03.09.07
Ilitch, Gilbert latest Michigan rich folk to make Forbes' list
Ilitch has done it throwin’ pizza dough and with lots of risky leverage
By Brian O’Connor
What can you buy with $1 billion? How about: 42,857,143 Hot-N-Ready large pepperoni pizzas from Little Caesars … Mike Ilitch and Dan Gilbert, Metro Detroit's two newest official Forbes billionaires.
Gilbert and Ilitch join nine other Michiganians on the coveted annual Forbes magazine list of billionaires, an exclusive club of less than 1,000 across the globe.
Gilbert, chairman and founder of Rock Finanical and Quicken Loans Inc. in Livonia, made it on the list with a net worth of $1.2 billion. Ilitch, chairman of Ilitch Holdings, which includes Little Caesars Pizza, the Fox Theatre and Detroit Tigers and Red Wings, is higher up with a total of $1.5 billion.
How rich are these people? Let me put it this way: At the very least, any person on the billionaires list has a net worth that could plug the entire 2007 State of Michigan budget shortfall …
Home-grown list-makers
As for our home-grown rich-folk, Richard Manoogian returns this year to the B-list. The head of home-products firm Masco slipped off last year when Masco stock also slipped. The stock is stronger now, but Manoogian is back largely because of gains in his extensive art collection, notes Matthew Miller, an associate editor for the billionaire's list.
"Art has been a tremendous investment for a lot of our billionaires," Miller says. Manoogian's collection "has seen maybe a nine-figure appreciation in the last couple of years."
Also returning is John Brown of Kalamazoo-based Stryker Corp., which makes medical equipment. He dropped off last year, either because Stryker stock was down or because his shares had been moved into a trust. Another Stryker shareholder, Ronda Stryker, moves up, thanks to a healthy gain of about percent in the medical stock. 30
Michigan's richest billionaire remains auto-glass magnate William Davidson, chairman of Guardian Industries Corp. and Palace Sports and Entertainment. His net worth of $4.1 billion includes owning the Pistons, Detroit Shock and the Tampa Bay Lightning hockey team.
Amway co-founder Richard DeVos Sr. is next on the list, with a $3.5 billion net worth. Also turning in a repeat performance is Richard Penske, along with mall developer Alfred Taubman and home builder Richard Pulte.
The newest B-listers
Of the new kids on the billionaire block, the Forbes estimate includes holdings of both Ilitch and his wife, Marian. This allows Forbes to add the family's MotorCity casino holdings, which are strictly segregated to keep the gambling business from tarnishing the sports-team holdings. Forbes estimates MotorCity to be worth about $200 million to the Ilitches.
"Technically, the way it works is that his wife owns it, but we give him credit because they made the bulk of it off of Little Caesars," explains Miller.
So how's it feel to make the list of the world's billionaires? Is it true, like the old hymn warns, that life can make the most fortunate person a beggar at times? Or, as the beatniks used to claim, is life just a junk sandwich, where the more bread you have, the less junk you eat?
Well, pizza probably covers up the taste of junk pretty well, but Mike Ilitch wasn't available to comment.
Gilbert was, though: "A very smart guy named Albert Einstein once said: 'Not everything that counts can be counted and not everything that can be counted " counts.'
Of course, being a billionaire, Gilbert provided that statement through one of his assistants.
[NOTE: Ilitch attorneys indicate Ilitch took on $1.1 billion in debt to finance the acquisition and expansion of MotorCity Casino, which suggests Forbes’ estimates an 85% Debt/Value ratio for MotorCity Casino. Analysts at Standard & Poor’s and Moody’s expressed concern for such risky leverage and downgraded MotorCity’s corporate credit ratings last year. Further, despite the Tigers success on the field in 2006, Forbes recently estimated the Detroit Tigers had a 73% Debt/Value ratio – the third worst debt ratios in MLB]
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