The Ross Effect

How a friendship forged at the University of Michigan between a budding billionaire and a star student set the stage for a $60-billion real estate portfolio built on a foundation of diversity and inclusion.
Stephen M. Ross
Wolverine Proud: Detroit native Stephen M. Ross, founder and chairman of The Related Cos. in New York, has invested close to $500 million in southeast Michigan. // Photo courtesy of Related Cos.

Stephen M. Ross is best known as chairman of The Related Cos. in New York City, which he founded in 1972 and grew into one of the most prominent real estate development firms in the world, employing approximately 3,000 people and developing or acquiring some $60 billion in mixed-use, residential, retail, and office properties across the globe.

But Ross is also acclaimed for his generosity to the University of Michigan in Ann Arbor, his alma mater. By February 2020, when Ross had already donated $378 million to U-M, he announced yet another philanthropic gift — $100 million to develop the U-M/Detroit Center for Innovation on the 14-acre site of the former Wayne County jail, located at the southeast corner of I-375 and Gratiot Avenue.

The project is a collaboration between Related and Dan Gilbert’s Bedrock Real Estate Partners, which specializes in the strategic development of urban cores. Gilbert’s initial commitment to downtown Detroit came in 2010, when he consolidated the suburban locations of Quicken Loans Inc. (now Rocket Cos.) — the country’s largest home mortgage lender — and established its corporate headquarters for 1,700 employees at One Campus Martius in the center of the Motor City’s central business district.

In the decade since, Gilbert has committed nearly $6 billion to acquiring and developing more than 100 properties in downtown Detroit (as well as Cleveland) totaling more than 18 million square feet of space. Along with more than three dozen other Gilbert-related entities, more than 17,000 employees from the Rocket Family of Companies work in downtown Detroit. Gilbert and Ross have previously joined philanthropic forces for Detroit’s benefit, donating $10 million in 2016 to the Wayne State University Law School.

As the pair move to ground-up development, the first phase of the U-M/Detroit Center for Innovation (DCI) will feature a 190,000-square-foot glass-fronted research and graduate education building designed by renowned architectural firm Kohn Pedersen Fox. The space will be designated for U-M students in automotive mobility, artificial intelligence, sustainability, cybersecurity, fintech, and other technology-related fields. Groundbreaking is expected to take place this year and the project should be completed by 2023.

The educational campus at I-375 and Gratiot will be complemented by mid-rise residential buildings for U-M graduate students, a business incubator and accelerator space, and a hotel in the former Detroit Police Headquarters just west of the site.

“Detroit’s a great city and has always been one of the leading cities in this country,” Ross says. “It’s gotten to a place where it’s really in a position to grow, and it needs that next step to create more jobs. What the DCI project will do is attract people to Detroit — students who will go to school there — and, just as importantly, it will attract businesses to recruit that talent. The school, capitalizing on the University of Michigan’s outstanding reputation in business, engineering, computer science, and so many other areas, will cultivate talent and train students for the jobs of the future.”

The Ross Effect DBriefScott DeRue, the Edward J. Frey Dean at the U-M Ross School of Business, says the university’s commitment to the DCI and to the city of Detroit is unwavering.

“It’s really building on a long history of commitment and engagement that the University of Michigan has had in the city,” DeRue says. “The DCI is really reimagining education for the future of work and the future society that we all aspire to. It’s rethinking how education can be conceived and delivered in ways that meet the needs of a very diverse community of students, and to really become a pipeline of talent that enables the city of Detroit to achieve its potential.”

Ross’ munificence on behalf of U-M can be traced back to his roots in his childhood neighborhood on the city’s west side, near Six Mile and Livernois, in the mid-1940s. His uncle, the late Max M. Fisher, was a successful industrialist and philanthropist, making a fortune in oil and real estate.

“His gasoline company sponsored all the sporting events,” Ross recalls. “He had the best tickets for the Tigers, Lions, and Red Wings at that point, and I used to go to all the games with him.”

All those thrilling experiences paled after the Saturday afternoon his parents took their son to Ann Arbor for his first U-M football game. “I fell in love with the place,” he says. “It was always a dream to go there.”

He was only a middle school student at Hally Elementary on Grove Street, but Ross quickly became a regular passenger on the train that ran on game days from Detroit’s Michigan Central Station to Ann Arbor. His dream of going to U-M gained momentum as he moved on to Mumford High School — but then, in the spring of his freshman year, his father moved the family to Florida to take a new job.

“I didn’t want to leave,” Ross says. “I loved Detroit. I had a lot of great friends. In those days, especially, who knew what the outside world was about?”

Ross enrolled at Miami Beach Senior High School and was more determined than ever to attend Michigan. “And then I didn’t get in,” he says, laughing. “But it wasn’t a shock to me. I wasn’t a good student in high school.”

Ross with U-M students
Ross greets U-M students, during a “Welcome Home” event in 2013. // Photo courtesy of the University of Michigan

The tall, inquisitive student spent the first two years of his collegiate career at the University of Florida, improved his grades, and transferred to U-M in time for his junior year. He graduated in 1962 with a bachelor’s degree in business administration.

“Michigan gave me the confidence to be able to grow and know what I could accomplish (with hard work),” he says. “When I was there, Michigan was — and still is today — one of the leading universities in this country. It gives you the tools to succeed, puts you in such a unique environment when it comes to creating enthusiasm for learning, and helps guide you along the path for whatever you end up doing in life. The school gives you the Midwestern work ethic, and basically teaches you that with hard work you can succeed.”

After graduating from U-M, Ross attended Wayne State University Law School in Detroit, earning a juris doctor in 1965. From there, he set his sights on a master’s of law in taxation program at New York University, and earned a degree in 1966.

Returning to Detroit following graduation, Ross began what appeared to be a comfortable career as a tax attorney at Coopers & Lybrand, now PricewaterhouseCoopers, or PwC. But just two years later, fidgety and bored, he impetuously decided Wall Street was where he was supposed to be. It turned out it wasn’t. “By the end of 1970 I was fired from my second job,” Ross says. “I thought I was unemployable.”

Pondering his future, he had an idea for a business, told his mother about it, and asked her to loan him $10,000. “She had confidence in me,” he says. “I mean, I had three degrees at that point in time. I told her I didn’t want to go out and get another job. I wanted to try and set up my own business.”

Using the loan to live on, Ross finalized a business plan for a novel idea he’d been working on in his spare time. Applying his knowledge of federal tax law, he set up Related Housing Cos. to finance and develop government-assisted, multifamily housing for long-term investment. It didn’t take long before clients bought in as his entrepreneurial skills emerged. “I was earning $25,000 as a salary when I was working on Wall Street,” Ross says, “and I went to $150,000 in that first year. And then I probably made over $500,000 the next year.”

He’s done alright ever since. The most recent 400 List in Forbes magazine ranked Ross No. 74, with a net worth of $7.2 billion. He’s at the very top of the benefactors list at his alma mater in Ann Arbor.

U-M Detroit Center for Innovation
Next Generation: A rendering of the planned U-M/Detroit Center for Innovation. // Photo courtesy of the Detroit Center for Innovation

Ross’ first significant gift to U-M was a tidy $100 million in 2004, to be used toward a new building and endowed operations for the business school, which was promptly renamed in his honor. In 2013, Ross circled back with a $200-million gift, half of which was earmarked for the further development of a state-of-the-art collaborative learning environment on the Ross School of Business campus. The remaining $100 million was targeted to the Stephen M. Ross Athletic Campus, transforming facilities and resources for the 900-plus student athletes who participate on the school’s 31 teams.

Sports run in Ross’ blood. In 2008 he acquired a 50-percent ownership stake in the Miami Dolphins football team, along with Dolphin Stadium (now Hard Rock Stadium), and neighboring land from AutoNation founder Wayne Huizenga, for $550 million. A year later, Ross purchased another 45-percent interest in the team from Huizenga, bringing the total value of the deal to $1.1 billion. Today, the Dolphins franchise is valued at $2.9 billion, according to Statista.

Ross’ love of the game, though, began at the University of Michigan. Ever eager to make an impact on campus, in the fall of 1988 he was invited by Peter Allen, a professor specializing in real estate at U-M’s business school (still years away from being named for Ross) and a long-standing real estate developer in Ann Arbor, to participate in a real estate forum for his students. The forum also featured several other well-established guest lecturers.

“Stephen was the keynote speaker for the forum, and he asked me right afterward, ‘Who’s the best student in your class?’ ” Allen says. “I turned around and I saw Jeff (Blau), and I waved for him to come over.”

Blau had already impressed Allen, and not only because he was the only undergrad in the class. Blau had also delivered an assignment that was far superior to the work of any of Allen’s graduate students.

“Jeff stood out remarkably from all the grad students,” Allen recalls. “I mean, he got an A+ in the grad class, and it was clear that he had an extraordinary mind for the complexities of real estate development. He was a senior, and I remember saying, ‘Jeff, I’d love to hire you. Would you come work for me?’ He says, ‘No, I want go back home to New York.’ It was about the time that we had the real estate forum. I told Stephen, ‘Here’s the best kid in my class; you ought to hire him.’ ”

Ross and Blau sat down and soon were engaged in deep conversation. “I guess we hit it off,” Blau says. Eager to bolster the favorable first impression he sensed he’d made, he followed up accordingly. “Stephen had an assistant at the time. Her name was Joanne. I kept calling and calling to see when Stephen might be coming back to Ann Arbor, and she called me one time and tipped me off that he was going to be (there) the following weekend, and that I should try to bump into him.”

Jeff Blau
M Go Blau: Jeff Blau was hired by Ross following a referral from U-M professor Peter Allen. Today, as CEO of the company, Blau oversees a $60-billion portfolio. // Photo courtesy of Related Cos.

Blau, who would go on to graduate from U-M in 1990 with a bachelor of business administration degree, not only figured out how to “bump into” Ross that weekend, but parlayed the encounter into what he delights in referring to as “the plane story,” which developed at the end of his visit as Ross was about to return to New York on his private jet.

“I grew up in New York, right?” Blau says. “So I said to Stephen (that) I had to be there to see my family, and would he let me ride back with him? He said, of course. By the time we landed in New York, I had a job offer.”

Blau spent the next summer as an intern at Related. By the fall, he planned to return to business school but wasn’t sure if he wanted to work at Related fulltime once he got his degree. “I grew up in a real estate family,” Blau says. “My father was a contractor and developer. I was working for one of the real estate companies in Ann Arbor, converting houses to student apartments, and I had a publishing business on campus. I’d always been an entrepreneur.”

Now he was suddenly hedging. After stalking Ross, impressing him with his doggedness, talking his way onto his private plane, and getting that job offer, Blau wondered if going to work for Related would mean losing the individuality he cherished. That’s when Ross reminded Blau that being an entrepreneur in Ann Arbor is vastly different than starting similar enterprises in New York City.

“And then there was his famous line,” Blau says, chuckling at the still-vivid memory, “which was, ‘You know, if you’re half as good as you think you are, it will be my job to keep you here.’ ”

Ross’ pitch clearly worked; Blau not only stuck around for the next 30-odd years, but is now CEO at Related and Ross’ second in command. “The reason I have this job today is because of Joanne,” Blau says. “Stephen didn’t know until many, many years later. After we got to New York on that day, I turned right around and got on a commercial flight right back to Detroit. I didn’t really have any reason to come to New York, other than to sit on the plane with him.”

Ross chuckles as he confirms Blau’s recollection. “I didn’t know that there was no reason for why he had to get back to New York,” he says. “It just shows me that Jeff is always thinking. It says a lot about Jeff, and he hasn’t changed a bit.”

The Ross School was really on the leading edge of embracing what technology could enable in terms of reimagining education … We’re the first Top 10 business school to launch an online MBA.  — Scott DeRue

As CEO, Blau is responsible for Related’s strategic direction, the pursuit of new development opportunities, corporate acquisitions, and financing activities across all of the business platforms, as well as the overall management of the firm. “I think the key for the company is how we bring together entrepreneurs who ultimately would be unlikely to stay in a corporate setting,” he explains.

Which, of course, is exactly the position Blau felt he was in all those years ago, before that life-changing chat with Ross. “That’s really what we’ve figured out, and I think it’s a little bit of our secret sauce. If you speak to our lead partners, developers, and all these men and women, (they all) could be on their own. But they choose to be here because they can act like entrepreneurs, kind of run their own deals, participate in the profitability of the deals, and have the benefits of the resources of a larger organization behind them. So everybody is thinking that way, right? To take risks. But don’t fall off the cliff.”

While it took Blau time to buy into the Ross philosophy of how entrepreneurship can thrive in a corporate environment, he shares his boss’s unbridled passion for their alma mater. “Being in Ann Arbor was one of the highlights of my life,” Blau says. “I don’t know anybody who went to Michigan and didn’t think it was the best point in their life.”

Like Ross, Blau has shown his appreciation for U-M with his checkbook: Jeff T. Blau Hall was dedicated on the Ross school campus in 2016, the result of a fundraising effort triggered by Blau’s $10-million contribution.

What’s more, last summer he and Ross jointly committed another $6 million to the Ross School of Business to help further its commitment to inclusion through the Blau Initiative for Diversity in Real Estate and Infrastructure. Its focus is on students from underrepresented backgrounds, and sparking their interest in business and investing well before attending college by offering learning experiences and internships in real estate and investing.

In addition, the Related Scholars Fund makes attendance at U-M and Ross more affordable via scholarships.

“These are all things we’ve been working on for many, many years at our company,” Blau says. “It wasn’t like the George Floyd incident kind of woke us up to that topic. If you look at the numbers of our employees and the percentages, it really speaks to that. Providing opportunity for and investing in minority-owned businesses, recruiting talent from local communities, our commitment to affordable housing — all of that has really been part of our DNA for many, many years.

“If you go to a REBNY (Real Estate Board of New York) dinner, I don’t know the number, but it’s like 90 percent white male. So it shows that the industry needs change, right? It’s not going to change overnight. But if people as young as in high school are informed what real estate’s all about and can have the opportunity to go to a school like Michigan that’s inclusive and is pushing to increase diversity, then over time I think the makeup of the industry could change for the benefit of everybody.”

The Big House
Luck Of The Wolverines: Ross receives a special recognition at U-M’s Big House during the “Under The Lights II” football game on Sept. 7, 2013, vs. Notre Dame. U-M won, 41-30. // Photo courtesy of the University of Michigan

The gift from Ross and Blau, and the creation of the Blau Initiative at the Ross School, dovetailed neatly with a Commitment to Action program that had already been introduced at the Ross School by Dean DeRue last summer. The offering is focused on introducing or improving programs pertaining to diversity, equity, and inclusion.

“We were entering year five of a five-year strategic plan,” DeRue says. “We made a lot of progress with our student leaders, alumni, faculty, and staff. So we renewed and reinvigorated that commitment to take a hard look at our policies and practices and how we operate the school, to make sure that we’re a diverse, equitable, and inclusive community.”

But DeRue is quick to point out that the Ross Business School, much like Related, had already taken early and significant steps in the areas of diversity and accessibility, long before the arrival of COVID-19 and the furor over the George Floyd incident.

“The Ross School was really on the leading edge of embracing what technology could enable in terms of reimagining education,” DeRue says. “We’re the first Top 10 business school to launch an online MBA, and we’re leveraging technology to make our world-class business education more accessible, more affordable, more personal, and more flexible. The silver lining of the pandemic, in terms of higher education broadly and certainly at the University of Michigan and the Ross School of Business, is we’re building capabilities that will enable us, post-pandemic, to serve new and different learners in ways that historically we may not have done.”

The prospective students DeRue refers to will not only be beneficiaries of the DCI; they’ll graduate within one of the world’s great brain centers — Michigan has the largest concentration of engineers, technical centers, manufacturers, and production facilities (per capita) in the country. All of which is sweet music to the ears of Peter Allen.

“It’s a wonderful teaching tool,” he says. “There are 90 graduate programs at U-M and there’s got to be 10 or 20 that are centered around the Detroit situation and trying to learn from it in terms of public policy, human behavior, transportation, and all the things about the city. My students have heard me say for 20 years Detroit is the most undervalued big city in the world, on the planet. And Stephen and Jeff, Scott, and Dan Gilbert and his team are connecting all the dots to bring it all alive.”

Apart from the benefits of alignment in purpose, it takes an individual to light a spark and carry an idea through to fruition. Over the course of his professional career, Ross has proven himself to be singularly adept at connecting all the dots and piecing together the intricate puzzles of his numerous complicated projects. But he makes this one sound stunningly simple.

“This is about inclusivity,” he says. “We want to remove obstacles and barriers and make sure that everybody has an opportunity to succeed. The key is that businesses will be attracted to set up shop in Detroit because of the presence of all this talent and these future leaders. And they’ll recruit here, and people will want to live and stay here because of the lifestyle in southern Michigan. In many cases, there will be students who want to stay and build their own businesses. This is very similar to how Silicon Valley in California grew.”

Stephen M. Ross Giving Commitments to the University of Michigan


A $5 million lead gift for the Stephen M. Ross Academic Center, providing academic support services and study space on the athletic campus (Rocket Co’s Dan Gilbert gave an additional $5 million).


A $100 million gift to update facilities and endow operations for the business school, which was renamed the Stephen M. Ross School of Business.


A $100 million gift for the Stephen M. Ross Athletic Campus and $100 million to further develop the Ross School of Business campus.


A $50 million gift to the Ross School of Business for a student success initiative, faculty support fund, and student investment fund.


A “major gift” to establish the University of Michigan/Detroit Center for Innovation. A partnership between The Related Cos. and Bedrock will co-develop the 14-acre site at 1400 S. Antoine St., located at the southeast intersection of I-375 and Gratiot Avenue in downtown Detroit, into a $300-million, 190,000-square-foot research and education center operated by U-M.

Other major gifts over the years include:

  • U-M football stadium expansion project.
  • Scholarship support for student athletes.
  • Henry Pearce Endowed Scholarship in the College of Literature, Science, and the Arts.
  • Related Scholars Fund in the Ross School of Business, to attract and support students from diverse environments who are underrepresented in business leadership.

Total commitments to date exceed $478 million.

Sources: University of Michigan, DBusiness