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Sister Pie aims to build on Beard Award nod Page 3

Meet Detroit Medical Informatics CEO Haas Saad Page 3

APRIL 15 - 21, 2019 | crainsdetroit.com

REAL ESTATE

As sale proceeds, tech park may be in the offing By Kirk Pinho |

kpinho@crain.com

The Palace of Auburn Hills property could be turned into a smaller version of the Oakland Technology Park. That development and others helped cement Auburn Hills’ reputation as a hub of new North American corporate headquarters and research operations attraction over the past decade. The Palace land, poised to be sold, seems likely to add to that strength. Last week, Crain’s first reported that Livonia-based real estate development company Schostak Bros. & Co. was under contract to purchase the more than 100 acres on which the 22,076-seat former home of the Detroit Pistons sits from Palace Sports & Entertainment. The arena, which held its last Pistons game on April 10, 2017, is expected to be demolished to make way for new tech and office buildings, according to real estate sources familiar with the plans. While Schostak executives did not return messages seeking comment last week, the property has long been expected to be converted to a new use once the Pistons made it clear that they were moving the team and its employees to downtown Detroit in Little Caesars Arena, which opened in September 2017, and the new Henry Ford Detroit Pistons Performance Center, which is under construction on Amsterdam Street in Detroit’s TechTown neighborhood and is expected to open this summer. SEE PALACE, PAGE 21

TECH PALACES AHEAD? The site of The Palace of Auburn Hills could be home to a million square feet of new corporate space. LARRY PEPLIN FOR CRAIN’S

WORKFORCE

MANUFACTURING

Paid leave, other supports gain currency for employers

Pressure mounts, losses pile up for Horizon Global

By Natalie Burg

By Dustin Walsh

Benefits broaden for new parents Special to Crain’s Detroit Business

Need to know

Paid leave is great for new moms and dads, but it’s not the only way Detroitarea companies support new families 

As Steve Edwards and his wife approached the arrival of their second child, one of the biggest challenges was, well, their first one. “We had a rambunctious 18-month-old running around needing a lot of attention,” said Edwards, a senior manager of corporate security for Ann Arbor-based Duo Security, which is now a business unit of Cisco. “My wife was having trouble keeping up and couldn’t lift him, so my boss

said, ‘Why don’t you work from home until the baby shows up?’

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“It was really great that he was that invested in the success of my family,” Edwards said. That gesture was on top of Edwards’ paid parental leave and many other ways Duo Security helped support his young family. After returning to work, he was able to leave the office to help his wife get to appointments, and she, though not a Duo employee, frequently stopped in to use the company’s nursing rooms when she was out with the kids. SEE FAMILY, PAGE 20

dwalsh@crain.com

The story of Troy-based Horizon Global Corp. is one about ambition and tragedy. The towing and trailer equipment manufacturer spun out of TriMas in 2015 with a quest to expand globally, and quickly. But the death of an executive’s child and an overextended acquisition strategy in Europe, crippled the company’s operations and changed the company’s priorities from success to survival.

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Despite recent restructuring efforts, Horizon Global is being fined by its customers for late deliveries, has lost hundreds of millions of dollars, faced delisting by the New York Stock Exchange and replaced much of its board earlier this month to secure financing to keep shipping parts. With pressure mounting from investors, it’s likely the company is performing a last-ditch effort to clean up its books in preparation for a sale, experts told Crain’s. SEE HORIZON, PAGE 19 // A P R I L 1 5 , 2 0 1 9 CRAIN’S DETROIT BUSINESS

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WOMEN IN LEADERSHIP

WOMEN IN LEADERSHIP, Page 10

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FINDING HER FIT IN NONPROFITS Judson Center’s Lenora Hardy-Foster on treating mind and body

Judson Center CEO and President Lenora Hardy-Foster at the center’s headquarters in Royal Oak. ERIN KIRKLAND FOR CRAIN’S

t provides autism, behavcare and adoption services in 1924. The nonprofi services for adults and recently expanded into in corporate ioral health and disability opened a 3,000-squareenora Hardy-Foster planned to work as an accountant primary health care. This February, Judson Center Health America after completing her MBA. clinic in Warren called The Judson Center Family the next three de- foot primary care almost $700,000 in fundraising Instead, she got a job at a nonprofit. She spent Clinic. Hardy-Foster was instrumental in cades there. a $500,000 grant from the Michigan Health that’s helping ing for the clinic, including including “I realized my calling was to be a part of an organization Fund. Hardy-Foster serves on many local boards, Endowment others improve their quality of life,” Foster said. for Children and Families, where she serves as a nonprofit that pro- the Michigan Federation She is now the president and CEO of Judson Center, earned her a lifetime achievement award locations across five coun- treasurer. Her accomplishments vides services to children and families in nine of Detroit Mercy, her alma mater. began providing foster this year from the University ties. Judson Center, which is based in Royal Oak, Judson Center opened a primary

By Rachelle Damico | Special to

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The Hardy-Foster File

Crain's Detroit Business

Your goal was to work for corporate America. Why did you stay in the a?

was doing good and improving the lives of children and families. I knew working in the nonprofit industry

recruiting and retaining competent staff. A lot of it has to do with having the right compensations, salaries n

clinic?

When I interviewed for my position, I shared with the interviewing com-


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MICHIGAN BRIEFS

INSIDE

From staff and wire reports. Find the full stories at crainsdetroit.com

Benson outlines plan to improve Secretary of State offices

CALENDAR

Report: Michigan adds 4,800 clean energy jobs

Michigan Secretary of State Jocelyn Benson said she will unveil changes designed to shorten wait times and fix broken self-service kiosks at branch offices where people renew driver’s licenses and conduct other business, the Associated Press reported. Benson, who took office in January, has visited all 131 branch offices. She released her findings Thursday, her 100th day on the job. One-third of self-service stations were broken and in general were difficult to use, the Democrat said. Many customers have to wait in line far too long to access basic state services, she said. The changes fall broadly into two categories: modernizing interaction with Michigan residents and improving operations in branch offices. Among Benson’s plans are exploring multiyear license plates, automatic driver’s license renewals and upgrading offices. She recently pulled down an online appointment system available in some branches because it was giving customers inaccurate wait times, but her office has begun redeploying the technology.

Michigan leads the Midwest in clean energy sector jobs, adding 4,800 jobs in 2018 — a 4 percent jump from the previous year — for a total of 126,081, with experts projecting 9 percent growth in 2019, according to a new report. Ramped-up electric vehicle production by automakers in metro Detroit fueled a 16 percent increase in clean energy transportation work, per the report, produced by Chicago-based Clean Energy Trust and Washington, D.C.-based Environmental Entrepreneurs (E2). The rise of wind and solar energy in Michigan is also driving clean energy job growth, with more workers manufacturing and installing wind turbines and solar-power panels. Solar and wind energy employs 10,202 in the state. About 78.5 percent of clean energy businesses employ fewer than 20 people, according to the report, which suggests small businesses are playing a key role in the sector. “This report indicates that the Midwest is creating jobs in the clean energy industry more quickly than the rest of the country — a sign the Midwest is a good place for clean energy businesses to grow,” Erik Birkerts, CEO of Clean Energy Trust, said in a news release. Michigan has the most clean ener-

The rise of wind energy in Michigan is also driving clean energy job growth, with more workers manufacturing and installing wind turbines.

gy jobs in the Midwest, topping Illinois by nearly 3,000, and it is ranked fifth in the nation for number of clean energy jobs. Among the largest clean energy employers are General Motors Co., Ford Motor Co., Fiat Chrysler Automobiles, Whirlpool Corp. and Sunrise Windows Ltd. Job titles include engineer, press operator, electrician, building energy analyst, automated controls technician, HVAC facilities manager and construction project manager. Clean Energy Trust is a nonprofit that has invested in dozens of “cleantech” startups throughout the

TER S I G O RE EK T

T WE S A L

Midwest, and Environmental Entrepreneurs is a group of business leaders and investors that advocate for clean energy and have invested in more than 2,500 companies. The two groups partner to analyze clean energy jobs in a 12-state footprint of the Midwest. They began making annual reports in 2016.

Barron Industries increases capacity to meet demand

Oxford-based manufacturer Barron Industries is increasing its capacity in response to growing demand for aluminum, stainless and carbon

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steel precision castings from its customers in the defense industry. The company has poured $1 million into new equipment, which went toward a new machining center and an upgrade to foundry operations, company president Bruce Barron said in a statement emailed to Crain's. The manufacturer is also tacking on a second and third shift at its Oxford manufacturing facility and boosting its workforce by 30 percent, according to a news release. Since November, the company has hired 25 new employees and expects to hire another 15 over the next three months, Barron said in the email. Today, the company has 70 employees. Established in 1983, Barron Industries produces ferrous and non-ferrous precision machined castings and complete assemblies, the release said.

CORRECTION  Last year Michigan hops farmers harvested 400 to 600 tons of hops. An incorrect amount was given in a story on Page 15 in the April 8 issue.

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DEVELOPMENT

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FINANCE

New Mi Bank aims to bank on midsize businesses By Kurt Nagl knagl@crain.com

DETROIT’S SISTER PIE OUTLINES AN EVOLUTION Detroit bakery Sister Pie at 8066 Kercheval Ave. plans to expand to a second location while keeping its original, which opened in 2015.

ANISA JIBRELL/CRAIN’S DETROIT BUSINESS

James Beard finalist plans 2nd location with cafe, groceries, classes “Hopefully that ess than a mile from the cramped West Village headquarters of popular Detroit would allow us to be even more bakery Sister Pie, there’s an old boarded-up grocery store. sustainable. … We In it, Sister Pie owner Lisa Ludwinski sees a multifaceted expansion that could could start making help her growing business surmount obstacles and respond to community needs. It in- things like cereals, cludes building a new cafe and small grocery store. or we can use even Ludwinski, a finalist for a James Beard Foundation Award, plans to expand her pie-cen- more of our tric enterprise to an 8,000-square-foot second location at 8110 Mack Ave. The bakery ingredients to push would keep its storefront since 2015 at 8066 Kercheval Ave., at the intersection with into the grocery section of our store.” Parker Street on an east-side Detroit corner that has changed a lot in the past few years.

By Annalise Frank | afrank@crain.com

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SEE SISTER PIE, PAGE 18

Sometimes it takes a doctor to teach a doctor. As a medical student and cardiovascular fellow in Michigan, Hass Saad, M.D., saw an obvious flaw in hospitals and health systems trying to roll out electronic health record technology without properly communicating to physicians and expecting them to change their medical processes to Cerner, Epic, McKesson and Meditech, four of the major EHR systems that hospitals use. “In 2013 and 2014, a lot of hospitals were going from paper medical records to electronic health records,” said Saad, founder and CEO of Detroit Medical Informatics Inc., a health care IT consulting firm. “The industry

offers lots of tech support. They would try to communicate (with doctors and not always be understood).” In 2014, Saad graduated with a medical degree from Windsor University School of Medicine. He became a cardiovascular research fellow at Metro Health Wyoming Hass Saad, M.D.: in from July 2014 to Saw an obvious February 2015. flaw in process. During that time, working 16 hours a day during his training, Saad said he saw a “lot of disservice to the practice of medicine” when the electronic health records were being rolled out. He

said doctors were given instructions on how to use the new computer systems for making medical notes, ordering tests and tracking patients. But many didn’t understand corporate jargon. “I knew medicine and could speak with them in a language they already knew. I (felt I) could translate to them, help them become more efficient and regain their autonomy when learning EHRs,” Saad said. He thought long and hard about his future career in medicine. Because he understood computers and what they could do for medicine, Saad realized he was more interested in the growing field of medical information technology. He felt he could bring his medicine and science understanding to the

New community bank to open May 28

$30 million raised from 230 investors

 Will focus on serving businesses with less than $25 million in revenue

administrative side of health care. “After one year of training I called it quits” and in 2015 launched Detroit Medical Informatics, Saad said. “I reached out to a lot of doctors who were interested in IT and started my first project in Baltimore (at the University of Maryland Medical Center) in 2015.” SEE RECORDS, PAGE 19

SEE BANK, PAGE 18

Lisa Ludwinski

Detroit Medical Informatics makes business as ‘physician whisperer’ for electronic records jgreene@crain.com

Need to know

Despite encouragement by the FDIC, there have been only about a dozen new charters approved in the nation over the past five years. Big banks continue to consolidate while smaller banks have been acquired or shuttered — the economic downturn cut the number of community banks in Michigan from 22 to six. Farr, whose Bank of Birmingham survived the recession and was acquired by Ann Arbor-based Arbor Bancorp in 2017, saw a void in the market, especially for medium-sized businesses, and set forth to fill it. Mi Bank will operate a “high-end” branch in a 1,400-square-foot office space at 3707 W. Maple Road, where clients can sit down with one of four bankers. The branch will offer a full range of banking services, including loans, deposits and mortgages. Under a five-year contract with fintech company Fiserv, the bank will be digitally focused and allow customers to do electronic deposits and online transfers via mobile app. Farr said the bank’s target clients are businesses with $25 million of revenue or less and those seeking loans between $500,000 and $5 million. Big banks typically focus on loans upward of $5 million, leaving strong demand from smaller companies for banking services.

HEALTH CARE

By Jay Greene

The first new bank planned in Michigan since the Great Recession has a name and an opening date. The aptly named Mi Bank is scheduled to open May 28 at the corner of Lahser and Maple roads in Bloomfield Township, said Rob Farr, the veteran local banker behind the enterprise. Once open, it will be the first de novo bank in the state since 2009, when creation of new financial institutions ground to a halt. Farr raised $30 million from 230 investors to Rob Farr: Veteran make it happen. A founding banker behind group of 19 peoenterprise. ple came together in January 2018 and began raising funds last April. The bank’s charter was granted last October by the Federal Deposit Insurance Corp. “We were looking for $25 million to $30 million and actually had to turn people away at the end, unfortunately,” Farr said. “But that’s a good indicator to us that people are excited about a new community bank.”

Need to know

 Hospitals and doctors sometimes struggle to learn best ways to use new electronic health record systems  Detroit Medical Informatics started by doctor with intent to help doctors use EHR systems  Productivity, financial returns usually dip after EHR installations


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Foundations help set agenda at Mackinac Policy Conference By Sherri Welch swelch@crain.com

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More and more, foundations are helping to set the agenda at the Mackinac Policy Conference. They have long been part of important conversations with the private and public sectors in the state, but they’re stepping up their public profile with an expanding number of sessions at the annual Mackinac Island conference hosted each spring by the Detroit Regional Chamber. At this year’s conference set for May 28-31, foundations are hosting — that is, sponsoring and presenting — six of nine sessions on the agenda. That’s up from five the past two years, four in 2014, two in 2013 and just one in 2012: by the Battle Creekbased W.K. Kellogg Foundation. Even more foundations (and others) would come in, if there were space on the agenda and at the Grand Hotel, chamber COO Tammy Carnrike said. Kellogg is returning to this year’s conference along with Kresge Foundation, Skillman Foundation, C.S. Mott Foundation, Ralph C. Wilson Jr. Foundation and the William Davidson Foundation, a newcomer to the hosted sessions in 2019. Like other sessions at the conference, the foundation-hosted events align with the conference pillars. This year’s conference theme, “One Michigan,” will focus on the pillars “prepare, grow and love.” More specifically, sessions will focus on education and talent development/retention, entrepreneurial and economic development and stewardship and sustainability of the resources, industries and other assets Michigan currently has. Foundations use the sessions as a forum to release new studies and research, explore topics of regional and statewide importance and leverage their connections to feature national speakers on important topics, Carnrike said, sponsoring programs that wouldn’t otherwise happen. “They have the ability to see where there are other experts they can bring in from other areas of the country (and) where other regions are doing well and bring those experts in to share their experience and their best practice.” The foundation hosts contribute to valuable conversation, attracting standing-room only crowds to their sessions due to strong content and speakers, Carnrike said. Given that, the chamber has invited them to help plan the conference and to take part in mainstage programs, Carnrike said. For example, Skillman President and CEO Tonya Allen will participate in a panel discussion on boosting education excellence in Michigan. Government is at the conference to speak out from a policy standpoint and business to speak on economic issues, Carnrike said. “To have the philanthropic community ... be there to say, ‘We are also part of the solution, here’s the work we do and resources we’re bringing to it’ ... really helps solidify what gets discussed in their sessions.”

Tammy Carnrike: Foundations use as a forum.

Kyle Caldwell: Nonprofits major economic driver.

Need to know

JJFoundation-hosted sessions at annual conference will total six this year or two-thirds of all hosted sessions JJThat’s up from five last year and just one in 2012 JJFoundations bring new studies, research, national speakers to advance conversations on key topics

“We’re benefiting from an increasingly diversified economy (and) economic growth has been accelerating in recent years. Still, there are concerns about talent shortages, how we develop our workforce and the sustainability of our economic growth.” Darin McKeever, president and CEO of the Davidson Foundation

Foundations and other hosts are still finalizing topics for their sessions, but three have working themes, said Kelly Weatherwax, director of communications for the Detroit Regional Chamber. Those are: JJC.S. Mott Foundation will focus on transforming municipal funding. JJW.K. Kellogg Foundation will focus on the 2020 Census. JJWilliam Davidson Foundation’s session will focus on the Detroit region’s entrepreneurial ecosystem. This is an especially important moment for the city of Detroit, the region and state, said Darin McKeever, president and CEO of the Davidson Foundation, a newcomer to the conference stage this year. “We’re benefiting from an increasingly diversified economy (and) economic growth has been accelerating in recent years,” he said. “Still, there are concerns about talent shortages, how we develop our workforce and the sustainability of our economic growth.” The foundation’s grantees have some valuable ideas about how to support entrepreneurs, scale businesses and strengthen the economy, McKeever said. During its hosted session, the Davidson Foundation will offer insights from some of its grantees, including the New Economy Initiative, local entrepreneurs and a representative of global nonprofit Endeavor, which supports second-stage entrepreneurs.

“We hope through the conference they might be able to broaden and deepen their reach with opinion leaders,” McKeever said. The Mackinac Darin McKeever: Policy ConferHope to broaden ence has tradireach. tionally been an important gathering for policy makers to understand the various dimensions of the Michigan economy, including nonprofits and foundations, said Kyle Caldwell, president of the Council of Michigan Foundations. “Nonprofits and the foundations that support them are a major economic driver in our state’s economic well-being,” he said. According to a report conducted by Public Sector Consultants for the Council of Michigan Foundations and Michigan Nonprofit Association, the number of nonprofits in the state has risen to a record high of more than 50,000 after a decade of decline. Nearly all of that growth had been driven by charitable or 501(c)3 nonprofits, which now number just over 39,000. Released in March, the report on the economic benefits of Michigan nonprofits also noted: JJNonprofits employed nearly 470,000 people in the third quarter of 2018 or just over one in 10 of Michigan’s total non-farm jobs, making it larger than Michigan’s leisure and hospitality industry. J In 2018, Michigan’s nonprofits held more than $268 billion in assets, up approximately 13 percent from $234 billion in 2013, growth Public Sector Consultants said was equivalent to adding an organization the size of a major automotive company to Michigan’s nonprofit sector. JJRevenue from the sector rose more than 17 percent, from $75 billion in 2013 to more than $87 billion in 2018. Beyond the numbers, foundations are playing an even greater role in the state, serving as leaders and catalysts, Caldwell said. They are increasingly teaming up with business and government as the state and local communities work to navigate the new economy and changing demographics, he said. Private, family, corporate and community foundations are serving as catalysts to public/private partnerships that address the state’s most important priorities: livable and thriving communities, water infrastructure, economic development, access to education and other quality of life issues, he said. Those issues and many others have been the focus of the Mackinac Policy Conference since its beginnings, Caldwell said. “It makes sense that foundations and nonprofits — playing such leadership roles in addressing important issues in Michigan — should be both on stage and on the porch at the conference.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch


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Startup Aquasight taps into data behind water By Kurt Nagl knagl@crain.com

More than 300 billion gallons of water are drawn from the United States daily — about 10 percent of it pulled from the Great Lakes — and overseen by more than 16,000 entities. Water management is a massive, fragmented industry, but what’s been left largely untapped until recently is the data behind the world’s most important resource — how it flows, how it’s treated, its quality. Inefficiencies and poor management have led to wasted water, cost utilities and customers millions of dollars and, in the most extreme cases, such as Flint, caused Mahesh Lunani: tainted tap water. AI helps solve To solve these isissues. sues, more water managers are turning to automated tracking systems as digitization upends the ways of old. There’s an international race to harness the data behind water, and a Troy-based startup called Aquasight counts itself among the contenders. “There’s too much live data,” said Mahesh Lunani, a 49-year-old career businessman who founded Aquasight in 2015. “I thought, how about we create a platform that they can

KURT NAGL/CRAIN’S DETROIT BUSINESS

(From back left clockwise) Carol King, business development manager; David Inman, on-boarding engineer; Ravindra Rapaka, product lead; and Zaki Shalhout, product lead, at Aquasight that works out of an office building in Troy.

plug into — AI to automatically solve issues.” Lunani runs a team of six full-time engineers and scientists, plus a few

part-time consultants, who work on the bottom floor of a nondescript office on Big Beaver Road, building an alliterative portfolio of products. Ace,

Atlas, Apollo and Aura are the current focus. They each serve a different purpose, but the company is constantly updating software and

considering ways to integrate them. Aquasight’s programs take data — meter readings, quality tests, hydraulic models — from clients across different sectors, such as municipalities, treatment plants or even fracking companies. The data is then manipulated by its software to map the flow of water in a community, track quality, gauge treatment levels and provide predictions and early warnings for troubling data trends. As long as there is a live stream of data from the client to Aquasight, the client can track these metrics in real-time with considerable accuracy, Lunani said. A user-friendly computer interface, and “Sami” — the Siri of Aquasight — indicates where there could be a water main break, for example, or if water needs more disinfectant. “If you know how to use an iPad, you know how to use the system,” he said. Lunani, who has a master’s degree in engineering from Wayne State University and completed a general manager program at Harvard Business School, isn’t the first with this idea. Data management has been overlapping with the water service business since the rise of smart meters in the past decade. The market for water-treatment equipment is valued at $118 billion globally, according to California-based market analyst Hexa Research Inc. SEE AQUASIGHT, PAGE 6

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AQUASIGHT

Aura, an Aquasight platform designed for municipal water departments, tracks the flow of water in a city in real time using data from the city’s hydraulic models, meters and water quality tests.

AQUASIGHT FROM PAGE 5

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The U.S. market size is nearly $24 billion and growing. Data management is beginning to take up a larger chunk, with firms of all sizes flooding the market. New York-based water tech company Xylem Inc. is one of the most dominant domestic companies in the space, with about $4.7 billion in annual revenue. The French firm Veolia Water, a $14 billion a year company, is also gobbling up market share. But there are dozens of smaller ones — Wisconsin-based Aquarius Technologies LLC, Vancouver-based Aquatic Informatics Inc., Kansas-based Atonix Digital LLC, to name a few. “There are a plethora of AI companies entering the sector nearly every day — this is a transformative thing going on in the sector,” said Sue McCormick, CEO of the Great Lakes Water Authority. “The first big innovation was smart meters. That was the birth of using data and beginning to mine it.” The GLWA serves 127 communities in the southeast part of the state. With a treatment capacity of 1.72 billion gallons of water per day, it is the largest water and wastewater utility in Michigan and one of the largest in the nation. It is also one of Aquasight’s most important sponsors. The GLWA is contracted with Aquasight to use two of its platforms: Aura and Apollo. Aura cost the utility a one-time fee of $100,000 to set up. As part of the deal with the GLWA, communities under its umbrella can opt into the technology by paying a subscription fee, which is one penny per resident per year, Lunani said. Dearborn Heights was among the first to sign on, and several others have come aboard since. In 2017, Dearborn Heights entered a threeyear contract with the company, which cost a $10,000 on-boarding fee and $2,458 per month, according to the contract. Mayor Daniel Paletko said the program has eased pressure on the water department staff and provided peace of mind for the city and its residents regarding water quality. “I thought, after Flint, we oughta be looking at more things to make sure the water quality is fine,” Paletko said. As for Apollo, the technology tracks the GLWA’s chemical usage and mines data from the pumps, blowers and mixers at its treatment plants to maximize O&M efficiency.

Aquasight was awarded a $160,000 grant from the U.S. Department of Energy in 2016 to deploy the technology with the GLWA in a pilot program that ends in 2020 with the possibility of extension. McCormick said the technology helps water departments move from being “responsive to being proactive.” “What we’re advocating is this type of artificial intelligence tool as a benefit for our member communities, to see what’s going on in their system overall, which is otherwise very difficult to understand,” McCormick said of the Aura program. Aquasight’s technology has resulted in $2.8 million of annualized savings for the GLWA, according to the utility. Despite the success, it faces stiff competition from other data management firms, especially those with more capabilities. Last year, the GLWA hired Pure Technologies, which was acquired by Xylem around the time of the deal, to detect structural weaknesses in a water transmission pipe in Oakland County. The 18-month contract is worth about $2.3 million. “AI is making its way into the water sector, and I think it’s going to help us with performance, consistency and quality,” McCormick said.

History and future

Lunani, a resident of Rochester Hills, started selling water pumps with his father in India at the age of 14. Although his career would take him far away from the water sector for several decades, he said his wide-ranging experiences set him up to come full circle and create Aquasight. He worked as an engineer with Ford for five years before taking a management consulting job with Roland Berger. He also worked for IBM and IT firm Cognizant Technology Solutions for four years each. “Water, AI, technology, business and a digital venture — I’m using all of it (for Aquasight),” Lunani said. Aquasight’s projected revenue this year is $1.2 million to $2 million, depending on what new business it can secure. Lunani said he has invested about $3 million into the technology — $1 million of which was a “small, convertible debt” raised from business partners. He said he owns more than 90 percent of the company. Lunani said he is shooting to double the company’s business each year for the next five years. The company was awarded last month a $140,000 grant from the Massachusetts Clean Energy Center to implement its tech-

nology at wastewater treatment facilities in the state, according to a news release. Xylem also received a similar grant. Aquasight is courting municipalities around the country, but the company needs more than pilot programs to achieve the growth envisioned by its leader. Since launching, Lunani and his team have learned a lot about running a startup. For one, selling the technology is just as important as developing it. Also, it may be necessary to alter the original vision for the sake of sustainability. “The utility market is very slow,” Lunani said. “For us to grow, we have to expand into faster-moving markets.” Lunani is in talks with fracking companies and water equipment manufacturers — two areas that he believes can fuel the company’s growth. He declined to offer names of companies. “The fundamental ability to manage the fracking water cycle as it pertains to treatment and collection is an expertise we have in addition to the technology expertise we have,” he said. “Equipment manufacturers are creating portable treatment plants, and they want to utilize our technology, so they can see the performance of the treatment process.” While larger companies have a more diverse set of services, Lunani said Aquasight’s real-time AI processing and “complexity in and simplicity out for users” sets it apart. He is seeking a patent for the company’s first platform, Atlas, which he expects to be granted this year and is considering applying for patents on other innovations, he said. Lunani also said he is in discussions with a “$50 billion to $100 billion company” to invest in Aquasight but has no intention of selling as it has “tremendous potential on its own.” He declined to say which company. In the shorter term, there are plans to contract with a sales force on the West Coast in the coming months to help the company market its product and allow Lunani and his team to better focus on technology development. That could mean more of a focus on the fracking and equipment manufacturing industries, or a venture outside water altogether. “Our core technology can be applied to anything with live data coming in,” he said. “That’s what we’ve learned and how we can grow faster.” Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl


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8

OPINION COMMENTARY

EDITORIAL

On Michigan’s roads, Michigan cries out for 21st we’ll pay more the century infrastructure I longer we wait P

ay now, or pay more later. That was the bottom line among panelists at a “Solutions Summit” about Michigan’s road-funding crisis last week sponsored by Crain’s and The Center for Michigan. Panelists made the point that we’re already paying for Michigan’s bad roads, from the obvious bent rims and broken springs, to the cost of farmers’ bruised produce that can’t be sold, to the intangible cost to our state’s reputation. There is broad agreement that the price tag right now for improving Michigan’s bone-rattling road problem is somewhere north of $2 billion a year. Gov. Gretchen Whitmer’s proposal to get that money with a 45-cent gas tax increase has caused some leaders in Lansing to balk at the cost, saying raising gas taxes to the highest in the country is too much for taxpayers to swallow in the space of a year. Taxpayers already saw the gas The cost of doing tax and vehicle registration fees nothing is far from rise as part of the Legislature and zero. Gov. Rick Snyder’s 2015 Band-Aid plan for road funding. Making the sales pitch for more is a tough task. It’s important to remember two things: The cost of doing nothing is far from zero. One estimate puts the annual cost for vehicle wear and tear due to Michigan’s roads at $650. The extra 45 cents would add up to about $250 a year per person. As roads deteriorate, they become exponentially more expensive to fix. Often that means governments steer dollars toward roads that are already in pretty good shape — because it’s cheaper to keep them that way than to fix those that are too far gone. That triage causes some local roads to become scarred messes once they become too expensive for local governments to fix. We like the gas-tax idea because it amounts to a user fee — the more you use the roads, the more you pay. It makes sense as a component of any deal, but a slower step-up in that tax, or another way of spreading out the pain, might be more politically palatable. Or pair new revenue for road fixes with reform of the state’s no-fault insurance system that could save drivers money on their auto insurance — even more politically complicated but a real “grand bargain” if it could be done. The ball is in the Legislature’s court now, and the Republican leadership is debating how to approach a road fix. It’s been reported that it will likely be summer before a long-term counterproposal is forthcoming. It’s important to have a thoughtful plan that fully addresses the problem, and not another half-measure. But it’s also important to get something done — because it’s not getting any cheaper while we debate.

t was encouraging that during her State of the State address, Gov. Gretchen Whitmer focused on the urgent need to address our infrastructure woes, a key pledge of her election campaign. While crumbling roads and weakened bridges are an obvious focus, lurking underground are equally serious challenges. When a major water main breaks and interrupts traffic or houses disappear down sinkholes, it grabs our attention and highlights the complex underground infrastructure we rely on as greatly as our roads and bridges. With good reason, these issues are occurring with increasing frequency. Communities are enduring not only potholes and sinkholes, but are also facing major issues with the quality of drinking water, and the consequences of undersized or collapsed sewer pipes, which can result in flooding homes and businesses. This has two devastating impacts: First, it creates an economic burden through property damage suffered by residents and businesses; second, it creates environmental problems, such as pollution of drinking water sources, high bacteria at beaches which cause unwanted closures, and the degradation of water quality in our inland lakes, rivers and streams. These challenges have a very real impact on our health, well-being, quality of life and economic vitality. Even more so than our roads and bridges, much of Michigan’s underground infrastructure is old, outdated and forgotten, with some urban water and sewer systems dating back to the late 1800s. Additionally, capacity in most cases hasn’t kept up with the decades of growth in commercial, industrial and residen-

OTHER VOICES Greg Kacvinsky

tial development. Because underground infrastructure is out of sight, it’s unfortunately often out of mind. One such “out of sight” threat is the condition of Michigan’s stormwater systems. These systems were designed under older standards and have simply not kept up with increasing rainfall intensities and larger urban areas. The poor condition of these systems is realized through flooding, sinkholes and widespread property damage. Interestingly, Michigan’s population has increased less than 8 percent in the last 40 years, while the total urban footprint has increased by 50 percent. This means that we’ve built a lot more infrastructure while we’ve barely expanded our tax base. Furthermore, the severity of storms has intensified in recent years, as experienced by recent catastrophic flooding in Houghton, Midland and Detroit. Heavier rainfalls can lead to untreated sewage flowing directly into our rivers and lakes, as well as sewer backups into basements. Undersized and obsolete storm sewer systems overflow and cause widespread flooding, road washouts, stranded vehicles, flooded homes and businesses. Reports on climate change predict we’ll experience more intense storms in the future.

We need to address stormwater infrastructure issues as quickly as possible. This is important not just for the quality of our natural environment, but for the stability of our economy. Not surprisingly, the issues come back to funding. First, there are fewer funds available today than in past years to repair or replace stormwater infrastructure. In decades past, much of our infrastructure was funded by federal grants. While many municipal leaders in Michigan would like to see the federal government make these types of grants again, it’s highly unlikely. It must be solved at the local level. The Michigan Legislature is looking to reintroduce legislation that would allow Michigan municipalities the option to establish stormwater utilities, which would provide all Michigan communities an equitable and transparent framework to finance much needed stormwater infrastructure upgrades. While there are laws in Michigan allowing municipalities to charge user fees for sewer usage and drinking water, thereby creating a funding source for sewer and drinking water infrastructure, judicial precedent has made stormwater utilities vulnerable to legal challenges, which is why this legislation will be critical. Michigan voters have spoken loud and clear — we must fix our infrastructure. The reality is that we have more infrastructure to pay for, and the longer we wait the bigger the emergencies get and the more expensive the fix becomes. Greg Kacvinsky is a stormwater practice leader, senior project manager and partner at community advancement firm OHM Advisors.

Could business help with Detroit schools’ talent crisis? W

hat’s a big issue standing in the way of better student achievement in Detroit schools? You could name a lot of things, but in three education-related events last week, what stood out was having great teachers — and paying them well to keep them in the classroom. In a “state of the schools” address last Wednesday, Detroit schools Superintendent Nikolai Vitti proposed paying teachers and principals more in general, but with additional compensation to work in hard-to staff schools and schools that have demonstrated gains in academic achievement. The same day, Detroit Children’s Fund held a “friend-raiser” to highlight its work in supporting traditional public and charter schools in the city. Four principals from schools that were showing academic gains talked about the annual ritual when teachers

MARY KRAMER Group Publisher

leave at the close of a school year for higher pay elsewhere — sometimes as little as $2,000 more. Also last week, veteran tech CEO Meg Whitman visited Detroit to support a relaunch here of Teach for America, the now 30-year-old program that recruits newly minted graduates of the best colleges in America to teach in low-income schools across the country.

Whitman, who was in the first class of women admitted to Princeton University, is the incoming chair of Teach for America. Her pitch to funders and businesspeople was simple: Detroit’s revitalization is hollow without better schools and better-prepared students. Even if past efforts have not produced desired results, business/civic leaders need to double down. “This the hardest work I’ve ever done; there’s no playbook for this,” she said. But talent is key to get results, whether it’s veteran teachers or firstyear novices. And talent is mobile. Reformers have found that once a school is known for improving results, other schools or districts swoop in with offers of higher salaries for teachers and principals. That should be a phenomenon that many employers can relate to. What if business contributed to a

pool to supplement the best teaching talent in the city? It may not be sustainable, but what if the commitment was five years? Or 10 years? That’s long enough to make a school competitive while state policy makers figure out a better way to fund schools in general. There may be roughly 5,000 traditional public and charter school teachers in Detroit. If one-fifth qualified for a privately financed merit award, averaging $5,000, it’s $5 million. Would that matter? Could it help? Vitti has been on the job for nearly two years. Under Vitti, attendance is up, chronic absenteeism is down and enrollment jumped by more than 4,000 students. That’s all good. But classroom talent is key, and I’m told teachers aren’t making what they made in the late 1990s. The Detroit

school district is in year two of its contract with teachers, who received a 7 percent increase in the first two years, according to the nonprofit education reporting group Chalkbeat. The district and union negotiators were to open the contract to determine the third-year increase during the contract. Vitti’s suggestion of merit pay may be an opening gambit. Maybe this is a tangible way business can contribute to a special talent fund that could help retain talent at all schools — Vitti’s and charters.

MORE ON WJR Listen to Crain’s Group Publisher Mary Kramer 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.

J


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Beaumont plans outpatient surgery center in Royal Oak By Jay Greene jgreene@crain.com

Beaumont Health plans to build a 90,000 square foot multi-specialty ambulatory care surgery center across from its Royal Oak campus with an unnamed developer and offer investment shares to surgeons. The plans are a shift from its previous plan, which was to build a single-specialty orthopedic surgery center and musculoskeletal center with Michigan Orthopaedic Surgeons PLLC, a Southfield-based group of 44 surgeons affiliated with Beaumont. But Carolyn Wilson, Beaumont’s COO, said the plans changed when other surgery specialties expressed interest in outpatient surgery and Beaumont finalized its overall outpatient center model. “What we are looking at is a broader physician investor opportunity where other cases can be done,” Wilson said. “Discussions are centered around orthopedics, pain and we have interest from urology, general surgery and others.” Wilson said the plan is centered on a similar outpatient center announcement with a surgery center component in Lennox Township in a partnership with NexCore Group, a Denver-based development company. Other specialties such as gastrointestinal, cardiology and ophthalmology also are participating in the planning, she said. Paul Fortin, M.D., president of Michigan Orthopaedic, said the group wants to be flexible and work cooperatively with Beaumont. He suggested the group may still need another outpatient surgery site, depending on Beaumont’s final plans. Fortin said Michigan Orthopaedic had “big ideas for a big scope (outpatient surgery) project,” but as discussions progressed with Beaumont it became clear that Beaumont’s plans for the single-specialty orthopedic surgery center changed. “This scope fits our needs and Beaumont’s needs. We are very interested in maintaining a good relationship with the mothership (Beaumont). We have no reason to compromise our relationship,” Fortin said. But Fortin said Michigan Orthopaedic is in a growth phase, recently merging with four smaller orthopedic groups and seeking to expand further into other geographic areas of Southeast Michigan. “We are considering any and all opportunities. We really see it as our mission to embrace the full musculoskeletal cost of care and provide the best product at the best price,” Fortin said. When asked if Michigan Orthopaedic will have enough capacity over the next five years at the planned Beaumont surgery site and at its current facility at UnaSource Surgery Center in Troy, Fortin said those questions will be answered over time. “We hope Beaumont continues to value independent doctors” as that is how Beaumont was built and has flourished. In March, Beaumont announced plans to build an outpatient center in Lennox Township in Macomb County by 2020. Beaumont also plans another outpatient center in Wayne County next year. The planned 105,000-120,000 square-foot centers will offer primary and specialty care physicians, emergency care, imag-

Paul Fortin, M.D.: Group wants to be flexible.

Carolyn Wilson: Broader physician opportunity.

ing, outpatient surgery, cancer services and physical therapy. Beaumont is working with NexCore Group to oversee financing, development, leasing, property man-

agement and asset management for the centers in Macomb and Wayne counties. A developer hasn’t yet been selected for the Royal Oak site in Oakland County. “We have a large volume of surgical care (about 7,000 annual surgeries in Royal Oak),” Wilson said. “Doctors have asked for an outpatient freestanding surgery center ... and patients are asking for it. It is a model we are comfortable with.” Under the outpatient center plan, Beaumont would own the property and a developer would build and own the centers. Physicians and Beaumont would form a joint venture and lease the surgery center part of the outpa-

tient center, Wilson said. Physicians would become investors in joint venture, she said. The developer would lease office space in the center to physicians. “We are likely to have a developer build the building. It gives more (financial) flexibility for Beaumont” on the projects, Wilson said.

Massive growth projected for outpatient surgery Fortin, a foot and ankle specialist, said Michigan Orthopaedic is preparing for an expected explosion in outpatient surgeries as payers, employers and patients are demanding more

convenient and lower-cost settings. He said many outpatient orthopedic surgery procedures can be just as effective with comparable outcomes as traditional inpatient surgery. Michigan Orthopaedic, which is participating in a bundled hip and knee replacement program offered by Blue Cross Blue Shield of Michigan, has quadrupled the number of outpatient surgeries over the past 18 months. Priority Health and other payers, including Medicare, are also offering incentives to increase outpatient surgery. Jay Greene: (313) 446-0325 Twitter: @jaybgreene

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FOCUS

WOMEN IN LEADERSHIP

FINDING HER FIT IN NONPROFITS Judson Center’s Lenora Hardy-Foster on treating mind and body

Judson Center CEO and President Lenora Hardy-Foster at the center’s headquarters in Royal Oak. ERIN KIRKLAND FOR CRAIN’S

By Rachelle Damico | Special to Crain's Detroit Business

L

enora Hardy-Foster planned to work as an accountant in corporate America after completing her MBA. Instead, she got a job at a nonprofit. She spent the next three decades there. “I realized my calling was to be a part of an organization that’s helping others improve their quality of life,” Foster said. She is now the president and CEO of Judson Center, a nonprofit that provides services to children and families in nine locations across five counties. Judson Center, which is based in Royal Oak, began providing foster The Hardy-Foster File Education: Bachelor’s degree and master’s in business administration, University of Detroit Mercy Current role: President and CEO, Judson Center Career ladder: Worked at Southwest Solutions for 36 years, most recently as executive director. Prior to that, she was vice president, finance and administration, overseeing the financial, human resources, information technology, risk management, health and safety, and property management functions for Southwest. A mentor: Sheilah Clay, former president and CEO of Neighborhood Service Organization who retired in 2018

Your goal was to work for corporate America. Why did you stay in the nonprofit arena?

I was born and raised in Selma, Alabama. There weren’t many opportunities for women in business or corporate positions back then. I dreamed of working in a corporate office for one of the large automotive companies. After I graduated, I was hired as an accounting manager at Southwest Solutions (a nonprofit that provides children and families counseling, literacy and supportive housing services). At the time I was looking for a job that allowed me to use my experience, whether it was a for-profit or nonprofit organization. When I started working for Southwest, I saw how the organization

care and adoption services in 1924. The nonprofit provides autism, behavioral health and disability services for adults and recently expanded into primary health care. This February, Judson Center opened a 3,000-squarefoot primary care clinic in Warren called The Judson Center Family Health Clinic. Hardy-Foster was instrumental in raising almost $700,000 in funding for the clinic, including a $500,000 grant from the Michigan Health Endowment Fund. Hardy-Foster serves on many local boards, including the Michigan Federation for Children and Families, where she serves as treasurer. Her accomplishments earned her a lifetime achievement award this year from the University of Detroit Mercy, her alma mater.

was doing good and improving the lives of children and families. I knew working in the nonprofit industry was where I was supposed to be. You worked for Southwest for 36 years. Why did you decide to move on?

I actually considered finishing my career at Southwest, but a recruiter reached out to me about the Judson Center position. I had always desired to be the CEO of a nonprofit. I learned a lot at Southwest, but I grew as much as I could there and they already had an outstanding CEO. Were there any early leadership challenges when you started?

One of the hurdles I immediately started working on was attracting,

recruiting and retaining competent staff. A lot of it has to do with having the right compensations, salaries and benefits in place. That still can be a challenge for a nonprofit. I made changes in salary and benefits, but there’s some markets I just can’t compete with, like the school system or what private practices are paying. You have to look at what you can do to make it attractive so people want to come be part of your agency and want to stay. Culture, camaraderie and a shared mission become critical to staff attraction and retention. We have that at Judson Center, and we’re focusing on it now more than ever. Why was it important to you that

Judson Center opened a primary clinic?

When I interviewed for my position, I shared with the interviewing committee that we needed primary health care or we were going to be left behind. It’s extremely important that we treat people who are diagnosed with a mental illness disorder. When you’re treating a person’s mind, you also have to think about the body. People who have a mental illness diagnosis on average die 25 years earlier than someone who does not. Now we’re able to have integrated care, where a person can come into one place and be seen by their psychiatrist as well as by their primary physician. SEE JUDSON, PAGE 11


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Automate robotics convention moving from Chicago to Detroit By Kurt Nagl

JUDSON FROM PAGE 10

Do you feel we need to be focusing on mental health more as a society?

I feel more time and resources should be devoted to serving people that are part of behavioral health. People that are bipolar, for example, can still live a normal life and be successful in their careers and their community if they get the right treatment. A lot of times we hear about something tragic that happened when you’re watching the news, and we find out the person had a mental illness. The government and state funding should focus on increasing resources for people with mental health disor-

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A large robotics trade show is leaving Chicago after nearly a decade to return home to Detroit. Automate, dubbed by organizers as the largest automation show in North America, will be staged at Cobo Center starting in 2021, said Bob Doyle, vice president of the Association for Advancing Automation, or A3, the Ann Arbor-based trade association that produces the biennial event. The free show, set for May 17-20, 2021, is expected to draw more than 20,000 people and 500 exhibitors from around the globe, including many robotics firms with local North American headquarters, including Rochester Hills-based Fanuc Corp., Shelby Township-based Kuka Robotics Corp. and Novi-based Nachi Robotic Systems Inc. A3 first began hosting a robotics show at Cobo in the 1980s, Doyle said. It was moved to Chicago in the 1990s and to the McCormick Place convention center in 2011. It was originally relocated from Detroit to give it a refresh and join forces with Promat, a supply chain and distribution show that takes place alongside the robotics show. In tandem with its move back to Detroit, Automate’s partnership with Promat is ending. Organizers announced the venue change Tuesday during the convention in Chicago. “We’re bringing it home,” Doyle said. “We’ve grown 40 percent every year, and this year, we ran out of space at McCormick Place. We knew in order for us to continue to grow, it was time for us to move.” Space constraints were only part of the motivation, though. The decision to relocate the event to Detroit was pretty much sealed when the association’s board members visited the city last year and were “wowed not only by Cobo Center, but the city itself — the growth, the opportunities,” Doyle said. Detroit’s emerging technology sector played a role in landing the event in the city, as did the concentration of robotics companies in metro Detroit. “These companies love to have it in their backyard,” Doyle said. Automate is A3’s flagship event that gives attendees a look at the latest technology in robotics, vision, motion control and related technologies. Especially in metro Detroit, ro-

11

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The Automate robotics convention in Chicago is being moved to Cobo Center in downtown Detroit and is expected to attract 20,000 visitors and 500 vendors.

Need to know

JJLarge robotics show to take place May

17-20, 2021, at Cobo Center

JJ$15 million to $20 million of direct local spending expected JJConvention, produced by Ann

Arbor-based A3, had been in Chicago since 2011

“We’ve grown 40 percent every year, and this year, we ran out of space at McCormick Place. We knew in order for us to continue to grow, it was time for us to move.” Bob Doyle

botics have long been associated with the auto industry, but the technology is increasingly prevalent in other industries, such as aerospace, life science, logistics and materials handling.

Economic impact The show could result in $15 million to $20 million of direct local spending, with an expected 5,000 room nights booked at local hotels, according to the Detroit Metro Convention & Visitors Bureau.

“Being able to host this kind of technology and innovation in Detroit is just kind of a wonderful showcase of how our community has continued to grow,” said Laura Coniglio of the DMCVB. Automate organizers have committed to having at least three iterations of the biennial event at Cobo in 2021, 2023 and 2025. Doyle declined to disclose the financial terms of the deal with Cobo and the cost to produce the event, but did say it was in the “millions of dollars.” In addition to the 20,000 convention attendees, the event draws about 1,000 paid registrants for an educational seminar. The convention, free to attend, is sponsored by participating companies. Doyle said sponsors for the event at Cobo will be nailed down as the date draws closer. Doyle said the difference in production costs between Chicago and Detroit was “nominal” and saving money isn’t the reason for moving. For Cobo and Detroit the event’s impact is potentially much more than visitor spending on food, gas and hotel rooms. Like the first FIRST robotics competition last year, which attracted 35,000 visitors to downtown Detroit, the event could help boost the city’s image. “It’s a nice feather in our cap,” Coniglio said.

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Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl

ders, especially since there has been an increase in the number of people receiving mental health diagnoses.

adoption services. Philanthropy is really key to our success. About 15 percent of our revenue comes through philanthropy.

What’s the biggest hurdle Judson Center is facing right now?

Do you have any advice for others who are considering a career in the nonprofit industry?

The clinic is open, but now we have to make sure we’re able to market it to families and communities so we can grow the program. We want to make sure the people that we’re currently servicing — about 1,100 patients that are part of our behavioral health practice — will also have the choice to be seen by a primary health care professional. We also have funding challenges, being a nonprofit. There’s always the possibility that the state may cut mental health dollars, foster care or

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Always know that there is value in what you have to bring to a nonprofit organization. Nonprofits need all different kinds of skills — strategic thinkers, great leaders and visionary people. If you have a passion for nonprofit work, I would encourage you to follow that dream. I have no regrets on my decision to work for a nonprofit when I thought I’d be working for corporate America. When I go home, I feel good knowing what I’ve accomplished.

When the right path is unclear,

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CRAIN'S LIST: SE MICHIGAN PUBLICLY HELD COMPANIES

Ranked by 2018 revenue

Stock Revenue Revenue Net income Exchange/ price ($000,000) ($000,000) Percent ($000,000) Ticker 52-week 2018 2017 change 2018/2017 symbol high/low Type of industry

Company Fiscal year end; website

Top executive(s)

1

Ford Motor Co. (12/2018) (313) 322-3000; www.ford.com

Jim Hackett president and CEO

$160,338.0

$156,776.0

2.3%

$3,677.0 $7,731.0

NYSE F

$12.15 $7.41

Automobile manufacturer

2

General Motors Co. (12/2018) (313) 556-5000; www.gm.com

Mary Barra chairman and CEO

147,049.0

145,588.0

1.0

8,014.0 (3,864.0)

NYSE GM

45.00 30.56

Automobile manufacturer

3

Penske Automotive Group Inc. (12/2018) (248) 648-2500; www.penskeautomotive.com

Roger Penske CEO

22,785.1

21,386.9

6.5

471.0 613.3

NYSE PAG

53.84 38.49

Automotive retail

4

Lear Corp. (12/2018) 248-447-1500; www.lear.com

Raymond Scott president and CEO

21,148.5

20,467.0

3.3

1,149.8 1,313.4

NYSE LEA

206.36 114.45

Auto parts and equipment

5

Adient plc B (9/2018) (734) 254-5000; www.adient.com

Douglas Del Grosso president and CEO

17,439.0

16,213.0

7.6

(1,685.0) 877.0

NYSE ADNT

67.10 12.15

Auto parts and equipment

6

Aptiv PLC B (12/2018) (248) 813-2000; www.aptiv.com

Kevin Clark president and CEO

14,435.0

12,884.0

12.0

1,067.0 1,355.0

NYSE APTV

103.23 58.80

Auto parts and equipment

7

DTE Energy Co. (12/2018) (313) 235-4000; www.dteenergy.com

Gerard Anderson chairman and CEO

14,212.0

12,607.0

12.7

1,120.0 1,134.0

NYSE DTE

126.07 94.25

Energy

8

BorgWarner Inc. (12/2018) (248) 754-9200; www.borgwarner.com

Frederic Lissalde president and CEO

10,529.6

9,799.3

7.5

930.7 439.9

NYSE BWA

54.35 32.46

Auto parts and equipment

9

Ally Financial Inc. (12/2018) (866) 710-4623; www.ally.com

Jeffrey Brown CEO

9,052.0

8,322.0

8.8

1,263.0 929.0

NYSE ALLY

29.00 20.60

Financial services

10

Masco Corp. (12/2018) 313-274-7400; masco.com

Keith Allman president and CEO

8,359.0

7,642.0

9.4

734.0 533.0

NYSE MAS

41.76 27.03

Building products

11

American Axle & Manufacturing Holdings Inc. (12/2018) 313-758-2000; www.aam.com

David Dauch chairman and CEO

7,270.4

6,266.0

16.0

(57.5) 337.1

NYSE AXL

19.34 10.13

Auto parts and equipment

12

Kelly Services Inc. (12/2018) (248) 362-4444; www.kellyservices.com

George Corona president and CEO

5,513.9

5,374.4

2.6

22.9 71.6

NasdaqGS KELY.A

32.31 19.21

Staffing services

13

Delphi Technologies plc C (12/2018) (248) 813-2000; www.delphi.com

Richard Dauch D CEO

4,858.0

4,849.0

0.2

358.0 285.0

NYSE DLPH

13.18 53.78

Automotive parts and equipment

14

Meritor Inc. (9/2018) (248) 435-1000; www.meritor.com

Jeffrey Craig president and CEO

4,178.0

3,347.0

24.8

117.0 324.0

NYSE MTOR

22.92 15.01

Construction machinery and heavy trucks

15

TI Fluid Systems plc E (12/2018) (248) 296-8000; www.tiautomotive.com

Bill Kozyra president and CEO

3,901.6

4,193.0 F

-7.0

154.8 134.8 F

LSE TIFS

3.85 1.95

Auto parts and equipment

16

Cooper-Standard Holdings Inc. (12/2018) (248) 596-5900; www.cooperstandard.com

Jeffrey Edwards chairman and CEO

3,629.3

3,618.1

0.3

107.8 135.3

NYSE CPS

146.78 46.59

Auto parts and equipment

17

Domino's Pizza Inc. (12/2018) (734) 930-3030; www.dominos.com

Richard Allison CEO

3,432.9

2,788.0

23.1

362.0 277.9

NYSE DPZ

305.34 225.25

Restaurant franchisor

18

Visteon Corp. (12/2018) (248) 702-1203; www.visteon.com

Sachin Lawande president and CEO

2,984.0

3,146.0

-5.1

164.0 176.0

NasdaqGS VC

139.45 56.59

Auto parts and equipment

19

Tower International Inc. (12/2018) (248) 675-6000; www.towerinternational.com

James Gouin CEO

1,571.9

1,382.5

13.7

48.9 47.6

NYSE TOWR

36.65 20.48

Auto parts and equipment

Superior Industries International Inc. (12/2018) (248) 352-7300; www.supind.com

1,501.8

1,108.1

35.5

26.0 (6.2)

NYSE SUP

22.95 4.29

Auto parts and equipment

1,461.7

1,216.7

20.1

52.2 28.2

NasdaqGS ULH

37.68 17.40

Trucking

Rank

21

Universal Logistics Holdings Inc. (12/2018) (586) 920-0100; www.universallogistics.com

Timothy McQuay executive chairman, CEO and president Jeff Rogers CEO

22

Credit Acceptance Corp. (12/2018) (248) 353-2700; www.creditacceptance.com

Brett Roberts CEO

1,285.8

1,110.0

15.8

574.0 470.2

NasdaqGS CACC

467.26 299.00

Consumer finance

23

Sun Communities Inc. (12/2018) (248) 208-2500; www.suncommunities.com

Gary Shiffman chairman and CEO

1,126.8

982.6

14.7

107.2 72.2

NYSE SUI

121.28 89.55

Residential REIT

24

Flagstar Bancorp Inc. (12/2018) (248) 312-2000; www.flagstar.com

Alessandro DiNello president and CEO

1,122.0

997.0

12.5

187.0 63.0

NYSE FBC

38.00 25.30

Thrifts and mortgage finance

25

Gentherm Inc. (12/2018) (248) 504-0500; www.gentherm.com

Phil Eyler president and CEO

1,038.3

985.7

5.3

41.9 35.2

NasdaqGS THRM

50.30 30.50

Auto parts and equipment

26

Chemical Financial Corp. (12/2018) (800) 867-9757; www.chemicalbank.com

David Provost president and CEO

912.2

766.9

19.0

284.0 149.5

NasdaqGS CHFC

59.46 34.62

Regional bank

27

TriMas Corp. (12/2018) (248) 631-5450; www.trimascorp.com

Thomas Amato president and CEO

877.1

817.7

7.3

83.3 31.0

NasdaqGS TRS

32.73 25.18

Industrial machinery

28

Stoneridge Inc. G (12/2018) 248-489-9300; www.stoneridge.com

Jonathan DeGaynor president and CEO

866.2

824.4

5.1

53.8 45.2

NYSE SRI

37.69 21.91

Auto parts and equipment

20

SOURCES: S&P Global Market Intelligence, (Marketintelligence.spglobal.com) and SEC filings. This list of publicly held companies is a compilation of the largest companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties that have stock traded on a public exchange. For companies not on a calendar fiscal year, revenue and net income figures are for the most recently completed fiscal year. 52-week highs and lows are for period ending April 2, 2019.

B Incorporated in Dublin, Ireland but has operating headquarters in Michigan. C Incorporated in London, UK but has operating headquarters in Michigan. In December 2017, Delphi Automotive plc spun off its powertrain segment as Delphi Technologies PLC (NYSE: DLPH) while Aptiv PLC (NYSE: APTV) emerged as its electric architecture and autonomous driving-focused business.

D Replaced Liam Butterworth who stepped down as CEO in October. E Formerly TI Automotive. Incorporated in Oxford, UK, for tax purposes but has operating headquarters in Michigan. F Currency conversion based on euro to dollars rate of 1.2002. G Sold its non-core switches and connectors business for $40 million in April. Sale part of a long-term shift toward high-tech transportation products.


C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 5 , 2 0 1 9

13

CRAIN'S LIST: SE MICHIGAN PUBLICLY HELD COMPANIES

Ranked by 2018 revenue Rank

29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Stock Revenue Revenue Net income Exchange/ price ($000,000) ($000,000) Percent ($000,000) Ticker 52-week 2018 2017 change 2018/2017 symbol high/low Type of industry

Company Fiscal year end; website

Top executive(s)

Horizon Global Corp. (12/2018) 248-593-8820; www.horizonglobal.com

Carl Bizon president and CEO

$850.0

$893.0

-4.8%

($204.0) ($3.6)

NYSE HZN

$8.63 $1.34

Auto parts and equipment

Taubman Centers Inc. (12/2018) (248) 258-6800; www.taubman.com

640.9

629.2

1.9

81.1 78.4

NYSE TCO

65.50 43.44

Retail REIT

396.4

333.3

18.9

13.7 (99.4)

NasdaqGS ALTR

43.99 25.28

Application software

Sterling Bancorp Inc. (12/2018) (248) 355-2400; www.sterlingbank.com

Robert Taubman chairman, CEO and president James Scapa founder, chairman and CEO Gary Judd chairman and CEO

183.8

139.3

31.9

63.5 38.0

NasdaqCM SBT

14.73 6.65

Thrifts and mortgage finance

Unique Fabricating Inc. (12/2018) (248) 853-2333; www.uniquefab.com

John Weinhardt president and CEO

174.9

175.3

-0.2

3.7 6.5

9.70 4.10

Auto parts and equipment

Diversified Restaurant Holdings Inc. (12/2018) (248) 223-9160; www.diversifiedrestaurantholdings.com

David Burke president and CEO

153.1

165.5

-7.4

(5.0) (20.5)

NYSE MKT LLC (AMEX) UFAB NasdaqCM SAUC

1.55 0.73

Restaurants

Agree Realty Corp. (12/2018) (248) 737-4190; www.agreerealty.com

Joey Agree CEO

148.2

116.6

27.1

58.2 58.1

NYSE ADC

70.26 47.22

Retail REIT

Saga Communications Inc. (12/2018) (313) 886-7070; sagacom.com

124.8

118.1 B

5.7

13.7 54.7

NasdaqGM SGA

40.10 30.05

Broadcasting

Conifer Holdings Inc. (12/2018) (248) 559-0840; www.cnfrh.com

Edward Christian president, CEO and chairman James Petcoff chairman and CEO

98.9

96.8

2.1

(9.2) (21.5)

NasdaqGM CNFR

7.20 3.06

Property and casualty insurance

Arotech Corp. (12/2018) 800-281-0356; www.arotech.com

Dean Krutty president and CEO

96.6

98.7

-2.2

1.9 7.0

NasdaqGM ARTX

4.15 2.37

Aerospace and defense

Macatawa Bank Corp. (12/2018) (616) 820-1444; www.macatawabank.com

Ronald Haan president and CEO

86.5

75.1

15.2

26.4 16.3

NasdaqGS MCBC

12.92 8.81

Regional banks

Perceptron Inc. (6/2018) (734) 414-6100; www.perceptron.com

David Watza president, CEO and CFO Thomas Zurschmiede president and CEO

84.7

77.9

8.7

3.7 (0.2)

NasdaqGM PRCP

12.25 6.75

Electronic equipment and instruments

75.4

77.3

-2.5

3.8 3.1

OTC FSCR

NA NA

70.9

62.1

14.1

14.4 9.8

NasdaqGS LEVL

30.79 20.89

Regional bank

InfuSystem Holdings Inc. (12/2018) (248) 291-1210; www.infusystem.com

Patrick Fehring chairman, president and CEO Richard DiIorio president and CEO

67.1

65.5

2.6

(1.1) (20.7)

5.21 2.45

Health care services

Rockwell Medical Inc. (12/2018) (248) 960-9009; www.rockwellmed.com

Stuart Paul CEO

63.4

57.3

10.6

(32.1) (25.9)

NYSE MKT LLC (AMEX) INFU NasdaqGM RMTI

6.88 2.19

Health care equipment

University Bancorp Inc. (12/2017) (734)-741-5858; www.university-bank.com

Stephen Ranzini president and CEO

53.9

50.9

5.8

5.1 3.8

11.99 8.30

Regional banks

OptimizeRx Corp. (12/2018) (248) 651-6568; www.optimizerx.com

William Febbo CEO

21.2

12.1

74.9

0.2 (2.1)

Pink Sheets LLC (OTCPK) UNIB NasdaqCM OPRX

18.39 4.29

Health care technology

Oxford Bank Corp. (12/2017) (248) 628-2533; www.oxfordbank.com

David Lamb president and CEO

18.5

14.4

28.8

1.6 1.9

19.00 16.30

Regional bank

FNBH Bancorp Inc. (First National Bank in Howell) (12/ 2018) (517) 546-3150; www.fnbh.com

Ronald Long president and CEO

17.8

15.5

15.3

3.2 0.3

2.50 1.80

Regional bank

Clarkston Financial Corp. (12/2018) 248-886-0086; www.clarkstonstatebank.com

James Smith president, CEO and CFO

9.2

8.4

9.3

2.3 0.2

0.00 0.00

Regional bank

Huron Valley Bancorp Inc. (12/2018) (248) 684-9626; www.hvsb.com

Jack Shubitowski president and CEO

7.1

6.4

11.0

1.6 1.1

15.00 13.50

Regional bank

CGE Energy Inc. (9/2018) (248) 446-1344; www.cgeenergy.com

Bryan Zaplitny president and CEO

7.0

9.4

-25.0

3.5 2.1

1.14 0.10

Renewable electricity

Bonal International Inc. (3/2018) (248) 582-0900; www.bonal.com

Thomas Hebel chairman, president and CEO

2.3

1.6

42.3

0.3 0.1

Pink Sheets LLC (OTCPK) OXBC Pink Sheets LLC (OTCPK) FNHM Pink Sheets LLC (OTCPK) CKFC Pink Sheets LLC (OTCPK) HVLM Pink Sheets LLC (OTCPK) CGEI Pink Sheets LLC (OTCPK) BONL

2.30 1.30

Electronic equipment and instruments

Altair Engineering Inc. (12/2018) (248) 614-2400; www.altair.com

Federal Screw Works (6/2018) (586) 443-4200; www.federalscrewworks.com Level One Bancorp Inc. (12/2018) (248) 737-0300; www.levelonebank.com

Automotive supplier

SOURCES: S&P Global Market Intelligence, (Marketintelligence.spglobal.com) and SEC filings. This list of publicly held companies is a compilation of the largest companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties that have stock traded on a public exchange. For companies not on a calendar fiscal year, revenue and net income figures are for the most recently completed fiscal year. 52-week highs and lows are for period ending April 2, 2019.

B On May 9, 2017, entered into an agreement to sell Joplin, Mo. and Victoria, Texas, television stations. This transaction closed on Sept. 1, 2017. The television stations that were sold constituted their entire television segment. LIST RESEARCHED BY SONYA D. HILL


C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 5 , 2 0 1 9

14

Onetime fast-food mogul, restaurateur Hawkins dies By Annalise Frank afrank@crain.com

La-Van Hawkins, a one-time fastfood franchise mogul, restaurateur and controversial figure, died April 6 in Detroit, according to a statement sent Wednesday from his family. He was 61. Hawkins launched an upscale southern restaurant in Greektown in 2002, Sweet Georgia Brown, and sold a collection of metro Detroit Pizza Hut locations in 2003 for more than $95 million. He was also known as a Detroit job provider and served an 18-month stint in prison. Hawkins “was a great visionary leader and one of the most accomplished

La-Van Hawkins

restaurateurs and entrepreneurs ...” the family said in the statement. A company linked to Hawkins, Tremendous Brands Group LLC of Southfield, as of December 2018 aimed to bring Habit Burger Grill locations to Illinois and Indiana in a 20-store franchise agreement. Hawkins himself hadn’t registered a business entity in Michigan since the mid2000s, according to state records. Hawkins emerged on the local restaurant scene in 1998 when he bought 89 Pizza Hut locations and moved his company headquarters to downtown Detroit. He sold the restaurants, operated under Wolverine Pizza LLC, for more than $95 million in

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“I saw Detroit as a city on the move with room for entrepreneurs and areas that haven’t been developed.” La-Van Hawkins

2003. Black Enterprise ranked his Hawkins Food Group the 12th-largest African-American-owned company in the U.S. that year, according to the Atlanta Business Chronicle. “I saw Detroit as a city on the move with room for entrepreneurs and ar-

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eas that haven’t been developed,” Hawkins said in an interview with Crain’s when he was a 40 Under 40 honoree in 1999. Hawkins made it a goal to provide jobs to and empower people who wouldn’t ordinarily get those opportunities. Hiram Jackson, CEO of Michigan Chronicle publisher Real Times Media, said in a Facebook post Saturday that Hawkins, a “longtime friend,” was “an entrepreneurial beast.” “(Hawkins) was instrumental in taking Checkers (Drive-In Restaurants Inc.) public, owned several Burger Kings and at one point was the largest Pizza Hut Franchisee in Michigan,” Jackson wrote. The Chicago native grew up in a housing project and left high school to take care of his ill mother, according to a bio printed by Wayne State University when Hawkins spoke there in 2003 about “building success in downtown Detroit.” Hawkins’ first job was sweeping floors at his uncle’s McDonald’s restaurant. He worked his way up to managing it, then became a regional vice president of KFC and left KFC in 1991. He first franchised through Checkers Drive-In. Hawkins was a founding owner of Sweet Georgia Brown, a successful fine-dining restaurant in Detroit’s Greektown that was thrown into turmoil as Hawkins was indicted and later convicted in 2005 for wire fraud and perjury in a wide-ranging government scandal in Philadelphia. He was released from federal prison in March 2010 after 18 months and returned to his native Chicago. Hawkins re-entered the Detroit restaurant market around 2012. He was the face of, but not an owner of, the short-lived Detroit’s Cheesecake Bistro in the same location as Sweet Georgia Brown. In a separate 2008 case in Detroit, U.S. District Judge Denise Page Hood ordered Hawkins to pay restitution of up to $5.7 million and serve 10 months concurrent with his federal prison sentence. That was for a charge of failing to pay federal withholding and Social Security taxes. Hawkins ran into financial trouble during his time in Detroit. Outstanding judgments awarded by area judges against Hawkins and companies owned by Hawkins ranged from $1,000 to $393,000, totaling more than $1 million from fall of 2001 to spring 2004, Crain’s reported at the time. In an interview with BLAC Detroit magazine in 2012 when Hawkins was planning to open Detroit’s Cheesecake Bistro, he told the publication that he’d returned to Detroit on an “assignment” from God. BLAC also asked about his love for Detroiters, and he said: “They’re resilient, they’re tough, they’re sharp. They’ve got the get-up-and-go; they’re aggressive. Nothing detours them. Yeah, they might get sidetracked along the way, but at the end of the day, they’ve been victorious in everything that they’ve done. That’s the reason why me, and the people of Detroit, we have a love affair that’s going on — one that’s going to last forever.” A funeral service is scheduled for 11 a.m. Monday at Great Faith Ministries at 10735 Grand River Ave. in Detroit. Burial will be at Oakview Cemetery in Royal Oak. Annalise Frank: (313) 446-0416 Twitter: @annalise_frank


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SPOTLIGHT

DEALS & DETAILS CONTRACTS  BMG Media Co., Birmingham, a web design firm, has designed websites for Adachi, Birmingham, a restaurant; Grand/Sakwa Properties LLC, Farmington Hills, a real estate developer; Greenwich Capital Group, Birmingham, a capital investment company, and Vlasic &

Roth LLC, Northville, a health care merger and acquisition firm. Websites: bmgmediaco.com, adachirestaurant.com, grandsakwa. com, greenwichgp.com, vlasicroth. com

EXPANSIONS 

Athletico Physical Therapy, Ann

Submit Deals & Details items to cdbdepartments@crain.com

CALENDAR TUESDAY, APRIL 16 Professional Development Seminar: Manage Conflict & Deal with Difficult Issues. 7:30-10:15 a.m. Detroit Economic Club. Topics include: How to create a climate where healthy, productive conflict exists; how to deal with disruptive conflict in a timely and effective manner; recognizing strengths and areas for improvement around tackling difficult issues; building a climate for productive conflict and strategies, tactics and actions to encourage healthy conflict to obtain better team results. Lawrence Technological University. $45 members, $55 guests of members. Website: econclub.org

UPCOMING EVENTS Oakland County Annual Economic Outlook Luncheon 2019. 11 a.m.1:30 p.m. April 26. Oakland County. Oakland County Executive L. Brooks Patterson’s Economic Outlook Luncheon will feature University of Michigan economists Gabriel Ehrlich and Donald Grimes, who will present their three-year forecast on the county’s economic future. Troy Marriott. $50. Contact: Sandra

Detroit hires director of digital inclusion

Arbor, physical therapy, orthopedic rehabilitation, sports medicine and athletic training company, has opened a new location at 4860 Washtenaw Ave., Ann Arbor. Website: athletico.com/Ann-Arbor-Ypsilanti

Farley

Hinrichs

Leadership changes at Ford

O’Connell, email: oconnells@oakgov.com; phone: (248) 858-7647. 2019 Technology in Industry Reveal. 8-11:30 a.m. April 29. Automation Alley. Automation Alley’s 2019 Technology in Industry Report will be unveiled. Event includes discussion of key findings of the data, including use cases, emerging trends, challenges, opportunities and action items designed to help business, educators and policy makers. Detroit Institute of Arts. $75 members; $95 nonmembers. Email: events@automationalley.com. Website: automationalley.com/techreveal Leadership Oakland Breakfast of Champions — David Drews. 7:30-9 a.m. May 1. David Drews, CEO of Justus Equity LLC and University of Michigan Executive-in-Residence, will discuss “Creating Impact: Modern Day Lessons in Leadership and Life.” Mercedes-Benz Financial Services. $36. Contact: Susan Hollady, email: shollady@leadershipoakland.com. Website: leadershipoakland.com/breakfast-of-champions Going Global. 8-10 a.m. May 1. Troy Chamber of Commerce. Panel in-

cludes: Rick Haas, Mahindra NA; Bruce Thelen, Dickinson-Wright, and Scott Sneckenberger, Plante Moran. Moderated by Chad Livengood, senior reporter, Crain’s Detroit Business. The panel will discuss: Expanding a business globally, foreign market research and strategies; cultural differences in business and impact of trade sanctions on global expansion. Altair Engineering, Troy. $29 Troy Chamber members; $36 nonmembers. Email: theteam@troychamber.com. Website: troychamber. com/events/going-global 5th Annual Small Business Workshop. 8 a.m.-1 p.m. May 7. The Lee Group. The Fifth Annual Small Business Workshop’s theme — “Navigating The Headwinds of Change” — addresses whether a business is ready for a competitive market, in light of potential economic changes. The workshop will feature speakers, panelists, community and corporate partners focused on assisting businesses while navigating a potential changing economic landscape later this year. TechTown Detroit. $75; early bird price $65 until April 19. Contact: Lisa Washington, email: meetings@meeting-coordinators.com; phone: (248) 643-6590.

As Ford Motor Co. CEO Jim Hackett works to transform the company, his top lieutenants will take on new roles: One will be responsible for making money and the other will spend it on future tech and innovation. Jim Farley, 56, Ford’s president of global markets, will take over Marcy Klevorn’s mobility role in his new title of president of new businesses, technology and strategy. He’ll oversee strategy, Ford’s Smart Mobility subsidiary, its autonomous vehicle unit, research and advanced engineering, corporate partnerships and global data insight and analytics. Joe Hinrichs, 52, Ford’s president of global operations, will become president of automotive. He’ll be in charge of Ford’s global operations, including product development, purchasing, manufacturing, and marketing and sales, as well as the company’s global business units: North America, South America, Europe, China and International Markets Group. Klevorn, 59, president of mobility, will retire in October after 36 years with the company. Farley and Hinrichs’ appointments are effective May 1. The move marks the second top executive shift in less than two years for Hackett, who appointed Farley, Hinrichs and Klevorn to their current roles after he was named CEO in May 2017.

The city of Detroit has hired a director of digital inclusion who will work in partnership with the University of Michigan and a nonprofit foundation to bring more Detroiters computer and internet access. The city wants to improve information access for its Edmonds residents, up to 40 percent of whom lack broadband internet access, according to a city news release. Joshua Edmonds, 27, comes from the Cleveland Foundation, where he spearheaded $1.5 million in investments in digital inclusion, the release said. Edmonds will work as part of Detroit’s Department of Innovation and Technology, building a framework to increase digital access and track progress doing so. His new job’s $65,000 salary is paid by the Miami-based John. S. and James L. Knight Foundation, not the city, in the form of a grant to the University of Michigan, Edmonds said in an emailed statement. The position was created as part of a partnership between UM and Detroit that looks at lowering poverty rates and improving equity in the city. “The digital divide touches everything from K-12 education to financial inclusion via online banking,” he said in the statement. “As such, I will be looking to engage a wide variety of partners with the capacity to provide funding. I do not have an outside budget, so I will be working with the our development and grants team to help identify additional funding opportunities.”

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April 15, 2019

C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 5 , 2 0 1 9

Ascension Michigan to get $3.6M from Wilson foundation to train, retain caregivers By Sherri Welch

swelch@crain.com

The Ralph C. Wilson Jr. Foundation is putting $15 million behind a threeyear pilot aimed at better supporting and retaining entry-level caregivers at health systems in Southeast Michigan, western New York and Cleveland. Locally, Ascension Michigan, which has seen high turnover among those employees, will receive $3.6 million to implement a program developed by the Cleveland Clinic to provide entry-level employees training and life skills coaching to increase job satisfaction and, by association, retention. The Cleveland Clinic and Buffalo-based Catholic Health are also receiving grants as part of the Transformational Healthcare Readiness through Innovative Vocational Education (THRIVE) pilot, which will include match amounts from each health system to bring total funding to $20 million. As the Wilson Foundation began to study the caregiver landscape and issues tied to it in its regional focus areas of Southeast Michigan and Western New York, “we learned very quickly that retention rates were a significant problem across both of our regions,” said Amber Slichta, vice president of programs for the Wilson foundation. It learned of the THRIVE program in development at the Cleveland Clinic — which received a legacy grant from the Wilson foundation during its first year of grantmaking — and proposed that the institute work with the Southeast Michigan and Western New York health systems on a three-year pilot to prove that investing in entry-level caregivers will increase job satisfaction and retention and produce cost savings, she said. A total of 4,000 caregivers, including home health aides, personal care aides and certified nursing assistants, are expected to come through the THRIVE program across the three health systems during the pilot. Health care systems in Southeast Michigan are seeing 50 percent turnover, on average, among patient techs and aides, Slichta said. Casinos, fast food restaurants and retailers like Whole Foods are competition for the entry-level positions. Part of the thinking around supporting the THRIVE model is to increase the perceived value of these positions to improve recruiting, she said. “Ideally, at end of three years, we’ll develop a model that can be replicated at other health systems in Southeast Michigan and in Western New York,” and among caregivers in health care settings outside of the hospitals, Slichta said. The Wilson foundation will invest $1.5 million to measure success of the pilot and demonstrate the return on investment in terms of improved retention. “We’re doing this to demonstrate that the THRIVE model works ... and that by investing in these workers, there’s a real financial return on this investment that can then keep the THRIVE model going after the initial philanthropic investment,” Slichta said. Beyond the pilot, there could be

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more support from the Wilson foundation to other nonprofit health systems in its focus regions to implement the THRIVE program, if it proves successful, Slichta said. “We also believe this can serve as a national model for others to take up over time,” she said. Warren-based Ascension had a strong interest in addressing retention when it came to entry-level positions like patient techs. It also acknowledged caregiver retention was a challenge and was interested in partnering with the other two institutions on hiking retention rates and keeping them up without philanthropy, Slichta said. As the pilot progresses, the health systems will start to pick up more and more of the costs each year, with each taking on the full costs in year four, assuming the model works as expected. Ascension will contribute $956,439 in match funds during the pilot, Slichta said. Patient care technicians and video monitoring associates at local Ascension hospitals will take part in the pilot. Participating hospitals include: J Ascension St. John Hospital, Detroit J Ascension Providence Hospital, Southfield J Ascension Providence Hospital, Novi J Ascension River District Hospital, East China Township J Ascension Macomb-Oakland Hospital, Madison Heights J Ascension Macomb-Oakland Hospital, Warren J Ascension Providence Rochester Hospital Patient care assistants, nurses aides, and similar positions “are often times the most critical part of care rendered to patients,” said Dr. Joseph Cacchione, CEO of Ascension Michigan and Ascension Medical Group. They are the front line with nurses, providing things like toileting and turning patients and helping them go from a bed to a chair. But annual turnover among the 350 associates the health system hires each year at its Michigan hospitals is in the range of 35-40 percent, said Todd Lowry, THRIVE program manager for Ascension. The loss of each of those employees incurs training and other costs equivalent to 1 to 1.5 times their annual salary, or $25,000-$37,000, he said. “Our goal is to be able to cut that turnover down … (and) to be able to pay for the THRIVE program long term from the savings from reduced turnover,” Lowry said. Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 5 , 2 0 1 9

SISTER PIE FROM PAGE 3

The idea is to drum up funding over the coming year and open in April 2020, Ludwinski told Crain’s. Sister Pie’s vision is for an expansive space with several distinct elements. First, there’s a 35-seat breakfast-and-lunch café where customers order at a counter and sit down. It would be casual, with sandwiches, soup, salads, quiche and maybe other breakfast dishes with eggs. “It’ll just be as though you went to Sister Pie and suddenly you could get a sandwich,” she said. Ludwinski’s business has long since run out of room at its 950-square-foot Kercheval shop, where customers can buy baked goods with an eccentric touch, such as shortbread with lavender and grapefruit, buckwheat chocolate chip cookies and salted maple pie. It can seat around 15 people indoors and maybe 10 outdoors, she said. In the new space, the head baker also wants to build out a grocery area with packaged salads and sandwiches; basic goods it is already buying from vendors, such as potatoes, milk, butter and eggs; and maybe a couple of heat-at-home pot pies. “Not only could someone coming to a class use some of those items to make food out of the cookbook or whatever,” Ludwinski said, referencing the recipe collection she released in October titled Sister Pie: The Recipes and Stories of a Big-hearted Bakery in Detroit. “But people who live around the corner could get (milk or butter). “Hopefully that would allow us to be even more sustainable. … We could start making things like cereals, or we

Sister Pie owner Lisa Ludwinski, a finalist for a James Beard Foundation Award, plans to expand her business.

can use even more of our ingredients to push into the grocery section of our store. We can make use of everything we have here in the bakery even more, because we’ll have different paths for us to grow. Kind of an effort to use all of our resources to our potential.” The new location would also house two classrooms so Sister Pie could expand its cooking classes, which are generally more profitable than baked goods sales and could help it offset costs as Ludwinski considers ways to keep products affordable. The waiting list for a spring class series is at least 100 people long, she said. Classes listed on Sister Pie’s website cost $80. Ludwinski plans to offer at least 24 classes a month, up from the current three to four. They could include anything from multiday workshops and custom events to classes for kids and older residents, and free community classes. The fourth component of the expansion plan is offices for Sister Pie’s administrative staff. Sister Pie has not yet signed a lease

ANISA JIBRELL/CRAIN’S DETROIT BUSINESS

Detroit bakery Sister Pie hasn’t signed a lease yet, but has an agreement to occupy a building at 8110 Mack Ave.

for the Mack Avenue building, but has a letter of intent with the owner. The owner, through Ludwinski, declined to be named or interviewed. Mack 1920 LLC, the owning entity, purchased the building in 2014 for $22,200 from the Wayne County treasurer, according to city records. Mack 1920 is registered with the state to Detroit-based Counsel Matters PLLC. Baking would be split between the two locations, Ludwinski said. Production had already been ramping up to meet demand, she previously told Crain’s, and the company is working toward making wholesale accounts with “a couple grocery stores.” Sister Pie sells products wholesale to The Farmer’s Hand market and Brooklyn Street Local in Detroit’s Corktown neighborhood, according to its website. It also sells pie and promotional gear online.

Financing and feedback Ludwinski estimates the company will need $400,000-$500,000 in build-

BANK FROM PAGE 3

Farr said medium-sized companies will be its bread and butter — it won’t have the resources to serve small companies or large corporations. It also will handle personal banking, but that will not be its focus. Andy Dillon, executive director of Conway MacKenzie, said that type of business model has strong potential in the market. “As our established banks grow, there is less interest in smaller deals,” he said. “There’s a good chance for them to succeed and serve an important role in our economy.” Farr said his short-term goal is to get to break-even within two years, which would require securing about $150 million of assets. “The longer-term goal is to grow organically and get to $1 billion by 2030,” he said. “Our biggest challenge in Southeast Michigan won’t be on the loans side. It’ll be on the deposits side.” Outstate banks typically have the opposite problem, with more deposits than loan business. Farr said he also plans on outstate acquisitions to help reach the growth goals. Due to the FDIC’s requirement that banks adhere to a three-year business plan, acquisitions likely won’t happen within the first three years of operation, said John Donnelly, managing director at Grosse Pointe-based investment bank Donnelly Penman & Partners, which was the lead agent on capital raising for Mi Bank. Donnelly said he sees robust loan demand and interest-free checking accounts driving the bank’s initial growth. Mi Bank will join a half-dozen or so

out, equipment and other costs for what Ludwinski is calling “Sister Pie on Mack” (it doesn’t have a formal name yet). She has started thinking about opportunities for financing assistance, including applying for a design award through Detroit’s Motor City Match program. Sister Pie will also consider pitch competitions, other grant programs, nontraditional loans or a revenue-sharing strategy where individuals invest capital and get repaid as revenue comes in, but aren’t considered part owners of the company. Ludwinski projects Sister Pie would pitch in somewhere around $15,000-$20,000 of its own capital. The bakery recorded sales of nearly $1 million in 2018, approximately a 20 percent increase from 2017. Before settling on the Mack caféand-grocery plan, Sister Pie solicited feedback during meetings with community members at the café and laundromat The Commons. People wanted “more savory food, more classes and potentially some

“The focus long- and short-term is on Michigan — the Mi is to let the market know we are Michigan-based and Michigan-focused.” Rob Farr

other local community banks still in the space, including Bingham Farmsbased Main Street Bank, Clarkston State Bank and Oxford Bank. Running a new bank will be largely uncharted territory considering the dearth of new financial institutions, but there have been a handful elsewhere that have found success. Bank of Bird-in-Hand, based in Lancaster, Pa., opened in 2013 and became the first de novo bank in the nation since the Dodd-Frank Act was passed. Bolstered by strong loan volume, and mergers and acquisitions of community banks within their market, the bank’s assets grew from $35 million to $308 million as of last June, according to a report from the American Bankers Association. Farr said he is confident in his new bank’s business model, even though the scars of the last financial crisis linger and the threat of another recession looms. His experience weathering the storm a decade ago has prepared him for what might come. He founded Bank of Birmingham in 2006, during a boom in community banking that also saw the creation of what became Troy-based Talmer Bancorp in 2007. In 2009, the bank lost $2 million and found itself in dire straits which most of its

sort of grocery element,” Ludwinski said, as well as another place to get a healthy, affordable breakfast or lunch. And many made it clear that “Sister Pie would feel really different” if its home base on Kercheval disappeared and it moved all operations to Mack. The decision to expand comes after Sister Pie considered several options to move forward, including possibly moving out of its original location. The move would bring some grocery essentials to an area that lost a small-scale grocer in 2016 when Parker Street Market closed its shop across the street from Sister Pie. A more substantial grocery store, Indian Village Marketplace, is about a half-mile southeast of Sister Pie and more than a mile from its proposed expansion location. There are a few nearby restaurants, including Detroit Vegan Soul, Craft Work, Marrow and the 24hour Grandy’s Coney Island. “I think it’s a great opportunity for her and that neighborhood,” said Gordon Hawkins, owner of Hawkins Realty Group, which sits at the same intersection as Sister Pie. If the new Sister Pie development materializes, the area along Mack Avenue north of West Village will “actually get some service where they can actually have something that’s walkable,” Hawkins added. “And with her being there and The Commons being there, I think that’s a great spark there for that neighborhood for developers and businessfolk and the like to come and, you know, basically be a part of it, just like what happened where we are on Kercheval.” Annalise Frank: (313) 446-0416 Twitter: @annalise_frank counterparts could not navigate. But the bank persevered and, in 2017, was acquired by Bank of Ann Arbor for about $33 million with $300 million in assets. “There’s a real desire by regulators to have some bank activity,” he said. “I think we’ll see some. It’s just taken some time after the financial crisis — everybody has to digest and process what went on back then.” Farr declined to name the founding members of the bank. He said the average investment was $75,000 to $80,000. (Crain's Group Publisher Mary Kramer is one of the founding investors. She was not involved in writing or editing this story.) The new bank spent around $350,000 building out its branch in Bloomfield Township. The general contractor is Royal Oak-based Ronnisch Construction Group Inc. and the architect is Bloomfield Township-based Luckenbach Ziegelman Architects PLLC. The office is being leased from Schwartz & Co. Investment Advisors. In addition, the bank will have a back-office presence at the Stoneridge Office Complex in Bloomfield Hills, where 11 employees will handle lending, accounting and administrative work. As for the name of the new branch, Farr said one might be surprised how much thought went into it. “The focus long- and short-term is on Michigan — the Mi is to let the market know we are Michigan-based and Michigan-focused,” he said. “Ultimately we went full circle and came back to what seemed to be an obvious name for us.” Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl


C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 5 , 2 0 1 9

RECORDS FROM PAGE 3

Now, DMI, which focuses on directly supporting physician quality support, counseling, customization and optimization of EHR systems, has four full-time workers and more than 300 physician consultants nationally representing many different clinical specialties. The company generated between $4 million and $6 million in revenue in 2017 and 2018, and it is growing this year, Saad said. “The idea behind DMI is to get doctors to be part of the change at hospitals,” Saad said. “We have been dubbed the ‘physician whisperers.’ We can bridge the gap between health care and technology and communicate with doctors at their

HORIZON FROM PAGE 1

Horizon Global declined to comment for this story. The company (NYSE: HZN) posted a net loss last year of $204 million on revenue of $850 million, down from a net loss of $3.6 million on revenue of $893 million in 2017. Its shares have lost about 90 percent of their value since hitting a high of $24 in late 2016. They were trading at $2.46 Friday morning. Horizon’s dismal performance since spinning off from TriMas in 2015 caused investors to challenge the company’s board last year. The Peter Kross Trust demanded in November 2018 that the company explore a sale or merger of the company after several quarters of what the shareholder calls “persistent gross underperformance.” In the letter to Horizon’s board of directors, the trust criticized the company’s independent directors for receiving “substantial board fees while owning very little stock, most of which was obtained as stock awards.” “As the independent directors have virtually no skin in this game and the company has persistently underperformed under their oversight, it appears that they are not aligned with the interests of shareholders and are not managing the company in the best interests of its shareholders,” the letter said. The company this month took out a $51 million term loan to continue to meet customer obligations. One of the bank’s stipulations for that loan was a big change to the company’s board composition. Horizon Global announced on April 4 it would expand its board from eight members to 10 members to “fulfill certain obligations related to the company’s recently completed $51 million second lien term loan.” In addition, four members of the board — Richard DeVore, regional president for Detroit and Southeastern Michigan of PNC Bank; Scott Kunselman, COO of Oakland University; Richard Siebert, former managing partner at KPMG LLC; and Maximiliane Straub, executive vice president of Bosch North America and CFO of Bosch LLC — were replaced with directors with turnaround experience, including Frederick “Fritz” Henderson, Adient plc chairman and former General Motors CEO; Mark Weber, COO of Federal Signal Corp.; and Harry Wilson, CEO of turnaround firm Maeva Group LLC. Denise Ilitch, president of Ilitch Enterprises LLC; current Horizon Global

level.” Since 2015, Saad has engaged with about 20 clients, mostly medium-sized to large hospitals like Brigham and Women’s Hospital in Boston, Georgetown University Hospital in Washington, D.C., and Cedars Sinai Health Network in Los Angeles. Oddly, no hospitals in Michigan, but Saad would like to change that soon. He said he is talking with two Michigan hospitals and hopes to have a contract this year. “Michigan was way ahead of the curve with EHRs,” said Saad, who said most health systems in Michigan began implementing the systems before he started DMI. “The first three years we worked with implementation. Now we are working to help systems with optimization, difficulties in gaining efficiencies, CEO Carl Bizon; and David Roberts, chair of the Carlisle Cos., remain on the board. “This is a classic case study in business school,” said Erik Gordon, clinical assistant professor with an expertise in public companies at University of Michigan. “My nose tells me the loan is to keep the company afloat until it’s sold, to show enough of a turnaround to get a deal. When you have a wholesale board change like that, it’s because the big strategic issues like a sale of the company are part of board strategy. The new board is probably one that has background in turnarounds and selling companies and isn’t tied to the old management.” The new board has its hands full as Horizon Global is well short of profitability and operational problems continue to plague the company. The company reported a $5.8 million charge related to customer fines for not delivering product on time in the fourth quarter alone. Its CEO has maintained the company is on the mend. “As a company, we have been taking aggressive action now, and we’ll continue to do so in order to position Horizon for long-term growth and profitability,” Bizon told investors on its earnings conference call on March 19.

Leaving home Horizon Global came into being as a public company in the summer of 2015, spun off from Bloomfield Hillsbased TriMas after the packaging and aerospace supplier deemed the unit then called Cequent as outside its core competencies. At the time of its spinoff, Horizon Global had improved margins and grown through acquisitions. Trading of Horizon Global shares began on July 1, 2015, at $15.05 a share. But it quickly faced challenges on its own. Within six months, sales were decreasing and profit margins weaker than under its parent company. Sales declines in its retail and industrial businesses offset gains in its automotive aftermarket and automotive original equipment lines. But the company declared that sales would grow and margins would continue to improve thanks to consolidation of its operations in Mexico. And it did. Horizon Global quickly recovered by the second quarter of 2016 with sales increasing 8.7 percent in the second quarter of 2016. With a full year of operations under its belt as a standalone, Horizon Global set out to establish itself as a global player by acquiring German towing products manufacturer Westfalia-Au-

“The idea behind DMI is to get doctors to be part of the change at hospitals. We have been dubbed the ‘physician whisperers.’ We can bridge the gap between health care and technology and communicate with doctors at their level.” Hass Saad, M.D.

revenue capture, documentation and to improve process flow.” tomotive and its sister company Terwa in a $189 million deal in late 2016. “The acquisition of Westfalia is a transformational step for Horizon Global, estabCarl Bizon: CEO lishing our aims for company as a turnaround. towing product leader in Europe,” then-CEO Mark Zeffiro said in an investor call on Aug. 25, 2016. “This combination of positions for our company provides us the opportunity to accelerate great growth on a global scale.” Its quest to conquer Europe continued when Horizon Global announced a $200 million deal to acquire Netherlands-based towing accessories manufacturer Brink Group in December 2017. The deal was to be financed mostly by long-term debt, but was canceled in June 2018 with Horizon Global paying a $5.5 million breakup fee to Brink Group’s private equity owners. The early results of the Westfalia deal were positive as Horizon Global saw a 39 percent increase in its European and African unit revenue during the first quarter of 2017, mostly attributed to the Westfalia acquisition. But by the third quarter of 2017, cracks started to show in Horizon’s European unit, which was integrated with its Africa business by that time. Zeffiro told investors on March 1, 2018 that Westfalia’s Nordic businesses were losing money, though being offset by good performance elsewhere in Europe. The plan was to fix the finan-

“As the independent directors have virtually no skin in this game and the company has persistently underperformed under their oversight, it appears that they are not aligned with the interests of shareholders and are not managing the company in the best interests of its shareholders.” The Peter Kross Trust letter to the Global Horizon board

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Generally, DMI is hired a month or two before hospitals begin the 18-month process of “going live” with the new system. “They turn on the switch and have to treat patients and use the EHR. We come in and help doctors. Implementation and optimization goes on at the same time. We stay several months after they go live.” Keith Neuman, chief information officer at Roper St. Francis Healthcare, Charleston, S.C., said DMI was hired to support its physicians with a Cerner EHR implementation. Over a six-month engagement during 2017, Saad and his DMI team worked closely with dozens of physicians, helping them learn the new system. “We use Cerner EHR on the acutecare side and were going from paper. It took us quite a while to get it done,” Neuman said. “We installed it, acti-

vated it, (did) the go live (in October 2016). Cerner had resources, but we brought in DMI to help us from a physician standpoint. It really helped to hire physicians to stand with my physicians. It was one of the best moves I made, and I should have done it sooner than I did.” If he had to do it all over again, Neuman said he would have hired DMI to assist with the design, build and installation. “Once they came in the door, DMI doctors had daily meetings with my doctors. They discussed what needed to change, how you should use the system,” he said. “We hired them for a couple months and ended up extending them several times. Doctors were upset when they left.”

cial problems there or exit the region altogether, Zeffiro said. “(Westfalia) was a bridge too far,” said a source close to the company who spoke to Crain’s on the condition of anonymity. “(Horizon Global) couldn’t absorb the acquisition.” And as the company’s executives were focused on integrating a troublesome Westfalia in 2017, things were also falling apart in North America.

spring of 2018, less than year after his son’s funeral, and Zeffiro, who resigned on May 8, 2018, days after the company reported a $57.5 million net loss in the first quarter of 2018. Horizon named Bizon, formerly its Americas president, to interim president and CEO before making him the permanent top executive later that year. “(Bizon) is a cost cutter,” a source said. “Cost cutters are not builders, so the company is looking for savings where it can.” By the end of the second quarter in 2018, Horizon Global had posted a loss of $64.1 million and revenue had fallen by $30 million from the same quarter a year earlier. Bizon told investors missteps in its Europe-Africa business were to blame, but measures were being taken to correct them. “Decisions made regarding manufacturing consolidation, production sourcing and related logistics have overcomplicated this business,” Bizon told investors last June. “Moves that were made to improve margins and increase productivity were not effectively executed and are having a short-term adverse effect on our results.” But the Kansas City distribution center was still a problem. The company exited the second quarter of 2018 with $23 million in past due orders stemming from poor operations in Kansas City. Horizon Global has made improvements in Kansas City, but the plant ended 2018 with $6 million in past-due orders. It reported an operating loss of $29 million in the fourth quarter. “If you’re going to consolidate a bunch of operations into one place, that one place better work really well,” Gordon said. “If not, you’ve just doubled down on your troubles.” At the beginning of 2019, the company’s market cap fell below $50 million and faced delisting by the NYSE. It regained compliance by late March of this year. The company is continuing consolidation efforts by moving from its Troy headquarters at 2600 W. Big Beaver Road into its Plymouth location at 47912 Halyard Drive, the fourth location to be consolidated into that office. “We expect to realize some initial cost savings from this decision that will be related to reduced operating and facility expenses, but this action will have many benefits beside cost savings” including improving collaboration and culture, Bizon told investors in March. The time line for the move, like the company’s future, is unclear.

Consolidation consternation In July 2017, Horizon announced it would consolidate six regional distribution centers into a newly built 512,000-square-foot facility in Kansas City, Mo.. by the end of that year. It was also closing a plant in Mexico and consolidating it into another South of the border. That same month, the son of John Aleva, president of the Americas for Horizon Global, died unexpectedly. Aleva was out two months at a time the company’s other top executives were dealing with the Westphalia acquisition, another source close to the company who spoke to Crain’s on the condition of anonymity said. “Aleva was a master salesman and leader and there’s no doubt in my mind the events that summer caused a lot of major initiatives that were crucial to the company did not get done,” the source said. “Then the acquisition in Germany was taking longer to implement and the profitability wasn’t coming in at the same time distribution wasn’t getting out to customers. All this can be led back to the disruption of a very key member that was the heart and soul of the company at that time.” By the fourth quarter of 2017, the company was bleeding cash and shipments were late. Sales decreased in North America by 5.1 percent in the quarter and reported a $3.6 million loss on the year. “The launch of the new Kansas City distribution center negatively impacted (fourth quarter 2017) performance, as the operating cash at launch were higher than anticipated,” Zeffiro told investors at that time. In response, the company initiated a cost-saving restructuring plan in March 2018, including reducing its U.S. salaried workforce by 30 percent by consolidating its Solon, Ohio, and Mosinee, Wis., offices into its Plymouth location and increasing production in low-cost locations like Mexico and Eastern Europe. It was expected to result in cost savings of $3 million to $5 million this year. But the plan couldn’t save Aleva who was fired by the board in the

Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh


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C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 5 , 2 0 1 9

FAMILY

don’t feel punished by their peers for taking advantage of them. Miller recounts an employer with a work-fromhome policy that was left to the discretion of managBrooke Miller ers to deploy. That created an inconsistency between two mothers with the same positions, one with a manager supportive of the flexible work option, and another who wasn’t. “These are two people with the same job, different manager,” she said, “and they had a 1,000 percent different experience.” Miller recommends pairing policies with employee education and manager training so everyone understands what is available and why family-friendly policies are important.

FROM PAGE 1

“Part of how we are successful is to remove any barriers to brilliance,” said Dug Song, Cisco vice president and general manager and co-founder of Duo Security. “We have to accommodate life changes for people.” Many employers are rethinking what it means to be family-friendly. Sure, paid maternity leave is good. But paid leave for all new parents is better. And while prenatal coverage is fairly standard, why not bring health care providers on-site so parents can more easily access care? Throughout Metro Detroit, more employers aim to offer benefits that help employees with families to not only get by, but to excel — especially during the high-stress time of early parenting.

Family-friendly benefits Now a part of Cisco, Duo Security employs more than 700 people. But the organization’s commitment to employees’ families dates back to its early days. “We’ve been doing this since we were under 10 people, but I think that’s what gave us the opportunity to become a big company,” said Song. “In our business, all we have are people. We’re not manufacturing anything. So our job is to make sure that everyone who leaves tonight is going to come back tomorrow morning.” Jamie Tomasello, senior manager of security operations for Duo Security, felt the value of the company’s family-friendly culture when she interviewed for her job three years ago. When the company learned Tomasello, who is a single mom, was arranging for her young son to accompany her to the interview, they offered to pay for his flight. And they’re still helping her arrange business travel around her son. “When I travel for conferences, I have to bring my son,” she said. “My manager is really good about understanding that my speaking or professional development opportunities need to happen in the summer or around school breaks.” The list of benefits goes on: paid time off and financial support for infertility, surrogacy and adoption; shipping refrigerated breast milk home from business travel; parent education, healthy pregnancy and breastfeeding programs; onsite mothers’ rooms and child care centers; as well as backup child care services should an employee’s regular plans fall through. And those are just some of the formal policies. According to both Tomasello and Edwards, the supportive culture for working parents is a benefit, too. They’re on a Slack channel for Duo Security parents, they organize shared childcare during half-days at schools, and they support each others’ parenting. “If you see a kid in the office, it’s not weird,” Tomasello said. “For us, it’s become extremely natural.”

Matching benefits to the culture Duo Security’s family-friendliness could be considered the Cadillac of benefits for new parents. But that’s not to say other employers should just copy and paste those policies into their HR manuals. “A lot of people think, ‘If we just had longer leave everything would be fine.’ But that’s not the end of the story,” said Brooke Miller, founder and CEO of Ferndale-based Honey Space for

Support before and after leave

Brooke Miller and Karen Evans speak to the Detroit chapter of the IPG Women’s Leadership Network at Commonwealth-McCann about policy development for parents in the workplace.

HONEY SPACE FOR MOMS

The state of parental leave

Parental leave benefits are still not commonplace in corporate America, but are on the rise. Roughly 27 percent of U.S. employers offered parental leave in 2018, up from 20 percent in 2017, according to the 2018 Employee Benefits Survey by the Society of Human Resource Managers. That increase is largely buoyed by paid maternity leave, which was offered by 35 percent of employers in 2018, up from 26 percent in 2016. Paid paternity leave was also up: 29 percent of employers offered it in 2018 versus 21 percent in 2016. Parental leave benefits were also far more likely to be offered by larger companies, according to the survey. Twice as many companies with 10,000 or more employees — 60 percent of them — offered paid maternity leave, compared with those with fewer than 500 employees, 31 percent of which offered the benefit, the survey said. Those larger organizations also offered paternity leave at a higher rate, 52 percent versus 25 percent. Paid leave for adoption, foster children and surrogacy are also on the rise, but at a lower rate than traditional maternity and paternity leave. Other family-friendly benefits the survey reported include: JJ11 percent of employers offered on-ramping for new parents re-entering the workforce. JJ2 percent offered on-site parenting seminars. JJ49 percent offered an on-site lactation room, compared with 28 percent in 2014. JJ11 percent offered adoption assistance benefits, compared with 6 percent in 2014. JJ27 percent allowed employees to bring a child to work in an emergency. JJ3 percent offered subsidized on-site child care; 3 percent offered non-subsidized on-site child care.

— Dustin Walsh

CONTRIBUTED PHOTOS

Ashley Tuomi, CEO of American Indian Health & Family Services in Detroit, is able to bring her baby to work with her for six months, easing family stress and giving her an opportunity to bond with her child without falling behind on the job.

lMoms, a business that offers coworking-plus-child care, moms’ groups and wellness services and consults with employers on family-friendly policies. “This is not a one-size-fits-all.” For example, said Miller, some companies love work-from-home policies, which many parents appreciate, but it’s not always a good fit culturally or logistically for some organizations. “A company may be taking the idea of another company and embossing it on theirs and wondering why it’s not working,” said Miller. “It’s something that needs to be on-brand.” One example of how that looks in practice is American Indian Health & Family Services in Detroit, which allows parents to bring their infants to work until they’re 6 months old. “It’s a way to keep your employees happy, and it’s good for their well-being,” said Ashley Tuomi, CEO of the organization, which employs about 50 people. “I have my 3-month-old sitting on my lap right now.” As CEO, Tuomi felt it was only feasible to take two-and-a-half weeks off for maternity leave. That might have been a burden, but bringing her baby with her made it an opportunity to avoid getting further behind without

guilt. And while some might find babies in the office to be a distraction, Tuomi sees it as a net gain. “Over time, the happiness it brings, as well as getting the mothers back to work, is so important,” she said. “While day-to-day it may not seem like people are more productive, their overall work quality is better.” Just as Miller indicated, the key to the success of the American Indian Health & Family Services’ infant-atwork policy is how aligned it is with its mission, which is to provide comprehensive, culturally integrated health and well-being services to Native American families and other underserved populations. “We’re very family-centered in all of our services and within our cultural beliefs,” she said. “For us, this is just a way to increase that family bond.”

Pairing benefits with culture change Policies that support new parents in the workplace are important, but so is culture, emphasizes Miller. Parents only benefit when taking increased leave or using flexible work arrangements is genuinely encouraged and practiced by leaders — and when they

Quicken Loans has long offered a robust suite of family-friendly benefits, from fertility coverage to generous parental leave. In recent years, they’ve added to their offerings with ongoing support and education programming for working parents. “The coolest thing is our monthly support groups led by experts,” said Tony Saunders, COO of Rock Ventures, which provides support services to Dan Gilbert’s family of companies, including Detroit-based Quicken Loans. The six on-site employee groups meet to discuss shared experiences such as first-year parenting, single parenting, and miscarriage and loss. “It’s awesome to be able to offer that benefit because often we assume that having the child is the toughest part, but being a parent has its own challenges.” Even their on-site child care subsidy, which offers team members up to $400 a month to defray child care costs at the center located in the Quicken Loans building, helps to more deeply ingrain family culture into the workplace. “It’s cool seeing some of the team members come up the elevator with their kids,” Saunders said.

Making the business case Naturally, one of the biggest barriers to companies implementing more generous benefits for new parents is cost concerns. But those concerns are misplaced, said Miller. They should be more concerned about the cost of not supporting employees with families. “Companies are spending an incredible amount of money to replace parents in the workplace who are talented and should be there,” she said. “We know that employers who have engaged, dedicated employees, those employees are more productive.” For example, research has shown that paid maternity leave increases the likelihood that mothers return to work and work more hours when they do — and in a tight labor market, robust family-friendly policies can be a competitive advantage, too. It’s no wonder that many companies, including Ford and even Walmart, have started expanding their benefits for new parents. Song calls Duo Security’s employee benefits a long-term and strategic advantage. “If you want to build a company and be successful, you have to take care of your people,” he said. “For me, it’s a pretty simple equation.”


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PALACE FROM PAGE 1

Larry Emmons, managing director of the Royal Oak office of Chicago-based brokerage JLL, said The Palace property is one of the four best sites in Oakland County for redevelopment, along with:  The former Summit Place Mall property that he and JLL are marketing to users on the Waterford Township/Pontiac border for Southfield-based Ari-El Enterprises Inc. as part of a planned $63 million redevelopment into the new Oakland County Business Center project;  The former Ford Motor Co. plant site in Wixom, which is the target of a $150 million development across 182 acres with 1.66 million square feet of new warehouse space  The Pontiac Silverdome property, which was demolished in December 2017 with 127 acres of land available. “There is interest. There have been a few phone calls from people looking at it wanting information, but this is not out of the ordinary,” said Steve Apostolopoulos, co-founder and managing partner of Silverdome site owner Toronto-based Triple Properties Inc. Emmons said The Palace site could roughly accommodate about 1 million square feet of building space spread across one or multiple buildings. He based what he called a “back of the napkin” calculation on 100 or so acres times 43,560 square feet per acre, and then taking about a quarter of that figure for building space. “These are going to be high-end buildings that fit the zoning in Auburn Hills with big green areas,” he said. Ryan Dembs, president and CEO of Farmington Hills-based real estate development company Dembs De-

velopment Inc., which is active in Auburn Hills, including a new speculative development in conjunction with Schostak Bros., said The Palace site’s size is a boon. “That’s a big piece of land,” he said. “It’s wide open, which makes it desirable. You can basically do whatever you want. I think that site lends itself to some bigger buildings; big sites like that these days are hard to come by.” In April 2017, the city unveiled its Palace of Auburn Hills Arena Site Redevelopment Study, which examined the 109-acre property (which has 18 acres of wetlands) and its reuse in the future. The 103-acre site on which the arena sits was zoned industrial, and in June 2017 was rezoned for technology and research uses; the 6-acre site on which the practice facility sits had already been zoned for technology and research uses. The study also says 1 million square feet of industrial use with three or four large-scale sites would be ideal. Steve Cohen, director of community relations for Auburn Hills, said in a statement that the city’s “planning concept envisions facilitating redevelopment of the site with several large scale R&D/clean industrial businesses. The option would be immediately supported by the real estate market and is a natural fit for Auburn Hills.” “ ... Working collaboratively with officials from the Michigan Economic Development Corp. and Oakland County, we are confident that the city of Auburn Hills will be successful in helping a future developer attract new companies and investment to the location, not to mention hundreds of good-paying jobs,” Cohen said. The Oakland Technology Park project has been developed over years by Farmington Hills-based Friedman Real Estate and South-

“That’s a big piece of land. It’s wide open, which makes it desirable. You can basically do whatever you want. I think that site lends itself to some bigger buildings; big sites like that these days are hard to come by.” — Ryan Dembs, president and CEO of Dembs Development Inc.

field-based General Development Co. LLC on 211 acres formerly owned by Chrysler Corp. and purchased during its bankruptcy in 2010 for $2.5 million. Messages were sent to Friedman Real Estate and General Development seeking comment. Oakland Technology Park's occupants include U.S. Farathane Corp. (240,000 square feet); Henniges Automotive Inc. (55,000 square feet); Faurecia North America Inc. (278,000 square feet); Incoe Corp. (135,000 square feet); Hutchinson North America (60,000 square feet); Hirotec America Inc. (216,000 square feet); Atlas Copco North America Inc. (120,000 square feet) and Renishaw (20,000 square feet). All together, it has at least 1.125 million square feet of building space plus another 55 acres in the center of the property that could accommodate between 175,000 square feet and 700,000 square feet, according to the Friedman Real Estate .

LARRY PEPLIN FOR CRAIN’S

Oakland County in 2016 rejected an overture to buy The Palace for $370 million from Palace Sports & Entertainment. County Executive L. Brooks Patterson said at the time that it would have been a bad financial move for the county. Oakland University had been in discussions to purchase the property, Crain’s and other outlets reported in October. Palace Sports asked several developers and other real estate companies this summer to pitch ideas and provide their assessments on the property’s value as well as how much it would cost to tear down the arena, a source familiar with the meetings said at that time. Real estate and development experts have long predicted that The Palace property will eventually be demolished and redeveloped. Billionaire William Davidson, the Auburn Hills commercial and industrial glass industrialist who bought the Pistons for $8 million in 1974, spent $90 million to build The Palace with partners Robert Sosnick, the former president of Southfield-based developer Redico LLC, who died in 2000, and dealmaker David Hermelin, who also died in 2000. Davidson died in 2009. Tom Gores bought the Pistons and The Palace in 2011 for $325 million. He has spent $40 million in upgrades on the arena. Schostak Bros., founded in 1920, developed Livonia Mall and Macomb Mall in 1962, as well as one of metro Detroit's first Kmart stores. Currently, the company is also developing Woodward Corners by Beaumont in Royal Oak along with Bloomfield Hills-based AF Jonna Development LLC, among other projects. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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CUSTOMER SERVICE Single copy purchases, publication information, or membership inquiries: Call (877) 824-9374 or customerservice@crainsdetroit.com Reprints: Laura Picariello (732) 723-0569 or lpicariello@crain.com Crain’s Detroit Business is published by Crain Communications Inc. Chairman Keith E. Crain Vice Chairman Mary Kay Crain President 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 the last issue in December, 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 2019 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.


C R A I N ’ S D E T R O I T B U S I N E S S // A P R I L 1 5 , 2 0 1 9

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THE WEEK ON THE WEB

RUMBLINGS

Gilbert buys long-vacant downtown building

Chef, Birmingham bistro owners cut ties

APRIL 5-11 | For more, visit crainsdetroit.com

D

an Gilbert has added another Woodward Avenue building to his ever-growing collection of downtown Detroit real estate. The billionaire founder and chairman of Detroit-based Quicken Loans Inc. and Rock Ventures LLC has finalized the purchase of the Fowler Building at 1225 Woodward Ave. for an undisclosed price. Its previous owner, an entity affiliated with New York-based Sequoia Property Partners, put it on the market late last year for $22 million, or $396.40 for each of its 55,500 square feet. Sequoia paid just $700,000, or $12.61 per square foot, in 2012. An email was sent to a representative of the previous ownership group seeking comment. The first floor of the building is expected to be converted to retail while its upper seven floors are slated for office or residential conversion, said Jim Ketai, chairman of Gilbert’s Bedrock LLC real estate development, ownership, management and leasing company. The building will be cleaned out starting “right away” and the redevelopment will start “immediately,” Ketai said. It has been vacant for around three decades. “I have been eyeballing it for a long time saying, ‘I wish the rest of that block and these three blocks would be occupied and look good,’” Ketai said. “To me, with everything else going on on Woodward with the buildings we have brought back to life and the Hudson’s and Monroe developments happening, it was necessary to add this to complete the whole thing.” Bedrock is working on the $909 million development of what is expected to be the state’s tallest building on the site of the former J.L. Hudson’s department store and the $830 million Monroe Blocks development near the Quicken headquarters. The Fowler renovation budget has not yet been determined, but Ketai said “it will be a lot of money, a big investment.” “A lot of work needs to be done. The building is not in very good shape. It’s somewhat similar to the other buildings, like 1201 and 1207 (Woodward),” Ketai said. “All the core and shell needs work, we’ll repair the facade and put in new infrastructure and windows.” After being built for an estimated $150,000 (about $4 million today), the Fowler Building opened in 1911 as the home of Kline’s Ladies Wear, which was housed there until 1958, according to city historic documents. It was designed by the architecture firm Donaldson & Meier. The Fowler was one of the few buildings along the Woodward corridor south of Grand Circus Park that didn’t bear Gilbert’s fingerprints, either through ownership or a master lease for the retail space. Bedrock and Farmington Hillsbased Keystone Commercial Real Estate LLC were the brokerage firms on the transaction. An architect and contractor have not yet been selected for the renovation.

B

BEDROCK LLC

Dan Gilbert has purchased the Fowler Building at 1225 Woodward Ave. for an undisclosed price. The first floor of the building is expected to be converted to retail while its upper seven floors are slated for office or residential conversion.

Detroit digits A numbers-focused look at last week’s headlines:

$1.3 billion The value of the Detroit Tigers, as estimated by Forbes

31 cents

Cost per minute to ride a Bird scooter after the California-based company more than doubled its rates

$2.1 billion Size of Detroit’s overall spending plan, which Moody’s Investors Service called “credit positive”

J Macomb Township-based tooling supplier Baker Industries Inc. has been acquired by global manufacturer Lincoln Electric Holdings Inc. as part of a large-scale metal 3-D printing venture it plans to launch in mid2019. J Dockless electric scooter company Bird has more than doubled its fare rate in Detroit. The California company, which operates the rentable scooters in many cities in Michigan, doubled its Detroit prices from 15 cents per minute to 31 cents per minute, according to its mobile app. J The University of Michigan has committed to purchase 200,000 megawatts renewable energy — estimated at half its total purchased energy for the university’s Ann Arbor campus — from DTE Energy Co. starting in 2021, the energy company and university announced last Tuesday.

BUSINESS NEWS

SPORTS NEWS

J Moody’s Investors Service is giving Detroit City Council’s newly minted 2020 fiscal year budget high marks for using “conservative revenue assumptions” and socking away $45 million in surplus revenue to fund post-bankruptcy pension obligations coming due in five years. J The Ralph C. Wilson Jr. Foundation is putting $15 million behind a threeyear pilot aimed at better supporting and retaining entry-level caregivers at health systems in Southeast Michigan, western New York and Cleveland. J The Michigan Economic Development Corp. hopes to see $1 million of new business contracts born from its aerospace summit pairing global purchasers with local suppliers that took place last Wednesday at Ford Field. J Travelers rushing to catch their flights at Detroit Metropolitan Airport will have to hoof it for a few more weeks. After months of renovations, the trams in the McNamara Terminal were expected to resume service last Friday. That timeline has been pushed to early May, the Wayne County Airport Authority said in a statement. J DMC Harper University Hospital no longer faces the loss of millions of dollars of Medicare funding after it passed an infection-control inspection on April 3. J Lansing-based franchised moving company Two Men and a Truck International Inc. plans to hire around 500 new workers in Michigan ahead of what it expects to be its busiest moving season.

J Michigan International Speedway will get an enormous new infield scoreboard to help spectators keep up with race leaders during the track’s motorsports weekends this summer. The new 150-foot high scoreboard will include screens on all four sides, MIS said in a statement. J The Detroit Tigers, despite a rapidly declining audience and two 98loss seasons, were profitable last season but remain sluggish in valuation gain, according to the annual baseball team valuations published by Forbes.com. The team is worth $1.3 billion, up from $1.225 billion a year ago, Forbes said. J Organizers of the Rocket Mortgage Classic in Detroit are launching a fundraiser, the Rocket Mortgage Classic Birdies for Charity, designed to capitalize on the excitement of the upcoming PGA tournament. J Fox Sports Detroit, which has the broadcast rights to Tigers games, said this week that it will have 17 “Players Only” telecasts in which former players offer running commentary and conversation during a game rather than traditional play-by-play. J The Dan Gilbert-owned Cleveland Cavaliers are renaming their home from Quicken Loans Arena to Rocket Mortgage FieldHouse as the Detroit-based mortgage company expands its Rocket Mortgage branding. J The Detroit Lions last Wednesday formally announced that Ford Field will get new artificial turf in time for the 2019 season.

oston-based celebrity chef Michael Schlow and his local partners in Japanese-inspired downtown Birmingham bistro Adachi have severed their ties. Real estate developers Kenny Koza and Clint Mansour will continue operating the restaurant, which opened in August in the former Ford-Peabody mansion on South Old Woodward Avenue. James Beard Foundation Award-winning Schlow and the Adachi partners “will amicably part ways to focus on separate new ventures,” Schlow Restaurant Group and the Adachi owners said in a news release. Executive Chef Lloyd Roberts will still run the kitchen and David Kraus will stay on as general manager, Koza said in the release. Koza and Mansour will continue work on the pan-Asian Bloomfield Township restaurant they were set to open with Schlow, Zao Jun. It’s expected to debut in early May, the re-

lease said. Koza didn’t immediately respond to a request for comment. Schlow, meanwhile, will turn toward incoming restaurants Prima in Washington, D.C., Time Out Market in Boston and Tico at Boston Logan International Airport. Last May, he closed his 3-year-old Greek tavern in Boston, Doretta Taverna and Raw Bar, the Boston Globe reported. The chef has been on TV, including on “Top Chef Masters” and on the Food Network, and wrote the cookbook It’s About Time: Great Recipes for Everyday Life. The New York native said in the release that Schlow Restaurant Group is “proud” of its involvement and of the restaurant’s food and service, but did not address the reason for the departure. The 65-seat Adachi is an upscale Japanese-inspired restaurant at 325 S. Old Woodward Ave. with sushi, sashimi, Japanese grilled meats and pan-Asian offerings.

Michigan International Speedway is making way for a new scoreboard and video screen for the 2019 season. MICHIGAN INTERNATIONAL SPEEDWAY VIA FACEBOOK

MIS to add towering new scoreboard system M

ichigan International Speedway will get an enormous new infield scoreboard to help spectators keep up with race leaders during the track’s motorsports weekends this summer. The new 150-foot-high scoreboard will include screens on all four sides, MIS said in a statement. It will have video screens, which will be 12 feet high and 19 feet wide, at the bottom to show replays and other action. Those will be 44 feet above the ground. The new leaderboard stretches 72 feet above the video screen and will totally encase all four sides, MIS said. The new digital leaderboard will show the top 15 positions, MIS said, and at the bottom, the final two positions will scroll through everybody in the race. The top of the leaderboard will feature a four-foot section that will be able to show the lap number of the race or the top speed in practice and qualifying, track staff said.

“We continue to make enhancements to the facility to improve the experience for the fans on race weekends,” MIS President Rick Brenner said in a statement. MIS, which sits on 1,400 acres in the Irish Hills near Brooklyn, Mich., declined to disclose the cost of the scoreboards. The video system comes from Brookings, S.D.-based Daktronics Inc., which is perhaps the most notable U.S. provider of electronic scoreboards. It built the $8.5 million, 5,100-square-foot video board that hangs at Little Caesars Arena, Comerica Park’s $10 million scoreboard from 2012, and the original and replacement video boards at Ford Field. Daktronics declined to comment, deferring to MIS. Construction has already begun on the new scoreboard and will be finished before the first races in June, MIS said.


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Profile for Crain's Detroit Business

Crain's Detroit Business, April 15, 2019 issue  

Crain's Detroit Business is the premier business publication for Southeast Michigan. This is the issue published April 15, 2019. You can fin...

Crain's Detroit Business, April 15, 2019 issue  

Crain's Detroit Business is the premier business publication for Southeast Michigan. This is the issue published April 15, 2019. You can fin...

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