ProPublica, How a Tax Break to Help the Poor Went to NBA Owner Dan Gilbert:
After a lobbying effort, Dan Gilbert, billionaire founder of Quicken Loans, won special tax status for wealthy areas of downtown Detroit where he owns billions worth of property.
Billionaire Dan Gilbert has spent the last decade buying up buildings in downtown Detroit, amassing nearly 100 properties and so completely dominating the area, it’s known as Gilbertville. In the last few years, Gilbert, the 57-year-old founder of Quicken Loans and owner of the Cleveland Cavaliers, has also grown close to the Trump family.
Quicken gave $750,000 to Trump’s inaugural fund. Gilbert has built a relationship with Ivanka Trump, who appeared at one of his Detroit buildings in 2017 for a panel discussion with him. And, last year, he watched the midterm election returns at the White House with President Donald Trump himself, who has called Gilbert “a great friend.”
Gilbert’s cultivation of the Trump family appears to have paid off: Three swaths of downtown Detroit were selected as opportunity zones under the Trump tax law, extending a valuable tax break to Gilbert’s real estate empire.
Gilbert’s relationship with the White House helped him win his desired tax break, an email obtained by ProPublica suggests. In February 2018, as the selection process was underway, a top Michigan economic development official asked her colleague to call Quicken’s executive vice president for government affairs about opportunity zones.
“They worked with the White House on it and want to be sure we are coordinated,” wrote the official, Christine Roeder, in an email with the subject line “Quicken.” ...
The result has likely already been a boon to Gilbert: Multiple studies have found that property values in opportunity zones increased because of the tax break. Gilbert has put an estimated $3 billion into buying and renovating properties in Detroit, the vast majority now in opportunity zones.
In addition, even though the law was designed to incentivize new investment, Gilbert has several already-planned developments in the area that could benefit from the tax break, experts said.
The upside for an investor such as Gilbert “could be huge,” said Steve Wamhoff, director of federal tax policy at the Institute on Taxation and Economic Policy, a liberal-leaning think tank. “This seems to be a situation where someone is going to get tax breaks for something they were going to do anyway.”