DAPCEP helps build STEM skills Page 3
Michigan develops electric vehicle charging network
SPORTS BUSINESS
When Steve Yzerman stepped down as general manager of the Tampa Bay Lightning in September, it paved the way for his return to Detroit.
The Captain returns Red Wings bring back Steve Yzerman as GM to orchestrate return to glory
By Bill Shea bshea@crain.com
Steve Yzerman, architect of the Tampa Bay Lightning’s rise to NHL powerhouse and perhaps the most beloved Detroit Red Wings player after only Gordie Howe, is back where many think he belongs. The Red Wings formally introduced the retired Hall of Famer on Friday afternoon as the Original Six franchise’s next general manager, confirming a hire that’s been speculated for months. Current General
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Manager Ken Holland will stay on as senior vice president. Red Wings President and CEO Christopher Ilitch and Holland were alongside Yzerman at an introductory press conference at Little Caesars Arena on Friday afternoon. Yzerman, 53, is now expected to orchestrate Detroit’s return to National Hockey League prominence, something he did as a Red Wings player for 22 seasons as a sharpshooting forward who helped deliver three Stanley Cups.
AP
TECHNOLOGY
StockX poised to take $1B leap By Chad Livengood clivengood@crain.com
and Dustin Walsh dwalsh@crain.com
SEE YZERMAN, PAGE 19
REAL ESTATE
BUILDING UP TO A PEAK? Metro Detroit construction boom continues, but factors signal it may get harder to build soon By Kirk Pinho |
C
pinho@crain.com
onstruction in Metro Detroit hit an apex last year in terms of project values, but many area builders and others are anticipating a mild slowdown in the years to come. It's not a matter of if, but when. ¶ New York City-based Dodge Data and Analytics says there was $5.17 billion in new buildings started last year in Wayne, Oakland, Macomb, Livingston, Lapeer and St. Clair counties, topping the previous high this century of $5.152 billion in 2004. Last year’s figure includes $2.44 billion in residential construction and $2.73 billion in nonresidential construction. ¶ But a variety of factors are contributing to an anticipated slowdown, in spite of a bevy of large developments in the regional pipeline (see box, page 18).
SEE BUILDING, PAGE 18
Dan Gilbert’s StockX is reportedly joining the stable of technology unicorns, gaining a more than $1 billion valuation if talks with a pair of venture capital giants results in a deal. A “unicorn” in venture-capital parlance is any company that has been valued at $1 billion or more. Last year, 47 companies reached unicorn status including mobile appbased delivery food service DoorDash, rentable scooter firm Bird and recruiting platform ZipRecruiter to name a few. The Detroit-based "stock market of things" that specializes in reselling highly collectible sneakers and luxury goods is in advanced talks with Hong Kong-based GST Global and Silicon Valley’s GGV Capital to secure what would be expected to be hundreds of millions in funding for the 3-year-old startup, Recode reported Friday, citing sources familiar with the matter. A StockX spokeswoman declined Friday to comment to Crain’s on the company’s valuation. A spokeswoman for Menlo Park, Calif.-based GGV Capital also declined to comment, referring questions to StockX. StockX would be a beneficiary of eager investors willing to gamble big dollars on companies with fast-growing revenue but no profits, local experts told Crain’s. The e-commerce company co-founded by Quicken Loans Chairman Gilbert and CEO Josh Luber is not profitable, Recode reported, despite doing more than $2 million in daily sales. The company makes money by taking a commission of 8 percent to 9.5 percent on each sale plus a 3 percent processing fee. Luber has repeatedly said publicly that StockX was expected to top $1 billion in sales through its exchange in 2018. SEE STOCKX, PAGE 20
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LIFE AFTER LAKESIDE? Retail burgeoning along Hall Road
In this package
By Kirk Pinho | kpinho@crain.com
S
art inexpense of Macomb County’s newest ome have had plenty of fun at the an orange, 35-foot-tall ring recently stallation in the Hall Road/M-59 median, dubbed The Halo. is no laughing matter. But the 10.5-mile road’s retail scene of thousands of in the region, catering to hundreds In fact, it’s one of the most active and highway shopping in big-box, junior-box people along a heavily traveled state and The Mall shopping centers in Lakeside Mall smaller retailers, plus a pair of regional at Partridge Creek. “There are three Walmarts, two Targets and two Home Depots,” said Louis Ciotti, an associate broker with Farmington Hills-based Landmark Commercial Real Estate specializing in Macomb’s dense retail footprint. “That defines the amount of retail and traffic right there.”
“It’s very important for the communities along Hall Road to determine what the future should look like, and how to
a ing from 38,768 to 43,611 in 2017, 12.5 percent bump, more than double the state’s 6.2 percent gain (from 461,458 to 490,024) during that same time period.
Macomb County retail According to CoStar Group Inc., a -
Slowdown ahead: Construction in Metro Detroit hit an apex last year, but mild builders and others are anticipating a 1 slowdown in the years to come. Page Life after Lakeside: Retail burgeoning along Hall Road. This Page Q& A with Vicky Rad: The time is right to reinvent Macomb County. Page 9 Family affair: The multigenerational Monahan Co. is building up Detroit. Page 10
ty sale price per square foot is $107, compared with $101 the previous period. That’s just the beginning, according to CoStar forecasts. Rents are expected to cross the $24 per square foot threshold by the end of the year, although vacancy rates are expected to gradual-
ly climb. Part of the reason for a flourishing
An orange, 35-foot-tall ring dubbed The Halo sits in the median at Hall Road/M-59, one of the most active retail scenes in the region. LARRY PEPLIN FOR CRAIN’S
he along Hall Road, remembers when was in the state Legislature and Lakeside Mall was slated to open to much fanfare. “I remember when they were growall ing pumpkins there. Going through a the communities, it would become very vibrant area. Did I think it would be this big? Heck no. “One of the things on Hall Road that identified it and put it on the map was to Lakeside. I drove out to Hall Road where they said they were putting this multi-leveled mall and when I’m looking trying to make sure I’m in the right to spot, some fenced-in cattle came in I say hello to me through the fence. for thought this couldn’t possibly be real,” Guastello recalled. However, Bonner said, expect there to be some changes afoot as Hall Road to becomes saturated and retail shifts the north and east. “Retail in Macomb County continues to shift towards residential population growth,” he said. mmu-
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MICHIGAN BRIEFS
INSIDE
From staff and wire reports. Find the full stories at crainsdetroit.com
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Report: Michigan venture capital community marks record-breaking year of investment Michigan’s venture capital ecosystem benefited from a record-breaking year of investment in startups in 2018. A total of 61 Michigan startups landed $385 million from venture capital firms, according to Ann Arbor-based Michigan Venture Capital Association’s annual research report released Monday. In comparison, last year 68 startups gained $179 million from VC firms based in Michigan, the report says. The state’s venture capital landscape is thriving, but a demand for more capital investment to assist the growth of startups is especially acute, the report says, as an additional $964 million in venture capital is needed to support that growth over the next two years. “To position Michigan at the forefront of innovation, we need highgrowth, high-tech startup companies to build a robust economy in the state,” MVCA Executive Director Ara Topouzian said in a Monday news release. “We have the critical components to building a strong entrepreneurial and investment community
— talent, research, capital and community — but as these companies reach their next stages of growth, we need additional capital to sustain it.” The number of venture-backed startups in Michigan grew by 37 percent over the last five years to 140. Of that, 32 percent were life science companies while 46 percent were information technology companies, the report from the nonprofit trade association says.
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MARY KRAMER
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OPINION
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PEOPLE
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RUMBLINGS
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WEEK ON THE WEB
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Michigan governor open to allowing Great Lakes oil tunnel
State’s entrepreneurial economy rises, but at slower rate, report says
Michigan’s entrepreneurial economy is rising, but at a slower pace than in previous years, according to the Michigan Entrepreneurship Score Card released Monday. The good news is a growing focus on support for second-stage companies, defined as businesses with 10-99 employees, offers hope for the longterm health of the state’s entrepreneurial economy, says the report by Michigan Celebrates Small Business (formerly MiQuest) in collaboration with SBAM. More than 200 factors are taken into considerations to produce the annual report card, which measures the overall fitness of the state’s entrepreneurial landscape, including such factors as transportation, workforce readiness, education and business costs.
17
DEALS & DETAILS
Enbridge’s Line 5 runs under the Straits of Mackinac.
“Entrepreneurs drive innovation and economic activity in our state, making Michigan communities vibrant places to live, work and play,” SBAM President Brian Calley said in a news release. “This Score Card provides real insight and helpful data to help guide policymakers as they consider enhancements and needed interventions to our economic environment.” The state’s entrepreneurial climate, which includes metrics such as innovation, capital access and general business conditions, fared better than other states. It ranks 18th, up from 22nd in last year’s report. Meanwhile, entrepreneurial change, which assesses the direction
and momentum of growth in the entrepreneurial economy, has also improved. Michigan ranks 24th, up from 31st last year. However, Michigan’s entrepreneurial vitality is underperforming compared to other states, according to the report, as entrepreneurs struggle with a growing list of adverse conditions and uncertainties. The state’s deteriorating infrastructure continues to aggravate and threaten business growth, according to the report. Poorer highways, broadband and air access, compared to other states, are “creating constricting competitive drags on both Michigan’s entrepreneurial and broader business sectors,” the report says.
Michigan Gov. Gretchen Whitmer said Wednesday that she’s open to allowing construction of an oil transport tunnel beneath the channel where Lakes Huron and Michigan meet, despite previously halting work on a tunnel plan developed by her predecessor, the Associated Press reported. Whitmer told reporters she wanted as quickly as possible to shut down Enbridge’s Line 5, which carries oil and natural gas liquids between Superior, Wisconsin, and Sarnia, Ontario. A more than 4-mile-long (6.4-kilometer-long) segment of the line divides into two pipes that run along the bottomlands of the Straits of Mackinac, which links Michigan’s two peninsulas. “There’s no quick, easy solutions here, but if the goal is to get the pipeline out of the water, I think the only responsible thing to do is to pursue any strategy that gets us there, including the possibility of a tunnel,” the Democrat said.
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NONPROFITS
DEVELOPMENT
MEDC at 20: Focus turns from tax incentives to site prep
DAPCEP adding programs to prepare youth in STEM By Sherri Welch swelch@crain.com
For much of its 42 years, Detroit Area Pre-College Engineering Program has worked to interest youth in science, technology, engineering and math and then steer them into careers like engineering. But there are many STEM-related jobs that don’t require a four-year degree. And there are many employers looking for people to fill them. Amid widely reported talent shortages in areas like skilled trades, DAPCEP is adding STEM education programs that will give students a range of job and career educational program options. These could include certificates that prepare high school graduates to move right into jobs in areas like coding or drone operation, an associate degree program to prepare for careers in areas such as health care, or four-year degree tracks for engineering careers. The goal is to give students the skills to fill those gaps as they come out of high school and either go on to college or stop there and pursue a trade, said Stephen Lewis, DAPCEP
Need to know
J Detroit Area Pre-College Engineering Program is adding STEM education programs for youth to explore skilled trades, health care jobs that don’t require bachelor’s degree J Will give youth options to move right into a job after high school graduation or on to certificate, associates or bachelors programs J New offerings to include emerging technologies and prepare students for jobs seeing shortages, high growth
board president and retired director of global powertrain strategy with Ford Motor Co. “As we increase our population of students we serve, obviously there are requests for additional programs not only from parents (and students) but also our potential sponsors and potential employers,” he said. “It has been brought up … maybe we need to pursue some programs … to make sure students understand the opportunity for skilled trades so that we give them a fair purview, just like we give them a fair purview of engineering opportunities.” As the landscape changes with emerging technologies as well as employer demand, DAPCEP has to change, said Executive Director Michelle Reaves. “Many students are just not aware of the opportunities all of the careers available within skilled trades and what they look like ... (and) don’t understand a machinist is still a technical career, not a lower-level position," she said. “This is a new opportunity for us.” At the same time, the nonprofit is looking to expand its footprint. Last year, in its first foray outside of Michigan, DAPCEP took its programs to Peoria, Ill., teaming with Bradley University on programs that now serve 200 children. SEE STEM, PAGE 19
By Chad Livengood clivengood@crain.com
The Michigan Economic Development Corp. last week marked 20 years in the business of serving as the state’s quasi-governmental agency focused on job creation, retaining and attracting businesses. MEDC CEO Jeff Mason talked with Crain’s Detroit Business about how the agency has evolved, where its focus rests in today’s economy with an 18-year low unemployment rate and why Gov. Gretchen Whitmer is seeking a $5 million cut to the popular Pure Mason Michigan touri s m - att ra c t i o n advertising campaign. Mason also said the MEDC shouldn’t get back into the business of subsidizing Hollywood films in order to prop up a fledgling movie industry in Michigan. The following is a Q&A transcript of Mason’s interview with Crain’s Senior Reporter Chad Livengood that has been edited for clarity.
INFRASTRUCTURE
GOING ELECTRIC
State, utilities sketch out future EV charging network By Jay Greene jgreene@crain.com
M
ichigan needs at least 193 charger outlets at 35 public stations along its major interstate highways to power the growing number of electric vehicles expected on its roadways over the next decade, according to a state-sponsored study. The study, commissioned by the state energy office and agreed upon by major utilities and private charging station vendors, provides a closer look at how Michigan’s infrastructure for electric vehicles might evolve over the next decade. The bottom line: Michigan’s rural highways will need more charging stations to begin to address the “range anxiety” feared by EV drivers. In the first phase of its report, which looked at non-urban areas, the Michigan Energy Office along with its stakeholders chose a mixed charging scenario that anticipates vehicles with smaller rechargeable batteries — a 70 kilowatt-hour vehicle battery that uses a 150-kilowatt charger, said Robert Jackson, energy office director. The cost to install the 193 recommended chargers is estimated at $21.5 million. The network, which recommends all 35 station locations have at least two charging outlets, would be paid in equal shares by the state, utilities and private property owners and vendors, Jackson said. SEE ELECTRIC, PAGE 20
In this economy, what value is MEDC bringing to the state in a big picture, economic-development sense?
RIVER NORTH PHOTOGRAPHY VIA ISTOCK
Where chargers will be needed This map shows estimated areas of need for public electric-vehicle chargers by the year 2030, under one set of assumptions in a study commissioned by the Michigan Energy Office. Houghton Marquette
Sault Ste. Marie
Crystal Falls
One of those projects you’ve been working on lately to get a Michigan company to grow and expand is Fiat Chrysler Automobiles and their plans at the Mack Avenue facility and Jefferson North and three other plants in the state. Where does that plan stand with the city facing a deadline of a week from now to get all of the land assembled?
Alpena No charger 5 chargers 10 chargers
Traverse City
20 chargers 30 chargers
Ludington Bay City Grand Rapids
Kalamazoo
Lansing
Flint
Ann Arbor Luna Pier
Source: Michigan Energy Office
Mason: When you look back at and you look at the place we play in the space, a significant amount — about 80 percent — of all of the activity we have going on are with existing companies that are already here in Michigan or with companies that are starting out in Michigan. The role we play is really helping them to accelerate their business growth. Things like Pure Michigan Talent Connect and some of our efforts in helping companies expand into international markets I think are the bread and butter of the types of things we do day in and day out with companies in terms of growing their businesses.
Port Huron Detroit
We continue to work with both the city and the company in relationship to trying to get that project across the finish line. We continue to have negotiations and conversations with the company. And the city clearly is working hard in terms of the land assembly side of it. We remain very optimistic that we’re going to get it across the finish line. SEE MEDC, PAGE 21
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Shanghai joins Boston, Pittsburgh, Las Vegas and Singapore on the list of places where Aptiv is testing Level 4 autonomous technology.
Aptiv firms up its autonomous technology ambitions in China
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Global auto supplier Aptiv PLC is securing a foothold for its self-driving technology in what may be the world's most lucrative autonomous vehicle market. The company, whose operational headquarters is in Troy, said last week that it has opened an Autonomous Mobility Center in China and will soon deploy test vehicles on the roads in and around Shanghai. That’s a precursor to eventual partnerships that could yield an autonomous ride-hailing service that mirrors the one Aptiv (NYSE: APTV) runs in Las Vegas along with Lyft. “Our first step is to get cars on the ground and start driving, and over time, our ambition is to go to market in China using the playbook we’ve established in Vegas,� Karl Iagnemma, president of Aptiv’s autonomous mobility division, said. “We’re developing the full-stack core technology, and we’ll integrate it with the vehicle platform from a partner. You put those ingredients together, and it’s a great market opportunity.� China has the potential to become the largest global market for autonomous driving technology, according to a report from McKinsey in January. By 2040, the consulting firm estimates, AVs could account for 66 percent of all passenger miles traveled in China and generate $1.1 trillion in mobility services and $900 billion from automated vehicle sales. The Chinese government has sought to accelerate the arrival of autonomous, electric and connected vehicles, and its ability to mandate approaches from the highest levels has eased the regulatory path that’s more clouded for manufacturers and tech developers in the U.S. and Europe. But China’s government has traditionally been protective of its domestic companies. “You’d think they’d say that ‘We have Baidu and Pony and a few others, and we don’t need anyone else in here,’� Michael Dunne, CEO and
Need to know
Former Delphi Automotive opens Autonomous Mobility Center in China ď §
ď § Supplier will soon deploy test vehicles on the roads in and around Shanghai ď § Move is a precursor to eventual partnerships that could yield an autonomous ride-hailing service
“We’re developing the full-stack core technology, and we’ll integrate it with the vehicle platform from a partner. You put those ingredients together, and it’s a great market opportunity.� Karl Iagnemma, president of Aptiv’s autonomous mobility division
founder of ZoZo Go, a consulting firm that advises automotive companies on China’s business market, said in an interview. “It seems to be the case that they’re under pressure from the Trump administration, and they’re opening up a little bit with the likes of Waymo and Aptiv.�
AV testing China has issued 101 license plates for autonomous vehicles owned and operated by 32 companies, according to records released by the government in February. Baidu holds at least 45 of those licenses. The company has only disclosed the number of AVs it operates in Beijing, but not the rest of the country. Daimler and Audi are among those with licenses to test in China. “China has made no secret about its ambition to get in front on autonomy, and the play here would be
electric, shared and autonomous,� Dunne said. “The environment is conducive to rapid growth.� While the world eyes China, three of North America’s front-runners — Waymo, Ford and GM’s Cruise Automation — do not yet hold testing permits in the country, though Baidu tests systems integrated into Ford vehicles as part of an AV-related partnership between the companies.
Delphi roots Aptiv is the tech-minded company that was created when Delphi Automotive split in half in December 2017. Through those roots, the company has held a manufacturing and engineering presence in China since 1993. That will provide a base for the burgeoning autonomous operations. The company says its test cars will be on the road in a matter of weeks. But no long-term partnerships have been announced with ride-hailing networks, vehicle manufacturers or companies that make high-definition maps for use in self-driving systems. Iagnemma said the company is in discussions with potential collaborators. This is the fifth test location for Aptiv. Shanghai joins Boston, Pittsburgh, Las Vegas and Singapore on the list of places where the company is testing Level 4 autonomous technology, which requires no interaction or oversight from a human while operating in a geofenced environment. While maintaining operations in multiple cities can be an expensive proposition, there’s potential risk in concentrating efforts on one or two cities, Iagnemma said. “You face more challenges if you move on from one city,� he said. “You have very different driving patterns from city to city, so in a way, we’re de-risking by continuing to develop in a variety of cities and environments.�
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Founder raises stake in Budco Financial as part of deal By Dustin Walsh dwalsh@crain.com
A Cleveland investment firm acquired Detroit-based Budco Financial Services LLC this month in a $10.5 million deal that will also raise the stake of founder and CEO Bud Brian. Brian increased his stake of the company to 40 percent from 12 percent, with ScaleCo Community Inc. acquiring the remaining 60 percent stake, Brian told Crain’s. ScaleCo and Brian acquired the stakes from private equity firm Evolution Capital Partners. ScaleCo founder Brendan Anderson is a partner in Evolution Capital Partners, but anticipates leaving the firm to continue long-term investing with ScaleCo. Budco is the first transaction for ScaleCo. Budco Financial is a payment processing business that finances extended service contract programs for automotive manufacturers like Ford Motor Co. Brian, 74, founded the former Budco in 1982 when he purchased printing and distribution company D.W. Hacker Co. and added the financial services years later. Brian grew the company to nearly $65 million in sales before selling the business in 2006 to a group of investors led by Beringer Capital. Beringer sold Budco to Glencoe Capital Management Michigan LLC in 2011 for as much as $75 million, but it did not acquire the financial services arm of the company as it violated certain vestment rules as Glencoe invested public retirement funds, Brian said. So Brian and Evolution Capital Partners acquired the arm from Glencoe for $10 million and Brian rejoined as the company’s CEO in early 2012. Brian said the company had stagnated since reacquiring it in 2012.
Need to know
JJCEO and founder Bud Brian increases stake to 40 percent JJScaleCo Community Inc. acquires remaining 60 percent stake JJPrivate equity owner out under deal
“ScaleCo is able to buy and hold companies longer than the three- to five-year window that normally occurs with private equity.” Bud Brian
“We had experienced very little growth since 2012,” Brian said. “We had maintained the business while we were increasing our intelligence network.” Under ScaleCo, Budco Financial may participate in managing and providing services to new ScaleCo acquisitions, Brian said. “ScaleCo is able to buy and hold companies longer than the three- to five-year window that normally occurs with private equity,” Brian said. “We’re now in a position to invest and grow the business.” While Evolution focuses on smaller companies generating at least $500,000 of earnings before interest, tax, depreciation and amortization (EBITDA), ScaleCo will consider investing in companies with at least $250,000 in EBITDA.
Awards will be given in six categories: Overall Excellence / HR Team of the Year; Compensation and Benefits; HR Innovator; Employee Experience; Diversity and Inclusion; and Finding and Growing Talent. The deadline to nominate an individual or team is Tuesday, April 30. Visit crainsdetroit.com/nominate for more information or to nominate. Questions? Contact special projects editor Amy Bragg (313) 446-1646; abragg@crain.com.
Deadline extended for 40 Under 40 award nominations Crain’s Detroit Business has extended the deadline for nominations for its annual 40 Under 40 program honoring people who have achieved great success in business, nonprofit or civic life at an early age. The program, now in its 28th year, has recognized more than 1,000 luminaries including Quicken Loans Chairman Dan Gilbert, Detroit May-
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Nominations open for Crain’s Excellence in HR Awards Human resources leaders are the nerve centers of their businesses. Though they often operate behind the scenes — sometimes boxed into stereotypes about pizza parties and paperwork — HR professionals take care of people, control costs, keep things in compliance and help organizations achieve their strategic goals. Crain’s inaugural Excellence in HR Awards seek to recognize metro Detroit’s outstanding human resources executives and teams.
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OPINION EDITORIAL
COMMENTARY
Baker College saga shows Raise Supreme Ferndale’s new challenge Court justices’ W salaries, then change the system
H
ave you gotten a raise in the past 17 years? Well, you’re better off than Michigan’s Supreme Court justices, a problem that it’s past time to fix. In an extraordinary letter to the panel that makes salary recommendations for Michigan elected officials, state Supreme Court Chief Justice Bridget McCormack last week made a plea for a raise for herself and fellow justices from their current $164,610 per year. She rightly points out that pay for state employees overall has risen by 40 percent since the court’s last raise in 2002. The cause of this imbalance is structural and McCormack inherent in the system by which Michigan sets pay for its elected officials. The State Officers Compensation Commission makes annual salary recommendations for all statewide elected officials: the governor and lieutenant governor, legislators and Supreme Court justices. The next step is the problem. The Legislature has to vote yes or no on the whole package — or simply not vote on it. Because it’s politically tricky to be seen raising their own pay, lawmakers are reluctant to take up the recommendations or vote in faChief Justice vor of them. McCormack rightly This has consequences for points out that pay the kind of talent the state for state employees can draw into its most imoverall has risen by portant positions. Certainly, 40 percent since the political power has draws of court’s last raise in its own, but a Supreme Court 2002. justice can easily make several times his or her salary as a justice at a big private law firm. A 2018 survey by legal search firm Major, Lindsey & Africa found that partners at large law firms can pull average compensation of $885,000 a year, making judicial salaries seem like peanuts. Not only that, but Michigan’s system for setting these salaries is will soon result in Supreme Court justices making less than the appointed judges on lower courts — which makes no sense. (It should be noted that the justices receive a generous pension plan by private-sector standards that incentivizes them to stay in office longer.) This vast disparity in salary raises the specter of a revolving-door court on which the most experienced justices have one eye on a partnership that pays. Or where top legal minds never consider a judgeship. There’s a simple way to fix this: Give the court a raise to at least the national average for state-level justices, then get rid of the compensation commission and simply give elected officials raises commensurate with cost-of-living changes. Certainly, public service will never pay as well as private practice. But this is a case where removing political considerations entirely will result in a better system and lure better talent to the state’s highest offices.
hen David Coulter first moved to Ferndale 25 years ago, the inner-ring Detroit suburb was pretty sleepy. The town had a couple of restaurant staples — the Rialto and Como’s restaurants on Woodward and a McDonald’s on Nine Mile. “It’s ironic that parking is a big issue now,” he told me last week. “You used to be able to park anywhere. There just wasn’t much to go to.” Not anymore. Parking was ostensibly the reason Baker College pulled its proposal to consolidate three campuses in Ferndale, on Nine Mile Road, east of Woodward. (See story, Page 18.) The project would have constructed an up-to-fourstory campus and parking deck in time for the fall 2020 semester. As many as 1,500 students and 50 staff would use the facility, but not all at the same time. I suspect another suburb wanting to build out its core downtown will soon welcome Baker with open arms. Baker hinted at a “Plan B” in its statements. When first announced in January, the Baker project seemed welcomed by Ferndale officials. Then a big social media backlash started brewing and the anti-Baker forces started showing up at meetings, worried about parking and condemning Baker for a low graduation rate, the reportedly high number of low-income students and more. Baker countered that it had changed its business model and raised admission standards, but to no avail. Separate from the Baker controversy, Mayor David Coulter announced last Tuesday that, after nine years in the job, he won’t run for re-election this year to the part-time position, making it an open race for mayor. With a day job as a program officer at the Children’s Hospital of Michigan Foundation, Coulter said balancing public duties and the mayor’s job didn’t leave a
MARY KRAMER Group Publisher
lot of time for anything else. Coulter is the second longest-serving mayor in the city’s history, topped only by Bruce Garbutt’s 22-year stretch, 19491971. Garbutt was Coulter there when Ferndale’s population topped 30,000. Today, it tops 20,000 — more a reflection of household size than housing density, I think. Coulter will leave the city better than when he was first elected. Today, many suburbs would like to emulate Ferndale’s success in creating a dynamic downtown, attractive neighborhoods and a strong base for manufacturing and other industries. As mayor, Coulter created a Mayor’s Business Council that met quarterly with the CEOs of Ferndale-based companies. I was an outsider invited “in” for that group for a couple of years. Because the meetings were held in the business owners’ sites, it gave members a chance to meet, see and understand the diversity of industry in the city, from Valentine Vodka to Garden Fresh salsa to Hodges Subaru and a truck parts supplier in the city’s industrial sector. “The council is one of the
things I was proud of,” Coulter said. “We can be a progressive city and still be a place for entrepreneurs.” Coulter also supported “the dot,” the city’s own “Development on Troy” Street now under construction. It’s uncommon for a city to act as developer, but that’s what happened on the “dot” — which includes first-floor retail, office space above and 400 parking spots. Coulter boasts that Ferndale has a “welcoming spirit and sense of community. There’s an image that Ferndale is progressive and ‘anything goes.’ But that’s never been the case.” And the community also speaks up. Coulter acknowledged social media played a role in the Baker College backlash. “The city didn’t even have a Facebook page when I was first elected,” he said. “There’s no fact-checking on social media. We could use more vetting.” It was likely the parking pinch created by the “dot” construction that spurred some of the backlash against Baker’s plans. And since Baker needed city-owned land to proceed, the community’s feedback carried greater weight. It is an election year, after all. The challenge for Ferndale now and in the future, Coulter said, is “doing development that’s responsible, continues growth and doesn’t change the character of Ferndale. We need to preserve the ‘sense of place’ while adapting, changing and growing. That’s what the Baker discussion has revealed … people are very passionate about Ferndale.”
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.
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LETTER TO THE EDITOR
Work Share offers options
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here have been several news stories lately about employee layoffs. Fortunately, there is an alternative that can help both employees and employers to help reduce the impact of these tough decisions. Through the Unemployment Insurance Agency there is a program called Work Share. Michigan’s Work Share program allows you to keep your employees working with reduced hours, while employees collect partial unemployment benefits to make up a portion of the lost wages. With Work Share, you can maintain operational productivity and hang on to your skilled workers. When business conditions improve, employers can quickly gear up without the expense of recruiting, hiring, and training new employees. Current employees would be spared the hardship of
full unemployment. There are many advantages to Work Share including: J Minimizes or eliminates the need for layoffs J Enables a business to retain Beebe trained employees J Employees are spared the hardship of unemployment and receive more income than if they were fully laid off Any employer who has a reduction in production, services or other conditions which will cause potential layoffs can participate for up to 52 weeks. This does not apply to seasonal, temporary or intermittent employment.
Here’s an example of Work Share: A company with 100 employees finds it necessary to lay off 20 people. With Work Share, the employer keeps all 100 employees on the payroll, but reduces their work week from five days to four days. This will achieve the desired 20 percent reduction in payroll. All 100 employees will continue to earn wages for four days and also are eligible for Work Share benefits for the fifth day. While Work Share may not be the right fit for all circumstances, it can make a crucial difference for employers and employees facing a tough temporary situation. For more information, employers should call 844967-5747. Michelle Beebe is senior deputy director of the Michigan Unemployment Insurance Agency.
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CALENDAR FRIDAY, APRIL 26 Oakland County Annual Economic Outlook Luncheon 2019. 11 a.m.1:30 p.m. April 26. Oakland County. University of Michigan economists Gabriel Ehrlich and Donald Grimes present their three-year forecast on the county’s economic future. Troy Marriott. $50. Contact: Sandra O’Connell, email: oconnells@oakgov.com; phone: (248) 858-7647.
UPCOMING EVENTS 2019 Technology in Industry Reveal. 8-11:30 a.m. April 29. Automa-
tion 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 includes: 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: expand-
ing 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 Western Wayne Diversity and Inclusion Experience. 7:30-11:30 a.m. May 1. Livonia Chamber of Commerce. Session will focus on implicit bias, one’s attitudes or stereotypes that affect understanding, actions and decisions in an unconscious manner. Event will in-
clude comments from Keith Allman, CEO of Masco Corp., who will discuss why his company finds great value in diversity and inclusion initiatives. Schoolcraft College. $49. Phone: (734) 427-2122, email: tahmouch@livonia. org; website: livonia.org, org To submit calendar items visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.
DEALS & DETAILS CONTRACTS JJMunro & Associates Inc., Auburn Hills, an engineering consultant, has selected Bianchi Public Relations Inc., Troy, a public relations firm, as its public relations agency of record. Websites: leandesign.com, bianchipr.com JJThe University of Iowa Carver College of Medicine, Iowa City, Iowa, is using Gale Interactive: Human Anatomy 3D interactive learning tools from Gale, a Cengage company, Farmington Hills. Also, the Association of College and Research Libraries, Chicago, Ill., and Gale have collaborated to create the ACRL Libraries Transform Toolkit to provide academic and research libraries with ]tools and resources to develop effective marketing and outreach strategies to promote their services. Websites: gale.com, medicine.uiowa.edu, ala.org/acrl JJTrace Medical LLC, Whitmore Lake, a ventilation rental company, has a long-term Network Administration Agreement with SunMED Medical Solutions LLC, Marlton, N.J., an in-home medical equipment provider, to provide ventilator rentals to the SunMED Managed Care Organization Network, Workers Compensation and Medicaid customer base of more than 500 providers. Websites: TraceMedical.com, SunMEDmedical.com
Now that you’re financially secure, your worries are over.
EXPANSIONS JJKyyba Inc., Farmington Hills, a consultant, has launched a new company, Kyyba Intermedia LLC, with plans for a new health and lifestyle magazine and a video and podcast series. Also, Kyyba Intermedia recently acquired IHM Media, Flint, publishers of Michigan Innovative Health magazine. Website: kyyba.com
NEW PRODUCTS JJBullsEye Telecom, Southfield, a telecommunications company, has launched a Voice over Internet Protocol-based key system for businesses to transition to VoIP by retaining a “key type” system for users. Website: bullseyetelecom.com JJZipLogix LLC, Fraser, a software company, released OfferPlace software for agents to send and receive offers right within the zipForm Plus platform. Website: ziplogix.com
Submit Deals & Details items to cdbdepartments@crain.com
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FOCUS REAL ESTATE
LIFE AFTER LAKESIDE? Retail burgeoning along Hall Road
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In this package
But the 10.5-mile road’s retail scene is no laughing matter.
Life after Lakeside: Retail burgeoning along Hall Road. This Page
In fact, it’s one of the most active in the region, catering to hundreds of thousands of people along a heavily traveled state highway shopping in big-box, junior-box and smaller retailers, plus a pair of regional shopping centers in Lakeside Mall and The Mall at Partridge Creek.
Q& A with Vicky Rad: The time is right to reinvent Macomb County. Page 9
“It’s very important for the communities along Hall Road to determine what the future should look like, and how to maximize its current potential. ”
ty sale price per square foot is $107, compared with $101 the previous period. That’s just the beginning, according to CoStar forecasts. Rents are expected to cross the $24 per square foot threshold by the end of the year, although vacancy rates are expected to gradually climb. Part of the reason for a flourishing retail scene is population growth, said Luke Bonner, the senior economic development adviser for Sterling Heights and CEO of Ann Arbor-based economic incentive, real estate and economic development consulting company Bonner Advisory Group LLC. “Macomb continues to have considerable population growth and job growth compared to the rest of the market,” he said. “New incomes, especially disposable incomes, are highly important.” Thomas Guastello, founder and president of Birmingham-based Center Management, which is highly active in Macomb County development
By Kirk Pinho | kpinho@crain.com
ome have had plenty of fun at the expense of Macomb County’s newest art installation in the Hall Road/M-59 median, an orange, 35-foot-tall ring recently dubbed The Halo.
“There are three Walmarts, two Targets and two Home Depots,” said Louis Ciotti, an associate broker with Farmington Hills-based Landmark Commercial Real Estate specializing in Macomb’s dense retail footprint. “That defines the amount of retail and traffic right there.” While not everything is roses — Lakeside Mall has long struggled and has been in foreclosure for nearly three years to its lender on a more than $60 million mortgage — new retail regularly flocks to Hall Road between Mound Road and I-94, which handles a combined 90,000 to 110,000 cars per day, eastbound and westbound combined, according to the Michigan Department of Transportation. “It’s one of those corridors we jawbone day to day from a national perspective,” said Simon Jonna, executive managing director of investments for The Jonna Group in Southfield, a division of Marcus & Millichap Real Estate Investment Services Inc., based in Calabasas, Calif. Others include Big Bea-
Luke Bonner, senior economic development adviser for Sterling Heights and CEO of Bonner Advisory Group LLC
ver Road in Troy, Novi Road in Novi and Ford Road in Canton Township. “Hall Road is the epitome of it all,” he said. “It is very much built out as a massive commercial corridor, and it generates north of $1 billion in retail sales per year on its own legs.” That has helped spur job growth, according to Macomb County data. The county says it has added retail jobs almost every year since 2010, ris-
ing from 38,768 to 43,611 in 2017, a 12.5 percent bump, more than double the state’s 6.2 percent gain (from 461,458 to 490,024) during that same time period.
Macomb County retail According to CoStar Group Inc., a Washington, D.C.-based real estate information service, Macomb County as a whole has $5.9 billion worth of retail real estate spread across 50 million square feet. There is 168,200 square feet of new space under construction, CoStar says. And a more refined examination of the Hall Road corridor specifically using CoStar shows that the retail market along that stretch is 6.2 million square feet with a 4.6 percent vacancy rate in the first quarter this year, a drop of 2.5 percentage points from Q4 2018. Rent has increased to $23.21 per square foot from $21.61 per square foot, a 7.4 percent bump from the previous quarter, and the average proper-
Slowdown ahead: Construction in Metro Detroit hit an apex last year, but builders and others are anticipating a mild slowdown in the years to come. Page 1
Family affair: The multigenerational Monahan Co. is building up Detroit. Page 10
An orange, 35-foot-tall ring dubbed The Halo sits in the median at Hall Road/M-59, one of the most active retail scenes in the region. LARRY PEPLIN FOR CRAIN’S
along Hall Road, remembers when he was in the state Legislature and Lakeside Mall was slated to open to much fanfare. “I remember when they were growing pumpkins there. Going through all the communities, it would become a very vibrant area. Did I think it would be this big? Heck no. “One of the things on Hall Road that identified it and put it on the map was Lakeside. I drove out to Hall Road to where they said they were putting this multi-leveled mall and when I’m looking trying to make sure I’m in the right spot, some fenced-in cattle came in to say hello to me through the fence. I thought this couldn’t possibly be for real,” Guastello recalled. However, Bonner said, expect there to be some changes afoot as Hall Road becomes saturated and retail shifts to the north and east. “Retail in Macomb County continues to shift towards residential population growth,” he said. “It’s very important for the communities along Hall Road to determine what the future should look like, and how to maximize its current potential. As the county continues to sprawl, that effect could negatively impact Hall Road real estate. Communities need to look at a more serious collaborative effort and work with each other to help keep the corridor viable. This includes land use, zoning and in general, how much more retail development do the communities really want? There is a lot of cannibalization on Hall Road, which in the long term doesn’t benefit anyone.” SEE HALL ROAD, PAGE 10
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SPECIAL REPORT: REAL ESTATE Q&A
Vicky Rad: Time is right to reinvent Macomb County By Kirk Pinho
kpinho@crain.com
Vicky Rad took a nontraditional series of steps to becoming Macomb County’s top economic development official. A graduate of Baker College with a degree in computer information systems, Rad started her career at Southfield-based Lear Corp. and then moved on to Regal Prototypes Inc. in Sterling Heights, where she worked in data administration. It was there that she got involved in Macomb’s substantial defense industry, leading her to become a senior procurement specialist for the Procurement Technical Assistance Center through Macomb Community College. After nearly four years there, she worked as a program manager for the Detroit Regional Chamber’s Connection Point program. But, the Chippewa Valley High School graduate says, her heart has always been in Macomb County. So when a position in Mark Hackel’s administration opened, she jumped at the chance, eventually becoming deputy director of the Planning & Economic Development Department, a position she held until the board of commissioners approved her selection as director to replace John Paul Rea earlier this month when he was named deputy county executive. Rad, 40, spoke with Crain’s real estate reporter Kirk Pinho in her seventh-floor office in the Macomb County headquarters in Mount Clemens. This is an edited transcript. Pinho: With regards to land use and planning, how do Opportunity Zones fit in to your entire equation? Rad: From an economic development
perspective, when word hit the streets last year there was a lot of buzz around it. It is the new shiny tool in the toolbox. It is very different than a lot of incentives offered at the state or local level. We end up becoming a facilitator for pretty much all of the deals we work through the county, and this is another example of that. If we can connect to the right investors for them to see where the Opportunity Zone is, what is happening in that area and really help them understand the demographics and what is happening in that community, that is ultimately where we see our role. It is marketing, getting out there and making the connections, because the program is very complicated. So it's making sure we've got the right parties involved so that when we do get that phone call from an investor, we are ready to respond. Not all the regs have been developed either, so it’s this evolving program. Do you have to temper expectations, just given the fact that these things aren’t fully baked yet?
Yeah, for sure. We’ve got six communities in Macomb County, 17 different census tracts that fall within Opportunity Zones. We were getting phone calls. So we needed to educate ourselves on this because we were all learning about them together. Then also, watching to see what are some best models out there to look at and say, ‘They were able to deploy it in this
Vicky Rad
community this way, so how are we able to bring that to the county?’ We’ve also used technology. We have a really nice GIS where we can map out not only where the Opportunity Zone is at, but we can add layers to that. When we look at what’s important to an investor, they want to know who is living in that community, what is the traffic if it’s a commercial building and the number of investments. All of those things we are able to layer in GIS so they are able to go online and they can really get a nice snapshot model within the Opportunity Zones. They weren’t just marketed or bandied about for urban areas, they were also targeted for more rural communities that have not seen as much investment. But there’s nothing north of M-59 in Macomb County.
They sought out distressed communities, so when we looked at where our population is at, we weren’t seeing that kind of population up there. There are some unique properties in here, the Gibraltar Trade Center and the courthouse fall in the Opportunity Zones. Warren Truck, they fall within an Opportunity Zone and the GM Transmission, which GM has slated for closure. You're looking at a building that has been there since the 1940s. That could definitely change what that footprint looks like in the Warren portion. What about what appears to be an ongoing trend among younger people to cluster in urban cores? Mount Clemens has that feel. Are there others that you’re attempting to create or attract?
So much is happening in that space. That’s from listening to the millennial generation. We are going to hit the silver tsunami with the retirees who live in Macomb County, but then you have this upward trajectory of millennials who want to live in Macomb County and they want walkable communities and the outdoors. Their needs are very different from the baby boomers’. You’ve got communities like New Baltimore, which is right on the water. They’ve got a huge effort underway to make that really more water accessible, where you’re bringing in more of your boating population to the downtown area, as well as those who will commute or bike to get there. That’s a grow-
ing community, one of our faster growing ones. The schools are very good up in that area, and you have the amenities of Lake St. Clair next door. Mount Clemens also has some very similar initiatives looking at the waterways, looking at a kayak launch, really getting more people downtown for recreation and then keeping them downtown so they stick around for dinner or happy hour. I grew up in this community, I grew up in Clinton Township. At one time, Mount Clemens was the night life. It was where things happened, and things have definitely changed. But you’ve got a lot of people within Mount Clemens that are really trying to champion and bring it back to what it was. It's a lot slower growth than what it has been in Detroit with the big renaissance downtown. Some of the challenges Mount Clemens has, and some of our older communities have, are legacy decisions, legacy planning issues that we have to work around and figure out how we can be creative around it. You’ve got great property in downtown Mount Clemens, but you also have land and building owners that are not moving on those. You just want that true champion that comes in and says, “OK, we are going to take that corner property and grow it and make it viable so you have more people in the downtown.” Oakland University, they are right across the street (in Mount Clemens). They are kind of creating a campus environment. When you look at the housing right around Mount Clemens, they are some beautiful homes, very historic. I’m looking in Mount Clemens for a house. You can’t find that type of home elsewhere. St. Clair Shores is also another interesting community because it’s so close to Detroit, so you have a lot of individuals who commute, who leave the county, go work in Detroit. That I-94 corridor is a perfect commute for them. We saw last year that one of our hottest housing markets was in St. Clair Shores, especially for first-time homebuyers of a younger generation. It’s a traditional bedroom community. You’ve got the Nautical Mile and a lot happening with their planning department to make it really a destination, not only for those who live there but also those who want to spend the day in St. Clair Shores. It’s unique. We’ve got Sterling Heights, they are in a position where they are running out of land.
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I forgot to mention Utica and its little downtown.
We love Utica. It’s just a tiny little dot on the map, but with the ballpark there, it definitely brings in more foot traffic. Sterling Heights has Lakeside Mall and they have a really great vision for how to repurpose an old, big-box mall, and how you make it more multi-use or multi-functional where it is a destination where people can live and shop there. Sterling Heights doesn’t have a traditional downtown. Most of those date back to 100 or 150 years ago, so could this be an opportunity for us now to create a new downtown in Macomb County?
FISHBECK , THOMPSON, CARR & HUBER engineers | scientists | architects | constructors
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SPECIAL REPORT: REAL ESTATE
Family affair: Multigenerational Monahan Co. building up Detroit By Kirk Pinho kpinho@crain.com
It’s a Tuesday morning in April and in a nondescript room in a nondescript building in a nondescript inner-ring Macomb County suburb, Michael P. Monahan knocks on a nondescript wooden table. You’d be forgiven if you didn’t realize, driving down Kelly Road, that a $30 million, multigenerational general contracting company — Monahan Co. — doing some of the bigger projects in Detroit’s construction boom was headquartered there, as it has been for decades. In all, 15 members across four generations of Monahans have suited up for the family business, which was founded in 1922 by family patriarch Edward V. Monahan. “We’re not smart enough to find something else to do,” joked Michael P. Monahan, his 58-year-old grandson and the firm’s controller who joined in 1983. He is one of seven cousins (one has retired, leaving six still at the company) who became the third generation to further the Monahan business, which has weathered recessions and depressions and downturns. Edward V. Monahan came to the U.S. from Canada and began building
“Complex rehabilitations of older buildings is one of Monahan’s specialties, and we are glad to be working with such a reputable, local company.” Dietrich Knoer, president and CEO of The Platform
houses on Detroit’s east side and in the Grosse Pointe communities in the 1920s, ultimately having four sons in the area, his grandson said. “The oldest one came back from the war (World War II) and they started doing commercial jobs, mostly for the Archdiocese of Detroit, and established kind of a commercial company. Then the other three sons came in,” Michael P. Monahan said. Their children, the seven cousins, began to follow suit in the 1970s and 1980s, with three of their children to follow in due time. “Once we started coming into the company, we kind of blew where the work went,” Michael P. Monahan
said. “We did a lot of archdiocese work again, we did a lot of churches, a lot of car dealerships, just a ton of commercial work, mostly in the suburbs, through the 1980s and 1990s and right up until 2010.” That’s when the work in Detroit started coming in. “Now 90 percent of our work is in Detroit, a lot of multifamily and ... turning buildings that are falling down into apartment buildings with some retail.” Among the company’s projects: J The $7.6 million first phase of the Baltimore Station project by Detroit-based The Platform LLC J The $16 million Chroma project on East Grand Boulevard by The Platform J The $22 million The Plaza redevelopment by Detroit-based The Roxbury Group, which converted the former “hammer and nail” building on Woodward Avenue in Midtown into 72 apartments J The $8.3 million 7.Liv project by developer Matt Hessler in the area of Seven Mile Road and Livernois J The $22 million redevelopment of the Wurlitzer Building into the boutique Siren Hotel by New York Citybased ASH NYC J The $150 million mixed-use Elton Park project in Corktown by De-
HALL ROAD FROM PAGE 8
Mall mecca The Hall Road corridor is also busy enough to at one time have supported not one but two regional shopping centers. Lakeside Mall is 1.55 million square feet, while The Mall at Partridge Creek is 650,000, totaling 2.2 million. By comparison, Twelve Oaks Mall in Novi is 1.5 million square feet and Somerset Mall in Troy is 1.45 million square feet, Ciotti said. And Lakeside Mall in Sterling Heights has been talking to developers and redrawing zoning rules for what it anticipates is the eventual demise of the property in favor of more urban, walkable downtown-style retail. There are two concepts for the mall on Hall Road between Hayes and Schoenherr roads on the table, Crain’s reported last year. The first keeps the fully enclosed mall largely intact and surrounds it with public, residential, medical and office space. The second takes a wrecking ball to the concrete behemoth built in 1976 and replaces it with more of a ground-up redevelopment. The owner of the property was foreclosed on in June 2016 after paying a $60.2 million commercial mortgage-backed securities loan that was issued in December 2004 and matured in December 2009, according to data from New York City-based Trepp LLC. “Lakeside is at the corner of Main and Main when it comes to the best location in Macomb County demographically,” Bonner said. “Retail has evolved to the point where enclosed shopping centers struggle to keep customers. ... Lakeside is perfectly
Lakeside Mall in Sterling Heights has been talking to developers and redrawing zoning rules for what it anticipates is the eventual demise of the property in favor of more urban, walkable downtown-style retail.
positioned for a reinvention of the use of the property in a much more long-term and sustainable way. This process will certainly take time. However, retail will not likely be the dominant use at a future Lakeside. Instead, it will be a complementary use to residential, health care, restaurants and entertainment concepts.” The Mall at Partridge Creek in Clinton Township — which is an open-air concept mall launched in 2007 — continues to attract tenants. For example, last year it was announced that Cooper’s Hawk Winery & Restaurants was building its first Michigan location there in about 10,500 square feet. However, Black Finn Ameripub at the mall closed this summer, according to The Macomb Daily, and the Carson’s store closed last year although mall offi-
cials told the newspaper that they were in discussions with a replacement tenant. Bloomfield Hills-based Taubman Centers Inc. in 2014 sold Partridge Creek plus six other malls, including Dearborn’s Fairlane Town Center, to Greenwich, Conn.-based Starwood Capital Group for $1.4 billion. Starwood paid $51.5 million for Partridge Creek and $102.2 million for Fairlane, according to CoStar. Still, there is an active enough retail scene to draw attention locally, regionally and nationally, Guastello said. “It’s like the old John Dillinger thing. ‘Why do you rob banks?’ ‘That’s where the money is.’” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB
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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 2 2 , 2 0 1 9
SPECIAL REPORT: REAL ESTATE
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(Sitting left to right) Michael J. Monahan, president; Michael P. Monahan, treasurer; John E. Monahan, vice president. (Standing left to right) W. Daniel Monahan, vice president; Kevin C. Monahan, project manager; Alissa Monahan, project coordinator; Joseph A. Monahan, vice president; David Monahan, project superintendent; Daniel J. Monahan, project manager.
troit-based Soave Enterprises Inc. J The $33 million redevelopment of the Metropolitan Building by The Roxbury Group and Detroit-based The Means Group Inc. into The Element Detroit hotel J The $16.5 million conversion of the former Dearborn City Hall into 53 lofts with space for artists J The conversion of the former Mil-
ner Hotel downtown into The Ashley, a 67-unit apartment building by Bloomfield Township-based Princeton Enterprises “We’re picking off the occasional project in Macomb and Oakland,” Michael P. Monahan said. Those include a renovation for the Red Cross in Warren, turning a former Troy bowling alley into new office space
and work for Kelly Services and Panasonic in Farmington Hills. “But most of our volume the last few years has been downtown and Midtown,” he said. Those who work with Monahan remark on its capabilities as a contractor. “Complex rehabilitations of older buildings is one of Monahan’s specialties, and we are glad to be work-
ing with such a reputable, local company,” said Dietrich Knoer, president and CEO of The Platform. And Mike Ferlito, a developer who worked with Monahan on a small condominium project on Selden Street, had high praise. “They are a great family and excellent to deal with,” Ferlito said. Competitors also say Monahan
does quality work. “I’m impressed as an outsider and contractor to see the projects they have done around town,” said Ron Staley, senior vice president of Southeast Michigan operations in the Detroit office of Lansing-based The Christman Co. “They are doing some very nice ones with The Platform and the Chroma building.” Multigenerational construction companies are nothing new. Many are larger, by many factors in terms of revenue, than Monahan Co., which employs around 30 people. The region is rife with them, ranging from Detroit-based Walbridge Aldinger Co. (the Rakoltas, $1.34 billion in 2018 revenue) to Southfield-based Barton Malow Co. (the Maibachs, $1.9 billion), to Sterling Heights-based Roncelli Inc. ($263 million) to Lansing-based Clark Construction Co. ($274 million) and Rochester-based Frank Rewold and Son Inc. ($139.6 million). Monahan says what helps set his family’s company apart is the stability and the personal touch. “Our theme is that you’re always going to have a Monahan on your projects. All our project managers are Monahans. It’s really a personal touch we'll give to you. You know that the guy you’re talking to in the beginning is the guy that you’re talking to when we hand over the keys, and that’s worked.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB
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 2 2 , 2 0 1 9
12
CRAIN'S LIST: INDUSTRIAL LEASES Rank
Property
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 40
6307 W. Fort St., Detroit B
Ranked by square feet
Owner, owner city
Tenant
Broker
Square feet
Industrial Realty Group, Los Angeles
Progressive Distribution Centers Inc.
Signature Associates Inc.
638,236
Ashley Capital, Canton Township
Penske Logistics LLC
Newmark Knight Frank; Vogel Advisors
590,141
Friedman Real Estate, Farmington Hills
FCA US LLC
Cushman & Wakefield
528,340
General Development Co. LLC, Southfield
FANUC America Corp.
Friedman Real Estate
461,525
Ashley Capital, Canton Township
Medline Industries Inc.
Signature Associates Inc.
419,257
W.P. Carey, New York, N.Y.
Tower Automotive
392,300
Ashley Capital, Canton Township
Ford Motor Co.
Advocate Advisors of Michigan, W.P. Carey Ashley Capital
Industrial Realty Group, Los Angeles
The Salvation Army
324,545
Faurecia
301,282
Crossroads Distribution Center, Belleville
Amson Nassar Development LLC, Birmingham Ashley Capital, Canton Township
Signature Associates Inc., Colliers International Inc. Colliers International Inc.
Ford Motor Co.
Signature Associates Inc.; CBRE Inc.
276,346
Brownstown Business Center, Brownstown Township
Ashley Capital, Canton Township
WestRock Box on Demand LLC
272,143
Brownstown Business Center, Brownstown Township B
Ashley Capital, Canton Township
Newmark Knight Frank; Cushman & Wakefield The Butcher Engineering Enterprises Ashley Capital Ltd. Mahindra North American Technical Colliers International Inc. Center Inc. Roush Holdings LLC Ashley Capital
Livonia Corporate Center, Livonia Pinnacle Commerce Center, Redford Township B Oakland Technology Park, Auburn Hills Romulus Business Center, Romulus 44850 N. Groesbeck Highway, Clinton Township B Brownstown Business Center, Brownstown Township B Cabot Business Park, Detroit 17801 East 14 Mile Road, Fraser B
660 South Blvd., Pontiac
Industrial Realty Group, Los Angeles
373,580
261,746 238,400
Livonia Distribution Center, Livonia
Ashley Capital, Canton Township
Plymouth Road Technical Center, Livonia B
Ashley Capital, Canton Township
NYX Inc.
Ashley Capital
215,621
Romulus Business Center, Romulus B
Ashley Capital, Canton Township
Owens & Minor Distribution Inc.
209,450
Warren Business Center, Warren B
Ashley Capital, Canton Township
Lipari Foods LLC
Newmark Knight Frank/Jackson Cooksey Ashley Capital
197,272
Crossroads Distribution Center, Belleville B
Ashley Capital, Canton Township
Rose Moving & Storage Co. Inc.
Ashley Capital
190,751
Chalk Spade Investments Inc., Concorde, Ontario Time Equities Inc., New York City
HTI Cybernetics Inc.
CBRE Inc.
189,400
Accurate Expediting Inc.
Colliers International Inc.
188,300
Crossroads Distribution Center, Belleville B
Ashley Capital, Canton Township
AEL Span LLC
Ashley Capital
185,405
Crossroads Distribution Center, Belleville B
Ashley Capital, Canton Township
FedEx Ground Package System Inc.
Fischer & Co.
179,760
U.S. Postal Service
Friedman Real Estate
166,900
2001 Centerpoint Parkway, Pontiac
Wooshin North America, LLC, Farmington Hills Pontiac Central LLC, Solon, Ohio
erae AMS USA Manufacturing LLC
CBRE Inc.
156,950
2001 Centerpoint Parkway, Pontiac
Pontiac Central LLC, Solon, Ohio
i.M. Branded
CBRE Inc.
151,000
3600 Giddings Road, Auburn Hills B
George P. Johnson Co., Auburn Hills
FCA US LLC
Cushman & Wakefield
147,135
Romulus Business Center, Romulus B
Ashley Capital, Canton Township
Pratt (Classic Container) Inc.
Ashley Capital
141,348
50 Continental Drive, Auburn Hills
Joel Nosanchuk, Bloomfield Hills
Samsung SDI America Inc.
137,560
Finkel Roth Group III LLC, Plymouth Township General Development Co. LLC, Southfield
Ford Motor Co.
Newmark Knight Frank; Colliers International Inc. Signature Associates Inc.
Incoe Corp.
General Development Co. LLC
135,000
IKO Industries Ltd., Toronto
Packaging Corp. of America
Cushman & Wakefield; CBRE Inc.
131,390
J.B. Donaldson Co., Farmington Hills
ESYS Corp.
124,473
Ashley Capital, Canton Township
U.S. Farathane LLC
Signature Associates; Newmark Knight Frank Signature Associates Inc.
123,462
Modular Automotive Systems LLC, Dearborn Ashley Capital, Canton Township
Everfresh Beverage
Colliers International Inc.
114,000
NYX Inc.
Ashley Capital
108,868
STAG Industrial Holdings LLC, Boston
Sodecia
Newmark Knight Frank
108,000
David Keyte, Portage
Chemico Systems Inc.
CBRE Inc.
107,356
Farber Roth Development Co., Farmington Hills Ashley Capital, Canton Township
Wabco North America
102,000
Veritiv Corp.
Signature Associates Inc.; Mohr Partners Inc. Ashley Capital
100,293
Amson Nassar Development LLC, Birmingham EA&S Investments, Birmingham
Tenneco Inc.
Cushman & Wakefield; CBRE Inc.
100,000
Hatch Stamping
Signature Associates Inc
100,000
Sterling Enterprise Park, Sterling Heights 9800-9824 Harrison St., Romulus
32500 Van Born Road, Wayne
25111 Glendale St., Redford Township B Oakland Technology Park, Auburn Hills Allied Commerce Center, Livonia B 1000 Brown Road, Auburn Hills Orion Commerce Center, Lake Orion 12200 Oakland Park Blvd., Highland Park C Plymouth Road Technical Center, Livonia B 42600 Merrill Road, Sterling Heights B 50725 Richard W Blvd., Chesterfield Township B 1220 Pacific Drive, Auburn Hills Livonia Distribution Center, Livonia B 15701 Technology Drive, Northville Townhip 1199 Austin Court, Howell
224,747
135,092
List is based on information from CoStar Group Inc., Crain's research, Loveland Technologies, public land records, from published information or as submitted by brokers, advisers or property owners. Crain's has tried to list all brokers involved in a transaction, but in some cases brokers may have been omitted.
B Lease renewal. C Renewal plus expansion. LIST RESEARCHED BY KIRK PINHO
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 2 2 , 2 0 1 9
13
CRAIN'S LIST: OFFICE LEASES
Ranked by square feet
Owner, owner city
Tenant
Broker
Square feet
United Shore Financial Services LLC, Pontiac
Henry Ford Health System
Newmark Knight Frank, Signature Associates Inc.
276,250
Radiant Solutions, Gaithersburg, Md.
MDA Information Systems
JLL
249,088
Bridge Commercial Real Estate, Atlanta, Ga.
FCA US LLC
Cushman & Wakefield
210,000
Royal Oak City Center, Royal Oak
Boji Group, Lansing
Henry Ford Health System
CBRE Inc.; Newmark Knight Frank
145,065
39450 Twelve Mile Road, Novi B
Northern Equities Group, Farmington Hills
Henry Ford Health System
Newmark Knight Frank
130,768
Schostak Bros. & Co., Livonia; REI, Bloomfield Hills,
Cooper-Standard Automotive
Advocate Advisors of Michigan, Schostak Bros. & Co. Inc.
110,000
Minskoff Grant Realty & Management Corp., White Plans, N.Y.
U.S. Attorney's Office
CBRE Inc.
108,419
Northern Equities Group, Farmington Hills
BCS Automotive Interface Solutions
JLL, Colliers International Inc.
94,733
The Hayman Co., Southfield
Midland Credit Management Inc.
Colliers International Inc.
93,000
Redico LLC, Southfield
Henry Ford Health System
Redico LLC
82,599
Bedrock LLC, Detroit
Bedrock LLC
74,500
First Martin Corp., Ann Arbor
U.S. Environmental Protection Agency
CBRE Inc.
70,516
Kojaian Management Corp., Bloomfield Hills
Flextronics
Newmark Knight Frank
60,768
Friedman Real Estate, Farmington Hills
Summit Health Inc.
Friedman Real Estate
60,598
General Development Co. LLC, Southfield
Hutchinson Corp.
Signature Associates Inc.
60,000
Bedrock LLC, Detroit
Kitch Drutchas Wagner Valitutti & Sherbrook PC
Advocate Advisors of Michigan, Bedrock LLC
54,600
The Hayman Co., Southfield
ONE10 LLC
CBRE Inc.
51,227
Wayne County, Detroit
SmithGroup
CBRE Inc.
49,665
15600 19 Mile Road, Clinton Township
Delta Management Co. Inc., Shelby Township
Macomb-Oakland Regional Center
CBRE Inc.
46,630
1857 & 1960 Technology Drive, Troy C
Friedman Real Estate, Farmington Hills
LG Chem Power Inc.
Advocate Advisors of Michigan, Friedman Real Estate
45,827
1960 Technology Drive, Troy B
Friedman Real Estate, Farmington Hills
Ally Financial Inc.
JLL, Friedman Real Estate
43,272
North Troy Corporate Park, Troy B
Friedman Real Estate, Farmington Hills
Aerotek
Cushman & Wakefield, Friedman Real Estate
41,502
Farmington Hills Corporate Center,
Kojaian Management Corp., Bloomfield Hills
Harman Becker Automotive Systems Inc.
Friedman Real Estate, Savills Studley
40,263
American Center, Southfield C
Redico LLC, Southfield
Sun Communities Inc.
Redico LLC
40,174
39675 MacKenzie Drive, Novi
Northern Equities Group, Farmington Hills
Novelis
JLL
40,000
Rank Property
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
1414 E. Maple Road, Troy
1200 Joe Hall Drive, Ypsilanti
1075 West Entrance Drive, Auburn Hills B
7 Mile Road build to suit, Northville Township 211 W. Fort St., Detroit
33737 W. 12 Mile Road, Farmington Hills
Troy PentaCentre, Troy C
The Village at Bloomfield, Bloomfield Township/Pontiac Sanders Building, Detroit
Traverwood Business Park, Ann Arbor
27755 Stansbury Blvd., Farmington Hills
Novi Research Park I, Novi
3201 Cross Creek Parkway, Auburn Hills
One Woodward Avenue, Detroit
2800 Livernois, Troy
Guardian Building, Detroit B
23 Farmington Hills 24 25
List is based on information from CoStar Group Inc., Crain's research, from published information or as submitted by brokers, advisers or property owners. Crain's has tried to list all brokers involved in a transaction, but in some cases brokers may have been omitted.
B Lease renewal. C Renewal plus expansion. LIST RESEARCHED BY KIRK PINHO
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 2 2 , 2 0 1 9
14
CRAIN'S LIST: LOCAL SALES
Ranked by price Rank
Building
1 2 3 4 5 6 7 7 9 10 11 12 13 14 15 16 17 17 17 20 21 22 22 24 25
Former Visteon Corp. plant, Shelby Township
26 27 28 29 29 29 32 33 33 35 35 37 37 37
Michigan Central Station, Detroit Cadillac Tower, Detroit Holiday Inn Express & Suites Downtown Detroit, Detroit 41144 Concept Drive, Plymouth
Seller
Broker/advisers
Square feet
Acres
Mapletree, Singapore
Hillwood Enterprises, Dallas
CBRE Inc.
1,000,350
NA
NA
$101.2
Ford Motor Co., Dearborn
Crown Enterprises Inc., Warren
NA
505,000
NA
NA
$90.0
Zaid Elia, Birmingham
Capital Invest Alliance, New York City VIC Partners LLC, Newport Beach, Calif.
Farbman Group
425,000
NA
NA
$24.0
NA
NA
NA
241
$23.3
Kirco Manix Construction, Troy
CBRE Inc.
79,401
NA
NA
$22.4
CBRE Inc.
312,000
NA
NA
$22.0
CBRE Inc.
439,150
NA
NA
$21.0
CBRE Inc.
180,230
NA
NA
$21.0
CBRE Inc.
NA
19
NA
$20.0
None
240,000
NA
NA
$19.5
Glenmont Capital Management, New York City Kawa Capital Management, Miami, Fla. AEW Capital Management, Boston
Founders Properties LLC, Minnetonka, Minn. STAG Industrial Holdings LLC, Cohen Asset Management Inc., Los 43800 Gen-Mar Drive, Novi Boston Angeles 12000-12500 Tech Center Drive, Livonia U.S. Realty Advisors LLC, New York Lexington Realty Trust, New York City STAG Industrial Holdings LLC, Oak Pass Capital Management LLC, 38150-38220 Plymouth Road, Livonia Boston Los Angeles The Platform LLC, Detroit Lakeshore Global, Detroit 7300 Woodward Ave., Detroit 10725 Harrison Road, Romulus
45501 12 Mile Road, Novi 6305-6385 Wall St., Sterling Heights 12499 Evergreen Road, Detroit Franklin Pointe Center, Southfield Shapero Hall, Detroit
Hino Motors Manufacturing USA Inc., Novi Store Capital Acquisitions, LLC, Scottsdale AIC Ventures, Atlanta
General Development Co. LLC, Southfield; Premier Realty LLC, Novi Quality Metalcraft Inc., Livonia
CBRE Inc.
125,000
NA
NA
$18.2
Signatures Associates Inc.
203,895
NA
NA
$17.3
E & A Property Management, Detroit
Friedman Real Estate
303,383
NA
NA
$16.6
Griffin American Healthcare REIT Universal Properties and Inc., Irvine, Calif. Management Inc., Costa Mesa, Calif. Ginosko Development Co., Novi Dennis Kefallinos, Detroit
Friedman Real Estate
84,749
NA
NA
$16.2
P.A. Commercial
150,888
NA
NA
$16.0
JLL
312,000
NA
NA
$15.5
Friedman Real Estate
297,000
NA
NA
$15.0
JLL
103,253
NA
NA
$15.0
29700 Commerce Blvd., Chesterfield Township
Advanced Intergration Technology, Plano, Texas
Raleigh Officentre, Southfield
Credit Acceptance Corp., Southfield Friedman Real Estate, Farmington Hills Cole Capital, Phoenix Westminster Capital, Lake Forest, Ill.
Troy Concept Center, Troy Midtown land, Detroit Hemmeter Building, Detroit 1175 N. Opdyke Road, Auburn Hills 7900 Haggerty Road, Canton Township 2600 Bellingham Drive, Troy 31555 Industrial Road, Livonia 51251 Fogg Industrial Court, Shelby Township Albert Kahn Building, Detroit
Lynn Corporate Park, Wixom Riverwood Research Center, Southfield Stoneridge Office Park III, Bloomfield Hills St. Regis Hotel, Detroit Former Detroit Public Schools book depository, Detroit 440 Congress St., Detroit
1009 Cass Ave., Detroit Meldrum Street property, Detroit 41965 Ecorse Road, Belleville 275 Rex Blvd., Auburn Hills 600 W. Lafayette Blvd., Detroit Jefferson Beach Marina, St. Clair Shores 810 E. Van Riper Road, Fowlerville
Price Rooms ($000,000)
Buyer
Black Equities Group Ltd., Beverly Hills, Calif.
Woodward Medical Office Building LLC, Southfield Nelson Ventures, Birmingham
Mohammad Qazi, Southfield
NA
NA
4
NA
$15.0
Lear Corp., Southfield
JLL
56,000
NA
NA
$13.2
Professional Property Management Co., Birmingham Plastipak Packaging Inc., Plymouth Township Dennis Bostick, Warren
Alidade Capital LLC, Bloomfield Hills Equity Industrial Partners Corp., Needham, Mass. Iron Pointe Partners LLC, Washington, D.C. Shamie Development Inc., Franklin
Signature Associates Inc.
143,150
NA
NA
$10.5
Signature Associates Inc.
442,500
NA
NA
$10.0
Newmark Knight Frank
93,160
NA
NA
$10.0
Colliers International Inc.
148,586
NA
NA
$9.8
Ray Fogg Corporate Properties LLC, Brooklyn Heights
Newmark Knight Frank
109,328
NA
NA
$9.6
Northern Equities Group, Farmington Hills; Lutz RE Investments, Birmingham RBL Real Estate, San Francisco
HFZ Capital, New York City; The Platform LLC, Detroit; Redico LLC, Southfield Styl-Rite Homes Inc., Wixom
JLL
320,000
NA
NA
$9.5
Signature Associates Inc.
128,308
NA
NA
$8.5
David Halabu, Southfield
JLL, Friedman Real Estate
68,142
NA
NA
$8.3
Channing Realty Advisors, Pepper Pike, Ohio
Friedman Real Estate, Farmington Hills Alidade Capital LLC, Bloomfield Hills
CBRE Inc.
61,096
NA
NA
$8.0
Invictus Equity Group, Detroit
Swanson family, Detroit
Prime Financial Plus Realty
NA
NA
125
$8.0
Ford Motor Co., Dearborn
Crown Enterprises Inc., Warren
NA
202,500
NA
NA
$8.0
Christos Moisides, David Sutherland, Gretchen Valade, St. Clair Shores Basco of Michigan, Detroit
Sterling Group, Detroit
Friedman Real Estate
85,539
NA
NA
$7.9
Fayez Khalil, Detroit
Friedman Real Estate
168,080
NA
NA
$7.7
Solanus Casey Center Benefactor LLC, Detroit Brookwood Capital Partners, Raleigh, N.C. Mahindra North American Technical Center, Inc., Mumbai Koucar Management, Troy
Delta Iron Works, Detroit
NA
18,000
NA
NA
$7.7
General Electric Co., Cincinnati
CBRE Inc.
124,585
NA
NA
$7.3
C-III Asset Management, Irving, Texas The Means Group Inc., Holdwick Development, Detroit Sterling Group, Detroit
Colliers International Inc., CBRE Inc.
151,200
NA
NA
$7.3
Colliers International Inc.
90,000
NA
NA
$7.0
Signature Associates Inc.
500,000
NA
NA
$7.0
BRIVAR Construction Company, Brighton
Signature Associates Inc.
120,000
NA
NA
$7.0
Prospect Industrial Real Estate, Livonia United Parcel Service Inc., Atlanta
Safe Harbor Marinas, Dallas, Texas CZ Cartage, Brighton
List is based on information from CoStar Group Inc., Crain's research, Loveland Technologies, public land records, from published information or submitted by brokers, advisers or property owners. Crain's has tried to list all brokers involved in a transaction, but in some cases brokers may have been omitted. LIST RESEARCHED BY KIRK PINHO
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 2 2 , 2 0 1 9
15
CRAIN'S LIST: LARGEST GENERAL CONTRACTORS
Ranked by 2018 revenue Rank
1
Company Address Phone; website
Belfor Holdings Inc. 185 Oakland Ave., Suite 150, Birmingham 48009 (248) 594-1144; www.belfor.com
Revenue ($000,000) 2018/2017
Value of new contracts ($000,000) 2018/2017
Sheldon Yellen CEO
$1,955.9 $1,794.8
Top local executive(s)
Local employees Jan. 2019
Total new projects 2018/2017
Southeast Michigan projects started 2018
$1,905.0 $1,746.7
2,190
152,600 141,912
2,239
2
Barton Malow Co. 26500 American Drive, Southfield 48034 (248) 436-5000; www.bartonmalow.com
Ryan Maibach president and CEO
1,900.0 2,591.0
1,950.0 1,302.4
1,100
359 340
208
3
Walbridge 777 Woodward Ave., Suite 300, Detroit 48226 (313) 963-8000; www.walbridge.com
John Rakolta Jr. chairman and CEO
1,340.0 1,500.0
1,685.2 1,291.0
343
202 159
89
4
Aristeo Construction Co. 12811 Farmington Road, Livonia 48150 (734) 427-9111; www.aristeo.com
Michelle Aristeo Barton president
470.0 448.6
359.5 556.8
386
370 430
NA
Stephen Fragnoli president and CEO
367.0 480.0
NA 392.1
171
NA NA
NA
5
Commercial Contracting Corp. (Commercial Contracting Group Inc.) 4260 N. Atlantic Blvd., Auburn Hills 48326 (248) 209-0500; www.cccnetwork.com
Ronald Staley senior VP, Southeast Michigan operations
305.2 305.9
1,002.1 645.3
57
276 164
78
6
The Christman Co. The Fisher Building, 3011 W. Grand Blvd., Suite 2600, Detroit 48202-3030 (313) 908-6060; www.christmanco.com
7
Clark Construction Co. 3535 Moores River Drive, Lansing 48911 (517) 372-0940; www.clarkcc.com
Charles Clark CEO
274.0 200.0
NA NA
55
NA NA
NA
8
Roncelli Inc. 6471 Metropolitan Parkway, Sterling Heights 48312 (586) 264-2060; www.roncelli-inc.com
Gary Roncelli, chairman and CEO; Thomas Wickersham, president and COO
263.0 281.0
255.0 294.0
245
85 88
83
9
Sachse Construction and Development Co. LLC 1528 Woodward Ave., Suite 600, Detroit 48226 (313) 481-8200; www.sachseconstruction.com
Todd Sachse, CEO and founder; Steve Berlage, president and COO
213.0 167.0
195.0 191.0
175
200 170
88
David Kelly vice president and general manager
206.5 233.9
635.2 189.9
80
42 34
40
10
Turner Construction Co. 535 Griswold St., Suite 1525, Detroit 48226 (313) 596-0500; www.turnerconstruction.com/office-network/ detroit
11
George W. Auch Co. (dba Auch Construction) 65 University Drive, Pontiac 48342 (248) 334-2000; www.auchconstruction.com
Vincent DeLeonardis president and CEO
191.8 150.2
234.5 349.0
108
143 122
143
12
Granger Construction Co. 39475 13 Mile Road, Suite 100 , Novi 48377 (248) 724-2950; www.grangerconstruction.com
Paul Roller project director
191.7 200.8
123.8 NA
77
89 NA
13
13
Ideal Contracting 2525 Clark St., Detroit 48209 (313) 843-8000; www.idealcontracting.com
Frank Venegas Jr. chairman and CEO
183.5 276.5
223.0 249.2
350
840 887
830
14
The Colasanti Cos. 24500 Wood Court, Macomb Township 48042 (586) 598-9700; www.colasantigroup.com
Carey Colasanti, CEO; Pat Wysocki, president
171.3 162.0
166.7 154.4
300
14 21
14
15
DeMaria 3031 W. Grand Blvd., Suite 540, Detroit 48202-3008 (313) 870-2800; www.demariabuild.com
Joseph DeMaria Jr., CEO; Anthony DeMaria, president
145.7 102.5
137.0 103.1
110
56 36
56
16
Frank Rewold and Son Inc. 333 E. Third St., Suite 300, Rochester 48307 (248) 651-7242; www.frankrewold.com
Frank Rewold president and CEO
139.6 182.1
205.0 250.0
67
25 28
25
17
Dearborn Mid-West Co. 20334 Superior Road, Taylor 48180 (734) 288-4400; www.dmwcc.com
Jeff Homenik president and CEO
126.5 177.0
75.9 NA
148
73 NA
63
18
Devon Industrial Group 535 Griswold St., Suite 2050, Detroit 48226 (313) 221-1600; www.devonindustrial.com
David Burnley president and CEO
121.3 145.0
185.0 NA
85
6 NA
5
19
O'Brien Construction Inc. 966 Livernois Road, Troy 48083 (248) 334-2470; www.obriencc.com
Timothy O'Brien president
119.1 65.2
34.1 146.7
53
9 10
8
20
C.E. Gleeson Constructors Inc. 984 Livernois, Troy 48083 (248) 647-5500; www.gleesonconstructors.com
Charles E. Gleeson II president and CEO
101.7 81.0
140.0 115.0
43
43 34
13
21
Spence Brothers 4130 Varsity Drive, Ann Arbor 48180 (734) 213-6033; www.spencebrothers.com
Herbert Spence III president and CEO
92.9 90.4
NA 45.0
NA
42 34
8
22
Marsh Construction (T.H. Marsh) 100 W. Long Lake Road, Suite 200, Bloomfield Hills 48304 (248) 586-4130; www.thmarsh.com
Ryan Marsh CEO
89.0 97.0
NA NA
46
NA NA
NA
23
Kirco Manix 101 W. Big Beaver, Suite 200, Troy 48084 (248) 354-5100; www.kircomanix.com
Douglas Manix president
80.0 78.0
150.0 65.0
40
25 20
22
24
Walsh Construction Co. 3011 W. Grand Blvd., Suite 2300, Detroit 48202 (313) 873-6600; www.walshgroup.com
Sam Bahou and Jason Kopp vice presidents
78.4 158.9
430.0 120.0
117
6 134
6
25
Oliver/Hatcher Construction and Development Inc. 27333 Meadowbrook Road, Suite 100, Novi 48377 (248) 374-1100; www.oliverhatcher.com
Paul Hatcher, president; Paul Oliver, principal
72.0 147.2
NA 50.4
40
NA NA
NA
This list of general contractors is a compilation of the largest such companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analyses and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Southeast Michigan office. NA = not available. LIST RESEARCHED BY SONYA D. HILL
An expanded version of this list is available with a Crain’s Enhanced Membership at crainsdetroit.com/lists
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 2 2 , 2 0 1 9
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SPOTLIGHT Henniges names Williams permanent CEO
Henniges Automotive Inc. on Tuesday named Larry Williams permanent CEO of the Auburn Hillsbased supplier after serving in the role on an interim basis for more than two years. Williams was named as the interim CEO replacement for outWilliams going executive Doug DelGrosso in 2016 when he left to become the CEO of Chassix Holdings Inc. DelGrosso became the president and CEO of Plymouth-based Adient plc in October 2018. Williams will continue his role as a board director and president of the company, which he’s held since January 2016. He previously held the title of CFO between 2007 and April 2018 and had served as Henniges’ interim CEO between November 2011 and July 2012 until the company hired DelGrosso. He joined Henniges as vice president of finance in 2003. He previously served in executive finance roles for Metzeler Automotive and GenCorp. “When I joined Henniges in 2003, I quickly found a passion for the company; I’m proud of the success we’ve achieved throughout my tenure and am thrilled to take on this new leadership role,” Williams said in a news release. “As CEO, I look forward to further amplifying Henniges’ position as a leading automotive sealing and anti-vibration solutions provider.” Williams earned an MBA from Butler University in Indiana and earned a bachelor’s degree in business administration from Central Michigan University.
Henniges is the 85th largest global automotive supplier with revenue of $994 million in 2017, according to Automotive News’ Top Suppliers report.
Integrated Design Solutions names new president
Integrated Design Solutions LLC, an architectural and engineering firm based in Troy, has swapped leadership as longtime president Paul Stachowiak steps down. Stachowiak, 64, will continue as chairman as Charles Lewis, 55, transitions to the Lewis role of president, according to a news release. The changes were approved March 20 at the annual board meeting. Stachowiak has been president and chairman since Integrated Design Solutions’ founding in 1999. This year is his last as a full-time member of the company. He plans to stay on in a more limited capacity through spring 2021 or 2022 to help mentor new leadership and transition client relations before retiring, he said. Integrated Design Solutions’ current projects include designing the 8,000-square-foot lobby of the Ford Building in downtown Detroit. It has also worked with Michigan State University, the University of Michigan, the University of Notre Dame, Romeo Community Schools in Macomb County and the University of Detroit Mercy and contributed to the $45 million renovation of United Shore Financial Services LLC’s new headquarters in Pontiac.
Detroit News editor and publisher Jonathan Wolman dies at 68 By Chad Livengood clivengood@crain.com
Jonathan Wolman, the editor and publisher of The Detroit News who helmed the newspaper during a tumultuous economic upheaval for the news business, died April 15 after a long battle with pancreatic cancer, The News reported. He was 68. Wolman’s 12 years as the top executive at The News capped a career spanning five decades working in newsrooms from Detroit to Denver and Washington, D.C., where he directed coverage of Congress and four U.S. presidents for the Associated Press wire service. “Jon was not only a giant in the journalism world and a thought leader here in Detroit and beyond, but also a wonderful human being,” said retired federal judge Gerald Rosen, who has been Wolman’s neighbor in Franklin for 12 years. “His dry, sometimes irreverent wit and deep insights about people and the world around him complemented a warm, caring and compassionate soul.” At The News, Wolman maintained the paper’s commitment to operating two bureaus in Lansing and Washington at a time when metropolitan newspapers across the country were closing Capitol bureaus and reducing coverage of the state and federal government. “No paper of The Detroit News’ size has had such a commitment to Washington journalism than Jon Wolman’s Detroit News,” said David Shepardson, the former Washington bureau chief for The News. “There was no better example of that decision than during the financial crisis of 2008 and 2009 when the fate of the domestic automotive industry was
Jonathan Wolman was the editor and publisher of The Detroit News.
being decided in Washington.” Under Wolman’s leadership, Shepardson and The Detroit News’ Washington bureau reporters won a prestigious Gerald Loeb Award in 2010 for their coverage of the 2009 federal bailout and bankruptcy reorganization of General Motors and Chrysler Group. Wolman managed The News during a period of continuous decline for Detroit’s daily newspapers, which share business operations through a joint operating agreement but maintain separate newsrooms. Both The News and Detroit Free Press have shed dozens of newsroom jobs over the past decade through early retirement buyouts, attrition and layoffs. Wolman’s stewardship of The News began two years after Gannett
Co. Inc. sold the newspaper to Denver-based newspaper chain MediaNews for $25 million in stock, a maneuver that allowed Gannett to buy the rival Detroit Free Press from Knight Ridder for $262 million. MediaNews subsequently was bought by New York City-based hedge fund Alden Global Capital, but The News was left largely outside of its new owner’s downsizing of its newspaper newsroom ranks because of the JOA with Gannett and because of collective bargaining agreements. Gannett owns 95 percent of the JOA partnership. As a local media leader, Wolman was a “dedicated” member of the board of directors of the Detroit Economic Club, President and CEO Steve Grigorian said. “You could always count on and look forward to hearing Jon’s own thought leadership on the speaker’s topic and speech after the meeting,” Grigorian said. “He will be sorely missed.” Wolman spent 31 years with the AP, starting as a reporter in 1973 in Madison, Wis., and then Detroit, later working his way up the ranks of the news cooperative’s Washington bureau, where he became an assistant bureau chief in 1984 and bureau chief in 1989. In 2000, he became executive editor of the AP. Wolman is survived by his wife, Deborah Lamm, and their three adult children, Jacob, Emma and Sophia. Memorial donations may be made to the Committee to Protect Journalists, the University of Wisconsin School of Journalism and Jewish Family Services of Metro Detroit. — Crain's Senior Reporter Bill Shea contributed to this report.
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William Saxton, former CEO of Butzel Long, dies at 92 By Kurt Nagl knagl@crain.com
William Saxton, the former CEO and chairman of Butzel Long PC who spent 60 years with the Detroit-based firm, has died at age 92. Saxton died April 15 in Arizona, according to a news release from Butzel Long. “He was really a giant at the firm,” Justin Klimko, president and CEO of Butzel Long, told Crain’s. “He helped bridge from the old to the new. He was really a very large figure in the Detroit legal community overall — very well-known, very well-respected.” Saxton Saxton started his career with the firm shortly after obtaining his law degree from the University of Michigan in 1952, when the practice’s founding members, Leo Butzel and Tom Long, were still active. Over the course of 60 years, Saxton had a hand in many crucial court cases, won scores of accolades and oversaw large-scale growth at the firm. The law firm had only a couple of dozen attorneys when Saxton started, Klimko said. By 2000, the firm
had 132 lawyers, according to Crain’s List of largest law firms at the time. Around 1990, Saxton took up the role of CEO and chairman until stepping away from daily business in the late 1990s/early 2000s. Saxton held the title of director emeritus until retiring in 2002. Klimko said Saxton kept ties to the firm up until a few years ago, even after moving to Arizona around 2009. Among Saxton’s achievements was successfully arguing the 1974 case of Milliken v. Bradley before the U.S. Supreme Court, according to the release. The case dealt with the controversial topic of cross-district school busing in metro Detroit. Saxton received the State Bar of Michigan’s Champion of Justice Award in 2003, the Distinguished Service Award from the State Bar of Michigan Labor and Employment Law Section in 1998 and the Nathan B. Goodnow Award by the Detroit Bar Association in 1996. Memorial services are scheduled for 2-2:45 p.m. Friday at Valley of the Sun Mortuary & Cemetery in Arizona, according to funeral planner Dignity Memorial. Memorial donations can be made to Shriner’s Hospital for Children. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl
Fred Yaffe, longtime local ad ace, dies at 86 By Kurt Nagl knagl@crain.com
Fred Yaffe, the advertising virtuoso who worked on countless campaigns in more than 50 years in the business, died April 14 at age 86 after a long illness. Kathy Yaffe, his wife of 48 years, said he had been in declining health since suffering a stroke 3 1/2 years ago. Until then, he had still been leading the advertising firm he started in 1960. “He had such a zest for life,” his wife said. “I guess the best way to describe Fred is fun-loving. He always had a joke to tell. He was a great mentor.” For more than Yaffe a half-century, Yaffe was a staple in local advertising circles, crafting some of the most memorable campaigns for wellknown clients including Little Caesars Pizza, Perry Drug Stores, Art Van Furniture, Faygo and ABC Warehouse. Little Caesars rolled out the “Pizza, Pizza!” slogan in 1979 before phasing it out during the “Hot-N-Ready” era beginning in the early 2000s. “I grew up with him in the business,” said Denise Ilitch, daughter of Little Caesars founders Mike and Marian Ilitch and now president of Ilitch Enterprises LLC. “He was way ahead of his time. He made a great
contribution to advertising at our company. He and my father got along well in their approach to advertising the business.” Yaffe left Brooklyn to attend the University of Michigan before spending a couple of years in the Army and returning to the school to obtain a master’s degree, his wife said. “He was a poor kid from Brooklyn that came to Detroit,” she said. “He started from nothing, and he built this all on his own.” Yaffe started his advertising firm, which would eventually become Southfield-based Yaffe Group Inc., in 1960. He stepped aside as its CEO in 2015 at age 82, Crain’s reported then. He had remained executive chairman and continued to work with clients. Yaffe was inducted into the Adcraft Club of Detroit’s Hall of Fame in 2018. The advertising firm is headed now by CEO John Cassidy and had 17 employees and $20 million in revenue as of 2015. Yaffe is survived by wife, Kathy; son James; and grandchildren India and Jonathan. Funeral services were Tuesday at Ira Kaufman Chapel in Southfield. Interment is at Beth El Memorial Park in Livonia. Memorial donations can be made to Capuchin Soup Kitchen in Detroit or the National Kidney Foundation of Michigan in Ann Arbor. Kurt Nagl: (313) 446-0337 Twitter: @kurt_nagl
17
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BUILDING FROM PAGE 1
Those include a shortage of skilledtrades laborers meaning fewer projects can start, a slower economy overall and increasing costs of materials and the labor shortage driving up project budgets, construction experts said. “In a broad sense, the construction industry expansion has been in place for some time now,” said Robert Murray, chief economist and vice president for Dodge Data. “To some extent, it is an expansion reaching its later stages, and to some extent it is a result of higher material costs and a labor shortage.” He noted that the Dodge data is calculated by including a total project cost when a permit is filed. That means that large projects for which permits were issued in 2018, for example, had their total value included in 2018’s data. That means work should carry over from last year into 2019, but start tapering off by 2020 with a 5 percent slowdown nationally. “Also what we are seeing is a more cautious lending stance toward the real estate development sector,” Murray said. “There is concern nationally that multifamily housing has been overbuilt.” To be sure, in downtown Detroit alone, dozens of vacant buildings have been renovated and reoccupied, or constructed as the city’s and region’s economy have rebounded. Go to the suburbs, and you’ll find countless more examples that the building industry has had a good post-recession run. Ron Staley, senior vice president of
Construction starts trending up
Annual construction starts for both residential and nonresidential building in the Detroit-Warren-Livonia Metropolitan Statistical Area have been trending upward from a low in 2009. The statistical area includes these counties: Lapeer, Livington, Macomb, Oakland, St. Clair and Wayne. 6M
Total Residential Nonresidential
5M 4M
2,730,000
3M 2M
2,440,000
1M 0
’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18
SOURCE: Dodge Data & Analytics
The Christman Co., a Lansing-based construction firm whose Detroit office is in the Fisher Building in the New Center area, said the construction surge has felt a bit like it might have a century ago. “My thought always was, ‘Wouldn’t it have been cool to be in Detroit in the 1920s when everything was crazy with the train station and the Book Tower and the Fisher Building being built?’ ” Staley said. “I think we are really living in that same environment. The wealth is not nearly the same and not all driven by the auto industry, but the projects that are getting done are all those same buildings in a major way, buildings that were done a century ago.” But not all in the industry felt the construction surge. Peter Burton, principal of Bing-
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ham Farms-based developer Burton-Katzman LLC, said some industrial tenants remain reluctant to pony up for the higher-than-normal rents needed to justify new buildings. And that comes as the region’s existing industrial product ages into obsolescence. “New industrial buildings, in order to make sense, your rents are going to be in the $8 to $10 per square foot range, while tenants are used to paying $4 to $5 per square foot,” Burton said. “By my measure, 2018 was not the best year ever. It was a good year, but it was nothing compared to 2007-08-09, the years right before the recession.” Mike Haller, president of Detroit-based construction giant Walbridge Aldinger Co., said delays in some of the larger projects have pushed about 12 million skilledtrades hours from 2019 to 2020 or 2021, which is causing a short-term 5- to 15-percent unemployment currently in certain trades. The delayed start dates for construction causes trade contractor uncertainty on whether to pursue additional work with the risk of becoming over-committed. “There are a number of large mega-projects that have been slowed down,” Haller said. “The Hudson’s tower, the Monroe Blocks, the (Wayne County) criminal justice complex just started. East China
Large upcoming construction projects
The J.L. Hudson's site building: Billionaire Dan Gilbert plans to construct the state’s tallest building on the former department store site on Woodward Avenue downtown. Cost: $909 million Monroe Blocks: Gilbert has also broken ground on a 3.66-acre development that’s expected to include high-rises for office and residential use, plus several other midrise buildings downtown. Cost: $830 million Michigan Central Station: Ford Motor Co. is redeveloping the former train station in Corktown as part of a broader plan to create an autonomous and electric vehicle campus in the neighborhood west of downtown. Cost: $740 million Gordie Howe International Bridge: The new six-lane, cable-stayed bridge is expected to be complete by 2024. Cost: $3.8 billion Wayne County Consolidated Jail: A new criminal justice campus for Wayne County, which scuttled a half-built one at the corner of Gratiot Avenue and I-375 downtown after cost overruns saddled the project. Gilbert is developing the new complex, plus the 15-acre former jail site in a project with an unknown cost, but one that’s likely to be in the hundreds of millions of dollars, if not more. Cost: $533 million FCA US LLC projects: The Auburn Hills-based automaker is revamping several plants, including $2.5 billion for manufacturing around its Mack Avenue facilities and Jefferson North Assembly Plant in Detroit. Cost: $4.5 billion McLaren Health Care Corp. hospital: McLaren plans to build a new replacement hospital in south Lansing that is expected to open in late 2021. It will feature 240 beds, a cancer center, ambulatory care center and other facilities to support health care delivery, educational opportunities and medical research on a 52 acres. Cost: $450 million
(Township), where DTE is building the new gas-fired, 1,000-megawatt plant. Corktown is kind of starting out slowly. “Those have a major impact on what’s actually occuring in the marketplace, especially when they are delayed.” Dan Gilbert’s Bedrock LLC real estate company, which is developing the Hudson’s and Monroe projects as well as the criminal justice complex, did not respond to a request for comment. Jeff Baxa, senior vice president of Southfield-based Barton Malow Co., said he is worried about what happens when the existing pipeline of large-scale projects — those $500 million and up — begins to dry up. “I worry about the next 2-4 years, as these large projects start to wind down, what is out there to replace them? Is that work going to be backfilled?” A survey by the Associated General Contractors of America released earlier this year shows that 79 percent of Michigan’s 42 respondents in that organization are experiencing challenges filling all or some salaried and hourly trade positions and that 74 percent of the respondents expect their company’s headcount to increase. And a total of 66 percent said it will continue to be hard to hire (45 percent) or harder to hire (21 percent) this year. Skilled trades have been battered for years as the 2008 recession ground construction to a halt, causing workers to seek employment elsewhere or in different fields. In addition, emphasis on two- and four-year college degrees has caused unawareness of the benefits of a skilled-trades career for some students. “People are pulling back,” said Michael P. Monahan, controller for Eastpointe-based general contractor Monahan Co. “While banks are freeing up money, meeting those budget costs is hard. Some of those estimates are 2-3 years old. Most of the jobs we do are 2-3 years old, and the numbers in the developers’ minds are from 2-3 years ago. While we don’t make any more money — our fees haven’t gone up — the materials and subcontractor fees certainly have.” Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB
Baker College scraps proposal to move to downtown Ferndale By Anisa Jibrell ajibrill@crain.com
Baker College has tossed out its proposal to build a flagship campus in downtown Ferndale after failing to come to an agreement with city officials to address community concerns about parking during campus construction. City Council was scheduled to meet Monday to decide if it would grant Baker a 100-day extension on an exclusivity agreement with the city that was reached in January. The Daily Tribune first reported the pullback. “Following extensive exploration and a thorough due diligence process, Baker College has elected not to move forward with the City of Ferndale as the location for our new metro-Detroit campus,” Baker College COO Jacqui Spice said in a statement emailed to Crain’s. “Throughout the Ferndale negotiations, we maintained work on contingency plans and we remain steadfast and are committed to serving our students and supporting the
communities of SE Michigan.” Jordan Twardy, Ferndale’s community and economic development director, addressed the concerns in a memo for the Monday meeting. “Much effort has gone into identifying this project’s potential opportunities and working through solutions to potential concerns,” Twardy wrote. “While that effort has made progress, the CED Department believes that the city and business community’s preference for preserving access to existing public parking, and Baker’s need to provide a Metro Detroit campus for their community by Winter 2021 are irreconcilable.” In a letter addressed to city officials, Patrick Ong, principal and project manager for Bloomfield Hills-based developer Acquest Realty Advisors, said the issue of parking while the college is being constructed was the “one obstacle that could not be overcome.” The only answer was to build the parking deck first and then begin constructing the college, but that
would have pushed back the project a year and a half, which isn’t in line with Baker’s master plan, he wrote. The college first announced its proposal to build a three- to four-story flagship campus in busy downtown Ferndale in January, with completion in time for the fall 2020 semester. A parking deck was planned on one of three properties, which include two privately owned and one owned by the city, Crain’s reported. The mixed-use parking deck would have had street-level retail and possibly a residential element. The three properties are on the south side of Vester Street between Bermuda Street and the alley; a parking lot on the north side of Vester adjacent to Valentine Distilling Co.; and a cityowned parking lot between Ferndale City Hall and the public library. Parking in Ferndale is already pinched due to construction of the Development on Troy, also known as The dot, a 400-space mixed-use parking deck with retail on the first floor.
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 2 2 , 2 0 1 9
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STEM FROM PAGE 3
It’s looking at areas including Cincinnati, western New York, Houston and California, with plans to add an additional city this year, Lewis said. “Those are good things for our corporate sponsors for us to pay attention to,” Lewis said. “They have locations throughout the U.S.”
Reaves
New programs amid rising demand Detroit-based DAPCEP provides out-of-school programs for K-12 students, aimed at increasing the number of underrepresented students who are motivated and prepared academically to pursue degrees leading to careers in STEM fields. Over half, or 58 percent, of the 11,000 kids it served locally last year were in Detroit; the rest from other parts of Southeast Michigan. They take part in Saturday educational programs and summer camps, with many programs hosted on college campuses to expose students to the college lifestyle. DAPCEP offers programs in partnership with 11 Michigan universities, local training programs and K-12 school systems. It’s operating on a cash budget of $3.1 million this year and a total budget of $4.3 million with in-kind services/donations. It’s important to prepare students for jobs in growing sectors where talent shortages are happening or expected, Reaves said. The state is projecting nearly 15 percent growth in high-demand, high-wage STEM occupations through 2026, DAPCEP said, pointing to a recent report. Growth in job openings for skilled trades and other STEM-related jobs that don’t require
YZERMAN FROM PAGE 1
After Detroit pizza moguls Mike and Marian Ilitch bought the Red Wings for $8 million in June 1982 from the family of Bruce Norris, they hired Jim Devellano as general manager and he picked Yzerman with the No. 4 overall selection in the 1982 NHL Entry Draft. Yzerman’s career helped cement the Red Wings as the city’s most successful sports franchise, which boasts 11 championships and a deeply loyal fanbase. After his 2006 retirement as a player, Yzerman spent four seasons in Detroit’s front office before Tampa Bay Lightning owner and billionaire financier Jeffrey Vinik hired him as general manager in 2010. The team was 340-222 with Yzerman as GM, and reached the 2015 Stanley Cup finals, losing in six games to the Chicago Blackhawks. The Red Wings in that time had begun to slip into mediocrity. Yzerman stepped down as the Lightning’s general manager last April, but remained with the team in an advisory role. He returned to Detroit where his family remained after he went to Tampa Bay, saying that he wanted the new advisory role because it would allow him to spend more time with his wife and three daughters. That fueled waves of speculation that he was Detroit’s GM-in-waiting, and that proved to be true. The Red Wings have missed the playoffs the past three seasons, and Yzerman’s task is to restart a postsea-
CHUK NOWAK, HALIDECREATIVE
Under the watchful eye of DAPCEP volunteers, grade school children take part in dissection of a pig heart during a DAPCEP program on blood flow and circulation, part of an effort to improve STEM education for K-12 students.
a four-year degree — such as carpenters, construction managers, dental hygienists, electricians, HVAC mechanics/installers, nurse practitioners and plumbers — is projected to range from 7 percent to 34 percent. Last fall, DAPCEP rolled out pilot programs for skilled trades and associate degree-level jobs with Wayne County Community College District. The programs include an overview of the health care industry to explore careers that require two-year degrees in health care, like nurse practitioners, dental assistants and phlebotomists. A pilot skilled trades program covered heating, ventilation and air conditioning; automotive
mechanics, plumbing and electrical. The program, which took 15 students into each area, will continue this fall, Reaves said. Another pilot, a year-long certificate program in drone operation, is set to launch this summer. It will enable youth to get certified as young as age 16 and move into jobs following high school graduation, with a little more training and experience. There’s increasing demand commercially for drone operators, Reaves said. “So many people are now using them, whether it be for construction sites, or real estate.” CNBC.com reported in 2017 that companies are paying drone pilots between $50,000 and $70,000 annu-
ally, depending on their expertise and equipment. Contract jobs can net $2,500 to $7,000 per job. The nonprofit will invest $50,000 to serve 40 students through the pilot, or $1,250 per student, said Chandra Lewis, a spokeswoman for DAPCEP, who is unrelated to its chairman. The goal is to start exploration at a younger age and then to build a knowledge base, Reaves said. DAPCEP plans to expand programs in robotics and also to bring back a CompTIA Network+ certification it offered in 2017. Two years ago, with a grant from PNC, the nonprofit provided 25 high school students from Pontiac, Southfield, Oak Park and Detroit computer
son streak that lasted 25 consecutive years (and 30 of 32 seasons). Detroit hasn’t won a cup since 2007-08, and its last two playoff bids were ended by Yzerman’s Lighting in 2015 and 2016. The fan goodwill built up from the 1980s through the 2000s won’t last forever and could be squandered without some more winning. While attendance at Little Caesars Arena, the Red Wings’ palatial $863 million home rink that the public is helping pay for, has remained among the NHL’s best, continued losing eventually could begin to siphon revenue and possibly the loyalty built among fans and corporate advertisers over the decades of success. The Red Wings ranked fifth in NHL attendance this season with a 19,120 per game average. They were fourth in 2017-18 and third in 2016-17. Detroit hadn’t ranked outside of the top four in attendance average since coming in seventh (18,870 per game) in 2007-08 when the recession hit the region especially hard. Detroit’s estimated $171 million in 2017-18 team revenue ranked 11th in the 30-team NHL, according to Forbes calculations. In December, Forbes estimated that the team is now estimated to be worth $775 million thanks in part to $40 million in revenue growth attributed to the new arena. The $775 million was good for eighth among the National Hockey League’s 31 current teams, a one-spot improvement over the season prior. All the financials will improve, as will attendance and other franchise health metrics, if the team can again be a regular Stanley Cup contender. The Ilitches, buoyed by their Little
Caesars fortune, always have spent lavishly on the Red Wings. Prior to the 2004-05 NHL lockout that scrapped a full season and ended with the implementation of a salary cap, the family spent $77.8 million on players in 2003-04 when the average NHL team payroll was $44.4 million. They’ve been at or near the cap ceiling most years. Detroit currently leads the NHL with $84.9 million in player spending, which leaves the team with about $5.6 million in salary cap space. Yzerman have a young core of promising talent in Dylan Larkin, Andreas Athanasiou and Tyler Bertuzzi as a base for his plan to create a playoff roster. There also are teenage prospects Filip Zadina, the Czechborn left winger that Detroit took with the No. 6 pick in last year’s draft, and Joe Veleno, the Canadian center taken with last year’s No. 30 overall pick. Yzerman will have 10 draft picks in the June 21-22 NHL Entry Draft, including the No. 6 overall selection and three second-round picks. He’ll have help on the business side, too: Kris Draper has been in the front office to help with scouting, player evaluations, free agent signings and trades for eight seasons after 17 years as a Red Wings player, and Ryan Martin has been assistant general manager for the past eight seasons specializing in collective bargaining agreement administration and compliance, salary cap management, player contract research and analysis, and salary arbitration preparation. Jiri Fischer, another ex-player, has been in the front office
a dozen years and is director of player evaluation, and Shawn Horcoff has been director of player development for three seasons. What can fans expect out of an Yzerman-led rebuild, and how soon will they get back into contention? “Yzerman will be decisive. That’s one of his biggest strengths as an executive. He’s willing to make tough decisions. When the Lightning didn’t have the look of a playoff team, he sold at the deadline. When it was time to push, he was as aggressive as anyone,” wrote veteran hockey journalist Craig Custance of The Athletic in an analysis of Yzerman’s style as general manager. “For the fans of Detroit, he’s a link back to the glory days. But more importantly, to the Red Wings rebuild, he brings cachet, respect and instant credibility. If he’s hard-lining a player in contract negotiations, they know he’s serious. Just look at the salary structure in Tampa. If he wants in on a big name, they’re taking his call. The combination with Holland, as connected and well-liked as anyone in hockey, is a powerful one if it remains intact.” Two key figures from Detroit’s current regime remain. The Red Wings gave coach Jeff Blashill, 45, a two-year contract extension on April 2. In four seasons he had a 135-143-47 record. Blashill was hired as a Red Wings assistant coach in 2011-12 and then in 2012-15 was head coach for the American Hockey League’s Grand Rapids Griffins. Holland, 63, has been with the team since 1983 as a scout and assistant general manager, and was named general manager in 1997. He
S. Lewis
science and mobile application development training, in partnership with Pontiac-based mobile training and curriculum development company Mobile Comply. Students who successfully completed both phases of the program over 12 weeks were awarded a scholarship for certification through the Computing Technology Industry Association. Of those who participated, about 15 took the certification exam. This fall, it will expand its IT certification to include the CompTIA A+ Technician and Network+, educating students to become entry-level network professionals, with expertise in managing, maintaining, troubleshooting, installing and configuring basic computer networks. “The goal is really to prepare them to be work force ready upon graduation of high school,” Reaves said. At the same time, new technologies are presenting opportunities for students that didn’t exist before, Reaves said. The nonprofit plans to incorporate artificial intelligence, automated vehicles, cyber security and other emerging technologies into its pre-K-12 programs going forward. DAPCEP has budgeted to invest just over $371,000 in the new programs this year, contingent on raising the funding, said Development Director Maria Webb. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch was given a new two-year contract a year ago. Now, Holland appears to be ascending to a role similar to what former general manager Jim Devellano has held since 1990. Devellano was the Ilitches’ first hire in 1982 and was GM for eight seasons and is considered the godfather of the team’s modern era of success as senior vice president. It was Devellano who drafted Yzerman when LaFontaine was taken ahead of him in 1983, and he also would go on to hire Holland and future coach Scotty Bowman. On Yzerman’s advice, Devellano drafted Sergei Fedorov in 1989 in a move that laid the foundation for the future “Russian Five” that would power Detroit’s Stanley Cup run, according to a profile last year from The Athletic. Yzerman has gone on to draft Russian players in Tampa, a strategy that may carry-over to his new regime in Detroit. Renewed success in Detroit would be a feel-good next chapter for Yzerman’s story here that dates to the first Reagan administration. He was the team’s first pick in the 1983 NHL Entry Draft and fourth overall — Detroit had wanted Waterford Township’s Pat LaFontaine, who was take one spot earlier by the New York Islanders — and he was the first draft pick under new owners Mike and Marian Ilitch. Known as “The Captain,” Yzerman helped Detroit win Stanley Cup championships in 1997 — its first since 1955 — and two more in 1998 and 2002. Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19
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STOCKX FROM PAGE 1
Eye-popping valuations have become more common in recent years as investors are throwing billions at fast-growing, potentially disruptive companies in hopes of building insurmountable leads over competitors, said Chris Rizik, CEO and fund manager of Ann Arbor-based Renaissance Venture Capital Fund, who declined to comment on StockX specifically. “Raising money and needing money are now more disconnected as many investors are helping companies build a war chest,” Rizik said. “The whole theory appears to be find a category you like, pick a winner and put so much money in it to build topline growth without worrying about profitability that competitors can’t catch up.” For example, Japan’s Softbank Group Corp. started a $100 billion fund in 2016 on this theory and has invested more than $70 billion. The bank, which includes backing from the sovereign wealth funds of Saudi Arabia and Abu Dhabi, has invested unusually large sums in dozens of companies including ride-hailing firm Uber Technologies, food-delivery company Doordash, shared office space firm WeWork and messaging firm Slack. StockX may be in such a race with competitors like Culver City, Calif.-based Goat Group. The online sneaker resale platform was valued at $550 million in February after it raised $100 million via an investment from brick-and-mortar retailer Foot
CEO and co-founder of StockX Josh Luber poses at their offices in 2018 in Detroit.
Locker. Goat has raised $197.6 million to date, according to a CNBC report. Prior to any new round of funding, StockX had raised $51.5 million to date, according to PitchBook. New York-based LetGo, not a direct competitor to StockX but with a similar company model, raised $500 million last year in a late-stage round of venture funding. But profits may be of little consequence to StockX investors if the
ELECTRIC FROM PAGE 3
“The uniqueness of this study will put Michigan on the map when it comes to locating a public network of charging stations,” Anne Armstrong Cusack, executive director of the Michigan Agency for Energy, said in a statement. Jackson said the study and the state’s share of the DC fast-charging network will be paid for by a $9.9 million share it received from the 2016 Volkswagen diesel settlement. The proposed public charging network will add to hundreds of other chargers installed by private developers like ChargePoint and Tesla. For example, Detroit has 190 charging station ports around the city. Conducted by researchers at Michigan State University, the study looked at optimal locations of EV chargers in public locations in the Upper and Lower Peninsulas in part to address drivers’ “range anxiety” issues. Assessing needs by 2030, the study assessed distance between charging stations, charging speed, total time needed to get a charge, wait time for chargers, and detour times added to a typical trip. The study also looked at two other scenarios for EV placement and investment. For example, the first scenario, considered a low-tech option, would place 598 charging outlets for 50 kilowatt-hour batteries in various locations that would cost about $28 million. Current average battery technology ranges from 25 kilowatt-hours to up to 100 kwh for a Tesla. Another higher-tech scenario suggested 128 charging outlets with a cost of about $14 million to charge vehicles with more powerful batteries that would range from 50 kwh to 100 kwh.
MICHIGAN ENERGY OFFICE, ELECTRIFY AMERICA
A DC fast-charging electric vehicle charger.
“Our hybrid model (scenario three) is designed to charge low-tech batteries with a DC fast charger at 150 kwhs at about 10 to 15 minutes,” Jackson said. “We know in 2030 there will be faster 400 kwh chargers, so we want to prepare ahead.” Jackson said the second part of the study, which is expected to be completed this fall, will focus on the placement of urban EV chargers in Southeast Michigan. A third study will look at the possibility of adding solar-powered batteries at stations to address storage and reliability issues, Jackson said. “We used some of the experiences learned in Canada where they have many charging stations,” he said. “They have solar panels to charge batteries” for backups in case the electric grid fails. Sarah Barbo, director of corporate strategy with Consumers Energy Co., said the Jackson-based utility gener-
JEFF KOWALSKY/AFP/GETTY IMAGES
company is positioning for an initial public offering. According to research by the University of Florida, 84 percent of companies pursuing an initial public offering have generated no profits, The Economist reported. That’s up from 33 percent in 2009. StockX’s investors would likely see returns from a successful IPO whether the company had ever generated revenue or not. Those investors have included Gil-
bert’s Detroit Venture Partners, SalesForce co-CEO Marc Benioff, musician Steve Aoki, Eminem, streetwear designer Don C, actor Mark Wahlberg, and Washington Capitals and Wizards owner Ted Leonsis, among others. In September, StockX raised $44 million in a round of venture capital co-led by Silicon Valley venture capital firms GV (formerly Google Ventures) and Battery Ventures.
ally agrees with the state’s non-urban charging network locations. She said the company is starting to talk with charging vendors and site hosts on beginning installations this summer. “We are still talking about the detail on the number of chargers, which ones we do first,” Barbo said. “We do have one difference with our program. We said 125 kilowatt-hour fast chargers and (the MEA) recommended 150 kilowatt-hour chargers. We thought about the cost-benefit and are not sure it is worth paying premium costs” for the faster-speed chargers at this time. Dubbed PowerMIDrive, Consumers’ three-year, $10 million electric vehicle charging program includes new electric charging rates for nighttime hours, rebates to residential and business owners for a variety of chargers and a customer education effort. Rebates will range from $5,000 for chargers installed in public areas such as workplaces and multi-unit dwellings and up to $70,000 in rebates for the installation of a fast charger. Barbo said Consumers has put out a request for information for site hosts and vendors interested in building and managing charger stations. “These companies are very proactive. It is a new market, but they have to figure out permitting and other factors,” she said. By summer, Barbo believes Consumers will begin to receive rebate applications for the charger stations that will lay out what type of chargers and how many stations will be built over the next year. “We are hoping to get some installed by next summer and many by the fall of 2020,” she said. Impact to the electric grid initially from the EVs will be minimal, Barbo said. “We will learn a lot over the next three years. Electric vehicles tend to be clustered and we don’t expect any problems,” she said. “As we have more
EVs, more home chargers and highway chargers, we will see” whether the capacity is sufficient after three years. Barbo said Consumers expects to double the number of EVs in its territory from 4,000 to 8,000 by 2022. According to HIS Global Insights, Michigan has 12,500 to 15,000 EVs, ranking 10th in national EV sales. Industry estimates vary but predict that EV sales will grow to 150,000 to 800,000 EVs annually in Michigan. EVs includes all electric vehicles, including plug-in hybrid electric vehicles and battery electric vehicles. Over three years, Consumers’ EV program is expected to provide rebates to at least 200 level-two chargers located at grocery stores, gas stations and workplaces and 24 fast charger systems throughout Consumers Energy service territory, Barbo said. The utility also estimated another 3,000 residential chargers, which are slower chargers than level two, will be installed based on an estimate of 4,000 new EV purchases in Michigan, Barbo said. On June 5, Consumers Energy plans to hold a public meeting in Lansing at the Public Service Commission offices on its EV pilot program. Barbo said Consumers plans to announce charging vendors chosen to participate in the network. Camilo Serna, vice president of corporate strategy with DTE Energy Co., said the state’s plan is helpful as DTE begins to work with private vendors and property owners to develop the charging network. “You need a host to share investment in the infrastructure and where the needs are and the opportunities,” Serna said. “Our map is more around Detroit, so we have a couple differences in what the state is thinking. But we have similar views on the chargers as Consumers.”
That round, which helped finance the company’s expansion into Europe, represented a sevenfold increase from the $6 million the company raised in February 2017. Since its website went live in February 2016, StockX has undergone tremendous growth since launching its authentication and stock market-like pricing of luxury sneakers. It now has nearly 750 employees, the majority of whom are based in Detroit inside Quicken Loans’ headquarters at One Campus Martius and at its apparel authentication facility in Corktown. Born from a proliferation of counterfeit sneakers that flooded eBay and other e-commerce websites for years, StockX serves as the resale conduit for sellers to market and sell luxury goods, which are shipped to StockX’s facilities in Detroit; Tempe, Ariz.; Moonachie, N.J.; and West London to be authenticated before being sent to buyers. StockX’s model isn’t just about being a resale platform. It also aims to use its website to create a sort of IPOstyle market for newly released sneakers and other goods. “We want to work with the brands, the industry, Nike and Adidas and Supreme, etc., to release products directly into the market, to literally IPO them,” Luber told the Los Angeles Times for an article published Friday. “And in that scenario, then we really start to play both halves of the retail and resell sneaker markets.” Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh By 2030, DTE is using projections of 300,000 electric vehicles in Michigan, but the number could grow as high as 1 million, Serna said. Serna said once DTE’s rate case is approved, which is expected in May, the company will be able to provide rebates for vendors of $20,000 per charger. “We are engaging those hosts now. We have a list and talking with customers. Some might call us. We will look at locations, depends on the site, and the funding might help cover 50 to 60 percent of the costs,” he said. “Whatever the state contributes would be good.” In a project called Charging Forward, DTE proposes to develop charging stations in both residential and commercial areas, give rebates to businesses providing fast chargers and to homeowners using homebased chargers and to educate customers about the technology. Serna said DTE is projecting a need for 32 fast chargers with one per location in Southeast Michigan with 100 kilowatt-hour chargers. “We are projecting grid capacity out to three years and don’t see any issues” for reliability, Serna said. “We will do a study in a few years and that might impact our view. Adoption is still low, but it could increase and we would have to address increased capacity on the grid.” Kevin Miller, director of public policy for ChargePoint Inc., the nation’s leading network and manufacturer of EV charging stations, has told Crain’s that Michigan utility company charging programs will encourage more EV charging at home, work and the road. Chargepoint supports 59,000 charging spots in the nation, including 1,100 in Michigan, and plans to build more. Jay Greene: (313) 446-0325 Twitter: @jaybgreene
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21
DEGC executive to take helm of New Detroit By Sherri Welch swelch@crain.com
Michael Rafferty, vice president of small business for the Detroit Economic Growth Corp., is departing to become president and CEO of New Detroit Inc. Rafferty, 43, will join New Detroit on May 20, succeeding Shirley Stancato, who retired at the end of last year after leading the nonprofit for 18 years. During the three years he’s led the DEGC’s small business practice, Rafferty has grown the team to 25 people. The new small business and entrepreneurship economic development programs launched during his tenure there supported the opening of more than 50 small businesses in Detroit and created a pipeline of another 150 businesses set to open in the next several years, New Detroit said in a release. Prior to his role at the DEGC, Rafferty led the Michigan Nonprofit Association’s Metro Detroit office for two and a half years, focusing on policy and overall technical support for nonprofits in nine counties. He also worked in economic development in Wayne County from 2011-2013 and in economic development in Brooklyn for over three years before that. Earlier in his career, he served as a program officer for Local Initiatives Support Corp. in Detroit and a policy analyst for former Detroit City Council member Sheila Cockrel. Founded in 1967 following the Detroit uprising, New Detroit is a nonprofit, racial justice organization comprised of leaders from civil rights and advocacy organizations, human services, health and community organizations, business, labor, foundations, education, media and clergy. Joseph L. Hudson Jr. convened the group at the bequest of Gov. George
“Rafferty brings a depth of experience and vitality to steward New Detroit as we implement a new strategic plan to impact racial equity.” — New Detroit Chairwoman Rachel Tronstein Stewart
REPORTERS
W. Romney and Detroit Mayor Jerome Cavanaugh to determine the root causes of the rebellion and establish what could be done to ensure that it never happens again. In its early years, the group won passage of a fair housing law in Michigan and pushed for equal opportunity in hiring practices at local employers. It funded community development groups and formed, among other groups, the Detroit Economic Growth Corp. and Wayne County Community College District. It advocated for school decentralization in Detroit, leading to regional regents and boards at the time, something that went away in the late ‘80s. And it pushed for local
MEDC
In the traditional economic development space, I think we’ve got an appropriate range of tools necessary to compete. And maybe of this was more perspective thinking about 20 years ago as we hit this anniversary of this organization, we’ve radically improved the overall business climate in the state of Michigan. ... I think now we’re competing effectively with other states and other nations for projects KLA-Tencor that was approved by the Michigan Strategic Fund board last year — this San Jose, California, semiconductor company that’s going to put 500 high-tech engineering jobs in the Ann Arbor area. While we used some incentives in order to win that deal, the underpinnings of that were having the right supply of engineering talent, the R&D capabilities in our state, the high quality of life, the affordability and cost of living. I think we’re able to compete with a number of fronts without necessarily having
hospitals to put African-Americans and Hispanics on their boards. In more recent years, its work evolved to focus on race relations with its hosting of “safe” facilitated conversations among peer groups and an annual youth summit for high schoolers from around the region. Among other programs, it provides capacity building services to small, minority-owned Detroit businesses and annually publishes the “Metropolitan Detroit Race Equity Report” to identify clear and measurable disparities among different racial and ethnic groups in this region. Other programs provide education in financial literacy to Detroit youth and explore entrepreneurship through a company from San Jose?
FROM PAGE 3
There’s always been this discussion about whether we have all of the right (economic development) tools in our tool box ever since the addition of the Good Jobs incentives and the MiThrive/transformational brownfield incentives. Do you sense you’ve got all of the right tools? Or are there ingredients in economic development that Michigan’s missing right now?
crainsdetroit.com Editor-in-Chief Keith E. Crain Publisher KC Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Lisa Rudy, (313) 446-6032 or lrudy@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Product Director Kim Waatti, (313) 446-6764 or kwaatti@crain.com Digital Product Manager Carlos Portocarrero, (313) 446-6056 or cportocarrero@crain.com Creative Director David Kordalski, (216) 771-5169 or dkordalski@crain.com Assistant Managing Editor Dawn Riffenburg, (313) 446-5800 or driffenburg@crain.com News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or abragg@crain.com Design and Copy Editor Beth Jachman, (313) 446-0356 or bjachman@crain.com Research and Data Editor Sonya Hill, (313) 446-0402 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687, TIP LINE (313) 446-6766
“In the traditional economic development space, I think we’ve got an appropriate range of tools necessary to compete. We’ve radically improved the overall business climate in the state of Michigan.” to lead with incentives or discounting the product price, if you will. Are there are some areas that you find we’re losing opportunities because of? The common threads are talent, education, transportation, infrastructure, transit. Are there are some areas outside of your control and domain that you think we ought to be focused on as a state in order to improve our chances to land the next
The one that’s in our domain that we have started doing some work on — working with our local partners — and that’s having ready sites. Whether it’s just raw acreage that has the right infrastructure available in terms of electrical capacity, water and sewer. … We are not a state that has a lot of available spec buildings — the 180,000-square-foot size buildings that have been built speculatively by developers that we can immediately turn to a prospect and say here’s a building you can move into in 60 days. We’re doing some work in that space both on the spec building side … as well as on the raw land site improvement to help get us better prepared or ahead of the curve to take advantage of some of the opportunities that are out there. There’s been some chatter about bringing back film incentives. Is that something you think we ought to do from the MEDC perspective?
I’ve not heard that. I think that’s an experiment that we need to learn from historically of kind of chasing after business that’s only business that follows the money as opposed to a more underlying competitive advantage for that type of business. … From my perspective, we ought to keep looking at the critical competitive advantages we have in Michigan that are not dependent upon on big outlays of incentives or credits. There’s many of them out there that
summer business camp. “Rafferty brings a depth of experience and vitality to steward New Detroit as we implement a new strategic plan to impact racial equity,” said New Detroit Chairwoman Rachel Tronstein Stewart, who is president of Gardner-White Furniture, in a release. “His experience managing major programs in collaboration with government entities, community groups and residents throughout metropolitan Detroit will prove incredibly valuable as we build a broad coalition to advance race relations in our region.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch we’ve had some success over time that we should concentrate our efforts on. Can you explain this proposed $5 million cut to the Pure Michigan program and what we would like to see less of in the Pure Michigan campaign in the next fiscal year if the Legislature adopts that?
I think the administration and the governor’s recommendation is making some hard choices here. People that are coming to travel to the state of Michigan ought to do that on roads that are not filled with potholes. We’ve got to start reinvesting in our infrastructure. We’ve got to have clean water. While potentially that cut will have an impact, we believe that it still puts Michigan in the top 10 states in terms of tourism investment. I know you have a contract through July. Has the governor given you any indication about whether you’re going to be reappointed or is there going to be any change to the structure of the MEDC as it relates to the Department Talent and Economic Development?
I continue to work here. I continue to have, I think, a very solid relationship with the governor and the new administration. I’m just focused on the mission today, and the rest will play out. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood
Annalise Frank, breaking news. (313) 446-0416 or afrank@crain.com Jay Greene, senior reporter, health care. (313) 446-0325 or jgreene@crain.com Anisa Jibrell, breaking news. (313) 446-1612 or ajibrell@crain.com Chad Livengood, senior reporter, Detroit rising. (313) 446-1654 or clivengood@crain.com Kurt Nagl, breaking news. (313) 446-0337 or knagl@crain.com Kirk Pinho, real estate. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor, the business of sports. (313) 446-1626 or bshea@crain.com Dustin Walsh, senior reporter, economic issues. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter, nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com
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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.
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NOMINATION DEADLINE EXTENDED: APRIL 29
CRAI
Sometimes boxed into stereotypes about pizza parties and paperwork, HR professionals are actually the nerve centers of their businesses. This new nomination program will recognize them. NOMINATION DEADLINE: APRIL 30
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Notable Women in Education in Michigan are tireless educators, administrators, consultants and executives striving to create brighter futures for the state’s residents no matter their age. NOMINATION DEADLINE: JULY 16
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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 2 2 , 2 0 1 9
23
THE WEEK ON THE WEB
RUMBLINGS
Magic Plus buys part of former state fairgrounds
Lions: ‘Monday Night Football’ in Green Bay, Bears on Thanksgiving
APRIL 12-18 | For more, visit crainsdetroit.com
A
n investment group that includes Earvin “Magic” Johnson has closed on the purchase of about one-tenth of the former Michigan State Fairgrounds site in Detroit, years after first announcing the plan. The Michigan Land Bank Fast Track Authority said last week that Magic Plus LLC finalized the purchase of 16 acres of the 158-acre site at Eight Mile Road and Woodward Avenue for $472,464. The remaining 142 acres are being sold to the city of Detroit for $7 million, with half to be paid up front, while the remainder would be paid once it’s redeveloped. The closing on that chunk of property is expected in the next few weeks. Magic Plus is the development group tapped five years ago to redevelop the site. Its principals are Joel Ferguson, a Lansing developer and member of the Michigan State University board of trustees; and Johnson, an NBA and MSU basketball legend and Lansing native. Ferguson said last week that Marvin Beatty, chief community officer for Greektown Casino-Hotel, had been an investor but is no longer involved. Beatty disputed that when asked by Crain’s. “I’m not aware that I’m no longer in the deal,” Beatty said. “All the rest will come out and it will all come to a head at some point. That’s my response to your question.” The state announced in March that it had changed its strategy of having a single developer — Magic Plus — revitalize the entire property, which was home to the Michigan State Fair until 2009. After delays and missed deadlines, the state decided to sell 90 percent to the city with the remaining 10 percent to Magic Plus. Ferguson said that the group is “going to put in something that is compatible with what the community wants,” but did not have a specific timeframe for redevelopment. “It’s going to be mixed-use with housing and retail, but we will be working hand-in-glove with the city planners to put together what we are going to do and interface with whatever the city has planned for the rest of the property,” Ferguson said, noting that he has retained Ann Arbor-based architecture firm Hobbs + Black on the project. The city anticipates issuing a request for proposals to redevelop its part of the property after the sale is complete. Then-Gov. Rick Snyder transferred the state fairgrounds site to the Fast Track Authority board in April 2012. Southfield-based developer Redico LLC had been part of the Magic Plus development team but sold its interest in the project to the remaining owners of Magic Plus in 2016 for an undisclosed sum.
BUSINESS NEWS J Plans for Southfield-based Diversified Restaurant Holdings Inc. to buy nine Buffalo Wild Wings restaurants in Chicago have been scrapped, relieving uncertainty over the expected $22.5 million deal. Diversified
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LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS
Development group Magic Plus LLC finalized its purchase of 16 acres of the former Michigan fairgrounds for $472,464 from the state land bank.
Detroit digits A numbers-focused look at last week’s headlines:
$10.5M
Sale price for Detroit-based Budco Financial Services, which was acquired by a Cleveland investment firm
$385M
Amount of venture capital that 61 Michigan startups landed in 2018
450
Number of parcels Hantz Farms is acquiring from Detroit and the city’s land bank
Restaurant Holdings — among the largest franchisees of the chicken wings chain with 64 stores — had intended to purchase the locations before its franchiser Minneapolis-based Buffalo Wild Wings Inc. took its right of first refusal and acquired the assets. J Michigan’s entrepreneurial economy is rising, but at a slower pace than in previous years, according to the Michigan Entrepreneurship Score Card released last week. The state’s entrepreneurial climate, which includes metrics such as innovation, capital access and general business conditions, fared better than other states. It ranks 18, up from 22 in last year’s report. J Aretha Franklin is still getting R-ES-P-E-C-T after death: The Queen of Soul received the Pulitzer Prize Special Citation honor last Monday, becoming the first individual woman to earn a special citation prize since the honor was first awarded in 1930. J Wayne State University President M. Roy Wilson, M.D., has asked the Michigan Department of Health and Human Services to hire an outside expert to review the university medical school’s handling of funds from a Medicaid program after questions were raised by several contracted medical groups. J Over the next 10 years, Valentine Distilling Co. plans to pour $500,000 into environmentally sustainable
manufacturing processes and energy sources at its production facility. J Michigan Secretary of State Jocelyn Benson introduced last week four specialty license plates honoring the Detroit Lions, Pistons, Red Wings and Tigers. J Home sales in metro Detroit saw an uptick in March, as the market continued a double-digit dive in inventory. Metro Detroit’s median home sales price was $177,000 last month, which grew by 4.1 percent, or $7,000, from March 2018. J Mighty Good Coffee’s four Ann Arbor locations are expected to close after its employees unionized in October. J In a step toward making regional transit seamless for metro Detroiters, bus networks DDOT and SMART rolled out a unified payment system that will eliminate transfer costs and streamline fares.
SPORTS NEWS J Detroit’s chance at a Major League Soccer expansion team was thrown a lifeline last week when the league opted to widen its plan to include two more markets for a total of 30.
REAL ESTATE NEWS J A self-described “high-end diner” plans a summer opening in the Park Shelton in Detroit’s Midtown as its landlord re-envisions some of the 12-story building’s first-floor retail space. J A Detroit-based marketing and advertising agency is preparing to move to a building it's rehabilitating for approximately $2 million in Detroit’s Milwaukee Junction area as plans to repurpose old structures there stack up. Rebuild Group expects to shift its 20 employees in a month from a leased New Center office east to 2921 E. Grand Blvd., about doubling its space, CEO Josh Gershonowicz said. J Construction of the first of six apartment buildings at the Bedrock LLC-led City Modern development in the Brush Park area of Detroit has been completed. The Flats at 124 Alfred St. is part of a $100 million project composed of 24 buildings — including townhomes, carriage homes, apartments and rehabbed historic homes — across 8.4 acres.
he Detroit Lions will have two nationally broadcast games in 2019: the usual Thanksgiving Day matchup and an ESPN “Monday Night Football” telecast at Green Bay in Week 6. The team also took part upon announcing its schedule in a tradition in recent years of taking to Twitter with clever, creative videos to tell fans about their upcoming opponents. The Lions had a pair of videos, one using GIF clips from the TV comedy “The Office” and a one of team President Rod Wood doing a group text with players and coaches. It also offered a quick way to add the schedule to fans’ online calendars. Detroit, coming off a bummer 6-10
season, opens the season on the road with an afternoon game on Sept. 8 at the Arizona Cardinals. The following week, on Sept. 15, the home opener at Ford Field is a 1 p.m. game against the defending NFC champion L.A. Rams. The Monday night game is at 8:15 p.m. Oct. 14 against the divisional arch-rival Packers. The Lions have won their last four meetings with Green Bay, which is their longest streak since 1982-83. Detroit hasn’t beaten the Packers five straight times since winning 11 in a row from 194954. The Lions have sold out every game at 64,500-seat Ford Field since defeating the Washington Redskins on Oct. 31, 2010.
The Roberts Riverwalk Hotel on the east Detroit riverfront is being marketed as a redevelopment opportunity by the Royal Oak office of brokerage JLL.
JLL
Roberts Riverwalk Hotel in play for redevelopment T
he Roberts Riverwalk Hotel on the Detroit riverfront is being marketed as part of a redevelopment play or for sale. The hotel has 108 rooms and sits on 3.76 acres within an Opportunity Zone. There is no listing price. The hotel at 1000 River Place Drive remains open. Michael Roberts, a St. Louis business mogul, bought the hotel in 2010 in the years leading up to Detroit's municipal bankruptcy and has owned it as investment activity along the river has heated up in the last several years. “I believe America would not let its great cities go to seed,” Roberts said in a statement. “That’s not what America does. We saw how America rallied to save New York City when it was on the brink of bankruptcy to now being home to a megaproject such as the Hudson Yards. “Investing in Detroit’s riverfront district at that time was an example of predicting the renaissance of Detroit. Now having owned the property for nearly 10 years, others see what I saw
then as one of the greatest recoveries in American history.” The Royal Oak office of Chicago-based brokerage JLL is marketing the property. JLL broker Aaron Moore has the listing. “Mr. Roberts saw an opportunity where others didn’t on the riverfront,” said Larry Emmons, managing director of the local JLL office. “They have been operating the hotel since as an independent flag. They have had it for nine years and think it is a good time to exit the market and move on to greener pastures.” Developed nearly 30 years ago as the River Place Inn as part of the $200 million, 25-acre Stroh River Place project, the Roberts Hotel sits on land formerly owned by Parke-Davis & Co., the former Detroit-based pharmaceutical company. The Roberts Riverwalk was called the Omni Hotel before Roberts, who bought it using Roberts Hotels Detroit LLC, a Missouri entity registered to him, in 2010.
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