Mortgage industry cuts; Auto show shares plans; Royal Oak approves marijuana licenses
Plus Ford starts F-150 Lightning production; Warren Transmission redevelopment takes a step forward; Greektown Casino gets a new name
Hey friends, Jer here.
I just got back from Chicago. Traveling always changes me, reinvigorates my spirit and gives me ideas on what works, what doesn’t, and new ways to look forward. I’m sure some of them will make it into the podcast. Probably the Friday edition.
Today, there’s a bunch of news to catch up on — except I want to give a quick shout out to Victor, one of the best tour guides I’ve experienced in a long time.
His comments on the buildings we passed on the boat made me smile every couple of minutes. Chatting with him after the Shoreline Sightseeing trip, I learned that although he’s from the South Side — of course, he has family here in Detroit and is here often. I love some hometown pride, no matter where it is.
It was the best $40 spent on a ticket in a long time and a new core memory. Highly recommend.
Let’s get to the stories.
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What to know…
» Job cuts are coming to the mortgage industry as the boom ends. Labeled a “career transition incentive,” Rocket Mortgage and Amrock (their mortgage and title divisions) want to reduce their workforce by eight percent.
Doing the math, it’s about 2,000 jobs on the chopping block. [National Mortgage News]
At least it’s a relatively generous severance package offered.
Nationally, it’s expected mortgage originations will go down from $4 trillion in 2021 to $2.5 trillion in 2023.
Headwinds are here. Many non-luxury buyers are now priced out of the housing market and have given up looking as there’s nowhere near enough housing supply.
Refinances are down, too, as mortgage rates are now up to 5% in a bid to cool higher inflation that was brought about by a number of factors, including (but not limited to):
Supply chain issues
A permanent shift to people buying more goods than they did before
A nationally and locally tight housing supply (more on that in a second)
Increased government spending across both the current and previous administrations.
My two cents: Expect cuts across that industry, not just Rocket who has to be more public about it now that they’re a traded company.
But from who I talk to, I don’t expect housing prices to come down for awhile. We just don’t build enough housing units in the U.S.; and we haven’t for decades in Metro Detroit. On a recent podcast, one guest said we were locally short 100,000 units. Here, we build maybe 5% of that a year if we’re lucky — and there are no plans right now to scale that up.
» We learned more about the plans for the indoor/outdoor North American International Auto Show this September 14-25. The Charity Preview returns, and there’s new things like ride and drives on the new downtown Detroit Grand Prix track. Organizers say they’ve sold out the main floor of Huntington Place (formerly TCF Center, formerly Cobo), which is a good sign. [NAIAS Press Room]
I’m looking forward to this new format. The auto show needed a reboot and the hiatus might turn out to be the best thing for it. It should be a good way to show off the city. Ironically, since I won’t want to deal with parking, I’ll probably take the bus or QLINE there.
» Ford has started production of the F-150 Lightning. The EV truck is crucial to Ford’s future and seems to be doing well with pre-orders. It’ll be assembled at the Rouge Electric Vehicle Center. That’s part of Ford’s Rouge Complex in Dearborn. Two other local factories are making components. [TechCrunch]
Hot take Tuesday: Elon Musk may have bought Twitter, but Detroit beat him in the race to produce electric trucks en masse first. Tesla’s Cybertruck line won’t even get started (maybe?) until 2023. Vehicle production is hard. My long-held bold take is that eventually he’s going to sell Tesla (or step back in a major way) to think more about space, AI, and now Twitter — but that’s for another day.
» Royal Oak’s cannabis industry will grow with three new businesses. At a Monday meeting, their commission approved Gatsby Cannabis, Royal Treatment, and Best Lyfe. They range from fully integrated grow and sales operations to a boutique. Targeted community benefits were a big part of getting these deals through. [Detroit News]
» The former GM Warren Transmission plant site will get new life. Located on 117 acres at Mound and Nine Mile, more than $30 million in incentives (including $7.2 million in Brownfield credits) have been awarded for the construction of three new buildings containing 1.4 million square feet of light industrial space. NorthPoint Development is behind the project.
If NorthPoint sounds familiar, it should. They’re doing a number of projects in the city of Detroit including the Cadillac Stamping and old AMC headquarters sites.
» As of May 1, Greektown Casino will have a new name, “Hollywood Casino at Greektown.” About $50 million has been spent on improvements on the downtown Detroit property since Penn Gaming took it over, including a new lobby.
I’m not much of a gambler, so I’ll talk about the food. I’m told:
There’s the Urban Cocktail and Rock Bar lounges and a new, upscale Dunkin' concept in the hotel lobby
They’re adding a Detroit Taco Company location — the first in the city of Detroit.
A new menu at their Prism steakhouse
From a business perspective, Greektown has consistently been a distant last in local market share (20 points down from leader MGM), so a refresh and some new offerings might just help.
» The official reason legendary Octopus tosser and Red Wings Zamboni driver Al Sobotka was fired has people talking. In a discrimination lawsuit we learn he peed in a drain for the ice rink at Little Caesars Arena. Turns out Sobotka has a health condition that means he needs to go more often; that’s at the crux of the suit along with a comment during a recent Zoom call that he was “old.” He was seen relieving himself by another employee and was reported; then fired by Olympia after 51 years of service. [ESPN]
If you want a more in-depth thing, ML Elrick’s Soul Of Detroit has a long form interview with Sobotka and his lawyer. [Listen]
» Should Detroit City FC get a loaned player to help their short bench? Fletcher Sharpe joins me to discuss that, speculate on Keyworth’s future, and preview Saturday’s match against New York. [Apple Podcasts]
» What are some of the best breakfast spots in Metro Detroit? After a recent episode and some great feedback, we share our (and listener) recommendations. Plus, answer some of your questions on a mailbag edition of the Daily Detroit podcast. [Apple Podcasts]
Since we had a bunch of news to cover (and I’m still catching up on producing the show from my Chicago trip), these 1,200 or so words are it for today. I’ll have some “Where to go” content later this week.
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