Crain's Detroit Business Oct. 25, 2021, issue by Crain's Detroit Business

THE CONVERSATION: Tiffany Brown clears paths into architecture. PAGE 22

SPOTLIGHT: Getting

high-tech in low-tech businesses PAGE 8

CRAINSDETROIT.COM I OCTOBER 25, 2021

TAX INCENTIVES

Hospitals posted prices, but did it matter?

An interior photo from GM’s Willow Run assembly plant, which the automaker closed in the mid-1990s, spurring a flurry of new tax incentives in Michigan.

After 10 months, transparency rule’s results are murky

HOME TURF After ‘Willow Run’ moment with Ford EV plants’ move south, how will Michigan react? PAGE 13

FIND THE COMPLETE SERIES ONLINE: CrainsDetroit.com/Crains-Forum

JEFF KOWALSKY/SPECIAL TO CRAIN’S DETROIT BUSINESS

BY JAY GREENE

Nearly a year after hospitals began posting simplified prices for procedures, surgeries or tests as part of an Obamacare mandate, it’s still unclear how many people are using them — and whether it will actually push prices down. It’s been 10 months since the Affordable Care Act price transparency regulation went into effect Jan. 1 and hospitals were required to post standard service charges and negotiated rates for each contracted health insurer. The last several years, some leading hospitals and health insurers voluntarily posted prices for selected procedures. But the data was inadequate and incomplete in order for patients to make care decisions, experts said. Now that most hospitals have started publishing prices, the trick

will be to get more consumers to use them — and understand them. Six hospital systems contacted by Crain’s say small but increasing numbers of consumers have visited their price websites for the 300 or more common health care services, surgeries or procedures. Diane Michalek, chief communications officer with Munson At a glance Medical Cen- A look at some ter, said its prices for common price trans- procedures. parency web- Page 20 site has averaged about 200 visitors per month this year, although the Traverse Citybased hospital system also encourages people to call to talk with a patient care representative for prices. Michalek said Munson did a lot of work last year to upgrade its existing “chargemaster” website to comply with the price rule. A chargemaster is a comprehensive unit price list of products, procedures and services. “What they find on the website is probably never the actual price a See PRICES on Page 20

Taking addiction treatment mobile draws investor flurry Workit Health CEO says vision is to be as ubiquitous as Weight Watchers BY NICK MANES

The ongoing emergence of telemedical care, further spurred by the COVID-19 pandemic, has worked to the benefit of an Ann Arbor-based venture capital-backed company that seeks to disrupt the “rigid” addiction recovery model. Executives at Workit Health Inc. last week announced a Series C fundraising effort that totaled $118 million from a variety of investors,

including the VC arms of a major health insurer and a national pharmacy chain. The investment gives Workit a valuation of $500 million, among the largest publicly known valuations for a startup in the state, and a meteoric rise from the company’s value of $48 million at this time last year. A high-growth, venture-backed company may seem out of place in the world of addiction recovery, but Workit Health co-CEOs Lisa Mc-

NEWSPAPER

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Laughlin and Robin McIntosh saw that as necessary to get the type of scale needed. McLaughlin, in an interview with Crain’s last week, pointed to her background working in nonprofits. A venture like what they’re building needed to outlive the uncertainty associated with whether they can obtain a new grant every year or two, she said. See WORKIT on Page 19

Workit’s service tries to bring telehealth to addiction treatment. | PROVIDED PHOTO

ONE ON ONE

CRAIN’S LIST

KC Crain talks with Andrew Blake on what’s next beyond cider. PAGE 7

Largest nonprofit capital campaigns. PAGE 12

10/22/2021 4:05:21 PM

NEED TO KNOW

MARKETING

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT  BEAUMONT SUSPENDS 370 OVER VACCINE MANDATE

bers raised a host of concerns and questions over the pending federal mandate, which will apply to employers with at least 100 employees. They cited the cost, the logistical challenge of checking workers’ vaccination status and test results at a time human resources or other staffing is limited, and said the 100-employee threshold is arbitrary.

THE NEWS: Just over 1 percent of Beaumont Health System’s workforce, or 370 of its roughly 33,000 workers, were suspended this week for not receiving the COVID-19 vaccine, the system told Crain’s. The Southfield-based health system announced all employees, contractors and vendors had to receive the vaccine for continued employment in late July with a later established Oct. 18 deadline. The 370 workers have until Nov. 16 to receive the vaccine or their employment will be terminated. An additional 70 employees resigned due to the mandate.

socket, R.I. -based company said in a news release Monday. She will report to Dr. Kyu Rhee, senior vice president and chief medical officer for Aetna, the health insurer owned by CVS. WHY IT MATTERS: Khaldun was a major face of Michigan’s public health battle against COVID-19. She had announced last month she was leaving her government post for the private sector.

WHY IT MATTERS: The numbers, along with similar figures released earlier by Henry Ford Health System, show that the mandates’ impact is likely to be muted, though it comes amid staffing shortages throughout the health care industry.

 BUSINESS GROUPS LINE UP AGAINST MANDATE

 KHALDUN TAKES EXECUTIVE JOB WITH CVS HEALTH

THE NEWS: Michigan business groups on Monday urged President Joe Biden to reconsider a plan to require most workers to get vaccinated or regularly tested for COVID-19 but said, if it is enacted, Gov. Gretchen Whitmer should ensure related state rules are no stricter.

THE NEWS: Dr. Joneigh Khaldun, until recently the state of Michigan’s chief medical executive and one of the public faces of COVID-19 public health in the state, is joining health care giant CVS Health Inc. in an executive role. Khaldun has taken the job of vice president and chief health equity officer at CVS Health, the Woon-

WHY IT MATTERS: The Michigan Chamber of Commerce and six local cham-

 ALLY FINANCIAL BUYS CREDIT CARD LENDER THE NEWS: Detroit-based Ally Financial, one of the top players in the automotive finance business, said it will buy credit card company Fair Square Financial for $750 million. The allcash deal is expected to close at the end of the first quarter of 2022, Ally said. Ally said the purchase gives it a “scalable, digital-first credit card platform.” WHY IT MATTERS: Adding a credit card offering has been an important objective for Ally, which has diversified from its origin as General Motors Acceptance Corp., a captive automotive lender.

 MSU PLEADS TO STAFF TO BE CAFETERIA VOLUNTEERS THE NEWS: Short of help, Michigan State University made an urgent plea to staff to volunteer in campus dining halls, including faculty. MSU’s residential services department has al-

Little Caesars turns to TikTok for commercial  Little Caesars is looking for the star of its next commercial on TikTok. The Detroit-based pizza chain announced the challenge Saturday at DC FanDome, a free DC Comics virtual fan event. The casting call asks people to submit TikTok videos to be featured in a Little Caesars commercial tied to the upcoming “The Batman” movie, which is scheduled to be released in March. Commercials created from the Little Caesars’ TikTok casting call will air in the weeks leading up to the film’s release and are part of a larger partnership with Warner Bros. Pictures. Videos will feature TikTok users acting like Batman throughout their day, whether it’s dressing like the superhero, talking like him or making a Batman gadget. To kick off the campaign, Little Caesars is partnering with WarnerMedia for con-

ready asked 132 full-time employees to work eight more hours a week, the Lansing State Journal reported, but it’s apparently not enough. “Faculty and staff from around campus are invited to sign up to assist in the dining halls! We have specific needs during

tent by TikToker Trevor Bell, a DC-loving actor and producer with 4 million TikTok followers. Submissions will need to tag Little Caesars’ TikTok handle and include the hashtag #BeLikeTheBatman.

evenings and weekends,” Vennie Gore, a senior vice president, said in an email to deans. WHY IT MATTERS: The plea is indicative of a worker shortage that has affected innumerable industries.

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2 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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DETROIT RIVERFRONT

RETAIL

Port authority raises red flag over work on Boblo building demolition Still needs approvals BY ANNALISE FRANK

The Mall at Partridge Creek has fallen under the control of a receiver amid financial woes, and it and Fairlane Town Center in Dearborn now have a new management company at the helm, Syracuse, N.Y.-based Spinoso Real Estate Group LLC. | LARRY PEPLIN/CRAIN’S DETROIT BUSINESS

MORE TROUBLING TIMES FOR MALLS Partridge Creek, Fairlane under new management in receivership BY KIRK PINHO

Two troubled metro Detroit malls have come under new management and one of them recently went into receivership amid financial woes. The Mall at Partridge Creek in Clinton Township and Fairlane Town Center in Dearborn are now being managed and marketed for lease by Syracuse, N.Y.-based Spinoso Real Estate Group LLC. Partridge Creek also has come under the thumb of a receiver, a step in the foreclosure process, in the last two months or so, according to loan commentary from New York City-based Trepp LLC, which tracks commercial mortgage-backed securities perfor-

Fairlane Town Center in Dearborn is being managed and marketed for lease by Spinoso Real Estate Group LLC. | WIKIPEDIA

mance and data. Both the 600,000-plus-square foot Mall at Partridge Creek at 17420 Hall Road and Fairlane Town Center, which is 1.4 million

square feet at 18900 Michigan Ave., are listed as part of the Spinoso Real Estate Group’s portfolio on the company’s website, with site plans for the malls current as of

Sept. 27 and Oct. 12, respectively. Spinoso staff Thursday afternoon confirmed the company has management and leasing deals for the two properties, which have fallen behind on their commercial mortgage loans during the COVID-19 pandemic. Emails and text messages were sent to representatives of Spinoso seeking further details. Spinoso has been active in legacy mall management in recent years, having worked on leasing and management for Eastland Center in Harper Woods, Westland Mall in Westland and Northland Center in Southfield. See MALLS on Page 21

The Detroit-Wayne County Port Authority is raising a red flag over actions by the Moroun-owned Ambassador Port Co. and whether or not it’s taking inappropriate steps toward demolishing a massive blighted structure in Detroit known as the Boblo building. The port authority’s law firm, Detroit-based Lewis & Munday PC, alleges Ambassador Port is acting outside its long-standing Master Concession Agreement with the DWCPA, the firm says in a letter sent Monday to the company. The Moroun trucking family, meanwhile, says it will make sure to get all required approvals in place before demolishing the building in question. The razing of the 10-story former Detroit Harbor Terminal building in southwest Detroit is of note because the tear-down is included in a deal that’s pending between the two parties. The agreement would end the controversial 100-year Master Concession Agreement that made Ambassador Port a master concessionaire with sweeping control over the Detroit Marine Terminal dock site. Under the MCA-breaking deal, Ambassador Port would gain ownership of the dock site from the port authority, and in exchange pay $5 million: waiving the authority’s $2 million in debt, giving it $1 million outright and paying $2 million in blight removal and cleanup work. As part of that work, Ambassador Port agrees to demolish the Boblo building. It got approval from the authority’s board in March, though questions have lingered over what it could mean for the port’s future. However, the deal requires Detroit City Council approval before it can move forward, and there’s no public indication as to when that vote could occur. See BOBLO on Page 21

REAL ESTATE

A space apart — condos push add-on rooms BY ARIELLE KASS

Lukas Bondy had some misgivings about shelling out an additional $35,000 for an extra 150-square-foot room that wasn’t even inside the condo he’s buying in Detroit. But his wife had no qualms. “‘We’ve got to do this,’” Bondy said she told him. “‘Sign me up.’ She saw the immediate benefit.” The Bondys are buying a 1,215-square-foot one-bedroom unit with a den at CODA, a Brush Park building that’s yet to break ground. In addition to the typical units, the developers are adding six “lifestyle rooms,” as they’ve pegged them —

rooms outside a condo’s footprint that can be purchased and used as if they were part of the home. Already, four have been presold. Sabra Sanzotta, the owner/broker of Berkshire Hathaway Home Services/The Loft Warehouse, said the idea for the extra rooms came from casitas in the Southwest — small homes on the same property as a larger domicile. The team wanted to adopt the idea for condo buildings, thinking of it as a separate space for a library, a wine cave, a listening room or a remote office. But so far, everyone who’s bought one plans to use it as a home gym, she said.

“Part of the mystique of loft living is the flexible space, but the downside is everything is visible,” Sanzotta said. Now, owners can have a separate room to stash a Peloton or other gym equipment without having it mar the vision they have for their space, she said — and they don’t have to clean it up. Bondy’s room will split time as a gym for his wife and an office for him, he said. The developer of North Corktown 11 and a private homebuilder, Bondy said the per-square-foot price for the room is less than the $650,000 or so he’s paying for his unit and two parking spaces. See ROOMS on Page 18

A flex room can be built out in some Robertson Homes townhouses. Darian Neubecker, the senior vice president at the company, said buyers are increasingly choosing that option. It costs an additional $7,000 for the room, which would otherwise be a storage area, to be finished. | ROBERTSON HOMES OCTOBER 25, 2021 | CRAIN’S DETROIT BUSINESS | 3

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REAL ESTATE INSIDER

After mulling move, Walbridge renews lease downtown Detroit’s central business district has avoided a blow. Perhaps the worst-kept secret in Detroit commercial real estate was that conKirk struction giant PINHO Walbridge Group was seriously considering a move out of the city after more than a century headquartered here. But after surveying no fewer than a dozen buildings in Detroit and Southfield, the Rakolta family’s company has agreed to stay in its One Kennedy Square HQ on Campus Martius Park in the heart of downtown. Financial terms of the lease renewal deal were not disclosed, although John Rakolta III, president of Walbridge Group, said it is for all of the 51,000 square feet it presently leases with a term ending in April 2022 and that about 200 people work in its office. Those employees include those from Devon Industrial Group, which is a minority-owned construction firm in which Walbridge Group has a minority ownership stake, and DFM Solutions, of which Lauren Rakolta is the majority owner. About 150 of the 200 are Walbridge staff. “Ultimately, we’ve been headquartered in Detroit for 105 years,” Rakolta III said. “Walbridge has seen the ups and downs, the good times and bad times, and the resurgence the last decade and when it came to really considering whether we were going to move or not, we’ve always have been pretty consistent in our core values as it relates to loyalty. We are loyal to Detroit. We want to see Detroit flourish, and we want to continue to be part of that.” Walbridge was represented by Southfield-based Advocate Commercial Real Estate Advisors. Southfield-based developer and landlord Redico LLC, which owns the 250,000-square-foot One Kennedy Square building at 777 Woodward Ave., represented itself in the deal. Rakolta said his family’s company looked at Detroit buildings other than One Kennedy Square, which

Construction giant Walbridge Group spent months evaluating a dozen or more different office buildings in Detroit and the suburbs before ultimately deciding to remain at its One Kennedy Square headquarters on Campus Martius Park downtown. | COSTAR GROUP INC.

was built in 2006 and also houses OneMagnify, the company formerly known as Marketing Associates; a local Ernst & Young office; and other office and retail/restaurant tenants. One economic factor in the decision matrix, Rakolta III said: Paying for parking for its employees downtown, which can be a six-figure expense or more every year for some companies, vs. free parking in the suburbs, and weighing that against how much it would cost to move to Southfield (or another suburb) and build out space there. “There is definitely that tradeoff in today’s market,” Rakolta III said. “When you are looking at a buildout and what you’re getting charged for

“WE ARE LOYAL TO DETROIT. WE WANT TO SEE DETROIT FLOURISH, AND WE WANT TO CONTINUE TO BE PART OF THAT.”

Growth Corp. and the state offers others that could have been pursued, Rakolta III said the company opted against — John Rakolta III, president, that. Walbridge Group “Ultimately, I owe it and the organization and what you’re not getting charged for, in broad terms, they are both owes it to all our team members to competitive. The bottom line being: explore the options,” he said. “We How far do you want to drive down hadn’t gone out to the market since the price for your footprint and your 2005 or 2006, and we don’t know what we don’t know. We ultimately team members?” Although there are some parking owed it to those individuals to go exsubsidies from the Detroit Economic plore and see what else is out there. ...

We underwrote moving and buildout. We were very conscious to do our process and talk to the stakeholders, have our team members do surveys and express their thoughts, and it’s very clear that staying in Detroit was what we ultimately wanted to do.” Dale Watchowski, president, COO and CEO of Redico, said Walbridge has been in One Kennedy Square since it opened. He said Redico was “glad to get the lease extension and the term for the full suite,” and that they were “so happy to retain” Walbridge in Detroit. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

MANUFACTURING

Mask company launched by ex-CEO of defunct Sakthi files for bankruptcy BY KURT NAGL

A face mask company started by the former CEO of an automotive supplier that imploded in Detroit two years ago appears to be suffering the same fate. Southfield-based Redcliffe Medical Devices Inc., launched by Lalit Kumar at the height of the COVID-19 pandemic, filed for Chapter 7 bankruptcy last week in U.S. District Court — Eastern District of Michigan. The bankruptcy petition follows a class action lawsuit filed against the company earlier this year alleging it “sought to capitalize on the human suffering” of the pandemic after raising $4.3 million through crowdfunding for masks that were either defective or never delivered. The company, which does business under the name Leaf Wellness Inc., marketed its Leaf mask as the “world’s first FDA, UV-C N99, clear mask.” It

Lalit Kumar (left), the then-CEO of Sakthi Automotive, gives Detroit Mayor Mike Duggan a tour of the former Southwestern High School, which Sakthi planned to repurpose into a training center. | CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

raised funds through the online crowdfunding platform Indiegogo with investment levels ranging from $49 for a single pack to $9,999 for a reseller pack. Other options included a “corporate pack” for $799 and a “Mom’s Luxe pack” for $499 which was said to in-

clude carbon cartridges, color kits and masks that were self-sanitizing with UV-C light. “In reality, Redcliffe advertised these alleged virtues of its Leaf masks as a way to obtain free money from thousands of customers,” the lawsuit said.

In the bankruptcy filing, Redcliffe’s assets are listed as being less than $50,000, while its liabilities are between $1 million and $10 million and its number of creditors are between 5,000 and 10,000. The company had said it produced 6 million masks per month at a 220,000-square-foot plant in Detroit — a false claim, according to crowdfunding backers. Kumar, who also uses the last name Verma, did at one point operate a manufacturing plant in Detroit. He was CEO of Sakthi Automotive Group, an automotive supplier in southwest Detroit that received millions of dollars in incentives from the state. The project ended in unkept promises and financial ruin. Kumar could not be reached for comment. Crain’s left a message with Joseph Siciliano, of Bloomfield Hillsbased Siciliano Mychalowych & Van

Dusen PLC, representing Redcliffe. Mike Wernette, of Southfield-based Wernette Heilman PLLC, which is representing Redcliffe in the bankruptcy, said he was “not authorized to make any statement or to connect (Kumar) with anyone.” On Monday, Judge Stephen J. Murphy issued an order and opinion denying Redcliffe’s motion to compel arbitration in the lawsuit against the company. “The timing and substance of Redcliffe’s bankruptcy filing is a ham-handedly questionable effort to delay justice,” the order said. “The court is more than familiar with Redcliffe’s CEO, Lalit Kumar, and his established, shady business practices ... It appears that (Kumar) is likely again engaging in shady business dealings like those in Sakthi.” Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

4 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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¬21 in 2021 We’ve increased our U.S. minimum hourly wage to $21 as a next step toward $25 by 2025. Bank of America has raised our minimum rate of pay for all U.S. employees to $21/hour — the next step toward $25 by 2025. Over the past four years, we have led the way by increasing our minimum hourly wage 40%. Being a great place to work starts with investing in the people who serve our clients. Providing strong pay and competitive benefits to support our employees and their families helps us attract and retain strong talent. Our actions demonstrate our continuing commitment to sustain job growth and economic stability for the thousands of individuals working in support of each other, our clients and the communities where we work and live. We will continue our efforts to make a difference and serve as a catalyst for others to do the same. What would you like the power to do?®

Matt Elliott President, Bank of America Detroit

Learn more at bankofamerica.com/detroit

COMMENTARY

Build on Michigan’s proven public mental health system

EDITORIAL

Look beyond money to lure projects to state M

oney isn’t always the answer. That’s what’s becoming clearer as the dust settles over Michigan’s failure to land Ford’s blockbuster $11 billion EV investment down south. In a special Crain’s Forum this week, reporter Rick Haglund explores in detail how the state for decades has used direct monetary incentives — with limited success — to lure new manufacturing to Michigan and keep existing ones here. What history and today’s reality make clear is that tax breaks, brownfield credits and other financial lures don’t always win the day and can easily be overdone. Such programs have taken multiple forms over the years. Exhibit A for overkill was the Michigan Economic Growth Authority or MEGA, created by Gov. John Engler to offer refundable business tax credits to a small number of companies creating new jobs. Democratic Gov. Jennifer Granholm, with bipartisan support from the Legislature, lifted the cap, ballooning the MEGA program into a $10.2 billion incentive program that allowed companies, mostly Detroit’s automakers, to get credits for just retaining jobs. Former Gov. Rick POLICYMAKERS Snyder ended MEGA in 2011 in favor of a SHOULD BE program that gave LASER-FOCUSED businesses upfront grants for creatON WORKFORCE cash ing new jobs. Michigan is budDEVELOPMENT, geted to spend $100 EDUCATION AND million on business and comOTHER QUALITY- attraction munity revitalization OF-LIFE ISSUES. projects in the current fiscal year. Local economic developers have long complained that’s not enough. But would money alone have kept Ford’s EV investment in Michigan? Tennessee and Kentucky spent big bucks to win the automaker’s investment, so it’s clearly a factor. But it wasn’t the only one. The global economy is far different place than it was 20, 10, or even two years ago.

Availability of a stable and educated workforce is more of a driving factor in where companies locate than ever before. Land and infrastructure are vital, of course, but companies need to know there will be enough workers with the right kind of skills. As Tennessee and Kentucky are showing us, big employers like Ford also want job-training programs and facilities near their new plants to keep the pipeline of talent flowing. It’s not enough to just write a big check. Given that, it’s critical that Michigan broaden its economic development focus. Policymakers should be laser-focused on workforce development, education and other quality-of-life issues that can benefit residents who are already here, as well as the businesses the state wants to attract. State Sen. Mallory McMorrow, D-Royal Oak, is rightfully raising the issue. She told Crain’s she’s not opposed to financial incentives, but that state policymakers need to have “a very honest conversation” about what Michigan needs to do to become more economically competitive. McMorrow said the state must assess its talent resources, its ability to deliver reliable energy and the attractiveness of its communities as places to work and play. “All of that is to say is that I hope we are not trying to incentivize our way out of those issues,” said McMorrow, who sits on the Senate Economic and Small Business Committee. Smart economic development policy requires both short- and long-term thinking. The parade of past incentive programs shows Michigan knows how to do the former. The state should use the disappointment over the Ford move as a wake-up call for the latter.

here is currently a set of bills in the Michigan Senate, SB 597 and 598, that, if passed, would move the management of the state’s Medicaid mental health system to private health insurance companies. This move would unRobert Sheehan ravel Michigan’s nationalis CEO of the ly recognized public menCommunity tal health system — its Mental Health Community Mental Association of Health or CMH system, its Michigan. network of providers, and its public managed care operations — and harm the 320,000 Michiganders served by this system. Rather than pursuing this path, Michigan needs to take concrete steps that will advance Michigan’s high-performing public mental system — building on its strengths — all of which are within our reach. These Senate bills will instead do real damage. These bills would: Move the Michigan system from a low-overhead, publicly managed system (6 percent) to a high-overhead, privately managed system (15 percent). That would mean a loss to the service delivery system of $300 million per year. Greatly reduce funding to the public community mental health agencies in every community, thus destroying this leading-edge clinical system and the longstanding partnerships between CMHs and schools, courts, law enforcement, homeless shelters and hospitals Not integrate mental health care and physical health care, as the sponsors claim, but simply move taxpayer dollars to private insurance companies. Real health care integration occurs where the client/patient receives their care. Put the state’s public mental health system in the hands of private health insurance companies with no experience in serving persons with serious and complex mental health needs. Ignore the views expressed by those who would be directly impacted by these changes — the persons served by the public mental health system and their families. These views, captured in the Section 298 Final Report run counter to the direction outlined in these bills. Eliminate the strong local control and governance of the current system, tied to local elected officials answerable to local community members.

MORE ON WJR  Crain’s Executive Editor Kelley Root and Managing Editor Michael Lee talk about the week’s stories every Monday morning at 6:15 a.m. Mondays on WJR 760 AM’s Paul W. Smith Show.

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com. Please include your complete name, city from which you are writing and a phone number for fact-checking purposes.

Instead, we should build on Michigan’s existing high-performing public mental health system. The longstanding high performance of this system is described in a report by the Center for Healthcare Integration and Innovation, “A Tradition of Excellence and Innovation.” Michigan’s public mental health system: Meets or exceeds state-established and nationally recognized performance standards. Leads the nation in converting a system dominated by state hospitals to one that is community-based (allowing for 32 Michiganders to be served for what it costs to serve one person in the state hospital). Has pioneered, in partnership with MDHHS, nearly every mental health innovation, evidence-based and promising practice that has taken place in Michigan. Has over two decades of experience in designing and running a high performing publicly managed system that oversees the care of all community-based mental health care and does so with very low overhead (putting 94 percent of every dollar into services). Controls costs, resulting in billions of dollars of savings for taxpayers when compared to Medicaid cost increases seen in other states. Is a leader in integrating mental health and physical health care (with over 600 integrated care efforts led by this public system). Rather than moving the state’s mental health dollars to private health insurance companies, Michigan needs to take the concrete steps that will truly advance the system. Improve access to comprehensive mental health services to all Michiganders by expanding the number of Michigan’s Certified Community Behavioral Health Centers, Behavioral Health Homes, and Opioid Treatment Health Homes — programs that capture increased federal dollars for such improved access. Improve access to inpatient psychiatric care and residential alternatives to hospitalization by implementing the recommendations in the Michigan Psychiatric Admissions Discussion group, a cross-discipline group of experts from across the state Address the mental health workforce shortage by paying competitive wages and building a career path for mental health direct support professionals; expanding loan repayment programs to attract clinicians to underserved Michigan communities; and overhauling the administrative demands that draw clinicians away from serving Michiganders. In this way, Michigan can build on its strengths to advance this system and make high-quality care accessible to all.

GETTY IMAGES/ISTOCKPHOTO

BY ROBERT SHEEHAN

Sound off: Crain’s considers longer opinion pieces from guest writers on issues of interest to business readers. Email ideas to Managing Editor Michael Lee at malee@crain.com.

6 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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CRAIN’S VIDEO SERIES

Andrew Blake on what’s at the core of his family’s business, and a taste of what’s next Andrew Blake is all about life cycles: the life cycles of people, the life cycles of apples, and all the ways That’s helped build a 75-year-old orchard in Armada, far on the north end of Macomb County, into its own family of companies. A college-inspired idea to get into hard cider is leading into a national expansion in apple production and even the start of a pivot into cannabis-infused beverages. Blake sat down with Crain Communications President and CEO KC Crain last week to talk about that expansion, life in a family business, and what else is next for what’s now the fifth-largest hard cider producer in the country. The interview has been edited for length and clarity. | BY KC CRAIN A lot of people know about Blake’s Orchard, but it’s actually Blake’s Family Of Companies, and we’re here with Andrew Blake today, the president of that enterprise. I think everybody’s probably taken a field trip to Blake’s at some point or another, but give us a little background. You guys have been doing this for a long time. So we kind of started as kind of fledgling apple orchard. My grandpa moved from Detroit out to Armada, about a 100-acre apple orchard. But he wasn’t a farmer; he was actually an engineer. He had three kids at the time and wanted to get out of the city, wanted to start this new life with his family. (But he) had no idea how to run it ... but he heard family farms, they have lots of kids, so he ended up having 10 more kids, so a family of 13 and a 100-acre apple orchard. ... You know, free labor. ... So it was really kind of a struggling business for the first 15 years but we quickly kind of turned and started getting into the family entertainment aspect, and really turned from being a production farm to really focusing on family experiences. And that’s really been the crux of how our business has evolved over the past 75 years. My dad and uncle took it over, and we continued to buy up farmland and become aggressive in our farming pursuits, but also always tried to add a value-added experience for families to come there, whether it was to watch cider being made or have families pick their own apples or have a petting farm. ... We’ve built a really large customer base, we get anywhere from 2 to 3 million people a year that come visit our three locations and we’re one of the most-visited spots in metro Detroit. ... I remember we had a traffic study company come out because we were working on getting road infrastructure ... When we did that, they said, short of Comerica Park, — this was before Little Caesar’s Arena was fully done — you guys are like the number two attraction. ... And you know, we’re kind of a dirt-road one-horse town, there’s like two stoplights in the town. So we employ at this point 900 people, which is awesome, because it’s a lot of local community. But we’ve expanded to where we’re really starting to attract talent from all over the country to come to our little town and help us. ... And, you know, we’re not your typical company ... myself as president, my dad and uncle are so actively involved, we don’t have offices. We are on-the-ground entrepreneurs and we’re attracting talent. Talk a little bit about the traditional aspects of the business. You kind of have a year-round growing cycle at the very base of it, and you plant in the spring, and you harvest in the fall. Right now we’re on like day 70 of harvest, so I’ve got bags under my eyes or whatever. ... But then on top of that layer, we have our retail, family entertainment, restaurant, tasting room businesses that lay over that foundational farm, and they’re kind of integrated in one experience. We call that agri-tainment ... I think we made that name up, because we didn’t know what else to call it.  From a revenue standpoint, you guys were heavy costs in the spring,

THIS IS PART OF A SERIES OF INTERVIEWS BY CRAIN COMMUNICATIONS CEO KC CRAIN WITH PROMINENT BUSINESSPEOPLE. TO WATCH THIS INTERVIEW, GO TO CRAINSDETROIT.COM/ONEONONE I didn’t get into the business school at Michigan State. And one of the things that kind of turned a switch in my head as I started to get a chip on my shoulder. ... So I got really focused after that, and I started to really dive in. I was still going to classes, but I was really kind of focused in on my own thing. That was right when craft beer was becoming super-popular in the Zeitgeist of America. And so, I knew we already had this juice business, we had this whole enterprise that really did everything within the process up until fermentation. So I’m like, OK, all I do is learn this, and it can’t be that hard. We’ve been doing it for thousands of years. So during my college, I was just doing enough to pass my classes. I really started working on this project. And I was full in on it in college.  I didn’t realize that you have been going on that long. Yeah, at tailgates I was, you know, whipping out my hard cider and having people try it, the nice thing is, it’s your sample size, when you’re in college, and there’s booze, it’s basically like, OK, that’s booze in it, I love it. So I don’t think I got the best, honest feedback there, but it was enough to kind of keep the idea rolling. See BLAKE on Page 19

Andrew Blake | BLAKE’S ORCHARD

heavy revenue in fall. Yeah, and that was it, and you just deal with that cycle of all your cash outlaid from Jan. 15 to June, and you just spend, spend, spend, labor, labor, labor ... and it’s an emotional roller coaster. And one of the things is we’ve kind of changed the business model. We wanted to keep that, because that’s so unique, but it’s not for the faint of heart. And, you know, there’s a reason why Wall Street doesn’t invest in farms, right? ... Year to year, there’s so much variability. So there are smarter ways to make money, I think, and I think it’s just a labor of love in some degrees, but there’s a lot of opportunity in it as well. ... We feel that we kind of have the stomach for this type of business, and we like it.  So you’re watching the cyclical nature of your business. And it wasn’t making sense to you, so you had an idea. How did you even come up with this idea? So a couple things happened. Family business, loved it, wanted to be in it. ... (But) it was pretty consistent, the struggles. You know, it was this cash outlay, it was keeping year-round help, and we didn’t have products that could last more than a week or two. ... We had to find a way to extend our product offering’s shelf life and kind of export the farm in a way, because I didn’t see how there was real sustainability longterm. ... So I was going into college and kind of thinking through a bunch of different ideas. ... This was right when online was getting kind of big, so I had this idea to ship caramel apples all over the country. Anyways, that one didn’t go so well. And you know, you fail fast. ... So I was at Michigan State,

Charting a path for a resilient world How can businesses thrive in today’s new normal? It begins with resilient leaders like you, who quickly connect today’s resources to meet tomorrow’s challenges. Learn more about the insights and services that can help you build greater organizational resilience—and help us all build a more resilient world. To start on your path to resilience, visit deloitte.com/us/covid-19 Copyright © 2021 Deloitte Development LLC. All rights reserved.

OCTOBER 25, 2021 | CRAIN’S DETROIT BUSINESS | 7

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SMALL BUSINESS SPOTLIGHT

Small businesses thrive, expand reach by turning to technology

From

FINDING WAYS TO CONNECT

According to Gartner Research, the global CRM software market grew by 12.6 percent to $69 billion from 2019 to 2020. About 91 percent of businesses with at least 10 employees use some form of CRM software, a Grandview Research report found.

There’s an app for that CRM systems aren’t just for restaurants. Bundled LLC, an online gifting company established in 2015 by West Bloomfield residents Chelsea Gheesling and Courtney Taylor, is using an automated gifting application that allows Bundled’s clients, which include General Motors Co., the Detroit Pistons and Rocket Pro TPO, to connect their CRM systems with the Bundled gift fulfillment system. Bundled has used the gifting app for close to three years, according to Gheesling. It implemented the

app at no additional cost to clients and a nominal service fee, which goes toward app updates, is included in the price of each gift Bundled clients purchase. “Most of (our clients) use our app as a sales tool,” said Gheesling, whose business has seen a 100 percent increase in revenue in 2021. “Let’s say someone closes on a house. At some point in the closing process, a note would come to (Bundled), and we’d send out a congratulations bundle. All a client has to do is predetermine a gift, then our IT person works with their IT person. It’s an easy process.” The app stores personal information for each client and programs reminders allowing them to keep a record of events such as birthdays, holidays and new hires. The app sends the client a notification when the gift is received. See TECH on Page 9

About 25 percent to 30 percent of Estia Greek Street Food orders come via its mobile app, according to co-owner Nina Battis.

JAY DAVIS/CRAIN’S DETROIT BUSINESS

Nina Battis, co-owner of Estia Greek Street Food, has a simple answer when asked why she opts for customer relationship management software to take orders as opposed to traditional equipment like a cash register. Jay “It’s just easy to use,” said Battis, who DAVIS uses a point-of-sale system to ring up customers. “The system keeps track of everything because it’s basically a computer, unlike the oldschool register. When we’re slammed, it makes taking orders so much easier and it helps us when it comes to beating a rush.” Using various forms of technology, any small business can stay connected with customers and widen its customer base in ways not otherwise possible. Utilizing technology such as POS systems and smartphone apps can streamline operations, making it simpler for employees and customers alike to order, receive and use goods and services. Plenty of small businesses in recent years have made major investments in customer relationship management, or CRM, systems. Those platforms are used to manage relationships and interactions with current and potential customers with a goal of improving business relationships. CRMs, such as online newsletters, email marketing and e-commerce software, mobile apps and customer service software, can help businesses stay connected with customers, streamline processes and improve profitability.

TURNING TO TECH Following are some tips for small businesses looking to implement new tech into their operations: Know what you want: Small business owners must know what the technology is going to be used for, be it online meeting software or a mobile app. A lack of research could cost more time and money.

Bundled’s automated gifting application allows its clients to connect their customer relationship management system with the Bundled gift fulfillment system and then staffers fill them. | BUNDLED LLC

LISTEN TO THE PODCAST  Crain’s Small and Emerging Business reporter Jay Davis talks with Marie McCormick, executive director of Friends of the Rouge, about how the nonprofit added new technology to it toolbox to pivot to virtual fundraisers and events during the pandemic. Listen at crainsdetroit.com/small-business-spotlight

Put together a team: Appoint staff whose responsibility it is to ensure the new technology is used correctly and throughout the company. Establish goals and objectives: Tech solutions can be used to increase revenue, communicate with staff and customers and widen a company’s reach. Establish what is your goal before choosing what software to implement.  See more tips, Page 9

READ ALL OF CRAIN’S SBS PROFILES AT CRAINSDETROIT.COM/SMALLBUSINESSSPOTLIGHT 8 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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JAY DAVIS/CRAIN’S DETROIT BUSINESS

From Page 8

Shifting to virtual Technology has also been helpful for nonprofits like Friends of the Rouge. The Plymouth-based organization’s Rouge Cruise is its biggest fundraiser each year, bringing in between $25,000 and $30,000 annually. The group, established in 1986, canceled its 2020

Legare

Gheesling

MORE TECH TIPS Integrate third-party applications: Integrating with services like Facebook, Microsoft Outlook, Mailchimp and Slack can maximize your organization’s efficiency. For customer relationship management systems, this can allow your team to switch between apps and access important customer data without leaving the CRM platform. CRMs usually offer dozens to hundreds of third-party integrations, so prioritize them according to what is most important to your business.

NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

About 25 percent of Bundled gift sales come from the automated app. “It’s less work for (clients) and more efficient for us,” Gheesling said. For Fuse Technology Group, the implementation of technology into daily operations had been slowly chugging along, but the COVID pandemic pushed it ahead full throttle, Vice President Brian Legare said. Legare, whose Ferndale-based IT company offers mobile and cloud management services, said clients early in the pandemic began integrating technology such as Microsoft Teams and CRM service Salesforce into operations as a way to streamline communication with staff and clients. It can also eliminate human error from the ordering process and aid with inventory management. Legare said it can be easier for a small business to add new technology, as larger corporations have chain-ofcommand issues and loads of paperwork to draw up and sign before anything new can be implemented. Estia recently got into the app game, too. Prior to the start of the coronavirus pandemic, Battis had begun working to develop an app to allow customers to view the full Estia menu, place orders and be alerted when their order is ready. Estia’s app, which went live last year after the initial pandemic shutdowns, also nudges customers who may have not have ordered for at least a month with an offer for a free item with their next purchase. The app also tracks purchases to give the restaurants a snapshot of what’s selling, Battis said. “We were very hands-on in the creation of (the app),” said Battis, who spent about $2,000 to develop it with platform Craver. “It was really helpful during the (pandemic) shutdown when we opened back up for carryout.” Now between 25 percent and 30 percent of Estia orders come from the app, Battis said. Demographics played a role in choosing to implementing the app. “We wanted to keep up with the times,” she said. “Our main demographic is a lot of younger people, people in their 20s, 30s and 40s. We thought we needed to connect more with our customers. That’s the way of the world.” Estia, which employs a total of 50 people, is also following in the footsteps of restaurants such as McDonald’s and Taco Bell in implementing a contactless ordering kiosk at its new Grosse Pointe Woods location. If it’s successful, the kiosks could be introduced at other locations, Battis said. Business is booming. Between the two current locations in Warren and Troy and its food truck, Estia annually brings in about $3 million in revenue, according to co-owner Paul Battis, Nina Battis’ husband. Paul Battis projects the Grosse Pointe Woods location will bring in between $1.4 million and $1.5 million a year. The food truck, which brings in $450,000 in revenue, accounted for about 60 percent of the business’ total revenue during pandemic pauses and limits on indoor dining, Nina Battis said.

Friends of the Rouge Executive Director Marie McCormick turned to technology solutions to pivot to virtual events during the coronavirus pandemic.

SOURCES: BRIAN LEGARE, FITSMALLBUSINESS.COM

event due to the coronavirus pandemic. Friends of the Rouge, with 10 fulltime and four part-time employees led by Executive Director Marie McCormick, got creative and instead hosted a virtual UnCruise. For five consecutive Tuesday evenings late last summer, guests of the event explored a stretch of the Rouge River filmed by Friends of the Rouge staffers from their kayaks. Rouge staff and board members provided live narration, stories and answered questions via Zoom. “There was a lot of work that went into changing the format and putting (the UnCruise) together,” McCormick said. “The cost to make the shift was minimal, but we got a lot out of it.” The organization purchased a GoPro camera for $499 and staff members also shot some video on their cell phones. Small business and enterprise Zoom memberships are $19.99 a month and allow users to host up to 1,000 participants each event. In a normal year, about 130 guests take part in the Rouge Cruise over five days, paying about $75 per ticket to attend, giving the group close to $10,000 from ticket sales. The majority of the funds raised for the event come from sponsorships. In 2020 the free virtual format allowed 1,600 people to participate in the new event, which brought in about $35,000, mostly from sponsorships, according to McCormick. Donations from guests totaled about $4,000, she said. The success of its virtual event has led Friends of the Rouge to implement more virtual offerings, such as a Spring Bug Hunt streamed live on the organization’s Facebook page. “Doing the virtual events has widened our reach quite a bit,” said McCormick. “We never would have thought about doing this without the pandemic. It almost gives you a global presence.” The group isn’t charging for virtual events yet, but could in the future, she said. The success of the virtual event is one example of how implementing technology can help the bottom line of a small business or organization. Fuse Technology’s Legare noted that using a free service like Facebook or Instagram, in addition to other CRM, is proven to help businesses thrive. It can have its pitfalls, though. “There’s the human element, where you might have one less employee on staff because the process with the tech eliminates the need to have someone doublecheck numbers or inventory,” Legare said.

“You have to be on top of (the tech). You have to keep apps up to date. You can’t just let them go because then the system doesn’t work and you’re back to square one. Many things change. You have to update codes on top of keeping the tech secure.”

Social connection Social media platforms, most notably Facebook and Instagram, help add to businesses’ reach. Friends of the Rouge, which has a shade more than 1,000 Instagram followers and nearly 15,000 Facebook followers, over the last year and a half has ratcheted up its social media presence. The group has put time and an undisclosed amount of money into social media, with the funds coming from grants. The group also has a consultant

who works on marketing and branding at a cost of about $60,000 a year between the Friends of the Rouge, the Huron and Clinton River Watershed Councils and the Detroit River watershed. “We’re working to cross-pollinate our social media content, so we get everything across to as many people as possible,” McCormick said. Bundled, with close to 9,000 Facebook and Instagram followers, has a monthly budget of “a couple thousand” dollars it uses for paid ads on social media, Gheesling said. That spend will increase over the course of the holiday season, she said. “We’re always trying to come up with new content to keep it fresh,” she said. “What we do is a lot of seasonal things. ... We just did a wreath kit that you can order and make a wreath at home.

“... We’re pretty granular about how we target people. Right now we’re targeting two groups: people with everyday consumer needs, and we’re heavily targeting people in (human resources), business owners, anybody sending a holiday gift,” Gheesling said. Estia has close to 16,000 Facebook and Instagram followers. The restaurant group posts frequently, and Nina Battis said it adds a great dimension to the business. “You have all of this technology available at your fingertips. As a business owner, I’d be crazy to not use it,” Battis said. “It helps in too many ways. This is a big part of the future of business.” Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

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yourchildrensfoundation.org/caring-for-kids OCTOBER 25, 2021 | CRAIN’S DETROIT BUSINESS | 9

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MANUFACTURING

OBITUARY

Electric Last Mile Solutions expands to Canada with hub

Real estate developer Ryan Dembs remembered as family man, friend

BY KURT NAGL

Electric Last Mile Solutions Inc. is opening a regional hub in Canada to be led by a newly hired executive with experience in the automotive and aerospace industries. The Troy-based electric commercial vehicle manufacturer selected David MacPhail as president of Canada, where the company has already seen interest and is angling to win market share. MacPhail started his new role last Monday. “With Canada’s commitment to sustainability and EVs and the need for more delivery vehicles in a growing e-commerce market, we see a good market opportunity and application for our all-electric commercial vehicles,” Ron Feldeisen, chief revenue officer at ELMS, said in a Wednesday news release. Canada said in June it would require all new light-duty cars and trucks to be emissions free by 2035. Customers in Canada are eligible for up to $6,500 in federal and provincial incentives to buy or lease EVs. MacPhail joins ELMS from automated manufacturing company JR Automation, where he worked in Montreal and Holland, Mich., as a business development manager and sales director. Before that, he was a sales manager with ATS Automation Tooling Systems in Montreal. He also spent six years with Swiss mecha-

tronics company Staubli and five years with Canadian aerospace company CAE Inc. He joins ELMS as the company aims to grow its global MacPhail presence and bolster sales, engineering and supply chain capabilities. The company began trading on the NASDAQ as ELMS in late June. The expansion into Canada includes establishing an office and launching sales of its vehicles, which will be imported from its manufacturing plant in Mishawaka, Ind. ELMS, which employees around 150 people, shipped its first Urban Delivery vans to customers at the end of September, the company said. It said a week prior that it had secured a purchase order for 1,000 Urban Delivery vans from distribution partner Randy Marion Automotive Group. It announced earlier this month a supply agreement through 2025 with Chinese battery company Contemporary Amperex Technology Co. Production of its second vehicle, the Class 3 Urban Utility EV, is expected to start in the second half of 2022. Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

BY KIRK PINHO

Suburban real estate developer Ryan Dembs, a resident of Franklin, died Oct. 17. He was 49. Dembs, who was president and CEO of the eponymous Farmington Hills-based Dembs Development Inc., spent more than a quarter-century in commercial real estate, building a career developing industrial and flex buildings, largely in Oakland County. The cause of his death was not released. “His company was built in a way that it can continue to operate and thrive in his absence,” said Brian Raznick, partner for Southfield-based law firm Jaffe Raitt Heuer & Weiss PC who has represented Dembs and his companies for years. He also described himself as one of Dembs’ closest friends and his family’s attorney. “He was a very extremely successful real estate developer, building some of the premier buildings in and around the metro area,” Raznick said. “But what he should be remembered for is all of his contributions to the community, and the things he would be proudest of are his wife, Lindsay, and his boys, Dylan and Harrison.” In recent years, Dembs’ company developed the $23 million GKN Driveline North America Inc. headquarters in Auburn Hills and a 75,000-square-foot speculative research and development building in Novi. The firm also developed the new 108,000-square-foot new office and R&D facility for supplier Martinrea, a division of Canadian supplier Martinrea International Inc., in Auburn Hills.

In March 2020, a joint venture between Dembs Development and Southfield-based Pitt Investments landed auto supplier Marelli as the anchor tenant Dembs for the former Federal-Mogul Corp. headquarters in Southfield, which the joint-venture paid $3.5 million for in May 2017. He was also listed among Crain’s Detroit Business’ 50 Names to Know in commercial real estate in 2016. Gary Weisman, principal and co-owner of Southfield-based developer General Development Co. along with Bruce Brickman, said Monday that he knew Dembs for about 15 years and the two had a “professor-student” relationship. When they first met, Weisman outbid Dembs for a piece of Novi property and, the day after, agreed to let Dembs into the deal in a joint-venture capacity. “We would be partners together instead of it having been a win (for me) and a loss (for him),” Weisman said. “It was like a mentor/mentee relationship that has lasted until yesterday (Oct. 17). Even last week, we launched a new real estate venture concept that was residential in nature. This relationship built over these years in industrial moved us even in a different direction.” But Dembs, Weisman said, was more than just a prominent real estate professional. “Ryan loved real estate,” Weisman said. “But it was a means to an end. His life’s contribution was his gener-

osity and his sweetness and his insatiable interest in the world around him. His whole life was about his family and his kids. Real estate was what he did for a living, but his family was his life.” Steve Gordon, president of Southfield-based brokerage firm Signature Associates Inc., said he had known Dembs since Dembs’ childhood because he did business with Dembs Roth, the development company run by Dembs’ father. “As he has grown up and progressed, I was so impressed with his development and maturity,” Gordon said. “He was just a cool, very cool guy. Although I don’t do all his business, we have had a very special, almost family, relationship, me and Ryan. It’s a tragedy.” Gordon described Dembs as someone who was athletic and physically active, playing tennis, racquetball and basketball, as well as running, lifting weights and doing yoga. “He was a phenomenal athlete,” Gordon said. Jeffrey Schostak, president of Schostak Development, the development arm of Livonia-based real estate company Schostak Bros. & Co., called Dembs “one of the most talented combinations of developer, contractor and entrepreneur in this town.” “However, he was far more than a real estate partner to anyone who knew him,” Schostak said. “Ryan was a great family man and a wonderful friend. He was pure class, and I felt lucky to call him a close friend. Ryan will be sorely missed by everyone.” Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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Detroit-based investment fund with ties to Ford family hauls in $300 million BY NICK MANES

A Detroit-based investment fund tied to the scions of one of the country’s major automotive dynasties has raised more than $300 million in fresh capital, according to a recent regulatory filing. Brush Street Private Investment Partnership 2021 LLC, an investment fund with connections to a family office for multi-generational heirs to the Ford Motor Co. fortune, last week closed on more than $302.9 million from 125 investors, according to a Form D filed with the U.S. Securities and Exchange Commission. The fund is managed by Michael Montgomery, who serves as president and CEO of Ford Estates LLC, a family office for the Ford family. Montgomery is also CEO of Brush Street Investments, the investing arm of Ford Estates, according to a Columbia University bio. Montgomery did not respond to multiple requests for comment. Ford Estates and Brush Street Investments, along with other Ford-related organizations, are headquartered in the same suite within the office complex attached to Ford Field

Brush Street Private Investment Partnership 2021 LLC has its office in the Ford Field complex at 2000 Brush St. in Detroit. | COSTAR GROUP INC.

in downtown Detroit. At least four other funds tied to Brush Street Investments reported raising more than $250 million combined between 2012 and 2016, according to a review of Form D filings by Crain’s. For the first six months of 2021, there were at least 3,716 family office

investments around the globe, according to FINTRX, a data-tracking company for family offices. During that same period, family office assets grew by $64 billion, according to the FINTRX report. Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

10 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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SPONSORED CONTENT

Detroit gets ready to host North America’s largest automation, robotics show in 2022 Global tech, manufacturing companies on deck for Automate when it returns to the Motor City next June. interest in robots among companies aiming to better meet consumers’ needs and mitigate supply chain disruptions.

Fanuc Corp., ABB Inc. and Kuka LLC are among the global robotics companies — all with a Southeast Michigan presence — that have already committed to take part in North America’s largest robotics and automation trade show, which returns to Detroit next summer.

At Automate, guests will meet robot manufacturers from Japan, Germany and the U.S., along with tech giants based in South Korea, China, Mexico and Canada. More than 40 exhibitors with Michigan locations have also signed up to showcase their products, such as Ascent Aerospace, Kawasaki Robotics Inc., Nachi, JR Automation, Applied Manufacturing Technologies, Comau, Leoni, and Cybergear.

Automate, a trade show and conference produced by Ann Arbor-based Association for Advancing Automation (A3), will gather leaders in robotics, vision and imaging, motion control, artificial intelligence and smart automation technologies from June 6 to 9 at TCF Center. Detroit’s Cobo Center previously hosted the show before it moved to Chicago in the 1990s. Next summer will be the first of three shows committed to Detroit. “As we emerge from the pandemic, we see increasing interest from companies in every industry to automate their processes as they aim to improve efficiencies, handle ongoing labor shortages and ultimately prepare for anything else the future might bring,” said Jeff Burnstein, president of A3. The organization Burnstein represents more than 1,000 automation manufacturers, component suppliers, system integrators, end users, research groups and consulting firms. “Automate provides attendees and exhibitors the best opportunity to interact with the world’s leading automation companies and find solutions to their most important challenges.”

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Industry growth drives interest in show Robotics and advanced manufacturing processes are leading to growth in not just the automotive industry but in aerospace, electronics and national defense. Data from The Brookings Institution indicates that Detroit dominates the nation’s largest metro areas in robot deployment, with over 15,000 industrial robots in place, or 8.5 robots per 1,000 employees. The Grand Rapids region boasts 6.3 robots per 1,000 employees. Data generated by A3 found that yearly orders of robots from non-automotive sectors surpassed automotive robot orders for the first time in 2020. This growth was driven by a solid fourth quarter 2020 for robot sales, with a 63.6% increase compared to fourth quarter 2019. These numbers indicate that 2020 was a period of high

DETROIT AUTOMATE BY THE NUMBERS 20,000+ attendees 600 exhibitors Attendees from 89 countries 81% of attendees plan to make automation purchases in the next two years 49% of attendees found new vendors they had never heard of at Automate

In addition to live demonstrations of automation and robotics technologies, attendees will also have access to educational classes and training by industry professionals. The show will also feature an Automate Launch Pad Startup competition that highlights the industry’s most innovative young companies while offering a cash award. The show will be free to attendees; there will be a fee for educational courses. “We’re excited that Automate will be held in Detroit in 2022 and expect even greater traffic as more companies realize how robotics and other forms of automation can help them compete in today’s challenging business environment,” said Lou Finazzo, vice president at Fanuc America, a leading brand for manufacturing automation based in Rochester Hills. Automate provides visitors the opportunity to explore and showcase products that help support the industry’s advancement. A3 invites interested potential vendors, sponsors and attendees to contact the organization and learn more about the event at automateshow.com.

10/21/21 8:51 AM

CRAIN'S LIST | COMPREHENSIVE MULTIYEAR CAMPAIGNS Ranked by campaign goal

ORGANIZATION NAME CAMPAIGN NAME

CAMPAIGN GOAL ($000,000)

AMOUNT RAISED AS OF SEPT. 2021 ($000,000)

JEWISH FEDERATION OF METROPOLITAN DETROIT/UNITED JEWISH FOUNDATION

$250.0

$259.4

Jan. 1, 2012

Jan. 1, 2022

To endow the next century of the Jewish community

2 2

OAKLAND UNIVERSITY

$150.0

July 1, 2016

June 30, 2024

The campaign has five focus areas: Student success; teaching research and discovery; campus expansion; community collaboration; and innovative programs

DETROIT RIVERFRONT CONSERVANCY

$150.0 1

In the quiet stage of a $100 million-$150 million campaign that will include the money to redevelop 5.5 miles of the riverfront from Gabriel Richard Park to the Ambassador Bridge, beginning with West Riverfront Park, which will feature a variety of new attractions designed to bring people down to the riverfront

THE HENRY FORD (THE EDISON INSTITUTE INC.)

$150.0

$121.0 2

Oct. 10, 2018

June 1, 2023

Will help The Henry Ford build digital and experiential learning tools, programs and initiatives to advance innovation, invention and entrepreneurship and launch the workforce of tomorrow

5 5 7 7 9

DETROIT INSTITUTE OF ARTS

$125.0

$45.0

July 1, 2018

Dec. 31, 2022

Unrestricted operating endowment; Phase II of long-term, endowment campaign 3

DETROIT SYMPHONY ORCHESTRA

$125.0

$60.0

Jan. 1, 2014

Jan. 1, 2023

The goals are to raise at least four times the operating budget and maintain no lingering capital debt

EASTERN MICHIGAN UNIVERSITY FOUNDATION

$100.0

$81.0

July 1, 2016

June 30, 2023

Will support student success, advance programs of distinction and help students excel in and beyond the classroom.

SAMARITAS

$100.0

$66.5

April 1, 2018

April 1, 2023

Build, renovate and consolidate buildings and programs where Samaritas serves. Affordable living community developments. Senior living community development.

MOTOWN MUSEUM

$55.0

$32.0

Oct. 17, 2016

The Motown Museum expansion will grow the museum to a nearly 50,000-square-foot world-class entertainment and education tourist destination featuring dynamic, interactive exhibits, a performance theater, recording studios, an expanded retail experience and meeting spaces designed by renowned architects and exhibit designers. When completed, the new museum campus will have a transformative impact on the surrounding Detroit neighborhoods, providing employment, sustainability and community pride by serving as an important catalyst for new investment and tourism in the historic area.

MICHIGAN OPERA THEATRE

$50.0

July 1, 2016

June 1, 2020

Operating funds for five years, support for paying off the $4.5 million mortgage remaining on the opera house, updates to the historic building, endowment and expanded community and artistic programming.

10 12 13 14

UNIVERSITY OF DETROIT MERCY

$50.0

$10.9

Jan. 1, 2020

Focused fundraising effort on facilities improvement and building the endowment

SCHAAP CENTER

$33.0

$0.0

To cover capital costs.

FISHER HOUSE MICHIGAN

$20.0

$10.0

A "home away from home" for the families of military service members and veterans, while the veteran is in medical treatment at the John D. Dingell VA Detroit Medical Center

PRESBYTERIAN VILLAGES OF MICHIGAN/PRESBYTERIAN VILLAGES OF MICHIGAN FOUNDATION

$19.5

$3.7

Jan. 1, 2020

Dec. 31, 2025

Delivering truly affordable housing and health care. Campaign for the Ages provides vulnerable seniors health and wellness services at four Presbyterian Villages - Flint, Fort Gratiot/Port Huron, Pontiac, and Westland.

ASCENSION ST. JOHN FOUNDATION

$18.0

$10.0

Sept. 1, 2018

Sept. 30, 2024

The purpose of this campaign is to fund a significant expansion and renovation of its Pediatric Services by renovating the Pediatric Inpatient Unit to create private rooms and incorporate the best practices in functionality and design, which will improve delivery of care and the patient and family experience. To build a Pediatric Emergency Department in the hospital that is separate and distinct from the current Emergency Department, a Level 1 trauma center that sees every kind of emergency. Move the Pediatric Intensive Care Unit so it is adjacent to the Pediatric Inpatient Unit which will facilitate easier flow between the areas for staff and doctors as well as enhance the experience for families. Create a dedicated Women’s and Children’s Entrance to the hospital to better accommodate women going into labor as well as injured or ill children and their families, making the journey seamless and easy.

FORGOTTEN HARVEST INC.

$17.0

$9.5

June 1, 2018

Dec. 31, 2021

Launched the quiet phase of a now $17 million campaign in 2018 to fund capital costs, furnishings and equipment and $1 million fund to help cover facility operation and maintenance costs for the first several years.

CHALDEAN COMMUNITY FOUNDATION

$15.0 1

$8.0

Nov. 1, 2016

Dec. 31, 2022

A new 30,000 square foot Community Center to expand CCF’s services to clients and the community. Workforce development programs, mental and physical health services, life skills for the developmentally disabled, recreation and family fun are only a few of the new programs that CCF plans to roll out in the expansion to address the growing need of clientele. The Michael J. George Chaldean Loan Fund which provides loans toward the purchase of vehicles after clients become employed. A 135-unit Van Dyke Housing Development to support long-term housing for new Americans.

18 19 20

AUSTIN CATHOLIC HIGH SCHOOL

$12.0

$5.0

Was launched to purchase the new facility and associated costs of renovation, expansion, furnishings and operational support.

DETROIT RIVERFRONT CONSERVANCY

$11.0

May 12, 2021

Oct. 1, 2022

Will complete 3.5-mile eastern leg connecting Gabriel Richard Park and Mt. Elliott Park to Belle Isle.

JEWISH FEDERATION OF METROPOLITAN DETROIT/UNITED JEWISH FOUNDATION

$10.0

$3.4

June 1, 2021

May 31, 2024

Secure Jewish life for children, grandchildren and many generations to come.

DETROIT PUBLIC THEATRE

$5.0

$2.5

Will support: capital expenses to build out the new home for the theatre; capacity building to add the personnel required to support operations in the new building and support DPT’s programmatic growth, a fund for risk capital, artistic excellence and building reserves.

ST. JOSEPH SHRINE

$3.3

$1.3

Oct. 15, 2020

Oct. 1, 2024

To support ongoing capital projects at the church. Projects include: completing church stonework, replacing heating and electrical systems, repairs to entrance and walkways; stained glass.

23 24 25

CHRIST CHURCH DETROIT

$1.5

Dec. 1, 2020

Dec. 30, 2025

Will fund repairs at the 175-year-old church and other projects, including updates to its kitchen so it can provide an expanded meal program for the hungry.

COMMON GROUND

$1.2

$0.9

April 1, 2021

To fund a behavioral health urgent care in Oakland County.

EASTERSEALS MICHIGAN

$0.4

$0.3

Sept. 1, 2017

Sept. 30, 2021

Raising funds to construct a new fully accessible concession stand for our newest Miracle League Field. This field called The Miracle League of North Oakland is located in Friendship Park in Lake Orion. Partners in the project include Independence Township and Orion Township. This league will remove the barriers that keep children with disabilities off the baseball field and let them experience the joys of America's favorite pastime.

CAMPAIGN START DATE

TARGETED ENDING DATE

WHAT THE CAMPAIGN IS PAYING FOR

Centennial Campaign

ASPIRE.ADVANCE.ACHIEVE. The Campaign for Oakland University Comprehensive Campaign

The Innovation Project

DIA NOW, The Campaign for the Detroit Institute of Arts Endowment DSO Endowment Campaign

Give Rise: The Campaign for Eastern Michigan University Giving Hope

Motown Museum Expansion Campaign

Historic Path to a Bold Future Campaign

Bridge Campaign for the University of Detroit Mercy Capital Campaign

Fisher House Detroit

Campaign for the Ages Your Child, We Care

Solutions That Nourish Campaign

Chaldean Community Foundation New Lives in a New Land

Together We Can

Comprehensive Campaign

Centennial Partner Campaign Next Stage Campaign

Historic Renewal Capital Campaign (Phase II)

175th Anniversary Campaign Capital Campaign

The Miracle League of North Oakland Concession Stand

Researched by Sonya D. Hill: shill@crain.com | This list is an approximate compilation of the largest comprehensive multiyear campaigns in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the organizations. NA = not available. NOTES: 1. As reported by Crain's. 2. Since campaign started. 3. The DIA Open Forever was Phase I of an unrestricted operating endowment campaign and ended June 30, 2018. It raised $65 million as of September 2018.

Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data 12 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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TAX INCENTIVES

IN NEED OF A

RECHARGE

‘No more Willow Runs’: Ford’s lurch south renews decades-old debate over trading tax incentives for new jobs | BY RICK HAGLUND

But elected officials in Lansing are vowing to redraw it after Ford Motor Co.’s stunning announcement that it would invest $11.4 billion to build a truck assembly plant and battery plant in Tennessee and two battery plants in Kentucky. The factories are expected to create 11,000 jobs. Some in Michigan see Ford’s move as a mortal threat to Michigan’s goal of becoming the center of electric vehicle development and manufacturing at a time when automakers are working feverishly to phase out gasoline-powered cars and trucks. “This is Michigan’s fault — the Legislature and the governor. There are no two ways about it,” said state Sen. Ken Horn, R-Frankenmuth, who is aggressively pushing for new tax incentives he and others say are badly needed to prevent Michigan from losing its auto industry. Horn said Ford’s new plants in Tennessee, which the automaker is calling Blue Oval City, are so significant that he’s convinced the Dearborn automaker will move its headquarters there within 20 years unless Michigan ups its economic development game. “That was the biggest kick in the gut to me,” said Horn, who chairs the Senate’s Economic and Small Business See RECHARGE on Page 14

CRAIN’S ILLUSTRATION/GETTY IMAGES

TWENTY-NINE YEARS AGO, GENERAL MOTORS CO. shocked Michigan by announcing it was closing its Willow Run assembly plant and consolidating production at the automaker’s Arlington, Texas factory, erasing 4,000 high-wage jobs in the middle of a recession. Republican Gov. John Engler, who had scuttled much of his Democratic predecessor James Blanchard’s economic development apparatus and was widely blamed for the loss of Willow Run, vowed to head off any more big auto plant closings. “We must draw a line in the sand, right here, right now, period,” Engler said in a March 1992 speech to 500 members of the Ypsilanti Area Chamber of Commerce. “It’s time to say, ‘No more Willow Runs.’” Engler rebuilt Michigan’s economic development armament, a portion of which still exists. Among Engler’s surviving creations are the Michigan Economic Development Corp., tax-free Renaissance Zones and brownfield redevelopment assistance. The former three-term governor and Legislature “established one of the most lucrative incentive programs in the country,” said Jo Ann Crary, president of Saginaw Future Inc., a local economic development agency. Over the years, shifting political winds have largely blown away Engler’s line in the sand.

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RECHARGE

From Page 13

Development Committee. Ford has showed no sign of turning out the lights out at Glass House. The automaker has invested $7.7 billion in Michigan since 2016, including expansion of an assembly plant to build full-size electric pickup trucks in Dearborn, a $740 million redevelopment of the Michigan Central train station into massive “mobility innovation district” and a research center in Dearborn the automaker said could eventually employ 20,000 workers. “We love Michigan,” Ford CEO Jim Farley tweeted on the day it announced its Kentucky and Tennessee investments. But local economic developers say the potential impact of Ford’s southern investments on Michigan’s ability to keep and grow its auto industry could be huge unless the state fortifies its incentives arsenal. “Ford’s announcement was really a clarion call to show that today Michigan does not have all the appropriate economic development infrastructure in place to help retain our companies, help them to expand here and to attract new firms,” said Maureen Krauss, president of the Detroit Regional Partnership, an 11-county Southeast Michigan economic development agency. Krauss, a veteran economic developer, likened Ford’s southern investment to GM closing the Willow Run plant and spurring Engler and lawmakers into action. “Sometimes moments like this provide you with a moment of clarity,” she said.

GM shuttered its Willow Run Assembly Plant in the mid-1990s, costing Michigan 4,000 high-wage jobs.

Farley

What Ford got to go south

Willow Run closed after GM consolidated truck assembly operations in Arlington, Texas. | JEFF KOWALSKY/SPECIAL TO CRAIN’S DETROIT BUSINESS

The massive Ford investments also have added fuel to a long-running debate over the need for and the effectiveness of tax incentives to entice economic development. Some, including the Mackinac Center for Public Policy, say tax incentives are ineffective in creating jobs and amount to corporate welfare. The Mackinac Center, a Midland-based free market-oriented think tank, has repeatedly conducted studies showing that Michigan’s economic development incentives didn’t create as many jobs as promised or did so at an unacceptably high cost to taxpayers. “These results do not pass the cost-benefits sniff test,” Michael LaFaive, senior director of the Mackinac Center’s Morey Fiscal Policy Initiative, said in testimony before Horn’s committee. Horn dismissed such reports as “ivory tower, academic studies” that ignore the real-world, incentive-driven war among the states for jobs. “They mean nothing,” he said. Ford said it chose Kentucky and Tennessee for the largest investments in the company’s 118-year history primarily because of the availability of large, shovel-ready sites and lower electricity costs, areas where Michigan is said to be uncompetitive. Battery plants can require five times as much electricity to operate as an assembly plant, Farley said. But the automaker also could rake in nearly $1.3 billion in incentives from Kentucky and Tennessee. Those incentives include thousands of acres of free land, tens of millions of dollars in job training funds and hundreds of millions of dollars in cash.

Kentucky offered a 1,551-acre parcel for what will be known as the Blue Oval SK Battery Park, which Ford is developing with partner SK Innovation, a South Korean battery manufacturer. The Bluegrass State's incentive package totals $410 million, including a $250 million loan that Ford won’t have to repay if the automaker creates all of the 5,000 jobs it has announced. Ford also will receive $36 million for job training, including construction of a $25 million training center. Tennessee’s package totals $884 million and includes a $500 million grant to Ford and SK Innovation for their plants on a 3,600-acre site at the sixsquare-mile Memphis Regional Megasite industrial park, and construction of a career and technical school to train new Ford and SK Innovation workers. Those hefty incentives have Michigan policymakers scrambling to rebuild the state’s business attraction programs, which were largely abandoned in favor of $1.8 billion in business tax cuts engineered in 2011 by former Republican Gov. Rick Snyder. Horn has introduced legislation largely modeled on the former Good Jobs for Michigan program that allowed six companies to capture employees’ payroll taxes in exchange for investments that create good-paying jobs. His Michigan Employment Opportunity Program would largely mimic Good Jobs for Michigan. The major difference is that it creates three population tiers, allowing investments in counties with less than 90,000 people that create as few as 50 jobs. The program would be capped at $300 million of payroll tax capture and sunset at the end of 2026.

Good Jobs for Michigan, launched in 2017 over concerns by local economic developers that Michigan couldn’t compete effectively with other states for jobs, sunset in 2019 and was not renewed by the Legislature. Gov. Gretchen Whitmer, who said Michigan wasn’t given “a real opportunity” to compete for Ford’s Kentucky and Tennessee investments, recently asked legislative leaders to work with her in developing new incentives. Her $2.1 billion MI New Economy Initiative, for example, would create a $100 million fund to create large, shovel-ready building sites, which economic developers say Michigan lacks.

Whipsaw strategy The state’s economic development strategy has been whipsawed over the past three decades by competing political philosophies. Engler came into office in 1990 convinced that a sunny business climate of low taxes and a light regulatory hand would attract business investment to Michigan like Wolverine fans to the Big House on a football Saturday. The former governor eliminated the state Commerce Department, the toolbox where most state economic development programs were kept. But the loss of GM’s Willow Run plant prompted Engler to recreate an economic development structure in his own image. One of his most important initiatives was the Michigan Economic Growth Authority, which offered refundable business tax credits to a small number of companies creating new jobs. Democratic Gov. Jennifer Gran-

| JEFF KOWALSKY/SPECIAL TO CRAIN’S

McMorrow

holm, with bipartisan support from the Legislature, lifted the cap, ballooning the MEGA program into a $10.2 billion incentive program. It also allowed companies, mostly Detroit’s automakers, to get credits for just retaining jobs in the state at a time when the automakers were in a financial free-fall during the Great Recession. “We were scared to death” of losing the auto industry, Horn said. There are still $5 billion of approved MEGA credits to companies that could be issued by 2032, according to an MEDC report. Snyder ended MEGA in 2011 as part of his business tax restructuring plan. He replaced multiyear tax credits with an incentive program called the Michigan Business Development Program that offered businesses upfront cash grants for creating new jobs. That incentive responded to a desire by businesses for a more rapid payoff from investment decisions with tax credits spread over multiple years — or decades in the case of GM, Ford and Stellantis (formerly Fiat Chrysler Automobiles). Michigan is budgeted to spend $100 million on business attraction and community revitalization projects in the current fiscal year. Local economic developers have long complained that’s not enough. Under pressure from those developers and local business leaders, Snyder in 2017 signed into law the Good Jobs for Michigan program, rewarding companies the income taxes generated by new jobs that pay above the regional average wage. Six companies agreed to invest a total of $6.1 billion in Michigan, committing to create 11,000 jobs in exchange for capturing $194 million in employee payroll taxes over five years. So far, those companies, including automakers Ford and Stellantis and pharmaceutical giant Pfizer, have added about 2,800 jobs as of Sept. 30, 2020, according to the latest MEDC report.

But considerably more jobs have been created since then. Stellantis, for example, says it has hired 5,700 workers for its Detroit Assembly Complex, which includes its new Mack Avenue assembly plant that started production in July. Some of the building projects, including a second headquarters in Ann Arbor by California-based KLA Corp., are still under construction. KLA claims to be the market leader in measurement and inspection of semiconductors. KLA has already hired 330 workers, all currently working remotely, and anticipates hiring as many as 600 people, said John McLaughlin, KLA’s Ann Arbor site leader. All of them will either work from the new headquarters or within commuting distance in Michigan when it opens by year’s end. McLaughlin said the company considered 350 locations before choosing Ann Arbor. Its criteria included a highly educated workforce, good quality of life, reasonable housing costs and easy access to an international airport. Ann Arbor scored high partly because of its proximity to Detroit Metro Airport. But McLaughlin said the state’s offer of $16.1 million in captured payroll taxes was “very critical” in KLA’s decision to come to Ann Arbor. The incentive overcame the need to build a new headquarters when the company could have moved into existing space in other cities. “Other locations were highly competitive,” McLaughlin said. “Without the incentive, it would have been very difficult for KLA to come here.”

‘We don’t have any tools’ State Sen. Mallory McMorrow, D-Royal Oak, said she’s not opposed to offering economic development incentives, but that state policymakers need to have “a very honest conversation” about what Michigan needs to do to become more competitive. McMorrow said the state must take a more “holistic” view that includes assessing the state’s talent resources, reliable energy from utilities and attractiveness of its communities as places to work and play. McMorrow and others say the state is falling short on those measures. “All of that is to say is that I hope we are not trying to incentivize our way out of those issues,” said McMorrow, who also sits on the Senate Economic and Small Business Committee. Offering incentives should only be “the last push to get us over the hump,” she said. Like McMorrow, Horn said Ford’s jarring announcement of its massive investments in Kentucky and Tennessee was “a blessing for us to talk honestly” about how Michigan can protect and grow its automotive assets. But Horn said incentives must be a key element of Michigan’s economic development strategy. Horn said he fears that Michigan plants producing internal combustion vehicles and parts will close, and the workers will relocate to new jobs in places like Kentucky and Tennessee unless Michigan becomes more aggressive in offering incentives again. Those states “know what we have and know we don’t have any tools to keep it,” Horn said. Rick Haglund is a freelance writer who spent nearly 25 years covering Michigan business and the economy for Booth Newspapers.

14 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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COMMENTARY

Incentives level the playing field for Detroit F

forming as they compete or too many years, for new investment, often blighted and vacant with communities that ofbuildings like the fer enormous cost advanformer Cadillac Stamping tages. It’s simple math: Plant and Michigan CenDespite what looks like a tral Station sat as remindcity with endless fields of ers to the world of what opportunity, every square Detroit once was, and mile of Detroit comes with what it had become. legacy issues. Thanks to tools that enBefore Detroit can able economic develop- Kevin Johnson is court developers and inment, those facilities — president and CEO vestors, we must first unand others like them — are of the Detroit lock the land. This is a seeing new life and pro- Economic Growth hugely expensive and viding new opportunities Corp. time-consuming process for Detroit residents. that can include securing Even as our city continues to feel the impact of the COVID-19 property from private owners, assesspandemic, Detroit is seeing new ing its condition and preparing it for growth. Of the more than 50 projects productive use. The $2.8 billion Stelannounced in 2019 and 2020, only a lantis investment in two east-side auto assembly plants is a great example of handful have been placed on hold. The others are moving forward, un- that process. By comparison, greenfield sites like der construction or near completion. In fact, 12 new development projects farmland are essentially shovel-ready. have been announced since March They don’t require the removal of con2020, totaling an additional $170 mil- taminated soil, demolition or infrastructure improvements. When you lion. These numbers prove that our de- add environmental remediation and velopment strategy is sound. They’re blight removal to the rising cost of conalso proof that incentives work and are struction, taxes and other structural critical to the continued growth of our expenses, Detroit is often at a competitive disadvantage compared to other economy. Rustbelt cities like Detroit are trans- sites. Without new investment, the

Detroit landed a new Lear Corp. plant at the site of the former Cadillac Stamping Plant with more than $22 million in tax breaks and a $1 million environmental cleanup grant from the Michigan Department of Environment, Great Lakes and Energy. | CITY OF DETROIT

city’s economic engine grinds to a halt. Incentives are a way to level the playing field and enable Detroit to be economically viable. Unfortunately, this tool is often misunderstood and vilified as a corporate handout. It’s an emotionally easy argument to make: Why do billionaire developers and Fortunate 500 companies deserve millions of dollars in incentives that cost our citizens and take from our schools? First, the argument is a misconception. There are no property-tax incentives that pay developers upfront to start a project in Detroit. Incentives help developers recoup costs associated with obsolescence and environmental cleanup once a project is completed. Second, every project that receives an incentive must have a positive cost

benefit to the city and its residents. Third, no school funding is ever diverted to developers. In the case of a tax abatement that impacts future school funding, the gap is closed by the Michigan Strategic Fund. Research conducted by the Pew Charitable Trusts indicates that targeted incentive programs tailored to address specific local needs are most effective. This includes tax incentives that alleviate concentrated economic distress, such as unemployment and poverty. The DEGC team is addressing these issues by utilizing Enterprise Zones, Community Development Block Grants, Opportunity Zones, Tax Increment Financing (TIF) and other similar tools. In economic development, DEGC operates on two absolutes:

Only projects that absolutely require an incentive to close the deal receive an incentive. In any development deal, Detroit always comes out on top. Incentivized projects must create revenue, drive neighborhood investment, provide jobs and bring other benefits that exceed the value of the incentive granted. DEGC is working closely with the city, state and region to make Detroit competitive, thereby increasing our consideration for new investment. We are committed to removing hurdles that prevent new development and creating a business-friendly environment. As such, incentives will continue to be a powerful tool to help make Detroit an economically viable choice for inclusive opportunity.

COMMENTARY

Stop rehashing 'Blue Oval City,' focus on keeping auto knowledge

to expand into 21st centuet’s be honest, a mary growth sectors by injor announcement vesting in Michiganders’ of growth and indigital proficiencies and vestment for a hometown high-tech knowledge and team like Ford Motor Co. skills. is good for Michigan. Investing in talent, inBut let’s also be real. An novation, research, and $11.4 billion investment design will allow Michiand creation of 11,000 gan to secure the jobs that new jobs in Tennessee are the future and expand and Kentucky hurts, and it Glenn Stevens is our ability to be leaders in should be a whole lot executive director of a variety of sectors. more than a “wake-up” MICHauto and vice Political partisanship call. president of mobility needs to end, and the inWe have already had a initiatives for the couple of those — think Detroit Regional vestment in attraction Amazon HQ and Rivian. tools and talent must beChamber. Ford’s announcement gin. Period. should spur our policy, Based on both metrics business, and legislative leaders to de- and what businesses report, competvelop a future-focused, data-driven ing for jobs in the Industry 4.0 factory strategy that will build on our assets, of the future and the connected and address our deficits and increase electrified world of mobility requires a workforce well-versed in cutting-edge Michigan’s competitiveness. You either have the tools and talent digital skills. Developing and attracting talent to compete, or you don’t. A long, steady decline of a signature industry will also allow Michigan to compete in the growth sectors of AI, fintech, UX is not an option. Shoring up our “tool kit” for busi- design, data management and inforness retention and attraction requires mation security. It is not productive to rehash why Michigan to build on our heritage of advanced manufacturing to secure Michigan wasn’t considered for “Blue our global leadership in next-genera- Oval City” in Tennessee. There are myriad factors, and it is more importtion mobility products. However, we absolutely must lever- ant to analyze how we can position our age our leadership in manufacturing state to compete for future investment

more effectively. Andy Grove, one of the founders of Intel, once said, “Don’t argue with the emotions, argue with the data. Measurement against a standard makes you think through why the results were what they were.” So, what does the data tell us? Do we need better infrastructure, talent, training, site readiness, competitive incentives or aggressive marketing? We may need all of these, but some are a higher priority than others in the long run. When I walked in downtown Nashville in 1990, Tennessee was not the standard for economic development. It certainly is one now. But so are Minneapolis, Idaho Falls and Huntsville. Why? Because these communities and states offer a lifestyle, community and incubator for the knowledge economy. These communities are growing because they have a political and business leadership that embraces a strategic commitment to economic development by consistently investing in all forms of infrastructure and education. They set the standard for developing and attracting talent and that will always be a winning differentiator. In Tennessee, they now have almost a quarter-century of consistent business-driven leadership, commitment

Bill Ford, chairman of Ford Motor Co., announces a new mega campus, called Blue Oval City. | BLOOMBERG

to education and a relentless focus on business and talent by the Tennessee Department of Economic and Community Development. Earlier this year, Oracle decided to invest $1.2 billion in a 65-acre technology campus on the riverfront in Nashville. This win represents 8,500 jobs in the software industry with an average salary of $110,000. That project will also support 12,000 indirect jobs and 21,000 construction jobs. The average salary for an assembly line employee at Ford Louisville Truck is $62,868. A good living. I still would have liked to have won a Ford battery plant. We need those

jobs. But without question, I would like to win a new Oracle campus, have the corporate centers of Minneapolis, a downtown area plan like Denver or a growing remote workforce embracing Pure Michigan. The fact is that Michigan needs both types of investments that lead to a diversity of jobs. There is simply no reason that Detroit, Grand Rapids, Traverse City or Marquette cannot be the standard for great places to live, work and play in the advanced industry and knowledge economies. We must give businesses more to like about our state.

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COMMENTARY

Go big or go home on site preparation

L n I

tion and autonomous vehicles. We are currently one of just nine states that does not have this tool. Considering that we have the talent to fill these jobs, we need to keep the talent, and R&D investment, here. Michigan shaped how the world moved once before and is uniquely positioned to lead this mobility revolution. But we need policy that reflects that potential and legacy. For Michigan’s policymakers, it should be simple. Do we want to lead the mobility, electrification and Industry 4.0 revolutions underway? Or settle for a much smaller role in the global economy? This is ours to lose.

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GETTY IMAGES

ord Motor Co.’s anInvest in mega nouncement of sites new battery plants in Kentucky and TennesShovel-ready sites are see made it clear that our an incentive for a busistate lags behind in two ness to locate in our comcritical areas when it munities. comes to site selection: No company has the available “shovel-ready” time to negotiate with 20 industrial sites and tax different property ownincentives. Maureen Donohue ers for parcels that have For Michigan, the job Krauss is president multiple types of zoning ahead is overhauling our and CEO of the and environmental reeconomic development Detroit Regional mediation needs. policy in a thoughtful, Partnership, an Business moves too strategic way that moves economic fast for that, and compaat the speed of business. development nies are bypassing MichiDespite our many organization for the gan to select shovcompetitive advantages, 11-county Detroit el-ready sites in other new business invest- region. states. Assembling large conment in our state is betiguous sites takes collabing deterred by policy that does not reflect the realities of oration, time and money. As the state global business attraction and ex- and communities consider how to pansion of our world class compa- spend American Rescue Plan funds, they have an opportunity to invest in nies. For over a decade in Michigan, developing the 1,000-acre-plus meeconomic development-related pol- ga-sites we lack. This is not cheap work and will icy has eroded to the point of putting likely cost over $1 billion of state and us at a disadvantage. Unfortunately, this has occurred local matching funds over the next at a time of unprecedented invest- decade, but it will position us to win ment in electrification and autono- large projects that deliver strong remous vehicle technology — a trend turn on investment. Beyond mega-sites, there is a lack that will undeniably shape the state’s future prosperity, and the of development-ready industrial professional opportunities and sites of all sizes across the country. Companies are selecting properties quality of life we offer our residents. It is time to correct the shortcom- they can move to market quickly. The Detroit Regional Partnership’s ings laid bare by Ford’s decision. There are proven avenues policy- Verified Industrial Properties (VIP) makers can pursue that will close program evaluates sites, saving comMichigan’s competitive gaps and panies time and providing the inforensure we continue to lead the mation needed to assess if a property world in automotive and mobility. in the Detroit Region is viable.

The VIP process also helps communities understand how far their sites are from shovel-ready status. The goal is to have 200-plus properties in VIP for national and international prospects to consider — but we need more communities to submit properties and more funding to ramp up site evaluation.

Reimaging incentives It’s no secret that tax incentives are not the most important site-selection factor, but they are an effective tool that helps communities close deals. The Michigan Employment Opportunity Program, introduced by

state Sen. Ken Horn, is a step in the right direction. It allows businesses to capture income taxes on new jobs they create. That is money the state would not collect unless a company decides to locate here and delivers good jobs that pay the regional average wage or higher. The legislation also has lower job requirement thresholds based on population which allows smaller rural communities to use the incentives like larger urban communities. Michigan also is falling behind is the lack of a tax credit for research and development, which is unfathomable given the race for electrifica-

COMMENTARY

Just say no to more corporate welfare B y now, you’ve heard the news that Michigan lost out to Kentucky and Tennessee on an $11.4 billion investment from Ford Motor Co. to build new electric vehicle facilities. To say the decision stung is an understatement. Ford is part of Michigan’s DNA and to see a significant future investment go elsewhere hurts. Unsurprisingly, as soon as the news broke, leaders across the state rushed to share why they thought Michigan had lost out, and furthermore, what they thought the state could do to set the stage for a better result the next time around. We had hoped to hear proposals for real improvements that would enhance the attractiveness of the

Dick DeVos (left) is chairman of the Grand Rapids private equity firm The Windquest Group and a former CEO of Amway. He was the 2006 Republican nominee for governor of Michigan. Matthew Haworth is chairman of Haworth Inc., a Holland-based, family-owned furniture manufacturer.

business climate for all. We had hoped the state would end its fascination with giving tax dollars away to a handful of big businesses through one-off, sweetheart deals they like to call “business incentives” and instead use those very tax dollars to help improve student achievement, fix the roads or other shared priorities. Instead, we mostly saw the repackaging of failed corporate welfare packages of the past that promised to boost investment and jobs but only seem to ever pay off for politicians and special interests. We’re here to say no more! Michigan currently falls outside the top quarter of states in terms of the attractiveness of its business climate, according to research from

Site Selection Magazine. Guess where Kentucky and Tennessee rank? If you said, “better,” you’re right. If you said, “in the top 10,” you nailed it. And thus, the secret to attracting businesses is really no secret at all — make the business climate better and they will come (or stay). Corporate welfare is certainly not the answer, and we encourage those in government to resist the urge of advancing any legislation that results in nothing but squandered resources. Business incentives don’t work, and worse, they take taxpayer dollars away from the programs that do work. The research backs it up. According to Timothy Bartik from the Upjohn Institute for Employ-

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COMMENTARY

nine ool. lent the e. orld uely evore-

s, it lead In? Or the

ority firm w faex-

pansion decision, even if no incentive had been provided.” In other words, as Bartik states, “at least 75 percent of the time, in-

centives are all costs, with no job creation benefits.” The promised job numbers rarely pan out, either. According to a Mackinac Center for Public Policy analysis of one such program called, of all things, MEGA tax credits, only 2.3 percent of projects approved for handouts actually met or exceeded their job total expectations. As James Hohman of the Mackinac Center said, “these job projections benefited only a few people — mostly politicians running for re-election.” This issue isn’t a left-right political tug-of-war either. Many on both sides have fallen victim to the allure of corporate welfare, but thankfully there is a growing swell of leaders who are voicing opposition as well. We hope more will join our fight. So what are the answers to a

better, more competitive tomorrow for our state? The same Site Selection poll that highlighted best business climates gave legislators a good place to start. Their top criteria include efforts to boost workforce skills and development, transportation infrastructure, ease of permitting and regulatory procedures, and state and local taxes. In other words, invest in people and foundational infrastructure, and cut excessive red tape. We encourage elected officials to roll up their sleeves and focus here. Business incentive programs deny our state the opportunity to make needed investments, are unfair for Michigan citizens and uncompetitive for employers who have grown and are growing here in Michigan. We can and must do better.

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tion and small-busi- adapt, compete and meet the chalt’s been a few weeks lenges of the coming decade. ness development. since Ford Motor Co. If we don’t strategically invest in These investments announced it would will help our workers our future, Michigan will continue invest billions in new succeed, businesses to fall further behind other states. electric vehicle and batexcel and communi- We have a pretty good understandtery plants in Kentucky ing of how our competitors are winties grow. and Tennessee, creating We have to better ning jobs. If we do nothing, states 11,000 new jobs. support career and like Ohio, Texas, Kentucky, and TenMichiganders take technical education; nessee will only move further ahead. pride in being at the cenMany are investing ARP funds in drive competenter of the auto industry, Jeff Donofrio is so it’s natural that we president and CEO of cy-based education, employment programs, talent decertificate and four- velopment, educational funding ask: Why wasn’t Michi- Business Leaders for year degree comple- boosts, and attracting new residents. gan in the running for Michigan. Indiana is investing $500 million tions; provide affordone of the biggest autoable housing; and into regional economic developmotive investments in consistently invest in ment grants, site development, ingenerations? If all we do is assign blame, the entrepreneurship and business at- novation and other transformationsame story will play out over and traction/retention in order to lower al uses. North Carolina is using $300 milpoverty rates and drive higher mediover again. lion to build its educator pipeline, While we need to understand our an household incomes. Unlike other times in our history, expand early childhood education, competitive gaps, what’s most important is that we transform into a we actually have the resources now and support high-quality child care. Virginia is targeting over $150 more nimble and competitive state to jump-start and accelerate this so that Michigan competes and transformation, using American million for higher-education finanRescue Plan and budget surplus cial aid and expansion of trades prowins jobs for decades. States that continue to win on job funding. These short-term invest- grams in community colleges. We also have to overcome a numgrowth are persistent in executing ments could not only help us win on long term economic strategies more jobs, but also help build trust ber of potential disruptions to our and quick wins needed to cement economy in the next decade. The and are able to overcome mistakes. global transition to electric vehicles They’ve made smart use of fund- partnerships. This effort should include addi- alone is estimated to impact over ing, investing in community development and educational initiatives tional support of Michigan’s state 160,000 Michigan jobs, with 46,000 and local economic development employees impacted directly. over multiple years. What will happen to these 46,000 They’ve developed resilient pub- agencies, including the Michigan employees, who currently build inlic and private coalitions with com- Economic Development Corp. The MEDC needs to be nimble ternal combustion engines, if the mitment to executing on a shared vision and prioritizing investments and able to quickly rethat produce massive returns for spond to opportunities their citizens over decades which if we want to be a serious IF ALL WE DO IS ASSIGN BLAME, contender for job THE SAME STORY WILL PLAY OUT. outlast leaders and terms of office. Michigan needs to do the same. growth. Decades of well-inWe need to build a broad coalition of public servants, business, eco- tentioned attempts at oversight have next few years don’t bring EV renomic development and communi- created a tangled, overly complex search and manufacturing jobs ty leaders dedicated to delivering on set of hurdles that provide little in here? We all want Michigan to win. the way of benefit to the public. a long-term economic strategy. The question is: Are we ready to With an energetic new leader and This strategy should include investing in site development, sup- experienced staff, the MEDC should put in the work required and most of porting state and local economic be empowered with the resources all, a collective persistent focus on incentives, entrepreneurial incuba- and structure it needs to quickly Michigan’s future?

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Let MEDC be more nimble. Jobs are at stake. I

COMMENTARY

Here’s how we prevent another ‘lost decade'

tail outlets, restaurants and ichigan is reeling bars, hotels and conference from the aftermath centers will spring up? How of Ford Motor Co.’s many tier-1 and tier-2 supannouncement that Tennespliers will follow Ford to see and Kentucky won the Tennessee? And of course: battle for 11,000 manufacHow much buying power is turing jobs and an $11.4 bilgenerated with the 11,000 lion expansion. employees, billion-dollar It is all about the mobility annual payroll? future; investments in elecMost importantly, Tentric vehicle and battery pro- Sen. Ken Horn, nessee will need to rob surduction. The Ford an- R-Frankenmuth, rounding states of talented nouncement came a few represents the 32nd workers, and Michigan has short months after General Senate District in Motors Co. decided to locate Saginaw County and the most to lose. We can’t afford another Wolverine its newest ultium battery parts of Genesee State “lost decade." plant in — wait for it — Ten- County. Don’t get me wrong, nessee. though. I can’t blame Ford While it was a gut punch, it wasn’t a knockout blow to Michigan. for its expansion move. It decided against After taking this hit, it’s best to listen to Michigan because we lack sites, we lack Muhammad Ali’s advice — “You don’t attraction and energy incentives, and lose if you get knocked down, you lose if other states have invested more in developing talent. And let’s remember, it’s you stay down.” The truth is, Michigan isn’t ready for more than the auto industry at risk. Days after the Ford announcement, the true heavy weight title of AV/EV Leprino Foods, which has a food-proChampion of the World. Yet! Michigan is still the leader in mobility, cessing plant Ottawa County in West but we must take swift action to improve Michigan, chose Texas for an expanour competitiveness. Not only in the U.S. sion of 600 jobs. We lost this nearly but around the world. To avoid another $900 million investment to Texas over setback and encourage growth, we need a water treatment plant and a $4.2 mila clear, consistent, comprehensive eco- lion grant. It is time to start listening to our comnomic development strategy. Michigan has lost big before, and we munity and economic development learned from it. In the early 1990s, GM leaders as they shout for competitive was considering an investment at Willow tools. We can do this, and we can do it in Run or in Texas. Michigan Gov. John En- a bipartisan fashion. We can start by gler believed if he lowered taxes (some passing the Michigan Employment Optwenty times), original equipment man- portunity Program (Mi-OP), which I ufacturers (OEMs) like GM would invest sponsored. Mi-OP would invite busihere. But Texas Governor Ann Richards nesses around the nation and world to offered GM an incentive package worth turn their eyes our way. It has a proven record, as a spinoff of $30 million. The outcome? The Arlington plant stayed open and Willow Run Good Jobs for Michigan, which pays wages at or above the regional average. It closed, eliminating 4,000 Michigan jobs. Gov. Engler immediately teamed up doesn’t cost the state money up front, with the Legislature and established the and it requires companies to certify new Michigan Economic Growth Authority jobs before they receive any benefit. Mi(MEGA), Brownfield Tax Credits, OPRA, OP encourages transformational growth Renaissance Zones, and the Michigan in rural areas too — including the Upper Jobs Commission — which became the Peninsula. But it’s just one thread in a finely woMichigan Economic Development Corp. Michigan won the Governor’s Cup from ven quilt. We need many other economSite Selection Magazine four years in a ic investment tools. Make no mistake, help is on the way row as the best state for new investment — if we work together. Ford’s announceand job creation. Today, Michigan has post-announcement is a lost opportunity for Michigan, ment questions that need to be an- but it is also an opportunity to learn; to swered. What will Tennessee’s $400 mil- do better; and to get back up on our feet. As we set up for the fight of the centulion dollar investment yield them over the next 20-30 years? How many homes ry, and to paraphrase another Ali quote, will be built in the region around the new “If you even dream about beating MichiBlue Oval Park? How many schools, re- gan, you better wake up and apologize.” OCTOBER 25, 2021 | CRAIN’S DETROIT BUSINESS | 17

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ROOMS

From Page 3

It makes sense to buy the space for a lot of reasons, he said, including the lingering pandemic, which may keep him working from home and make going to a shared gym less desirable. “I can host private meetings there,” he said of the space. “I liken it to having an office at the front of a rural house. It’s like the urban aspect of that.” The National Association of Home Builders said it wasn’t familiar with other developers who were building out such spaces, and other Detroit developers didn’t know of condo projects that offered similar spaces. But Bondy expects it to catch on. “It’s a unique amenity,” he said. “I think it will be repeated.” There are a number of reasons for that, beyond the interest of buyers. Such rooms allow developers to sell small spaces they otherwise wouldn’t be able to make a profit off of. And they reduce the expense of adding shared amenities, like a gym or workspace, if most residents have the option to buy their own. That can also lower association dues, if there are fewer shared spaces to keep up, Sanzotta said. “There’s always some wasted space in a development,” she said. “If we can find less-optimized parts of the building and sell them for something everybody wants, it’s a win-win.” Darian Neubecker sees the benefits. Neubecker, the senior vice president of Robertson Homes, said people who don’t need a large office

space and might benefit from both having separation from their homes and being close to them while they work could be takers. “Young children can be a distraction at times, but it’s the best of both worlds if you’re not hopping in the car and driving 20 minutes,” he said. “Certainly, any time you give a resident spaces with options for uses, it’s well-received.” Neubecker said in recent years, his townhouses have had a 10-by-13 room in front of the garage that comes unfinished — buyers can use it for storage, or can finish it out as a Zoom room, or for other purposes. Now, he said, nearly everyone is fin-

ishing the space, which costs an additional $7,000. Neubecker estimates almost 200 such rooms have been built across Southeast Michigan. But it’s harder in a vertical building, like a condo development, where the walls are defined, he said. “You’re creatively using space and getting value for that,” he said. “The trend for flexibility in design is going on and accelerating now.” The appeal is also apparent to Seth Herkowitz, a partner at the builder Hunter Pasteur. The CODA rooms are a couple of hundred feet away, sometimes on another floor. Herkowitz said as people have rethought the functionality of their homes since the

PEOPLE ON THE MOVE FINANCE

LAW

TRANSPORTATION

Mid-States Advisors

Jaffe Raitt Heuer & Weiss, P.C.

RoadEx

Mid-States Advisors, a Birmingham-based middle market financial advisory firm, hires James Connor as Managing Director. Connor brings 40 years’ experience in C-level positions in corporate and advisory roles including 22 years as CEO or President of industrial and Fortune 500 companies. He will oversee and deliver a range of executive-level strategic, financial, and operational services for Mid-States’ clients including CFO services, M&A support, business valuations, and debt restructuring.

Jaffe Raitt Heuer & Weiss, P.C. welcomes Wendy Zabriskie as a partner in the firm’s finance and real estate practice groups. Wendy rejoins the firm with nearly 30 years of experience in corporate and real estate finance, development, acquisitions, sales and project management. Wendy will use her expertise to support the operations of the finance and real estate practice groups, particularly on the borrower side of high profile, complex transactions.

To place your listing, visit crainsdetroit.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

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start of the coronavirus pandemic, it makes sense that a nearby, detached space would have some allure. “It’s very progressive from a design perspective,” he said. “The concept makes sense.” Still, he wonders how much people might be willing to pay for a white box they’d have to finish themselves. In the end, Bondy decided the room was a steal at less than half the price it would have cost for a unit with a second bedroom. “It’s a guaranteed space to find focus,” he said. “At the price per square foot we’re buying at, there’s a ton of value there.” CODA developer Michael Va-

nOverbeke plans to live in the building, and he’s buying a room, too. He intends to hang bicycles there, rather than put hooks in the walls in a visible space. He’ll also use it as a gym. VanOverbeke expects more luxury buildings to offer the spaces going forward. Moddie Turay, the CEO of City Growth Partners, agrees. “I think it’s great to put these ideas to the market,” he said. “The market will tell you if it doesn’t make sense to them, or it does.” Turay likes the idea that the space can evolve fluidly — from a gym to an office to a children’s playroom. Especially after dealing with the coronavirus pandemic, he said, there are questions about how people who live in dense urban areas may interact with spaces, and room within a community but outside of one’s walls may have a particular appeal. It’s not uncommon for outside storage space or terrace areas to be built for residents, but Kevin Hirzel, the managing member of Hirzel Law PLC, said as far as he knows, the lifestyle room concept is unique. He wonders if owners might someday sell the rooms as commercial space or otherwise transfer the deed separately from the rest of the unit. Regardless of the restrictions, he thinks the units have a chance to succeed. “I think there would be strong demand,” Hirzel said. “It’s definitely a unique concept. I’ll be interested to see if it catches on.”

COMPANIES ON THE MOVE

ADVERTISING SECTION

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To place your listing, visit www.detroitbusiness.com C O M P/companymoves ANY’S dstein@crain.com or contact Debora Stein at 917.226.5470 / J OURNEY NEW OFFICE LOCATION

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For more information, contact Debora Stein at dstein@crain.com or submit directly to

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18 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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BLAKE

apples to the actual apple processing to then the juice to then the fermentation. We’re trying to own all pieces within that.

From Page 7

Then when I went and worked in Chicago for a year after college, and I came back with this kind of business plan and pitched it to my dad and uncle. ... My dad and uncle are many things, and gamblers is one of them. . ... They really liked the idea, and they kind of saw the logic in it. But we were this family company at the time, you know, and we still are ... But we’re like, OK, is alcohol going to mar that experience? You know, because we were so real, wholesome, “family.” So we had some real honest conversations about that. But ultimately, there’s no reason why those products can’t leverage and kind of expand family experiences. And you get people on dates, you know, we really try to follow the life cycle anymore — the life cycle of our customer, which we believe is everyone, kind of through their life. So Blake’s is a different thing to you when you’re zero to 12. And it’s another thing to you when you’re 12 to 18, when you’re going out on dates, or you’re having a girls night, or a guy’s night or whatever. And so we ... kind of found some real, you know, logic in that, and my dad and uncle ultimately got behind it.  So you gave them a business plan, you asked them for what I’m assuming is a lot of money. Yes, they finally agreed. It was an easy meeting. So they agreed to the initial investment upfront, which was kind of proved the concept enough to wear him down. ... I’m very persistent. ... I came home from college, I was still I was living in my dad’s basement. So every night, you couldn’t get away from me. ... I think he just said yes, at some point, because just wanted me to stop talking about it. ... And as of last week, we’re the fifth-largest cider producer in the country ... And we have our sights

 So is that a different play? I mean, if you get into sauce and slices, can you distribute to all the McDonald’s of the world? That would be your customer, supermarkets, McDonald’s, heavy specialty retail throughout the country. And, we kind of figured, we are who we are, we’re apple people, why not be the best at all aspects of apples, not just the cider and juice. And it was really out of necessity that we’re making that exploration, but, we see a huge opportunity now.

one apple state, Washington-Oregon area. That (deal) should be closed for Thanksgiving ... we’re just kind of dotting that in some I’s and crossing some T’s there, and that’ll give us access to that apple market. And then New York is the other big spot, so my dad and uncle are actually out there and with that venture we’re looking to expand our product offering within apples. We sell apples, we make cider and juice when make hard cider. But the interesting thing about juice in traditional cider making is the juice is actually a byproduct, the apples to make juice are a byproduct. It’s a secondary market from either apple slices or applesauce, and then if they don’t work for that, they get kicked over into juice. So it just makes a lot of sense to kind of get on the front leg, from

Health, the second largest pharmacy chain in the country and now an investor in Workit Health, noted that the company “is transforming how substance use and mental health care is delivered for those suffering from many forms of addiction.” The investment “further demonstrates CVS Health's commitment to make health care more affordable, accessible and simpler,” Flume said in a statement. The most recent investment was led by Insight Partners, a $30 billion venture capital and private equity firm based in New York City. To that end, ID Ventures makes for little more than a “baby investor” in Workit at this point, Patti Glaza, executive vice president and managing partner of the the VC arm of Invest Detroit, said with a laugh. Still, the fund was an early stage investor in Workit dating back to 2016 and continues to participate in its fundraising rounds, having now put in about $700,000 total, according to Glaza. Workit's founders’ ability to iterate a vision of a different kind of treatment stood out to Glaza, she said, adding that the fact that the company plays into the growing trend of telehealth is somewhat secondary. “It goes back to (how) they were disrupting an industry that was very traditional,” Glaza told Crain’s in an interview, referring to the substance abuse treatment market. “There's AA meetings and you go to treatment centers for 30 days or 60 days. There are clinics that you visit. But what they recognized was that not everyone follows the AA plan.”

A 2016 report from the U.S. Surgeon General offered a similar critique, noting that the yearly economic impact of substance abuse totaled nearly $450 billion between alcohol and drug misuse. “Despite the social and economic costs, this is a time of great opportunity,” the Surgeon General report stated. “Ongoing health care and criminal justice reform efforts, as well as advances in clinical, research, and information technologies are creating new opportunities for increased access to effective prevention and treatment services.”

To Glaza’s point, McLaughlin told Crain’s that having been spurred on by her own experiences getting sober, there is opportunity to use other methods than the typical routes well known throughout society, and that’s where Workit comes into play. “And so I think the brokenness (of recovery models) stemmed from there only being really, really rigid forms of recovery that were most prominent in the area,” McLaughlin said. “So it was kind of an all-ornothing model.” — Crain’s Senior Reporter Dustin P. Walsh contributed to this report.

Andrew Blake and Blake’s Hard Cider used their fermentation expertise to make hand sanitizer as well. | COURTESY BLAKE’S

set on number one. ... Only one (of the top five) is another family business like ours, and the other ones are all big guys ... Miller Coors, Boston Beer, InBev.  When you think about the lift the hard cider has given to your business. Is it a 20 percent increase overall? I mean, how does it compare to the rest of the traditional business? At this point, they’re about 50-50 as far as a revenue split.  But you’ve grown the whole company 100 percent. That’s correct. ... We kind of say we have two different heartbeats, you know? ... The two heartbeats share organs between the two companies to kind of create this unique experience.

WORKIT

From Page 1

“So it was really important to build this in a way where it was going to never go away,” McLaughlin said. “Like the vision was to become like Weight Watchers, just on the tip of everyone's tongue, but a steady force in everyone’s lives.” The company is certified as a B Corporation, a form of socially responsible companies described as “businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.” Workit Health focuses on treating addiction for a variety of substances and behaviors using a largely virtual format. The company offers licensed clinical support in 10 states: Michigan, Alaska, California, Florida, Minnesota, New Jersey, Ohio, Oregon, Washington and Texas, and seeks to ex-

 So you’ve got the core business, you’ve got the cider business. And you just happened to hint that your father was on his way to go look at a new acquisition. So the great thing about our product is it’s made from real apples, and we’re kind of apple folk. And you know, what we’ve essentially done in a way is we have consumed so many apples in the Michigan market, we are affecting the price and the supply chain of apples for ourselves. So we are investing in heavier plantings and partnerships here in Michigan. But we really look at it as we’re a national company, we really need to be as vertically integrated as we can with our entire supply chain. So we are just closing a deal on manufacturing facility out in Oregon. That’s the number

 What else is there in Michigan? Are there more opportunities here? You know, Michigan’s home. And when I look at our strategy, we really want to become one of the household Michigan brands. We think that we’re up there with the best of them, but I think we have work to do. So ... we’re looking at some, some entertainment and experience opportunities. Down here in Detroit, we’re looking at one up in Traverse City. And we’re looking at another, fourth agri-tainment, full-on experience actually out in the South Lyon area. So that’s kind of what we’re looking at as our Michigan footprint. And then, you know, we’re also like I said, we were, the only thing that’s been consistent about Blake’s is we’ve kind of continuously kept to our core but evolved business lines, business opportunities. And we’re currently working on rolling out a cannabis-infused beverage line with our partners at (cannabis company) Pleasantrees here in Michigan, and we feel that’s going to be a really unique opportunity. And we feel that there’s no one better in the state at making liquid than us. We have that expertise. But we think that there’s a way that we can do that that brings in the Blake’s customer but also expands our product offering.

McLaughlin

McIntosh

tients staying in more traditional forms of treatment for the first month. Additionally, the company says 41 percent of members receive treatment for longer than one year. Its virtual-focused model could be hugely in demand if the rapid uptake in telehealth is any indication. Less than 1 percent of Medicare primary doctor visits were telehealth in February 2020 but spiked to 43 percent of visits in April of last year, driven by the COVID-19 pandemic, according to the American Hospital Association. Between August 2019 and August 2020, insurance claims for telehealth services in the U.S. rose 3,552 percent, according to FAIR Health's Telehealth Re“THE VISION WAS TO BECOME LIKE gional Tracker. For Workit, McLaughWEIGHT WATCHERS.” lin said the company sees — Lisa McLaughlin, Workit Health about $4,200 in revenue from the “average” mempand to other states, with plans for a bership. With about 6,000 active members, that comes out to a little national presence by 2023. In the statement announcing the more than $25 million in annual revfunding last week, company execu- enue. About 90 percent of that comes tives touted that 84 percent of its from insurance billings, with about members stay in the Workit Health 70 percent of those billings coming program for longer than 30 days. That from either Medicare or Medicaid. Josh Flume, chief strategy and compares to what they say is an industry average of 33 percent of pa- business development officer for CVS

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PRICES

plans in Blue Cross, and each plan prices things differently. You can have 25 different charges for the same procedure,” he said. Connolly said with more than 10,000 payment codes, hospitals will have a hard time being completely transparent for all prices. “It’s not easy. You can price a gallon of gas. It doesn’t work that way for health care,” he said. Because of hospital pricing complexity, Connolly said it will take at least two years before people use hospital price lists enough to force down costs. “I don’t think there will be a flood in use right away,” he said. “Those that have high deductibles, copays and outof-pocket costs will use it more.” O’Neill said Henry Ford has plans to enable the online price estimator to link to every patient appointment, giving patients a pre-service estimate of costs.

From Page 1

patient’s going to pay,” Michalek said. “My guess it is pretty overwhelming to look at the website. It’s been equated to taking my car in to get service, and I say, ‘Hey, I am hearing a funny noise.’ You get a quote and the mechanic calls you back later and says, ‘Oh, we found three other things.’ Health care is similar to that.” Kevin O’Neill, vice president of system contracting at Henry Ford Health System in Detroit, said the five-hospital system has seen a 15 to 20 percent increase in traffic in its two-year old price transparency website. He said the health system gets about 1,400 visits per month to its website by patients to garner price estimates. “We have about 350 services available that a patient or a prospective patient can go online and get an estimate,” O’Neill said. “We’ve seen an increase over the last 12 months. That’s really where the value is. Helping a patient be more informed about what their out of pocket is going to be for a given service. You can’t get that from the chargemaster file.” Other hospital companies contacted by Crain’s about their price websites — Beaumont Health, Michigan Medicine, Trinity Health Michigan and Garden City Hospital — said they are attracting visitors to their websites to price services, but the volumes are so far Michalek minuscule compared with total patient visits. Executives said posting a minimum of 300 shoppable services, complete with cash price estimates as well as negotiated prices O’Neill by payer, was much more difficult than the Centers for Medicare and Medicaid Services projected. CMS estimated the cost of compliance to be $11,898.60 per hospital per year Udow-Phillips and would take an average of about 100 worker hours. Spokespersons for Munson and Henry Ford said compliance cost more than 10 times that. “It was very time-consuming. Michigan Medicine has close to 65,000 unique services and 475 unique payer plan codes, which we were able to group into 35 different contracted groups,” said Mary Masson, Michigan Medicine’s director of public relations, in an email response to Crain’s. Masson said the Ann Arbor-based health system has assigned six to 10 employees to the patient estimates tool. She said about 2,000 consumers per month are requesting price estimates, a small percentage of its total patients. She said it’s also unclear if patients are acting upon the price information. “At this point, we don’t know the financial impacts,” Masson said. Mark Geary, head of communications with Beaumont Health, an eight-hospital system based in Southfield, said it responds to more than 20,000 written estimates of patients’ out-of-pocket costs per month. Beau-

Will it mean higher prices? Hospitals have posted prices for procedures that vary wildly among health systems. | GETTY IMAGES

Cost of care Published hospital prices vary widely, according to a recent sampling from Turquoise Health, a San Diego-based health technology company that operates a price comparison website that uses hospitals' publicly reported pricing. Hip or knee replacement: Beaumont Hospital/Royal Oak Henry Ford Hospital/Detroit

$12,035 $17,448

St. Joseph Mercy Hospital/Pontiac

$48,911

DMC’s Harper-Hutzel Hospital/Detroit

$49,265

MRI chest scan: Garden City Hospital

$212

Multiple Henry Ford Health System hospitals

$312

Michigan Medicine/Ann Arbor DMC Sinai-Grace Hospital/Detroit

$1,300 $3,019

Colonoscopy: Any Beaumont Health hospital $493 DMC Receiving Hospital $13,071 SOURCE: TURQUOISE HEALTH

mont has been providing a rudimentary price estimate tool for some of its hospitals the past several years. “We have focused on providing the out-of-pocket cost estimates because patients have told us that is the information that they most want to know,” Geary said. But like many systems, Geary said fully complying with the price transparency regulations has been difficult because of the complexity. Moreover, next year the CMS is considering increasing noncompliance penalties and also providing additional guidance on how hospitals can make standard charges available. “We believe these changes, especially the elimination of average/aggregate price reporting, will require Beaumont to invest additional human and financial resources to comply, but will not provide pricing clarity to patients,” Geary said in an email. “Our first priority will always be providing patients with the information that they need.” O’Neill said it took Henry Ford nearly 3,000 work hours to complete the price website, much more than the 100 hours CMS had estimated. “The rules weren’t clear,” he said. “There was a lot of networking that we did both with our (electronic medical record) vendor Epic, and (talking) with other health care systems to try to figure it out.” O’Neill said the biggest challenge was publishing the prices paid by insurers, called negotiated payer rates, something hospitals had never made public before because of the competitive nature of contracting with insurers.

He said Henry Ford has made large investments the last three or four years to help patients understand and pay for health care. “A lot of that has to do with creating the digital experience for patients, giving them options to self-service their accounts, pay their bills online, communicate and pay their bills via their mobile device,” O’Neill said. Cynthia Fisher, founder and chairman of Boston-based Patient Rights Advocate, said she believes patients are starting to use the hospital pricing websites. There also are consulting firms such as Turquoise Health that are creating searchable websites to make it easier to find prices on hospitals in specific markets. “The good news is a lot of new tech firms that are coming into the space to parse through the data and start to show the price discrepancy,” Fisher said. “They’re looking to help hospitals comply, and they’re looking to help patients save.” Jim Jusko, president of Firelight Health LLC, a health care data company based in Santa Monica, Calif., said consultants can help employers reduce health care costs using the price data. He said self-funded employers have claims data on their workers but don’t know what their competitor pays the same insurer or whether they are truly getting the best deal. “Employers and their advisers can take actions to encourage employees to go to the hospitals that are charging fair prices because that’s better for the plan and leaves them more money for other health care purposes,” Jusko said.

New websites emerge

Udow-Phillips said the price lists could also be used to negotiate around improved quality or outcomes, but she believes hospitals will continue to use volume and market leverage over competitors to negotiate higher rates. But she said price transparency could backfire. “The intent is clearly to lower health care costs and to give consumers more information to be better shoppers for health care,” Udow-Phillips said. “I’m concerned that it could also be used by hospitals to leverage and negotiate for higher rates from health insurers once they see their neighbor hospitals getting paid more. And in the end that could raise health care costs.” For example, several Prime Healthcare hospitals in New Jersey asked UnitedHealthcare to increase its rates on some services because it said it was getting paid far less than many of its competitors, according to a September article in Modern Healthcare, a Crain’s sister publication. Prime operates two hospitals in Michigan, including Garden City. CEO Saju George said the hospital is fully compliant with the price rules but few patients have used its website. Prime declined to comment whether it will use competitors’ price data in Michigan to negotiate higher rates like its New Jersey hospitals. O’Neill said it is very likely hospitals use the data to compare their prices with competitors and possibly negotiate with payers. He said Henry Ford most likely will use the data it gleans from competitors and its own prices to supplement its negotiating strategy with larger payers. “In some instances, it will drive rates up, and certainly in other instances it will have the intended effect of bringing rates down,” he said. “It’s just evolving, and we will have to figure out how best to use it.” Dorstel agreed competing hospitals

Turquoise Health’s Marcus Dorstel, head of operations, said a growing number of people are using its price transparency website to search more than 3,400 hospitals nationwide. “We have several thousand visits per week. More and more folks are learning it is possible to look up prices and what it costs at different hospitals,” Dorstel said. Turquoise’s top six medical price searches by popularity are MRIs or other imaging, joint replacements, childbirth, colonoscopy and mammogram screenings and cardiac diagnostics. Still, it’s unclear if the price lists are changing where patients receive health care services. Michalek said it is hard to know if Munson has had an increase or decrease in patient volume because of the price lists. “We’ve had the highest in our hospitals and our emergency departments in our entire history this summer,” she said. “That’s due to a multitude of factors around travel patterns. We’re a tourist town, obviously, and the COVID-19 pandemic, where we’ve seen surges like we’ve never seen before.” Marianne Udow-Phillips, the former director of the Center for Healthcare Research and Transformation in Ann Arbor, was skeptical a decade ago when the price transparency regulation became a part of the Affordable Care Act. Now that it is a federal regulation, her opinion hasn’t changed that much. “I haven’t yet seen a lot of data on it, (but) I’m a skeptic that this is going to be significant for consumers,” she said. “It’s still complicated. Most consumers don’t make their decisions based on price. And it’s still pretty unclear how that price affects them.” Brian Connolly, former “HEALTH CARE IS A VERY COMPLEX CEO with Oakwood Healthcare, a four-hospital system BUSINESS. . . . YOU CAN HAVE 25 that merged with Beaumont DIFFERENT CHARGES FOR THE in 2014, said he always believed patients have a right SAME PROCEDURE. ” to complete hospital price — Brian Connolly transparency. “I didn’t want anybody to be surprised about their bills. If you will most likely use the data in contract come into my hospital, have a proce- negotiations with payers, but payers dure, you would be lot happier and sat- will use it as well. isfaction higher if you knew how much “You probably will see a market rate it cost,” Connolly said. develop for an area. It will open the But Connolly is sympathetic to the door for more competitive pricing of difficulty in offering prices for more services based on how markets work,” than 300 services with every payer. Dorstel said. “There’ll be some hospi“Health care is a very complex busi- tals on the low end and some on the ness. There are dozens of individual high end.”

20 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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WIKIMEDIA COMMONS

The former Detroit Harbor Terminal building, also known as the Boblo building, in southwest Detroit is slated to be demolished under a pending agreement between the Detroit-Wayne County Port Authority and operator of the dock site, Ambassador Port Co.

BOBLO

From Page 3

The languishing 846,000-squarefoot structure at 4461 W. Jefferson Ave. has racked up hundreds of blight tickets from the city in the last two years. As of Thursday, nearly $63,000 in fines was owed, according to Detroit public records. The port authority and Ambassador Port agree that the Boblo building should be torn down. It’s the possibility of doing it before the pending deal is finalized that concerns port authority Executive Director Mark Schrupp. He says if it’s done without proper assurances, its cost may be added to the debt the public authority already owes. “They’ve applied for building demolition (with the state) and we’ve objected to the extent that they haven’t followed the procedures required under the (Master Concession Agreement), which means to submit things to us for our approval and allow us the opportunity to object,” Schrupp said. “We believe that they’ve exceeded their powers under the MCA and we’ve told them that.”

Not happening yet Ambassador Port has started asbestos abatement work in coordination with the Michigan Department of Environment, Great Lakes and Energy the last couple of months, according to state documents. And on Oct. 14 a notification was filed with the state saying the company intends to demolish the structure using an excavator and/or other heavy equipment, with a timeline starting Monday and lasting through May. “There are a number of approvals that we need before the actual demolition of the building can happen, including that of the DWCPA,” Esther Jentzen, director of public affairs for Detroit International Bridge Co., a related Moroun-owned enterprise, said in a statement to Crain’s. “The building demolition is not imminent ... (The company is) getting all our ducks in a row so we can provide the project to DWCPA for approval prior to the demolition taking place.” Approvals would still need to be secured from the city, including getting water service and any other utilities disconnected, and a fire hydrant use permit. Plus, no

demolition permit application had been submitted as of Thursday to Detroit’s Buildings, Safety Engineering and Environmental Department, a city spokeswoman said. That could be secured down the line as it’s not required for any pre-demolition activities, according to the Detroit City Code. Ambassador Port’s demolition contractor is Adamo Group Inc. and its abatement contractor is Environmental Specialty Services Inc., both based in Detroit, according to state documents. “I drive by the property periodically, so I saw that there was some activity myself and inquired about it, and that’s when we found out they’d actually taken steps,” Schrupp said. The port authority underlined its problem in the Monday letter to the Moroun-led companies that operate under the port agreement and also own the nearly Ambassador Bridge. “It has been brought to our client’s attention that (Ambassador Port) has taken and/or is in the process of taking steps to demolish the Boblo building. My client (the port authority) believes that the demolition of the Boblo building would be a positive change at the property,”

Lewis & Munday partner Aretha Glover-Bohannon wrote in the letter. “However, (Ambassador Port’s) actions must adhere to the terms of the MCA. This letter shall serve as our written notice of objection to the demolition or pre-demolition work related to the Boblo building ...” If the demolition of the building is considered an “improvement” to the site, the cost could be added to debt the port authority owes, Schrupp said. That is, unless it’s done after the approval of the MCA-breaking deal, since the pending deal includes agreed-upon financial terms for the tear-down. The port authority’s attorney says in the letter that Ambassador Port needs to stop all demolition and pre-demolition activities if it won’t agree to not add the cost of the demolition to the authority’s debt. The letter said it followed previous objections from Schrupp in meetings and emails to any work being done without submitting a plan and requesting the authority’s green light for the work under its master plan as required. Ambassador Port, in its statement, agreed it needs the authority’s approval before it knocks down the nearly century-old storage building. The public should be kept in the

MALLS

From Page 3

Eastland Center is expected to be torn down in the coming months to make way for new industrial and warehouse space, while demolition has begun on the vacant Northland Center as the new ownership group, Bloomfield Hills-based Contour Cos., plans a massive multifamily mixed-use development on the site. The Partridge Creek receivership appointment puts a sort of punctuation mark on the open-air shopping mall’s decline the last few years, marked by the COVID-19 pandemic, a shift away from brick-and-mortar retail to online shopping and the loss of anchor department store tenants like Nordstrom and Carson’s and other businesses.

Fairlane Town Center and two other malls in Virginia and Texas made up a three-mall portfolio owned by Miami Beach, Fla.-based Starwood Capital Group that defaulted on a $161 million CMBS loan, on which it owes $127.2 million. | COSTAR GROUP INC.

The possibility of a receiver, which has the power to sell the property and assume control of its finances and management, at Partridge Creek has been known since March. However, this is the first time it’s been revealed that one has been

appointed, although the identity of the receiver is not known. The appointment comes 18 months or more after Fairlane Town Center came under the control of Dallas-based receiver Chris Neilson and his Dallas-based firm Trigild.

loop as to how this demolition is going to happen and when, said Michigan Sen. Stephanie Chang, D-Detroit. “It does seem like (the asbestos and pre-demolition work) is kind of a major thing that maybe the public should have been notified about,” Chang said. “This is a pretty important site along the river and making sure our waterways are protected is really important.”

Pending deal To finalize the deal to end the MCA, City Council needs to vote to agree to waive the city’s reversionary interest in the property — or, the interest it would have when the property is reverted to its previous state once an agreement ends. If that happens, the authority’s concerns about the demolition would be assuaged. The plan would break the port authority out of the growth-constricting “constraints” posed by the MCA, the agency said in a March news release, allowing it freedom to carry out development projects of its own. Ambassador Port President Dan Stamper in March called the deal to break off the MCA a “win-win.” Contact: afrank@crain.com; (313) 446-0416; @annalise_frank lion, compared with $345.2 million when Starwood paid what was then Taubman Centers Inc. (now Taubman Co. LLC) $1.4 billion for them, Trepp data this summer showed. Partridge Creek also fell into default on a $725 million CMBS debt, which is secured by it and three other malls. It owes $681 million. In June, Crain’s reported that those four malls have a combined value of just $210.6 million, compared with $1.074 billion when they were bought seven years ago. An email was sent Thursday morning to a spokesperson for Starwood Capital Partners seeking comment and additional details on the receivership. Trigild also did not respond to an email seeking comment. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

OCTOBER 25, 2021 | CRAIN’S DETROIT BUSINESS | 21

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THE CONVERSATION

Tiffany Brown wants to tear down barriers to careers in architecture NATIONAL ORGANIZATION OF MINORITY ARCHITECTS: Tiffany Brown, executive director of Washington, D.C.-based NOMA effective in January, loved art and writing as a young student but was not exposed to architecture until her senior year at Northwestern High School in Detroit. Brown, who has three degrees from Lawrence Technological University in Southfield — a bachelor’s degree, master’s and MBA — these days wants kids in Detroit and other cities to have better opportunities to make a career of architecture, an industry that is overwhelmingly white and male. After college, Brown spent 11 years at Detroit-based Hamilton Anderson Associates, where from 2003-14 she worked on the redevelopment of the former Herman Gardens public housing projects site where she grew up into the Gardenview Estates. After that, she joined SmithGroup in 2016 and worked there for four years. “I kind of went through a series of phases where I realized my energy was most effective doing this type of work that NOMA is doing,” Brown said. “Just to see that people like me can be successful in this profession, I think it’s important.” | BY KIRK PINHO  What are your goals for NOMA? We’ve grown in membership and I feel like it’s just about doubled since I started this role. There are a few things. I think just redesigning a system that was pretty much designed to exclude, and that was my experience growing up in the city. That’s how the built environment really shaped the world for me, was the exclusion that I experienced, so I think it’s important for me to partner with the other organizations that lead our profession, that shape our profession, and make sure there’s access to students to learn about what architects do, that there are projects available for minorities, and in our industry, redesigning a system that was designed to oppress.  Can you extrapolate a bit on the exclusion component that you talk about? Exclusion is not having access to the things that would help me be exposed to something like architecture, not having the resources, or there would be a financial barrier, or (not having) the mentorship that I needed. To some people, it could be growing up in environments that did not nurture their love for (architecture). Our exclusion could be seen as attending a college or university and going onto that campus and never having seen what a design studio looks like. The process that it takes to becoming an architect feels like a filter, and whether it means you don’t have professors who look like you, or you don’t have the same type of classes in high school that you would need to be successful in college, those are the types of things that I experienced. Those are the types of paths that I hope to clear so that students coming behind me won’t have that happen, and won’t experience that because it could deter someone who’s really meant for architecture and design from studying it.  Last year, in the middle of the protests over George Floyd’s mur-

Tiffany Brown, executive director, National Organization of Minority Architects

der, you wrote that the U.S. needs to “commit to rebuilding equitable structures at all levels.” I imagine that translates to architecture and design, as well? Equitable structures could mean what we’re learning about in schools. Equitable structures could mean the design of spaces in those schools. Equitable structures could mean the process that it takes to become an architect. Let’s say an attorney has to pass the bar, but we have about seven bars to pass. These are extremely difficult exams and are extremely expensive, and so are the study resources for those things. If

I’m not able to afford those things, we pass. Let’s say an attorney has to pass the bar; we have about seven bars to pass. Even if I get there after being able to afford studying architecture in the first place, how is that equitable? The process to become an architect is something that needs to be understood by the person who’s thinking of even starting. That structure — not having a mentor, not having some access to the resources that you need to pass these exams. Even down to how we are paying: Are we paid equally? Are we promoted in the same manner as our peers? We’re actually not.

 What is 400 Forward, your nonprofit? 400 Forward is a nonprofit that I started in light of the 400th African American woman becoming licensed (as an architect). It’s an initiative where I try to seek out and support the next 400 women designers who want to become architects and designers. It’s a mentorship program. It won a Knight Foundation matching grant for the launch. It’s something that I’m able to partner with NOMA on all the time. But it’s an initiative where I’m able to mentor high school girls, provide financial support to those who are studying for these licensure exams and then also give scholarships to college students.  What can be expected with the NOMA exhibit and conference and other things that are planned? So, NOMA was started in Detroit after an AIA (American Institute of Architects) convention that was being held here. So every 10 years, we usually bring conferences back to like where it all started, so that’s what we’re calling this anniversary conference, a homecoming, especially being the 50-year mark (of NOMA’s founding). So on Oct. 21, we’re kicking things off with the Say it Loud exhibition, where people can come and learn about NOMA’s history, NOMA’s leadership. It’s open to the public. We have some keynote speakers, a panel discussion taking place, there’s a reception. It will be held at the Detroit Historical Museum, and we would love for people in Detroit to come and learn about what NOMA is. Most of the conference-related activity is going to be happening virtually, but we are celebrating with some signature events, like red carpet events here in person. We have the Say it Loud event kicking things off, and then at the Renaissance Marriott, and then at the Garden Theater, just bringing people back to the city, people who haven’t been here since 2012. Lots of things have changed. We’re always happy to showcase our city.

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RUMBLINGS

Tech exec donates $25M for UM computer science building A GIFT FROM A METRO DETROIT tech executive will result in a new computer science building for the University of Michigan. The $25 million gift from the Leinweber Foundation, founded by software executive Larry Leinweber, will fund a 163,000-square-foot building on the university’s North Campus, which the UM board of regents voted on Thursday to name the Leinweber Computer Science

and Information Building, according to a news release. Leinweber founded and was the CEO of New World Systems Corp., a Troy enterprise Leinweber software company for municipal governments.

Leinweber sold the company to a Texas software business in 2015 for $670 million, Crain’s reported. The UM gift aims to bring the Computer Science and Engineering Division of Michigan Engineering and the School of Information together under one roof in a new $145 million building for the first time, according to the release. A timeline for the planned building was not disclosed as part of the

announcement. The building still requires the approval of the university’s board, which is scheduled to meet Dec. 9 to discuss the proposal, according to a spokesperson for the university. Leinweber and his wife, Claudia Babiarz, have supported other UM buildings in the past, including with an $8 million gift in 2017 for a new physics center, as Crain’s reported.

Chairman Keith E. Crain Vice Chairman Mary Kay Crain CEO KC Crain Senior Executive Vice President Chris Crain Secretary Lexie Crain Armstrong Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except no issues on 1/4/21, 7/5/21 nor 12/27/21, combined issues on 5/24/21 and 5/31/21, 11/15/21 and 11/22/21, by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Contents copyright 2021 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.

22 | CRAIN’S DETROIT BUSINESS | OCTOBER 25, 2021

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