committing to “balanced, equitable neighborhood development” while working closely with neighborhood residents, Kresge’s partnership with Marygrove will “help to overcome this narrative,” he said.
As for Gilbert, he pushed back on criticism that his efforts overlook Detroit’s outer neighborhoods, telling Feloni, “I don’t like to go around bragging about it—like maybe that’s our problem—but we care deeply about the neighborhoods, and… we just think it’s all on the same side. There’s no way businesses can be successful by having really bad neighborhoods in a successful downtown. It just doesn’t work that way.”
Bedrock’s non-downtown properties include Brush Park City Modern, a development of 400 houses, 20 percent of which are affordable housing for seniors, and the $300 million Brewster-Douglass development in the same neighborhood that will include 913 residential units (a quarter being affordable housing), public space, an early-childhood-education facility, and a small hotel.
In late October, ProPublica reported that several swaths of downtown Detroit received “opportunity zone” tax breaks after Gilbert—a Trump donor—cultivated ties to the White House, prompting Sen. Cory Booker, Rep. Emanuel Cleaver, and Rep. Ron Kind to call for an investigation. Gilbert’s company responded with its own report, while a Quicken executive told Forbes the company had “zero influence” over the process of granting OZ status.
A Call for “Equitable Funding” Across U-M
Detroit residents aren’t the only people concerned about the unequal allocation of large amounts of private dollars. As millions continue to flow into downtown Detroit and U-M revels in its $5.28 billion windfall, a coalition of U-M faculty, students and staff argue that the university’s Ann Arbor campus has a “massive surplus of funds,” while the Flint and Dearborn campuses don’t receive nearly as much support. “We’re asking for a realignment of resources that promotes equitable funding, equitable support for all UM students, enhanced diversity and enriched collaboration and exchange among all three campuses,” UM-Flint tenure track faculty member DJ Trela said.
U-M’s Fitzgerald said that since each of the three campuses receive their own appropriations from the state, raise their own money through donors, and set their own tuition rates, they should set their own priorities based on how they wish to use those resources. “Donors make many of their contributions to support programs and operations at each of the three campuses,” he said. “The university is obligated to use those funds as intended by the donors.”
As far as the Detroit Center for Innovation is concerned, U-M’s press release noted how the center is part of the university’s “growing footprint in and around Detroit including its nearby U-M-Dearborn campus” located nine miles from the city center. “While the U-M academic center will provide instruction at the Detroit Center for Innovation,” the release read, “degrees and certificates will be awarded by the Ann Arbor campus.”
“There’s Money to Be Raised”
In his cautiously optimistic take on the new center, Detroit Free Press’ John Gallagher nonetheless asked, “How does having 1,000 U-M grad students doing their work” at the new center instead of in Ann Arbor “help the city at large? How does it lessen the poverty, joblessness and education shortcomings that remain such huge challenges in Detroit?”
Gallagher’s questions were relatively tame compared to pushback from members of the U-M community. Amytess Girgis, the student who started the petition criticizing the center, told Michigan Daily, “I really think the University of Michigan administration needs to involve faculty and students who have been doing work in Detroit and will continue doing work in Detroit in a very informed way. I think the university, going forward, needs to really be aware of the dissent that is happening over the gentrification of this so-called innovation center.”
During U-M’s Semester in Detroit program, students spend an undergrad semester living in the city while interning and learning about life in the city. In late November, U-M Semester in Detroit representatives Stephen Ward, Craig Register, and Marion Van Dam penned a piece laying out a laundry list of criticisms with the center. The new center, they argued, would invest in tech skills that foment the rise of “surveillance capitalism.” Citing a piece by Detroit Free Press’ Gallagher, they wrote how planning for the project took place “almost exclusively behind private, closed doors.” And they called attention to Gilbert’s alleged abuse of federal tax benefits.
“We need only look back a few years, or even weeks, to see how white billionaires continue to ‘re-imagine’ majority-black Detroit in their own image and for their own economic benefit,” they wrote. “Given this history, and considering the private interests involved in this partnership, we believe the ‘Detroit Center for Innovation’ is an inappropriate and irresponsible deployment of the university’s social, economic and intellectual capital.”
The university is aware of the concerns of Semester in Detroit faculty members, but believes the project has been received positively thus far, U-M’s Fitzgerald said. “We do believe that there is an enormous community benefit to having up to 1,000 graduate students learning and doing on this site that once was to become the site of the Wayne County Jail.”
Looking ahead, Bedrock CEO Matt Cullen told Crain’s that fundraising efforts for the main $300 million academic building are being aimed at philanthropic foundations and corporations that may be interested in having a presence in the business incubation center. “There’s money to be raised,” he said. “There’s work to be done in defining all of those budgets and understanding what the philanthropic gap is, if you will.”