Billionaire developer Stephen Ross and the New York-based Ford Foundation are teaming up with The Platform LLC to make a $27.5 million investment in bringing housing to Detroit neighborhoods.
Ross, a Detroit native and New York real estate developer who also owns the Miami Dolphins, announced a $7.5 million investment and the Ford Foundation a $10 million investment during the Detroit Homecoming event Thursday night at the Detroit Film Theatre at the DIA.
Their investments add to $10 million from The Platform, a development company formed by Peter Cummings and Dietrich Knoer.
The Platform Neighborhood Initiative is bringing affordable housing, plus market-rate apartments, to areas outside of the significant development that’s already taken place in the downtown and Midtown areas. Neighborhoods targeted for the projects include Islandview, Brightmoor/Old Redford, Live6, New Center, TechTown, Milwaukee Junction, North End, Eastern Market and the Riverfront.
“If you have a real estate personality as prominent as Stephen Ross and an institution like the Ford Foundation making these kinds of commitments, it says as much about the city of Detroit as it does The Platform,” Cummings said.
He said Ford Foundation CEO Darren Walker and Ross met a few weeks ago on other business and began discussing Detroit Homecoming and potentially making an investment. Ross agreed to call Cummings, a longtime acquaintance, and the deal was set in motion.
“It’s an expression of his confidence in the kind of work we are doing and the dynamic market we have in Detroit,” Cummings said.
“Stephen Ross is one of our country’s most successful entrepreneurs and I’m glad he is coming back to his hometown,” Detroit Mayor Mike Duggan said in an emailed statement.
The partnership is also “yet another example of the commitment Darren Walker and the Ford Foundation have to Detroit.”
Cummings and Ford Foundation CEO Darren Walker engaged Ross in a conversation about the special moment Detroit is in, said Xav Briggs, who is vice president of economic opportunity and markets and oversees the foundation’s Mission-Related Investment Fund.
“The city is resurging. (But) by the same token, not everybody is a part of that.”
Each of the three investors bring something, Briggs said: Platform with the neighborhood development plan, the Ford Foundation with its mission-related investment and broader strategy to support equitable revitalization in Detroit and Ross with a connection to his hometown and the ability to influence future investment.
Ross “knows well, as do we, that an investment by Stephen Ross sends a signal to the marketplace,” Briggs said.
“The opportunity to be a part of his hometown’s comeback using his expertise and then (to leverage) his reputation as a real estate investor was too good to pass up.”
After the event, Ross had little to say about his decision to invest in Detroit real estate.
“I mean, hey, it’s where I’m from,” Ross told reporters. “I want to see the city come back. It’s all about that.”
Ford Foundation’s $10 million investment in the neighborhood development is the among the first mission-related investments it’s made since its April commitment to invest $1 billion of its $12 billion endowment over the next decade to mission-related investments that produce a market-rate of return while also doing good.
It comes in addition to the foundation’s annual philanthropic grants and its commitment to the so-called “grand bargain” that helped shore up Detroit pension plans to help the city emerge from bankruptcy, while also preserving the Detroit Institute of Arts collection.
The investment in the Platform Neighborhood Initiative is a “two-fer,” Briggs said. “It aligns with the foundation’s intent to focus investments on affordable housing in the U.S., an urgent need in so many parts of the country, while also supporting the broader revitalization of Detroit, particularly beyond the downtown and Midtown areas.”
In making mission-related investments, foundations are required by law to evaluate both financial and social return.
“This is not for us about making out-sized financial return, but earning a decent financial return while doing an awful lot of good is possible here,” Briggs said.
“That’s because of all the leadership in Detroit, to make smart bets, to include a wider range of partners over time.”
What’s especially exciting about this investment is the foundation didn’t create the concern for equity and inclusion it’s focused on, Briggs said. “Platform brought it, to their credit.”
There’s a tendency in American cities to treat every dollar invested as a positive, he said. But investments that displace people from a place they call home are anything but positive.
The Platform will report out the impact of the investment over time. The company has large-scale developments surrounding Grand Boulevard and out into the neighborhoods with project costs in the hundreds of millions of dollars. Among them are a renovation of the Fisher Building, a new apartment development at Third Street and Grand Boulevard and others peppered throughout places such as Brightmoor/Old Redford and the Islandview neighborhoods.
Cummings “intends to be quite transparent about where this is going, to what kinds of partners, to focus on a real equitable approach. That is a compelling factor for us,” Briggs said.
The foundation is looking at a range of investment opportunities for additional mission-related investments in the future, he said.
He declined to say if any others are in Detroit but said, “We remain very open to building on the grant investments in the recovery organizations like Develop Detroit and many others … to bring this particular investment tool to bear.”