  Izzadore Member Username: Izzadore Post Number: 59 Registered: 11-2006 |
Tony_pieroni, where do ([IF] they moved downtown - or at all) you 'see' Quicken if not on the Statler site? Burbs? Whitney? Riverfront? | ||
Kenp Member Username: Kenp Post Number: 677 Registered: 03-2006 |
I love it, D-Yes right in the middle of the action. Real players speaking out. I agree with Mr. Pieroni that his building must go before a Statler site can be developed. And I believe him when he says he has not been contacted by the city. But I also think its the Statler site that Quicken is coming to. This is going to be a interesting outcome for sure. Please keep us posted Mr. Pieroni. | ||
Detroitrulez Member Username: Detroitrulez Post Number: 326 Registered: 12-2006 |
what happened to the announcement occurring on August 1. | ||
Urbanize Member Username: Urbanize Post Number: 2165 Registered: 02-2007 |
^^^Actuallym our own Hybridy posted a brand new thread about The Announcement coming Yesterday. "there you have it. decision promised by tomorrow- Speaking of Quicken, Gilbert promised yet again a decision in two months, and he officially ruled out Cleveland: http://www.freep.com/apps/pbcs .dll/a...06060418&imw=Y Detroit Free Press Cavaliers' owner sticks with Michigan June 6, 2007" Where's the announcement Hybridy? | ||
Quozl Member Username: Quozl Post Number: 1156 Registered: 07-2005 |
Tony_pieroni: Thanks for all of your enlightening posts Tony, I appreciate your effort. Do you happen to know a Detroit investor by the name George Babbitt? I believe he has a local company called TransParagon Worldwide. | ||
Mackinaw Member Username: Mackinaw Post Number: 3514 Registered: 02-2005 |
Tony_pieroni, I'm sure you saw what the Whitney owner said in the paper. Do you agree with 3WC's assertion that it [the idea that they've been getting offers and passed] is probably garbage? Your inside info is making this thread worthwhile again. | ||
Gistok Member Username: Gistok Post Number: 5051 Registered: 08-2004 |
Wouldn't it be nice to have "ask the Ilitch's" or "ask Michael Higgins" threads (although those threads could get rowdy....) Not that this one doesn't need to be cleaned up now and then!  Or even to ask folks like Chuck Forbes or David DiChiera about future development ideas they might want to share. But Mr. Pieroni gets his share of coarse remarks, so one can hardly blame other downtown property owners from posting here. Of course there are some influential folks who lurk on this forum, Lowell hinted as much during our picnic. But he's kept a tight lip on who they are!  | ||
Spiritofdetroit Member Username: Spiritofdetroit Post Number: 554 Registered: 11-2006 |
edit edit edit | ||
Huggybear Member Username: Huggybear Post Number: 302 Registered: 08-2005 |
As someone who doesn't have a huge emotional investment in anything on Bagley, my take-away from Mr. Pieroni's discussions of the AAA building is: 1. The owner believes that whoever develops the Statler site needs his property. 2. The owner is not interested in selling ("unless it makes sense to me tax-wise") but instead wants an equity interest in a development entity. 3. The owner doesn't like single-use projects such as a corporate headquarters. 4. The owner took the $400,000 settlement from AAA and spent it on suing the City's contractor. I think we can take Mr. Pieroni at his word on all of these points. There has been complete integrity on his part as regards them. His positions have been consistent for quite some time. But let's not confuse integrity (candor, honesty and consistency) in discussing his goals with the implications of those positions. That's an entirely different issue. I don't know Mr. Pieroni at all, but taking him at his word on the points above, it doesn't make me very optimistic about the future of that parcel. 1. The Statler was built without the AAA building being part of it; with the Tuller site empty and the Statler site leveled, it might be speculation for anyone to assume this is a critical piece of property. If Mr. Pieroni says no one from DEGC has said anything about buying the site, it's a fair conclusion that DEGC doesn't consider it critical. Likewise, if he says that Quicken hasn't spoken to him about the property, it's fair to assume that if the Statler site is under consideration, then Quicken doesn't need it either. Dan Gilbert did not get rich by being dense or uninformed. He doesn't need forum members to "pass the word along." 2. Selling to make it worthwhile tax-wise probably means that it would be for a lot of money. I would guess that means enough to offset the losses from the damage and/or the litigation. Meaning seven figures, minimum. In terms of the preferred alternative, equity interests in real estate projects are not easy to come by. 3. If the site is critical, the owner wants an equity interest, and the owner only likes certain types of projects (none of which is apparently in the offing for the larger site), then it means that the possible goals are (a) to leverage the parcel into something much more important (like a control premium in the corporate world) or (b) to obtain a buyout at a high price. 4. Legal fees, the major component of litigation costs, are not in most circumstances recoverable in litigation, whether or not you win the appeal. So the $400K from AAA likely is gone. The Michigan Court of Appeals - which is now on about a two-to-three-year timetable - does not hand out reversals like candy. From what I have been told by lawyers, reversals of jury verdicts are difficult to obtain. By the numbers, the most likely result is affirmance, which means $400K less to fix the building (or, apparently, to winterize it). The intermediate case would be remanding for a new trial, which will involve significant additional expenses, time for the trial with a new jury, and possibly years of subsequent appeals. I'm sure that whoever is defending the case for the contractor knows this and that perception might not add up to the best prospects of a settlement on appeal. I don't fault Mr. Pieroni for pursuing his goals; any rational actor in his position would work to maximize his advantage. He's not running a charity. I don't know whether the methods he has chosen are the best for getting the job done (that part is his problem) or in the best interests of the city (it's not his job to worry about that). By the same token, I would expect rational actors who negotiate with him to aggressively pursue their interests by hardballing him. What I have seen in this argument is that every time someone is perceived as attacking what Mr. Pieroni is doing, the response is, "well, he's a really nice guy - he (posts here/answers questions about his positions/lets us go on tours of the Michigan Theater garage)." Being charming and a gentleman in social situations is not mutually exclusive with the aggressive pursuit of business goals. Has anyone ever had a face to face with Mr. Ilitch? Mr. Maroun? Mr. Jackson? Contrary to DetroitYes belief, these people (and others routinely vilified here) do not have horns, carry pitchforks, or walk on cloven hoofs. And are people really so starved for actual information or the opportunity to tour buildings that they simply go into a defensive mode when anyone questions why a burned out building has been sitting there for a couple of years? I think the answer has been given by Mr. Pieroni in multiple parts - it's waiting on a resolution acceptable to the owner, which may or may not occur and may or may not be compatible with what people perceive to be the interests of the community. But regardless of all the extra details about the fight over the money, the reality is a building that is sitting there. From that result-oriented standpoint, not much differentiates the AAA building in concept from any other property waiting for "the right opportunity" to land on it. | ||
Mackinaw Member Username: Mackinaw Post Number: 3520 Registered: 02-2005 |
Well-articulated, good analysis. Mr. Pieroni is an asset to us because he shares his views here and gives us useful info, but he can still be asked questions. And this is a good medium for doing just that. | ||
Gistok Member Username: Gistok Post Number: 5053 Registered: 08-2004 |
Huggybear, I agree, a good response. Let's see if you get a reply. While I do respect Mr. Pieroni, I can agree with many of your points. As a visual reminder, I'll post again the Statler block, with his building in red, and an approximate route of the People Mover Track through the block in blue.  To me that red parcel looks rather important for developing the block, but people with more development acumen than I may think otherwise. After all that is a rather large block (but not quite as large as the Tuller/UA block). And maybe the DEGC is more concerned with GCP and Washington Blvd. frontage, if a Quicken HQ is proposed for that site. Ironically, in the past, of all the streets radiating from GCP, Bagley used to have the most massive "street wall" (before the loss of the Tuller and Statler)... in a sense larger even than Woodward. One would only need to view the book "DETROIT - THEN AND NOW" and check out the 1940's view down Bagley Ave. from GCP, to know what I mean. (Message edited by Gistok on August 08, 2007) | ||
Quinn Member Username: Quinn Post Number: 1428 Registered: 01-2005 |
Great analysis Huggybear. I agree with everything you say in your post, especially the part about it being an issue that needs to be addressed with a construction of a new building next to it. I don't see it being an issue for Quicken. Of course, I still stick by my feelings about the Hudson's or Monroe-Block sites being better suited for the new headquarters. | ||
Tony_pieroni Member Username: Tony_pieroni Post Number: 31 Registered: 02-2006 |
I feel like Al Pacino in Godfather 3: "I try to get out, but they keep dragging me back in." A friend called and told me I'd better check this topic again, and I have, and I -sigh - and against my better judgment, guess I should respond. Quinn, you refer to Huggybear's analysis as "great." It's articulate, but sure not great. Huggybear, if you'd have read my comments above carefully you would not have "analyzed" the situation the way you did, and I wouldn't be here typing away now as I am. While I find detroitYes.com interesting, entertaining, and frequently informative, I've got businesses to run and because I'm basically disorganized, I've got other things I should be doing. Anyway... You state: "The owner believes that whoever develops the site needs the AAA building." That's true. I've had many years experience in these things. Many if not most developers would agree with me, I think. However, what I think is irrelevant insofar as the City and any potential developer, if there is one, apparently think otherwise. That's a decision a developer will have to make, not me. You state: "The owner is not interested in selling ('unless it makes sense to me tax-wise') but instead wants an equity interest in a development entity." First, there's never been a piece of commercial property sold in America where the tax aspects were not an important consideration. That doesn't mean that tax considerations effect the price necessarily; they do have a bearing on whether an owner can afford to sell at a price offered. In this case, a price that I might consider accepting that would make sense tax-wise would not escalate the price above the market for the property. (I have spent thousands of dollars on appraisers and have, I'd say, a far better idea than most what the property is worth.) [Realizing that you probably have no meaningful information whatsoever on which to base an answer, I'd still be interested in knowing what you think it should sell for.] Second, it's true that if the development were to be apartments or another income producing use, or condos, I'd like to negotiate with the developer to determine if contributing the property to the deal and taking an equity interest in the whole development would make sense for both of us. If not, then I'd sell the property. That's been my position forever. Do you, Huggybear, with whatever experience you have in real estate, think that's an unusual position? I can assure you it's not. You state: "The owner doesn't like single-use projects such as a corporate headquarters." Where the hell did you come up with that bit of nonsense? My only comment was that a single-use development such as a corporate HQ would not make it feasible for me or the developer to consider swapping the land for an equity position. So, I'd just sell the property. What do you think I consider myself, some super zoning board/planning commission who will only permit a development on the site that I approve. I'm not an idiot (although I suppose some might disagree.) You state: "The owner took the $400,000 settlement from AAA and spent it suing the city's contractor." First, the city did not hire the contractor, the state did. Second, I doubt you know anything about any settlement I may have made with AAA, so you're way out of line concluding that the litigation money came from AAA. I don't have any problem covering my own litigation costs and would have litigated the case even without a settlement from AAA. Third, what would you do if someone negligently burnt down your house or business? This is America. You'd sue. So would everyone else on this web site. You seem to think the lawsuit was a bad idea if I read you correctly. You think I should just have walked away? Come on now. You state: "Selling it to make it worthwhile tax-wise probably means that it would be for a lot of money." As I pointed out above the tax issue has little if any impact on a sales price in this case. Will the price be for a "lot of money?" Well that depends on what one might consider a "lot of money." I presume people have very differing concepts as to what that means. I'd say if anyone wants to buy the building it will be for what most would consider a "lot of money." But to even discuss the concept one has to have some basic understanding of major project economics. Cost of the real estate is a very minor part of the equation. Especially in this case, where the city will probably throw in the S-H site for nothing. The cost of my little parcel doesn't even count in the scheme of things. That doesn't mean that I would hold out for a ridiculous amount or that a developer would pay more than he thinks it's worth. I'm a deal maker, not a deal breaker. All smart real estate people are (not that I include myself in that category necessarily.) [Note: You make some very valid points re: the perils of appeals and their liklihood of success. However, the pendency of the appeal in this case has no effect whatever on my ability to dispose of the property. I am by assignment asserting only AAA's claims in this case, a fact that I'm sure you were not aware of.] You state: "...I would expect rational actors who negotiate with him to agressivly pursue their interests by hardballing him." Well, bring 'em on. Seriously, I doubt if there will ever be any "hardballing" going on, and if there is, it will be me doing it. I'm not compelled by money needs to sell it, won't miss any meals if it never sells, and my life won't be effected one way or another if the property is never developed.It's far tougher for a prospective buyer to deal with an unmotivated seller than otherwise, and the purchaser under those circumstances would not in a position to hardball anyone. Someone down the road may want to buy the property. If that time comes then I presume the process will not differ greatly from any of the hundreds of real estate deals I've been involved in in some capacity or other. There will be either a willing buyer and a willing seller or there won't. It's not rocket science. And I'm assuming that both parties will be pretty sophisticated so the deal should be immune from irrationality. My guess is that the S-H site is a long way from development, But I do hope I'm wrong. And it won't be me that hinders development. Finally --- You state: "Has anyone ever had a face to face with Mr. Ilitch? Mr. Maroun? or Mr. Jackson? Contrary to detroitYes beliefs, these people (and others routinely vilified here)do not have horns, carry pitchforks or walk on cloven hooves." {How can you be sure they don't?}Seriously, neither Ilitch nor Maroun have any inclination or obligation to discuss their private business dealings with the public or anyone else. So be it. (That may be why they're very, very rich and I'm not.)However, George Jackson is another story. He's the City. Why doesn't someone on here try to get a face-to-face with him? Lots of luck. | ||
Mackinaw Member Username: Mackinaw Post Number: 3528 Registered: 02-2005 |
Waiting for major development news for the city really brings out the best in all of us... | ||
Tony_pieroni Member Username: Tony_pieroni Post Number: 32 Registered: 02-2006 |
Mr/Ms Jelk - I'm sorry you can't afford a better place to vacation than the space behind the AAA building, so I'd be glad to give you the key to the gate so you can make yourself at home there for the rest of the summer. Besides, you sound like a guy that should be caged up for awhile. I can't remember for sure if you're the one who is fixated on me being someone else (thirdworldcity) or vice versa, but maybe you should get a life and try to solve some of life's greater mysteries, like why you can't find something more meaningful to do with yourself than posting irrelevancies on this website a hundred times a month or more for almost four years. I've know thirdworldcity for many years as has been stated here before - we go way back - and are currently in the same business in Texas. He told me about this website, and advised me early on not to get hooked on it and spend too much time on it as he apparently does. I should have followed his advice, and now intend to. To Mr. Quozle - Sorry, but I don't know George Babbitt. That's not saying much because I'm not nearly as involved in downtown real estate as I used to be. | ||
Gistok Member Username: Gistok Post Number: 5059 Registered: 08-2004 |
Mr. Pieroni, I think Jelk was referring to an incident of what appeared to be of a sexual nature (some forumer took pics from a neighboring office tower) within the AAA compound. Right now Mr. Ilitch has a similar problem with someone busting into the GAR (another thread). A few years ago a forumer saw a prostitute bringing her "Johns" into the GAR (unfortunately while he was inside, but that's another story). I guess having unoccupied buildings downtown does provide its challenges in keeping scrappers and other riff-raff out. I would imagine that this time Ilitch Holdings is going to immediately reseal the plywood over the entrance. I remember years ago a Preservation Wayne member calling them about people breaking into the United Artists, but there was no action taken back then. Luckily things have changed in 2007. I know you mentioned folks getting into the AAA Building in the past, getting in from the unsecured Statler, but have you had any problems with any scrappers trying to get into your parking/theatre space? | ||
Johnlodge Member Username: Johnlodge Post Number: 1587 Registered: 10-2003 |
Mr. Pieroni, I hope you won't let a few bad seeds, who annoy the rest of us as much as they do you, ruin your experience or drive you away from these forums. I sincerely enjoy reading your posts, and hearing about how development of city property REALLY works, and not the fantasy land development ideas of some of this forum's other participants. | ||
Dsmith Member Username: Dsmith Post Number: 121 Registered: 07-2005 |
I think there is a better chance of Quicken going under than Quicken building a new HQ downtown. The mortgage originators have been dropping like flies since the housing bubble popped and it's only going to get worse for them. | ||
Thejesus Member Username: Thejesus Post Number: 1794 Registered: 06-2006 |
You're right...it's not looking good...the whole reason they were going to relocate was because they were outgrowing their existing office space...with American mortgage laying off 90% of it's staff and Quicken currently on a hiring freeze, there's a good chance they will see negative growth for the foreseeable future... | ||
Gistok Member Username: Gistok Post Number: 5060 Registered: 08-2004 |
Thejesus, I have to agree... the longer that a decision takes, the less likely it is that it will happen... | ||
Mackinaw Member Username: Mackinaw Post Number: 3530 Registered: 02-2005 |
That would be just Detroit's luck... | ||
Quinn Member Username: Quinn Post Number: 1430 Registered: 01-2005 |
OMG you guys...negative nellies abound! Do you seriously think this TEMPORARY lull in their business is going to change their LONG TERM goals? No way. They are still moving downtown I say. No worries. | ||
Gistok Member Username: Gistok Post Number: 5061 Registered: 08-2004 |
Thanks Quinn, I hope you're right... although I prefer Statler to Hudson's! More bang for the buck! | ||
Yooper Member Username: Yooper Post Number: 68 Registered: 12-2006 |
Why does everyone keep talking about Jelk on this thread? He hasn't posted on it. Gistok - where are these sex pictures you mentioned? | ||
Kenp Member Username: Kenp Post Number: 694 Registered: 03-2006 |
Jelks pics and post are mysteriously missing. | ||
Bumble Member Username: Bumble Post Number: 295 Registered: 11-2004 |
Reality gets in the way of a good story sometimes. | ||
Thejesus Member Username: Thejesus Post Number: 1795 Registered: 06-2006 |
"OMG you guys...negative nellies abound!" We're not being negative, we're being logical. If the reason for relocating was because they were outgrowing their existing office space, then they may no longer need to do that, or it may no longer be practical to do that if they lay off part of their work force, as American did. | ||
Billk Member Username: Billk Post Number: 81 Registered: 09-2005 |
Oh well, maybe Eprize will still move downtown. That's better than nothing. | ||
Livernoisyard Member Username: Livernoisyard Post Number: 3664 Registered: 10-2004 |
Observation: Quicken Loans, being a mortgage broker, appears to encourage ownership. However, they themselves lease instead of own! They don't seem to be setting an example of ownership. | ||
Kid_dynamite Member Username: Kid_dynamite Post Number: 175 Registered: 06-2007 |
LY, Time for me to step in. First of all, QL is a direct lender, not a mortgage broker. The feeble point you are trying to make about "setting an example" by owning the facilities we work at is a poor one. I don't want to even debate how dumb that sounded. |
