Meet the Tech Entrepreneurs Aiming to Revive American Downtowns

Entrepreneurs are revitalizing downtown Detroit and Atlanta. Can the model be copied elsewhere?

On paper, Eric Smith—Senior Vice President of Business Strategy at Bedrock, the real estate development company that has revitalized Downtown Detroit—wouldn’t necessarily strike you as a romantic. He came to Bedrock, and commercial real estate more generally, from a background in business consulting, by way of a law degree and a stint in the armed forces. While he’s certainly genial and articulate, you’d be forgiven for assuming he was a pragmatic, by the numbers sort of guy.

Which is why, even after speaking with him for 30 minutes and glimpsing the obvious passion he feels for Detroit and the work Bedrock has done there, I’m still somewhat surprised when he told me, “There's so many Detroiters who are committed to and love this city and are going to be here. The culture is so strong. But, on the institutional side, I think deep pools of capital couldn't see that on a spreadsheet.”

Smith made that remark by way of explaining what he referred to as the “bifurcated” view of Detroit that real estate investors and locals, respectively, have of the Motor City—and we’ll get back to that concept in a bit. But Smith’s comment was also intended to distinguish what separated his boss, Dan Gilbert, from other investors that surveyed the Detroit opportunity in the first decade of the millennium, and perhaps even since then, and found it lacking.

Like Smith, Gilbert came to real estate development if not through the back door, then at least via a side entrance. As the founder of Rocket Mortgage, Gilbert was (and is) a hugely successful fintech entrepreneur. According to Smith, Gilbert’s initial interest in Detroit was based only partly on creating value through real estate.

Prior to 2010, Rocket Mortgage—then Quicken Loans—was based outside of the city in suburban Michigan. But Gilbert recognized that the young talent he wanted to attract to Rocket weren’t interested in living in the suburbs; they wanted to be in a city. A lifelong Michigander, Gilbert was born in Detroit and was firmly attached to the city. Instead of relocating to New York or San Francisco, Gilbert realized there was an opportunity to reinvent Downtown Detroit for the benefit of its citizens, Rocket Mortgage, and, ultimately, himself.

The model that Gilbert arguably created—whereby an entrepreneur from outside the real estate industry reinvigorates an American city, or at least a portion thereof—has now been adapted or copied by numerous others, to greater and lesser degrees of success–for every Dan Gilbert there’s a Tony Hsieh, who tried and failed to create a tech hub in Las Vegas’ largely dormant downtown.

In today’s letter, we’ll take a look at two such projects: the primogenitor in Detroit and a much more recent example in Atlanta. In doing so, we’ll uncover:

• Why these projects are perhaps best suited to entrepreneurs outside the real estate industry

• The importance of partnering with the local community

• How these revitalized downtowns can incubate complimentary businesses

• The “virtuous cycle” that can make these projects a long-term success