As an Englishman who has visited and travelled through more than 25 U.S. states, I have always found that the best place to understand the belly of America is in one of its casinos — on a Monday morning.
In Vegas, you'll find a sense of energy and hope. The casino is busy, and while not all of the restaurants or bars are open, the tables and machines are in full swing. The high rollers are still at it. It seems the cacophony and gambling madness will never end.
People here don’t mind losing; they seem able to afford it.
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This is patently not the case in the allegedly benighted city of Detroit, Mich. A Monday morning in November at the MGM Grand sees an almost deserted casino: only one breakfast restaurant open and freezing temperatures outside the relative warmth of the building.
Here, gamblers aren't playing high-stakes, big money roulette. The reels on the fruit machine spin for one cent per go. In Detroit, high rollers bet in quarters.
In its heyday, Detroit was a very different place, but its demise from the third-largest city in the U.S. has been well-documented. Its city population has fallen from 1.85 million in 1950 to a little over 700,000 in 2013, as it suffered one mistake after another.
A wide racial divide, city hall financial mismanagement in the '50s, huge pensions for public workers and soaring crime all led to a gradual city exodus. Plummeting tax revenues and a borrowing binge sped the process, and the 2008 housing crisis forced people to walk away from properties they couldn’t afford.
Image: The Washington Post/Getty Images
But despite the bankruptcy, crime, urban desolation and despair, a different story is emerging. Slowly, the Detroit phoenix seems to be peeking from its very substantial ashes.
The lunchtime walk from the MGM Grand is weird. It’s cold, there are no cars. It is reminiscent of Reykjavik, the capital of Iceland, where everyone stays inside — only the crazy or naive walk. Across the Detroit river is Canada. The smokestacks and stacked aerials are the perfect setting for a Springsteen song.
But at 1555 Broadway Street, just across from the Detroit Opera House, a once-famous building has become the lodestone for the city's regeneration, a coworking space that houses startups — even a company known as Twitter.
The M@dison Theater was originally built in 1917 and was crumbling away until it reopened in 2011. It was purchased by Dan Gilbert, the chairman of Rock Ventures and Quicken Loans, the largest online retail mortgage lender in the U.S.
This followed Gilbert’s decision to move his Quicken Loans family of companies and 1,700 employees to Detroit in 2010. The M@dison’s purchase is part of a longstanding future commitment to the city.
“The Madison building project is another step in the … vision for a technology corridor of growth … in the heart of downtown Detroit," said Gilbert at the time of the M@dison’s opening. "This historic building will be molded into an exciting center where young entrepreneurial enterprises will collaborate, innovate and build the kind of 21st century businesses that our new economy in Detroit will be based upon."
In the interim two years, Gilbert’s vision has more than come to pass. Through Rock Ventures, the umbrella entity of Gilbert’s portfolio of companies, the company now owns more than 40 downtown properties, totalling nearly 8 million square feet. (Interestingly, one of those properties is the newly opened Greektown Casino.) Gilbert-owned businesses employ more than 11,500 people in the city.
Even on a bitterly freezing day, the M@dison building is impressive. Much of the original materials were used in its rebuild. Exposed steel beams add an industrial effect, and original graffiti graces the walls of the formerly abandoned site. There is also a cool rooftop area and a large event space, as well as the mandatory coffee machines and community games area.
The M@dison building has not only created a coworking space for tech entrepreneurs, its influence has become a household name: "the M@dison Effect." It's a phenomenon in which companies that have grown too big for the M@dison have moved into nearby offices. Block by block, Detroit’s tech scene is reviving a great city. Even Google moved in.
Backstitch has also moved from the M@dison. The company lets users build their own web and curate content from their favorite people and interests. Backstitch moved out with Bizdom, the startup accelerator they share. Both are now proud members of the M@dison Block.
“The M@dison block community has seen some amazing growth in the past year," says Jordan Warzecha, CEO of backstitch. "It started out as just a building with some desks and a bunch of one- to two-person companies.
“There is definitely a sharing mentality that goes on within the block. We get together for everything from brainstorming ideas to holiday potlucks. This has led to introductions that have turned into huge opportunities and has also allowed us to help other startups with things, such as prospective hires.”
After leaving the M@dsion, I wander around downtown to get a feel for the area. To escape the cold, I head to a place with a different kind of Monday morning truth: a pub.
After a few pints with the locals, I discover more about Detroit. According to the hipsters inside, there is a waiting list for downtown apartments, due to the surge of interest from young people in and around the city.
So, it is not all gloom and doom in Detroit. Dan Gilbert’s confidence in the city is being echoed by tech companies and the young entrepreneurs who run them. These people have little fear and time for hackneyed stories about Detroit. They just might be onto something.
I, however, may need to change my strategy of Monday morning casinos. In the future, I should just head for a coworking tech hub — that’s where it’s all really happening.
Image: Bloomberg via Getty Images