OPEN RESPONSE TO PROPUBLICA
“ProPublica’s absurd article about Dan Gilbert and the Rock Family of Companies’ involvement in Opportunity Zones is rife with misguided, misleading and utterly baseless allegations parading as fact.
The entire article is predicated on an email from one state official to another that the authors freely admit lacks context.
As we shared with ProPublica, economic development groups, private investors and municipalities answered the call for feedback into the Opportunity Zone selection process – at the State’s request. It is unfortunate ProPublica ignored this well-known process that is commonplace and essential to make well-informed public policy decisions.
The Opportunity Zone program was developed to encourage private development in the nation’s most distressed areas – something the Rock Family of Companies has proudly done long before the creation of Opportunity Zones. Since moving downtown in 2010, we have invested and committed nearly $6 billion to long-term projects in Detroit. We are immensely proud of our record of investment, job creation, and philanthropy in Detroit. Contributing to the city’s ongoing economic growth remains our top priority. We will not allow this intentional hit piece to slow our mission.”
WE ARE COMMITTED TO THE REVITALIZATION OF DETROIT
The Rock Family of Companies (FOC) are proud of its unrivaled commitment to the Detroit community. Since moving to the city in 2010, the FOC have directly contributed more than $200 million to Detroit-based organizations and programming, while participating in more than 400,000 volunteer team member hours. Bedrock, and its affiliates, have invested and committed nearly $6 billion to acquiring and developing more than 100 properties, including new construction of ground up developments, in downtown Detroit.
The Rock Family of Companies operate under a “For More Than Profit” philosophy, recognizing that businesses and community are inextricably linked. We have found that investing directly into our great city has resulted in the most meaningful returns in education initiatives, housing stability, entrepreneurship programs and countless other areas. When personal and corporate values align, unbelievable growth happens in our community. For more information about our For More Than Profit approach, click here.
STATEMENTS PREVIOUSLY PROVIDED TO PROPUBLICA
As we reviewed ProPublica’s inquiries, we immediately realized their fundamentally biased and incorrect understanding of not only the Rock FOC’s participation in the establishment of these Opportunity Zones, but how the process works altogether. Below are the full statements provided to ProPublica, which were not fully included in their piece.
Rock Family of Companies Responds
to ProPublica Inquiries
October 14, 2019
“ProPublica’s misguided narrative regarding Dan Gilbert’s involvement in Opportunity Zones is completely without merit. Claims that Dan, or any representative from the Rock Family of Companies, engaged in advocacy activities (monetary or otherwise) regarding the eligibility of certain areas to be designated as Opportunity Zones are completely false.
The federal government — not the Rock Family of Companies— determined the eligibility based on technical criteria. Moreover, Bedrock had no motive to see census tract 26163520800 made eligible. The company had already purchased its assets well before the Opportunity Zones were even designated (as of Oct. 14) — there are no tax benefits. ProPublica’s thesis that these properties would benefit from this tax treatment is utterly invalid.
The program was developed to encourage private development in the nation’s most distressed areas. Since moving downtown in 2010, we have invested more than $2.5 billion and committed almost $6 billion to projects in Detroit. We are immensely proud of our record of investment, job creation, and philanthropy in both Detroit and Cleveland. Contributing to those cities’ ongoing economic growth remains our top priority.”
Jared Fleisher, VP of Government Affairs, Rock Family of CompaniesSupplemental Statement
October 17, 2019The Rock Family of Companies joined a wide range of stakeholders in providing feedback into the Opportunity Zone selection process. The State of Michigan engaged interested parties, asked for their input, and encouraged participants to share the State of Michigan’s request for input with other potentially interested groups. This was an open process – it is utterly commonplace for the state to solicit feedback from economic development groups, private investors and municipalities regarding which areas have the greatest potential for economic development and investment. In fact, this is not only commonplace, but essential in order to make well-informed decisions. Ultimately, the City of Detroit – not the Rock Family of Companies or any other respondent to the open call for comments – made the recommendations to the state about which census tracts in Detroit should be selected.
From a development perspective, it would be ludicrous if the city did not include tract 2080. This tract encompasses half of downtown and the west riverfront, which are two high-priority areas for economic development. ProPublica would do well to view major planning documents, including initiatives like the Detroit Future City, which identify these two regions as strategic areas of focus.
To be clear – the Rock Family of Companies did not exercise any inappropriate influence. As previously stated, your thesis is misinformed.
Jared Fleisher, VP of Government Affairs, Rock Family of CompaniesSETTING THE RECORD STRAIGHT
Facts are hard to come by in the ProPublica article. Below we help clear up some of their misconceptions and intentional mischaracterizations of the truth.
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MYTH: Opportunity Zones are simply tax breaks for businesses and individuals.
FACT: Opportunity Zones, which were implemented through a bipartisan vote in Congress, act as a stimulus for businesses and individual investments in areas that will benefit tremendously from large-scale projects through increased opportunities for housing and job growth.
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MYTH: Political connections in the White House led to the establishment of specific Opportunity Zones in Detroit.
FACT: Per the article, “The exact role of the White House is not clear.”
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MYTH: Businesses had the ability to influence which tracts were selected at a local level.
FACT: Perhaps there is no clearer indication that ProPublica misunderstands how government works. Public comment periods to enact policy that has the potential to impact the future of a community is the very essence of civic engagement.
Of course we responded to the city and state's call for responses. As we have stated time and again, our mission is to reinvigorate the city. Opportunity Zones are an important vehicle in Detroit’s continued growth and redevelopment. -
MYTH: The Rock Family of Companies lobbied for specific census tracts to be included as Opportunity Zones.
FACT: The federal government — not the Rock Family of Companies — determined the eligibility based on technical criteria. Moreover, Bedrock had no motive to see any specific census tract made eligible. The company had already purchased its assets well before the Opportunity Zones were even designated — there are no tax benefits.
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MYTH: Bill Emerson and the Rock Family of Companies exclusively lobbied the U.S. Treasury and Internal Revenue Service when they responded to the open comment period on Opportunity Zone regulations.
FACT: In reality, when a government agency proposes a new regulation, Federal law requires the agency to allow at least 30 days after publication of the proposed rule for the public to submit “written data, view, or arguments” regarding the proposed rule. This process is followed for thousands of regulations issued by numerous government agencies. For this particular rulemaking on qualified opportunity zones, 137 public comments were filed by a variety of stakeholders, including community development and other nonprofit organizations, bar associations, trade associations, investors, developers, lenders, and even the U.S. Environmental Protection Agency. Filing public comment letters is not lobbying and, indeed, is specifically exempted from Federal laws relating to lobbying.
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MYTH: A $750,000 donation to the Presidential Inauguration Committee influenced regulation on Opportunity Zones.
FACT: To suggest that a donation to the nonpartisan Inauguration Committee induced Congress to pass legislation is not only false, it’s laughable.
The Rock Family of Companies were proud to have had the opportunity to support the Presidential Inauguration Committee, the nonpartisan organization behind a uniquely American event that allows for the peaceful transfer of power from one administration to the next. Equally important to us, was the opportunity to support several charitable organizations, including local groups that traveled from our home state of Michigan to participate in this great American tradition.
WHAT ARE OPPORTUNITY ZONES?
Opportunity Zones are not unique to Detroit. Established in the 2017 U.S. Tax Cuts and Jobs Act, Opportunity Zones offer incentives for patient (long-term) capital investments all over the nation in communities in which investment has been sparse and growth of businesses has been minimal. There are three types of tax incentives that relate to the treatment of capital gains. Each of the incentives are connected to the longevity of an investor’s stake in a qualified Opportunity Fund, for 10 years or more.
For a downloadable PDF map of the Opportunity Zones, click here.