Business

Dan Gilbert vs. Kirk Pinho: Crain's Article Has 'Twisted, Peculiar Math,' He Tweets

December 19, 2016, 12:08 PM by  Alan Stamm

Donald Trump has media-bashing company on Twitter. Dan Gilbert swipes at a Crain's Detroit Business writer over a cover article about him.

The downtown developer accuses Kirk Piho of "twisted apples to oranges peculiar math" because the journalist challenges this assertion by Gilbert last week: "It costs the same to build a skyscraper or building in New York City, Chicago, as it does in Detroit."

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Dan Gilbert, left, is annoyed by reporter Kirk Pinho.

Pinho's article calls that claim "dubious." Gilbert reacts in a late-night tweet, saying the reporter is among "Fake Debunkers."

This may seem like a debate between two construction finance nerds, but when the co-founder of Bedrock Detroit bickers publicly with a leading Detroit development writer, it's a conversation worth noting.  

Bedrock and other companies owned by Gilbert, the billionaire founder of Quicken Loans, have spent more than $450 million to buy more than five dozen downtown properties since 2011, Louis Aguilar of The Detroit News calculated last spring. Upcoming projects include development of the former Hudson's site on Woodward Avenue and a 10-acre development with GM east of Renaissance Center.   

Gilbert's statement about building costs came during a WJR interview by Paul W. Smith. Pinho tells what's behind it and why it's questionable:

One of the arguments Dan Gilbert has used to push for a new tax incentive for sweeping developments is that it costs just as much to construct a new building in Detroit as it does in three of the biggest and priciest real estate markets in the country.

Whether that's actually true isn't entirely clear.

Gilbert's team says its calculation includes all components of new building — minus the cost of land — ranging from materials to permitting and insurance costs. Yet data from a well-known construction cost estimator puts Detroit's per-square-foot rate for new office construction well below New York City, Chicago and San Francisco, and construction laborer wages in those markets — a key variable from city to city — are more than 10 percent higher. . . .

So what data is Gilbert using when he says a skyscraper in Detroit costs as much to build as one in New York, Chicago or San Francisco?

It's not known. Detroit-based Bedrock LLC, the real estate development, ownership and management company Gilbert co-owns, declined to provide specific calculations used to come to that conclusion.

The front page coverage, posted Sunday morning, sparks that day's 10:17 p.m. Gilbert tweet quoted above.

That prompts exchanges with Free Press reporter Joe Guillen and early Monday with Ron Fournier, a veteran journalist who became associate publisher of Crain's in September and editor this month:

In a follow-up[ tweet, Gilbert says Bedrock will provide figures suporting his statement. "We will do so, Ron," he tells the editor at 8:48 a.m. Monday.

Pinho also earns a defense from national business writer Micheline Maynard, a Forbes contributor who adds context:

In a  tweet four weeks ago, Fournier describes Gilbert as part of "the downtown oligarchy." That didn't provoke a challenge.



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