Deciding whether — and when — to locate a business in downtown Detroit is a lot like timing the stock market.
You want to invest when good assets are available at bargain prices, right? And when consumer sentiment seems poised to rebound after a rocky patch.
But you also know there are no sure things in the stock market — and you know from the trajectory of the past 50 years in Detroit that there’s a history of downside risk.
A year ago, Jeff Lambert, 40, co-founder and president of Grand Rapids-based public relations and investor relations firm Lambert, Edwards & Associates, was mulling what to do about his southeast Michigan office. He had established a presence in the region with the 2009 purchase of longtime Detroit PR man John Bailey’s firm in Troy, and that office’s lease was up in 2012.
“We started out by looking in all the Detroit suburbs,” Lambert told me. There was plenty of good space available in the popular office locales of Troy, Southfield, Birmingham. Lambert almost settled on Royal Oak.
“My feeling initially was maybe that it was too early for Detroit,” he said, reflecting on the crosscurrents of a promising buzz around entrepreneurial activity in Midtown and downtown, coinciding with the city’s precarious finances, troubled schools and other worries.
His attitude shifted last summer as he worked with his client Blue Cross Blue Shield of Michigan on its relocation of 3,000 employees from Southfield to the Renaissance Center downtown.
Lambert also spent a day with Sue Mosey, president of the civic group Midtown Detroit, who showed him not only possible office spaces but also residential projects where his staff might live. Bailey introduced him to Josh Linkner, a serial entrepreneur now heading Detroit Venture Partners, whose lead investor Dan Gilbert moved his own Quicken Loans downtown from Livonia in 2010 and has since purchased nine Detroit buildings and exhorted other companies to flock to the city core.
In December, Lambert finally decided to make the move to Detroit. He sealed the deal last month for 8,600 square feet on the ground floor of space on Broadway adjacent to the Detroit Opera House garage. He’s across the street from the Gilbert-owned M@dison Building, where DVP is located, but didn’t end up leasing in a Gilbert-owned property.
“There was this all-for-one, one-for-all spirit,” Lambert said of his interaction with Mosey, Linkner, Blue Cross and others. “It was about Detroit, not about who owned what building.”
Lambert will move about a dozen people into the new Detroit space this summer, “hopefully while the Tigers are still playing ball, before the playoffs and World Series,” he said. Lambert Edwards will occupy about 6,000 square feet of space, providing room to grow its Detroit contingent to 15 or 20 people, and sublet the rest to another tenant. Lambert Edwards has annual revenue of about $6 million and 45 employees in all, with six in Lansing and nearly 30 in Grand Rapids.
Is his timing right?
Not to be a negative Nellie, but I thought I should inform Lambert that Mike Ilitch once admitted to a bit of “over-aggressiveness” in moving Little Caesars downtown to the Fox Theatre from the suburbs in 1987, when most businesses were heading the other way. “It was kind of a bleak feeling when we first started out,” Ilitch told me in 2006.
Lambert has done all the math — on city income taxes, on paying for parking downtown instead of free parking in the suburbs — and chosen to bet that Detroit’s on the cusp of something big.
“There’s a generational piece to this,” said the Grand Rapids native. “People who’ve been around Detroit a long time are a little more skeptical. Yet the younger people I’ve talked to are ready to jump in with both feet … and they don’t have some of the baggage of the older generation. So a little bit of that enthusiasm and even naïveté is healthy, because the enthusiasm is contagious.”
More Details: Moving to Detroit
Several companies have moved into downtown Detroit or have announced plans to do so recently. The number of jobs varies from a handful for Twitter to 4,000 for Quicken.
Some of the companies:
Blue Cross Blue Shield of Michigan
Chrysler Great Lakes Business Center
By Tom Walsh, Detroit Free Press