DETROIT — If Tim Smith, the CEO of the Skidmore Studio, ever feels regrets about moving his design firm from the comforts of suburban Royal Oak, Mich., to a downtown space here, they are all but erased every day when he walks out his office door to grab a bite.
“I noticed that the streets are more crowded when I walk to lunch and that’s not something I remember as someone who has worked in Detroit over the years and grew up here,” Smith said. “In the past, there has been talk about a revival but this is real. And I know (the move to Detroit) has opened some new doors for us.”
As improbable as it might seem in an economy still struggling, downtown Detroit is on an upswing — finally. With its abandoned storefronts and hollowed-out, Art Deco-era office buildings serving as the image of urban decay, the commercial district is wooing new businesses through public and private incentives. The migration into the city is occurring even as the city itself faces a potential cash shortfall by next spring.
In the last two and a half years, new people working downtown increased by more than 10 percent, or 9,000 new jobs, according to the Detroit Economic Growth Corp. The biggest influx has been in the last 12 months, lured by office rents well below those in other major cities.
Smith considered moving downtown for two years, ever since he purchased the creative firm from the Skidmore family. He wanted to be on the leading edge of a Detroit resurgence in the marketing and advertising industry, one that had suffered since the start of 21st century.
“At first it was mainly an emotional decision to re-energize the Detroit creative community,” Smith said. “It was a way for us to pave the path to recharge the industry’s batteries.”
When Smith was reviewing possible sites for his firm in 2010, his commercial real estate agent questioned whether he really wanted to move to Detroit. In the last several months, however, the move received positive feedback from clients, vendors and employees. Even some “friendly competitors” have met with him about moving to Detroit.
Skidmore’s new 10,000-square-foot, fourth-floor studio space marks a return home for the firm, which focuses on branding and marketing strategies, graphic design, motion graphics, interactive design and online media. Founded in downtown Detroit in 1959, Skidmore built an early reputation for its illustrative work for the Big Three car companies.
Now with 24 employees, Skidmore has more visibility downtown near Comerica Park, home of the Detroit Tigers; Ford Field, home of the Detroit Lions, and the Fox Theatre district, one of its central tourist hubs, Smith said. He decided to move after he learned about the Creative Corridor Incentive Fund, a public and private initiative designed to bring creative firms back to Detroit. Through the fund, Skidmore was awarded a grant valued at $300,000 over the life of the lease and can be applied as a post-rent subsidy.
Smith already had support of his employees, which was a necessity, he said.
“Many of our people already live or play in Detroit but we had to work out some of the logistics that were of concern to them — parking, city taxes, the commute,” Smith said. “But we see Detroit as a vibrant and active place. And we had specific needs for a building because we wanted a loft layout with open spaces. We were fortunate to find that.”
Skidmore is not alone. In mid-May, Quicken Loans took the first step in bringing 2,500 more of its professionals to downtown Detroit by early 2012. Some 1,500 Quicken Loans team members recently set foot into their new offices at the renovated Chase Tower Building in the central business district, bringing the company closer to relocating all of its Michigan workers there.
The transplanted employees joined 1,700 colleagues who moved from the suburbs to Detroit in 2010 when Quicken Loans and several sister companies moved their headquarters to the Compuware Building, home of another large city employer, technology and software firm Compuware Corp.
An additional 1,000 employees from several of Quicken Loans’ sister companies will soon move to downtown Detroit and occupy space in the Madison Theatre Building and First National Building when final renovations on those two buildings are completed.
“More and more people, investors and businesses are joining the initiative to build something very special here,” said Dan Gilbert, founder and chairman of Quicken Loans, the nation’s largest online home lender and a Detroit-area native. Gilbert, owner of the NBA’s Cleveland Cavaliers, acquired the 505,000 square foot, 14-story Chase Tower occupying a full city block last April, and immediately began renovating its interior to reflect the company’s culture. The building features bright colors and open floor plans.
Skidmore Studio is a tenant in the historic Madison Theatre Building, also owned by Gilbert. The building serves as a collaborative entrepreneurial hub for technology and creative companies.
As Michigan’s state tax credit programs are being eliminated by Gov. Rick Snyder to help offset a severe budget crunch, local entities are taking the lead on providing incentives. Detroit and Detroit Economic Growth Corp. are using a variety of strategies to encourage job growth. Private foundations; anchor institutions such as Wayne State University, Henry Ford Health System and the Detroit Medical Center; and private businesses are also providing support.
For example, some of these institutions and private businesses are offering financial incentives for employees to live in greater downtown. Foundations are underwriting programs such as the Creative Corridor Incentive Fund and the Green Grocer Project, which offers financial and technical assistance to grocers, said Detroit Economic Growth Corp. spokesman Bob Rossbach.
Detroit Economic Growth Corp. is leveraging federal funds for infrastructure to build attractive new streets and pedestrian amenities, and it administers a federal energy conservation program that encourages building owners to upgrade lighting, install insulation, replace windows and make other energy-saving improvements.
For now downtown Detroit’s greatest area of job growth has been from the burgeoning health care sector. Its third- and fourth-largest employers, the Detroit Medical Center and Henry Ford Health System, employ more than 19,000 professionals, according to Detroit Economic Growth Corp. Wayne State University, which also includes a medical school, employs another 5,000-plus.
One health care business that has also moved into Detroit is technology company GalaxE Solutions, which already has hired nearly 150 people. It plans to hire 500 over the next five years as it brings more of its business back from overseas. “The nature of software development for large corporations has changed and the complexity makes it necessary for us to be closer to our clients,” GalaxE Solutions CEO Tim Bryan said.
Still, Detroit is hardly back to its former thriving self. Even though office vacancy rates are down by a percentage point from the end of last year, they still hover around 28 percent. Washington, D.C., by contrast, has vacancy rates of about 10 percent. Yet Detroit’s vacancies have not stifled a new optimism. “The city is an amazing place to live, work and play with so many great restaurants and cultural gems to explore,” said Quicken Loans CEO Bill Emerson. "There is never a shortage of things to do in Detroit. It is a great time to be in the D.”
“I noticed that the streets are more crowded when I walk to lunch and that’s not something I remember as someone who has worked in Detroit over the years and grew up here,” Smith said. “In the past, there has been talk about a revival but this is real. And I know (the move to Detroit) has opened some new doors for us.”
As improbable as it might seem in an economy still struggling, downtown Detroit is on an upswing — finally. With its abandoned storefronts and hollowed-out, Art Deco-era office buildings serving as the image of urban decay, the commercial district is wooing new businesses through public and private incentives. The migration into the city is occurring even as the city itself faces a potential cash shortfall by next spring.
In the last two and a half years, new people working downtown increased by more than 10 percent, or 9,000 new jobs, according to the Detroit Economic Growth Corp. The biggest influx has been in the last 12 months, lured by office rents well below those in other major cities.
Smith considered moving downtown for two years, ever since he purchased the creative firm from the Skidmore family. He wanted to be on the leading edge of a Detroit resurgence in the marketing and advertising industry, one that had suffered since the start of 21st century.
“At first it was mainly an emotional decision to re-energize the Detroit creative community,” Smith said. “It was a way for us to pave the path to recharge the industry’s batteries.”
When Smith was reviewing possible sites for his firm in 2010, his commercial real estate agent questioned whether he really wanted to move to Detroit. In the last several months, however, the move received positive feedback from clients, vendors and employees. Even some “friendly competitors” have met with him about moving to Detroit.
Skidmore’s new 10,000-square-foot, fourth-floor studio space marks a return home for the firm, which focuses on branding and marketing strategies, graphic design, motion graphics, interactive design and online media. Founded in downtown Detroit in 1959, Skidmore built an early reputation for its illustrative work for the Big Three car companies.
Now with 24 employees, Skidmore has more visibility downtown near Comerica Park, home of the Detroit Tigers; Ford Field, home of the Detroit Lions, and the Fox Theatre district, one of its central tourist hubs, Smith said. He decided to move after he learned about the Creative Corridor Incentive Fund, a public and private initiative designed to bring creative firms back to Detroit. Through the fund, Skidmore was awarded a grant valued at $300,000 over the life of the lease and can be applied as a post-rent subsidy.
Smith already had support of his employees, which was a necessity, he said.
“Many of our people already live or play in Detroit but we had to work out some of the logistics that were of concern to them — parking, city taxes, the commute,” Smith said. “But we see Detroit as a vibrant and active place. And we had specific needs for a building because we wanted a loft layout with open spaces. We were fortunate to find that.”
Skidmore is not alone. In mid-May, Quicken Loans took the first step in bringing 2,500 more of its professionals to downtown Detroit by early 2012. Some 1,500 Quicken Loans team members recently set foot into their new offices at the renovated Chase Tower Building in the central business district, bringing the company closer to relocating all of its Michigan workers there.
The transplanted employees joined 1,700 colleagues who moved from the suburbs to Detroit in 2010 when Quicken Loans and several sister companies moved their headquarters to the Compuware Building, home of another large city employer, technology and software firm Compuware Corp.
An additional 1,000 employees from several of Quicken Loans’ sister companies will soon move to downtown Detroit and occupy space in the Madison Theatre Building and First National Building when final renovations on those two buildings are completed.
“More and more people, investors and businesses are joining the initiative to build something very special here,” said Dan Gilbert, founder and chairman of Quicken Loans, the nation’s largest online home lender and a Detroit-area native. Gilbert, owner of the NBA’s Cleveland Cavaliers, acquired the 505,000 square foot, 14-story Chase Tower occupying a full city block last April, and immediately began renovating its interior to reflect the company’s culture. The building features bright colors and open floor plans.
Skidmore Studio is a tenant in the historic Madison Theatre Building, also owned by Gilbert. The building serves as a collaborative entrepreneurial hub for technology and creative companies.
As Michigan’s state tax credit programs are being eliminated by Gov. Rick Snyder to help offset a severe budget crunch, local entities are taking the lead on providing incentives. Detroit and Detroit Economic Growth Corp. are using a variety of strategies to encourage job growth. Private foundations; anchor institutions such as Wayne State University, Henry Ford Health System and the Detroit Medical Center; and private businesses are also providing support.
For example, some of these institutions and private businesses are offering financial incentives for employees to live in greater downtown. Foundations are underwriting programs such as the Creative Corridor Incentive Fund and the Green Grocer Project, which offers financial and technical assistance to grocers, said Detroit Economic Growth Corp. spokesman Bob Rossbach.
Detroit Economic Growth Corp. is leveraging federal funds for infrastructure to build attractive new streets and pedestrian amenities, and it administers a federal energy conservation program that encourages building owners to upgrade lighting, install insulation, replace windows and make other energy-saving improvements.
For now downtown Detroit’s greatest area of job growth has been from the burgeoning health care sector. Its third- and fourth-largest employers, the Detroit Medical Center and Henry Ford Health System, employ more than 19,000 professionals, according to Detroit Economic Growth Corp. Wayne State University, which also includes a medical school, employs another 5,000-plus.
One health care business that has also moved into Detroit is technology company GalaxE Solutions, which already has hired nearly 150 people. It plans to hire 500 over the next five years as it brings more of its business back from overseas. “The nature of software development for large corporations has changed and the complexity makes it necessary for us to be closer to our clients,” GalaxE Solutions CEO Tim Bryan said.
Still, Detroit is hardly back to its former thriving self. Even though office vacancy rates are down by a percentage point from the end of last year, they still hover around 28 percent. Washington, D.C., by contrast, has vacancy rates of about 10 percent. Yet Detroit’s vacancies have not stifled a new optimism. “The city is an amazing place to live, work and play with so many great restaurants and cultural gems to explore,” said Quicken Loans CEO Bill Emerson. "There is never a shortage of things to do in Detroit. It is a great time to be in the D.”
