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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