Olympia to miss Hotel Eddystone deadline Page 3
Women in Leadership: Debora Matthews Page 15
AUGUST 13 - 19, 2018 | crainsdetroit.com TRADE
Suppliers look for ways around tariffs DTE’s path By Dustin Walsh firstname.lastname@example.org
As the U.S. tariffs on steel and aluminum products begin to impact bottom lines, auto suppliers are taking actions to sidestep the impact — all proactive, but some on the outside of legality. The Trump administration imposed 25 percent tariffs on $34 billion worth of Chinese imports and last week finalized a list of $16 billion in tariffs on Chinese imports. U.S. trade officials are also considering duties on $200 billion more. In turn, China is
Need to know
Trump administration imposed 25 percent tariffs on $34 billion worth of Chinese imports and last week finalized a list of $16 billion in tariffs on Chinese imports
Smaller auto businesses have fewer options to pass through the higher materials costs to customers
threatening to impose tariffs on up to $110 billion of U.S. goods if the administration moves forward. The trade war is heating up and smaller auto businesses have fewer
Turco PLLC. “I liken it to musical chairs: When the music stops, who doesn’t have a chair?,” Sharkey said in an email to Crain’s. “You have to read the contracts to find out.” Sharkey, who specializes in contract law, said automakers aren’t budging on supplier requests for price increases tied to tariffs and the materials suppliers aren’t willing to negotiate either, putting lower-tier suppliers in difficult financial situations.
options to pass through the higher materials costs to customers, experts warn, and some are seeking to game the system to reduce their exposure. Many are turning to legal help, looking for cracks in contract agreements with customers and suppliers, while others are possibly seeking less ethical means of avoiding import penalties. The tariffs have been a source of “tremendous friction” in the automotive supply chain, said Daniel Sharkey, partner at Birmingham-based law firm Brooks Wilkins Sharkey &
SEE CARDS, PAGE 25
SEE ZERO COAL, PAGE 26
Steve Majkowski, owner of Rochester Sports Cards and Memorabilia. LARRY PEPLIN FOR CRAIN’S
ROOKIES AND RARITY Need to know
The sports card market, like any other commodity-driven industry, is subject to booms and busts. The biggest bull market for cards blossomed in the late 1980s, and it fueled an entrepreneurial wave that saw 30 to 40 card shops open across metro Detroit through the 1990s. Across America, they cropped up in strip malls, on street corners, and inside
Only a handful of sports cards shops remain in metro Detroit, nationally
Overproduction in the 1990s, subsequent recessions forced many shops to close Limited card runs, special inserts have energized the remaining market
mega-malls. Then came the card industry’s bear
market of the 1990s and the global recessions of the 2000s. The numbers of local shops that primarily deal in sports cards has dwindled to just a few. Arguably, the two local leading survivors are Grand Slam Sports Shop in Sterling Heights and Rochester Sports Cards and Memorabilia in downtown Rochester. They offer a contrast in how sports card shops survive today. Grand Slam opened in 1989, as 2018 // A U G U S T 1 3 , OIT BUSINESS CRAIN’S DETR
sports cards were about to crest as an industry. It deals almost exclusively in new and vintage baseball, football, basketball and hockey cards. Rochester Sports Cards opened in 2014 and has managed to thrive with a more diverse product inventory and hosting events. Both stores have lucrative online sales to bolster their healthy walk-in business. Two factors, owners of both stores told Crain’s, have helped them survive.
By Bill Shea
By Jay Greene
Consumers Energy Co. plans to stop burning coal to power its electric plants by 2040, and it has a clear path to get there using additional renewable energy generation, regional market purchases and advanced energy saving technology, according to the energy plan it filed earlier this year with the Michigan Public Service Commis- Need to know sion. DTE Energy Consumers Co. also has sug- Energy and DTE gested in regula- Energy have tory filings that it pledged to intends to wean eliminate coal by itself off coal by 2040 2040 by building Consumers two natural-gas plans 43 percent power plants and renewable energy quadrupling re- mix; DTE pledges newable-energy 25 percent, but generation. both could up ante But the state’s dominant electric Which major utilities plan total- utility will get to ly different paths zero coal first? toward eliminating coal, reducing carbon emissions by 80 percent over the next 20 to 30 years and delivering efficient power. How will they do it? DTE’s path toward zero coal is tougher because the Detroit-based power giant currently relies on coal to produce 65 percent of its power. On the other hand, Jackson-based Consumers uses coal for only 32 percent. Over the next 22 years, Consumers said in its integrated resource plan, filed June 15, that it will replace that 32 percent coal with at least 5,000 megawatts of renewable energy and take other cleaner power steps. It plans to attack the demand side of the equation by ramping up efficiency programs and using data-driven technology to guide incentives, known as “demand response,” for customers to reduce electricity from energy-hogging air conditioners.
SEE TARIFFS, PAGE 29
How two sports card shops survived the bust
to zero coal tougher than Consumers’
Vol. 34 No. 32 $5 a copy. $169 a year.
AN BUSINESS: FLIN CRAIN’S MICHIG
© Entire contents copyright 2018 by Crain Communications Inc. All rights reserved
Downtown Flint flips the script << Buildings built for newspapers, furriers, carriage companies get new life. Page 8 Keeping Kalm with clothing designs. Page 10 FLINT & GENESEE CHAMBER
at left) and
(pictured right). the $6.8 million Dryden Building
ript nt flips the rssc Downtown Fli furrie get new life s, carriage companies and
Downtown Flint is busy
t projects, including the with economic developmen
$37 million restoration of
the Capitol Theatre (pictured
Buildings built for newspaper By Tom Henderson
Need to know
in downtown Development projects with eco- Flint revive long-vacant buildings Downtown Flint is busy Iconic former nomic development projects. Flint Journal buildings, buildings — among the projects but long-abandoned or indus- Woolworth’s some built by businesses for a new signed are been — have Contracts tries now gone or in decline replaced by Hilton Garden Inn to open in 2020 being renovated and growing enterprises. needInside Two big buildings no longer Journal, for ed by the struggling Flint economic the with of busy heart is the Flint at now Downtown example, are whose development projects. This Page Health and Wellness District, with pedestrian assistant pastor sidewalks are crowded lots are Tim Goodrich was ans and whose parking uth counselor at Christ Community
store on Saginaw Street
that has been vacant linary Arts
seven years owned by the URC for college. and then donated to the Culinary A block away from the Street, the Arts Institute on Second of the historic $37 million renovation to be Capitol Theater is scheduled The ber. completed in mid-Septem soft-opening two had has theater The Moth, a shows, including one by on Nastorytelling event broadcast grand official tional Public Radio. An mid-Septemopening is planned for to the ber after finishing touches lighting and sound. n projSeveral other constructio walking ects are underway within distance. nt I've “This is the most developme life,”
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
From staff and wire reports. Find the full stories at crainsdetroit.com
Study: Autonomous driving won’t displace truckers It’s been long speculated that autonomous driving technology will widely displace one of the most common jobs in the U.S. — truck drivers. Goldman Sachs, for instance, predicts that as autonomous vehicle technology peaks, as many as 25,000 trucker jobs could be eliminated per month or about 300,000 annually. But a new workforce study from the American Center for Mobility in Ypsilanti Township is saying: Hit the brakes. The study, commissioned by ACM and led by Michigan State University and the Texas A&M Transportation Institute, concludes that automated technology will “largely support truck drivers instead of replacing them” for the next decade. There are nearly 3.5 million professional truckers in the U.S. Michigan’s $927 million truck industry supports more than 215,000 jobs (not all truck drivers) or about 1 in 17 jobs in the state, according to the Michigan Trucking Association. And the industry is plagued by a trucker shortage — the American Trucking Associations projects the industry is short 50,000 new drivers annually to meet
increased demand. Truck platooning — where a lead truck driven by a human is linked to two or more trucks in convoy using connected and autonomous technology — is expected to be the prominent use of this new technology in the trucking industry. This, the study says, will create more support jobs. Shelia Cotten, the MSU professor who led the research, said in a press release that while automated vehicle technology won’t eliminate jobs, it will shift workforce demands. “... This level of advanced technology has the potential to lead to the creation of thousands of new jobs in the engineering, data analysis, cybersecurity and vehicle ‘monitoring’ areas,” Cotten said in the press release. The report points to the need for more education and training to facilitate the rapid changes in the trucking industry, according to Christopher Poe, assistant director for Connected and Automated Transportation Strategy with the Texas A&M Transportation Institute. “In the near-term there is great potential for these technologies to assist commercial drivers in safely operating trucks. Longer-term it will be important to define, develop, and deliver targeted training for the workforce,” Poe said in a press release. The study notes that there may be
WEEK ON THE WEB
Trump-backed James wins GOP Senate nod
A new workforce study concludes that automated technology will “largely support truck drivers instead of replacing them” for the next decade.
displacement among passenger carbased driving jobs, particularly taxi drivers, by the late 2020s, when large numbers of autonomous vehicles are expected to be deployed.
State head of economic development to step down Sept. 30
Michigan’s lead economic development official is departing the public sector. Roger Curtis, director of the state department of talent and economic development, will step down from his position effective Sept. 30, Gov. Rick Snyder’s office said in a press release. He has accepted a private sector position, which has not yet been announced.
Curtis, 51, joined the Snyder administration in November 2016 and is credited with implementing Project Rising Tide, a pilot program that provided planning, zoning and economic development initiatives to struggling Michigan communities, and the governor’s educational framework, the Marshall Plan for Talent. The plan, signed into law in June, funnels $100 million this fall into Michigan’s public high schools to train students for high-demand jobs over the next five years. The fund is designed to bolster career-oriented school programs to maintain a pipeline for students from graduation to jobs in professional trade, information technology or other top career fields.
Michigan businessman John James, a black Iraq War veteran who was endorsed by President Donald Trump, won the Republican nomination last Tuesday and will take on Democratic U.S. Sen. Debbie Stabenow this fall, the Associated Press reported. James, 37, a political newcomer, convincingly defeated buyout firm founder Sandy Pensler in the GOP primary. The two traded barbs over their business records, conservative credentials and Trump, who swung his support behind James more than a week before the election. Stabenow is seeking a fourth Senate term and has easily fended off past challengers, but Trump’s narrow 2016 victory in Michigan has the GOP hopeful it can flip the seat. James, of Farmington Hills, is Michigan’s first black Republican nominee for a major statewide office in more than three decades, but he has said he only wants to be assessed on his character.
NONPROFIT ROLL CALL:
WHO’S THE BEST-MANAGED? Nonprofits are the heartbeat of counties across the country. They provide resources to those most in need, bring attention to pressing issues, and help inspire others to make positive change. Now, it’s their turn to be recognized. Nominate the best-managed nonprofit in the Metro Detroit area. We want to know which nonprofits are making the most out of their data – collected or received from outside sources – to make smarter and more impactful management decisions. Applicant must be a 501(c)(3) with headquarters in one of the following counties:
◆ Wayne ◆ Washtenaw ◆ Oakland
◆ Macomb ◆ Livingston
The deadline to nominate is Monday, Aug. 20 and finalist interviews will be conducted on the morning of Tuesday, Oct. 23.
Place your nominations today at crainsdetroit.com/nominate.
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
Could Stroh’s locate a brewery in Detroit again? If a born-inDetroit business like Ford Motor Co. can come back to the Motor City, why couldn’t an iconic brand like Stroh’s beer CHAD have its own LIVENGOOD brewery in the city again? Given Ford’s big bet on Corktown and the long-ago-left-for-dead Michigan Central Station, it doesn’t seem like such a wild idea anymore that the Stroh Brewery Co. would at least build a microbrewery in Detroit to compliment the throwback beers the company is bottling at Brew Detroit, a contract brewer in Corktown. Stroh’s shuttered its Detroit brewery on Gratiot Avenue 33 years ago this summer as the debt-ridden Stroh family struggled to hold onto to a company that was founded in Detroit eleven years before the Civil War broke out. The fall of the Stroh’s beer empire was symbolic of Detroit’s late 20th Century decline and predated Ford’s exit from the city a decade later when the automaker decamped from the Renaissance Center. In an interview for the Crain’s “Detroit Rising” podcast, Stroh's brand manager Andy Gurjian was seemingly Andy Gurjian: caught off guard Stroh’s working when I asked on Detroit beers. him if Stroh could have its own brewery in Detroit again. “I don’t know. That’s tough,” Gurjian said. “I think it’s one step at a time. We were able to get back here in 2016. We found a way to do that.” Tough? Maybe. Implausible? No. Los Angeles-based Pabst Brewing Co., which owns Stroh’s and still brews its original backyard lager in Milwaukee, sought to be part of the Detroit comeback narrative in 2016 when it partnered with Brew Detroit on a Bohemian-style pilsner recipe that had been in the Stroh’s family recipe book for years. Stroh’s is now brewing three beers at Brew Detroit: the Bohemian pilsner; the Perseverance IPA; and Spirit Witbier, a seasonal summertime beer. All three beers are only available for sale in Michigan. SEE STROH’S, PAGE 27
Beaumont doctors on settlement: denials, silence Jay Greene
tower that overlooks the sparkling new arena. In addition, the developer that had been slated to bring more than three-quarters of nearly 700 residential units to the downtown market is no longer working on those efforts in The District Detroit, the planned 45- to 50-block swath of largely Ilitch-owned property north of downtown anchored by the new arena for the Detroit Red Wings and Detroit Pistons.
It is a story repeated at least 10 times a year: a health care company overcompensates doctors with money and other perks in hopes of payback in the form of referrals. The health company is sued by a whistleblower and joined by federal and state governments and eventually settles for tens or hundreds of millions of dollars. Sometimes administrators and physicians go to jail; most often they do not. The schemes mostly involve cardiologists and oncologists, but also surgeons because those three specialties represent the highest-margin services at hospitals. The payoffs usually include free or heavily discounted office space, perks that could Need include free vehi- to know cle leases, nurses JJBeaumont one to staff private of- of a long list of fices at no charge, hospitals and and compensa- health care tion packages companies to well above the settle doctor kickback charges going rate. A variation of with federal the story hap- government pened from 2004 JJCharges include to 2012 at Royal Beaumont paid Oak’s William eight top doctors Beaumont Hos- excessive pital, according physician to a settlement compensation to with the U.S. De- increase patient partment of Jus- referrals tice signed July 30 by Beaumont JJThree doctors Health execu- named in the Beaumont tives. The interesting settlement denied twist is that the they were involved lawsuits that spawned the settlements named many, many more doctors than those named in the settlement. None of the current top executives, including CEO John Fox, who arrived at Beaumont in 2015, worked for Beaumont at the time of the alleged violations of federal Stark and Anti-Kickback statutes and the Michigan Medicaid False Claims Act. Beaumont Health has since merged to become an eight-hospital system. Of the $4.7 billion the federal government recovered in 2016 in fraud and false claims settlements and judgments, $2.5 billion came from the health care industry, including drug companies, medical device companies, hospitals, nursing homes, laboratories and physicians. Hospitals and outpatient clinics accounted for $360 million in recoveries.
SEE EDDYSTONE, PAGE 29
SEE BEAUMONT, PAGE 28
KIRK PINHO/CRAIN’S DETROIT BUSINESS
The redevelopment of the Hotel Eddystone will not meet a deadline imposed as part of an agreement that allowed the Ilitch family to blow up a different vacant hotel near Little Caesars Arena three years ago.
Olympia to miss deadline for Hotel Eddystone project By Kirk Pinho email@example.com
The redevelopment of the Hotel Eddystone will not meet a deadline imposed as part of an agreement that allowed the Ilitch family to blow up a different vacant hotel near Little Caesars Arena three years ago. Now Mayor Mike Duggan’s administration is keeping its options on the table, including legal action, to compel Olympia Development of Michigan to redevelop the 13-story
Need to know
JJCity keeping its options on the table,
including legal action, to compel Olympia Development of Michigan to redevelop the 13-story tower JJEddystone was spared from demolition in a compromise agreement with the city that allowed Olympia to implode the former Hotel Park Avenue nearby in 2015 JJDeveloper for Eddystone, two other residential projects has bowed out
MUST READS OF THE WEEK New security area planned at Young building
Chamber site is strategy to retain, attract talent
Motor City Brewing Works plans second location
Glass house security entrance planned for Coleman A. Young Municipal Center in Detroit. Page 4
Detroit Regional Chamber to launch talent retention, attraction website for 11-county area. Page 4
Motor City Brewing Works is partnering with the owner of shuttered Angelina bistro for the brewery’s second location. Page 30
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
AUCTION 3960 WEST FORT STREET, DETROIT
• 3.5 Acre Industrial Property • 2% Broker Co-Op Available • Close Proximity to Downtown & Ambassador Bridge • Zoned B6 •ϯϳ͕Ϭϵϴ^&KĸĐĞͬtĂƌĞŚŽƵƐĞ^ƉĂĐĞͻŝůůďŽĂƌĚ>ĞĂƐĞ an Gr
L b Hu
t ee Str t r Fo st e W
W. lvd dB
B tte ye a f a
Thursday, August 23rd at 11 A.M. www.hudsonmarshall.com • 800-841-9400 Hudson & Marshall LLC, #6505409055
FOLLOW US ON TWITTER
Glass house security entrance planned for municipal center By Chad Livengood firstname.lastname@example.org
The Coleman A. Young Municipal Center is getting a new glasshouse security entrance along Larned Street to improve the flow of employees and citizens entering the city-county building as part of $2.2 million in facility improvements to the 64-year-old building. The existing exterior canopy on the Larned Street side of the building will be enclosed to house the security screen lanes that are currently in front of the lobby of the building, which houses city of Detroit offices on the east end and Wayne County courts on the west end. A rendering of the project from the Detroit-based architecture firm SmithGroup shows the existing pull-up drive along Larned Street would be eliminated in favor of a pedestrian plaza integrated into the new glass-house security entrance. The Detroit-Wayne County Joint Building Authority, which owns the building for the city and county, has awarded the general contractor work to Gilbane Building Co., a firm based in Providence, R.I.
The Coleman A. Young Municipal Center is getting a new glass-house security entrance along Larned Street.
Bids from construction subcontractors are due Aug. 24, according to a public notice. The project includes improvements to the landscaping outside of the building, waterproofing to address basement leaks and the construction of a new pedestrian-friendly plaza, according to a project description from Hines, the real-estate management firm that is the facility manager for Coleman A.
Young Municipal Center. Construction on the new entrance will begin in October and is expected to be complete by July 2019, said Deb Craig, a senior construction manager in Hines’ Midwest regional office in Toledo. SmithGroup is the architect and project manager, Craig said. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood Mockup of the Let’s Detroit talent attraction and retention website.
A F e e - O n l y We a l t h M a n a g e m e n t G r o u p
AMBR DETROIT AND SAGA MARKETING
Michigan’s #1 Financial Advisor* Charles C. Zhang CFP®, MBA, MSFS, ChFC, CLU Managing Partner
Charles was ranked #8 on Forbes’ list of America’s Top Wealth Advisors and is the highest ranked Fee-Only financial advisor on the list.**
We Uphold a Fiduciary Standard 101 West Big Beaver Road 14th Floor Troy, MI 48084 (248) 687-1258 or (888) 777-0126
www.zhangfinancial.com Assets under custody of LPL Financial and TD Ameritrade. *As reported in Barron’s March 10, 2018. Rankings based on assets under management, revenue generated for the advisors’ firms, quality of practices, and other factors. **As reported in Forbes September 26, 2017. The rankings, developed by Shook Research, are based on in-person and telephone due diligence meetings and a ranking algorithm for advisors who have a minimum of seven years of experience. Other factors include client retention, industry experience, compliance records, firm nominations, assets under management, revenue generated for their firms, and other factors. Minimum Investment Requirement: $1,000,000 in Michigan/$2,000,000 outside of Michigan.
Chamber to launch talent retention, attraction website for 11-county region By Sherri Welch email@example.com
The Detroit Regional Chamber is getting ready to roll out a talent retention and attraction website that will serve as a template for other regions in the state. The Let’s Detroit talent attraction and retention site and strategy will align with the state’s “Choose Michigan” talent attraction site/campaign, which is expected to launch later this month, as announced during the Mackinac Policy Conference by Gov. Rick Snyder. The chamber benchmarked other regions nationally and internationally that have robust campaigns and web portals to attract talent to develop the new site, which will target young professionals. It’s borrowing elements around employer engagement and the “live, work, play” aspects from Grand Rapids’ “Hello West Michigan” site, and an element that will enable people near and far to “text a Detroiter” stemmed from Sweden’s use of an 800 number anyone can call to ask questions about the country. The “Let’s Detroit” site is set to go
live in September. “We view this as something that will be evergreen, that will evolve and adapt over time,” said Detroit Regional Chamber President and CEO Sandy Baruah. “There is a war for talent in global economy, and we don’t see that abating anytime soon.” Currently, about 36 percent of graduates from post-secondary certificate and degree programs stay in the state, Baruah said. The chamber’s goal is to increase that to 60 percent and the Let’s Detroit site is part of the strategy. The campaign is also aimed at connecting employers and talent, he said. On the Let’s Detroit site, visitors will be able to connect with each other and places to live, work and play across the chamber’s 11-county region in Southeast Michigan. Young professionals will also be able to text a Detroiter (or “sherpa”) to ask learn more about the region. “You can be anywhere in the world and text a question … one of the ambassadors we’ll recruit into the program wil be able to answer that,” Baruah said.
A work group of more than 100 people, including representatives from business, nonprofits and youth groups and others with expertise in economic development, human resources and higher education, helped develop the concepts for the Let’s Detroit strategy. Ambr Detroit is developing the website and texting function, and Saga Marketing the Let’s Detroit marketing strategy. The chamber estimates it will take about $500,000 a year to operate the Let’s Detroit platform. It’s secured the first $100,000 from the Michigan Department of Talent and Economic Development to develop the template that other Michigan cities and regions can customize. The chamber is seeking contributions from its members and grants to fund the remainder. “Our c-suite board members tell us ... on a consistent basis that they can’t find talent they need today and they want to ensure their kids can ... have professional careers they want in Michigan,” Baruah said. Sherri Welch: 313 (446-1694) Twitter: @SherriWelch
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
Regional cooperation Whitmer takes on Medicaid fight benefits cross borders U
rooks doesn’t get it. Metro areas compete with other metro areas for talent and investment. A strong core city bodes well for the entire
region. Oakland County’s office-rich corridors, from Southfield to Troy to Auburn Hills, were built in large part on the disinvestment in Detroit that began in the 1950s. Now that the pendulum appears to be swinging the other way, he’s taking aim at the CEOs who are supporting Detroit’s resurgence. The strategy will come back to bite him. It makes him look small, like he can’t think bigger than the Oakland County borders. This is a moment in time when Detroit investments can pay rich dividends for the entire region. CEOs led by DTE Energy Co.’s Gerry Anderson have organized to support Mayor Mike Duggan’s agenda to make Detroit a better place to live and work. Agenda items include better regional transit and lowering the cost of auto insurance by removing unlimited medical benefits from no-fault insurance. These efforts would help solve some of Detroit’s pressing problems, but the benefits would cross county lines. Patterson is warning business and suburban officials that a new regional economic partnership will be an economic grab to benefit only Detroit. That’s misguided and myopic. The point of the effort by the CEO group and chamber is to provide a one-stop shop for economic development across the entire region, to help companies looking for a new home to navigate the labyrinth of governments and economic development agencies in Michigan. To make sure all the right people are “in the room.” Certainly, some of that effort’s biggest backers, like Anderson, are also boosters of downtown Detroit. But the idea that they harbor a secret plan to raid the suburbs is ludicrous. More rooftops and businesses in Troy or Sterling Heights are good for DTE, after all, just as they would be in Detroit. Despite perceptions, it’s hard to say that Detroit’s resurgence is coming at the expense of the suburbs. Some big names have headed downtown, but there have been announcements left and right of new corporate tenants and expansions in Macomb and Oakland counties, especially in Shelby Township and Auburn Hills. The region as a whole is on the rise, and the way to keep that momentum going is to encourage the cooperation among business, government and nonprofits that helped us get to this point. This is only a zero-sum game if we let it be.
ntil Gretchen Whitmer’s primary election victory party last Tuesday night, there’s perhaps not been a Democratic political event in the past eight years where Democrats spoke so highly of outgoing Republican Gov. Rick Snyder. Detroit Mayor Mike Duggan praised Snyder for expanding the Medicaid health insurance program that provided 680,000 low-income adults with medical care paid for by the Affordable Care Act of 2010. Duggan called it Snyder’s “single greatest act of leadership” and credited Whitmer with drumming up the Democratic votes to pass it when Snyder couldn’t convince enough fellow Republicans to push the green button. “A different Democratic leader would have said, ‘Oh, let the governor be embarrassed,’” Duggan told Whitmer supporters gathered inside MotorCity Casino’s SoundBoard auditorium. “Gretchen Whitmer went desk to desk and delivered a 20-18 margin that got folks covered.” Whitmer and her Democratic allies are making Snyder’s signature domestic policy achievement — the expansion of Medicaid eligibility — their signature policy issue to run against Republican Attorney General Bill Schuette in the governor’s race this fall. “We’re going to make it a big issue this fall,” said Brandon Dillon, chairman of the Michigan Democratic Party, who kicked off an “Unhealthy Michigan” campaign Thursday to highlight Schuette’s opposition to the program. “The fact is, Schuette wants to take away Rick Snyder’s signature achievement — and we want to protect it.” They contend Schuette’s past efforts to dismantle the Affordable Care Act that provided 90 percent federal funding for the entitlement program and his support of work requirements will lead to the demise of Snyder’s Healthy Michigan program. Snyder signed legislation in June imposing the work requirements, starting in 2020. “If Bill Schuette is elected and delivers his promise, a year from now, he will essentially reach into those medicine cabinets and take the medications away,” Duggan said. “That’s what he’s running on.” But the Schuette campaign isn’t ruling out a dismantling of Snyder’s Med-
icaid program. John Sellek, a campaign spokesman for Schuette, said Democrats are trying to turn health care into “a political football and stoke fear, instead of treating it as the serious issue it is.” Democrats aren’t just emphasizing this issue to low-income voters on Medicaid or voters who know somebody who relies on the state for health insurance. They’re planning to make a case to businesses that have benefited from a program that has extended health insurance to one in every 15 residents. The Healthy Michigan program is in many ways providing health insurance to individuals whose employers can’t afford to — or won’t. Rural and urban hospitals, doctors and managed care companies have benefited from the new customers with insurance, greatly reducing the hundreds of millions of dollars hospitals lost annually in charity or uncompensated care. This was one of Snyder’s arguments to accept the federal funding to expand Medicaid eligibility. Charity care for Michigan hospitals plummeted by 67 percent from $420 million in 2013 — the year Michigan expanded Medicaid — to $139 million in 2016, according to the Michigan Health & Hospital Association. “It’s cut down on uncompensated care, it’s made it so people will come in to get the service they need,” said Laura
Appel, senior vice president and chief innovation officer at the hospital association. If Schuette were elected governor and decided to eliminate the Healthy Michigan program or tinker with the Medicaid system, he would likely face a wall of opposition in Lansing. That’s because hospitals seem to be generally pleased with the system in place. The Affordable Care Act forced hospitals to take cuts in Medicare to fund the expanded Medicaid coverage and other parts of the law. That amounted to $7 billion over 10 years for Michigan’s hospitals, Appel said. Statewide in 2015, the state’s hospitals recorded aggregate losses after Medicaid reimbursements at $262 million, a nearly four-fold reduction from the more than $1 billion shortfall a decade ago, Appel said. “It’s a huge improvement,” Appel said. “But it still doesn’t get us to the (total) cost of care.” At the four-hospital Detroit Medical Center system alone, uncompensated care declined by 54 percent from $200.5 million in 2013 to $92.5 million in 2016, Crain's health care writer Jay Greene reported in March. In the Democratic primary, health care policy was a major issue as former Detroit health department director Abdul El-Sayed pushed for a Medicarefor-all statewide insurance benefit. Whitmer called a single-payer system for Michigan “unrealistic.” The former legislator from East Lansing was clearly trying to avoid letting Schuette box her into the democratic socialist camp of Vermont Sen. Bernie Sanders (who endorsed El-Sayed). In early July, Whitmer told Crain’s she would unveil a new health care proposal “soon.” The proposal never came. But she promises to put forward a plan in the general election campaign that will build on Snyder’s program. “I ran on my record of actually having delivered health care coverage when I worked with Rick Snyder to embrace the Affordable Care Act and extended it to 680,000 people in our state — and I’m determined to do more,” Whitmer said the day after the primary. “We know that’s all at risk if Bill Schuette’s our next governor.
ers turned out: the highest in a primary in a very long time. We will probably set a record in November as well. Folks are more interested in what is going on, and they do not want to sit on the sidelines anymore. This election will matter. They all matter, but they seem to be getting more significant every election. And the country is becoming far more polarized than ever in our history. We are becoming more passionate as a nation and far too intolerant. So the flag has been dropped, and they are off and running. No doubt it
will be a muddy track. That too has become the new norm. Tolerance is gone, and we are looking for lots of dirt. We can concentrate on Michigan. There is no national election to worry about. There will be no red wave or blue wave in Michigan. Just some local elections that will make a lot of difference in the lives of folks who live here. If you are passionate, then get involved. Otherwise, listen, watch, read and decide. It will be a very important 90 days.
CHAD LIVENGOOD firstname.lastname@example.org
The battle begins for our vote
ast week was just a skirmish. The real battle beings now. The candidates are looking for our hearts and minds when it really matters. If we are lucky, and we probably will not be, there might be a brief lull in the volume of advertising before the general election. And then it will begin, the real battle. The one that really counts. Actually, we will have some pretty good choices this November. It will not be between a couple of nice-looking but similar folks who want our vote. This time, we are going to have
KEITH CRAIN Editor-in-chief
some stark differences between Republicans and Democrats. I have heard our Democratic can-
didate called progressive and her party called a progressive party. I don’t know if that is new or old, but it seems to have replaced the liberals with something a bit further left. Meanwhile, we will see the Trump supporters and the other Republicans also vying for the very important independents in the middle. It is no longer fuzzy. There will be distinct differences between the candidates, and we will find all that out in the next 90 days. We set a record in the primary, sort of. Almost 30 percent of eligible vot-
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
New Soo Lock vital for Michigan's economy, security
he importance of the Soo Locks to the nation’s shipping and security has been in the news a lot lately. In 1988, I was working for the U.S. Army Corps of Engineers and helped develop a comprehensive Soo Locks analysis called “Connecting Channels,” specifically drafting the chapter relating to the Locks’ critical role in America’s national security. Almost 30 years later, the Soo Locks remain vital, but have yet to be updated. The Soo Locks opened in 1855 and the waterways they link have been used by everyone from Native Americans, French explorers and fur traders to today’s massive Great Lakes freighters. The Locks now account for the transportation of 90 percent of the world’s iron ore as well as tons and tons of stone, coal, cement, grain and other cargoes. Over 60 million tons and more than 3,000 freighters pass through the locks annually. Virtually everybody agrees that the Soo Locks are vital to the nation’s security. The Department of Homeland Security estimates that closing the Poe lock alone, one of four locks (only two of which are operable) at the Soo, would likely cause a complete shutdown of Great Lakes steel
OTHER VOICES Mark Stapleton
production and ultimately cost 11 million jobs nationwide, many of them in Chicago, Detroit and Cleveland. Therein lies the national security concern.
Those in the know agree that the locks are in desperate need of updating, including the need for a second large lock capable of handling the 1,000-foot cargo ships now traversing the Great Lakes. The Mid America Association of State Transportation Officials representing 10 Great Lakes states officially petitioned Congress to fund the construction of this new lock. Even President Donald Trump weighed in when he promised in a speech in Washington Township that the Locks would be fixed. Congress authorized construction of a new lock in 1986 and authorized
full federal funding in 2007 but still hasn’t authorized the estimated $600 million to fund construction of the lock. The pressure is building to get the job done, and the U.S. Army Corps of Engineers, the people who will have to manage the process, are being pushed to speed it up. Getting the job done won’t be a walk in the park. Some experts suggest it could take as long as 10 years and cost as much as $1 billion. To give you some idea of the difficulty of the undertaking, the bedrock at the locks is Jacobsville sandstone, a reddish stone that is up to 1,000 feet thick. Imagine drilling into that un-
derwater mass for a taste of the challenges. My current company, G2 Consulting Group, specializes in the types of geotechnical engineering skills that will be required to get the job done. Obviously, we’d like to participate on the Soo project, too, but regardless of who wins the work, the job clearly needs to be done — the country's commerce, our jobs and our security depend on it. Mark Stapleton is a project manager at G2 Consulting Group, a Troy-based geotechnical, geoenvironmental and construction services company.
TALK ON THE WEB
Re: Patterson picks fight with CEO group Brooks Patterson embodies the destructive quality of provincialism in Southeast Michigan and remains as an anchor against regional cooperation and progress, as he waxes his anti-Detroit grievances of years past. Please tell Brooks that Coleman Young left many years ago. The rest of America has moved on to a spirit of regional cooperation and economic growth that evades our region even as Detroit rebounds, and will surely continue to evade us, until dinosaurs like Patterson finally move on with their outdated views. AffirmingVoice He is right there is a favoritism to Detroit over the suburbs for development and this is a good thing that these CEOs understand because they actually work in for profit, competition-driven environments. Southeast Michigan’s major weakness is its urban core. We have great suburbs (though with a lack of urban core they’re taking on many urban disadvantages) and spectacular rural environments. So if he was using intelligent strategy instead of biased justification, he’d note this favoritism is a good thing, building up our weakness. This urban core is in demand among businesses looking for collaborative communities instead of isolated campuses (not all but many). Suburbs are great places to live as suburbs not attempting to be big cities attracting developments better suited to urban cores with history and location and infrastructure (a big negative for metro Detroit) suited to compete. E M Parmelee Competition is a good thing, lower per square foot rents for businesses. Capitalism at work. karpodiem
If you want a stronger future for Michigan,
raise your hand. If you want Michigan’s economy to grow and thrive, we need to compete with other states and win. We need to create an environment that attracts new business, and talent that has the education and training to do the jobs of tomorrow. A plan has been developed to accomplish these goals: the Plan for a Stronger Michigan. Raise your hand to support the Plan at StrongerMichigan.com.
An Initiative of Business Leaders for Michigan.
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
CRAIN’S MICHIGAN BUSINESS: FLINT
FLINT & GENESEE CHAMBER OF COMMERCE
Downtown Flint is busy with economic development projects, including the $37 million restoration of the Capitol Theatre (pictured at left) and the $6.8 million Dryden Building (pictured right).
Downtown Flint flips the script Buildings built for newspapers, carriage companies and furriers get new life
By Tom Henderson email@example.com
Downtown Flint is busy with economic development projects. Iconic but long-abandoned buildings — some built by businesses or industries now gone or in decline — are being renovated and replaced by growing enterprises. Two big buildings no longer needed by the struggling Flint Journal, for example, are now at the heart of the Health and Wellness District, whose sidewalks are crowded with pedestrians and whose parking lots are jammed. And in November, a former Woolworth’s department store on Saginaw Street that has been vacant for at least a decade will re-open as the Mott Community College Culinary Arts Institute after a $13 million renovation by Flint-based D.W. Lurvey Construction Co. The 36,000-squarefoot facility will include two teaching kitchens, a bakery, a fine-dining space, a cafe and meeting space. “The current culinary school was too small to meet accreditation requirements,” said Tim Herman, president of the Uptown Reinvestment
Need to know
JJDevelopment projects in downtown
Flint revive long-vacant buildings
JJFlint Journal buildings, former Woolworth’s among the projects JJContracts have been signed for a new Hilton Garden Inn to open in 2020
Inside JJDowntown Flint is busy with economic development projects. This Page JJTim Goodrich was an assistant pastor and youth counselor at Christ Community Church when he felt a new calling: To become an artisan making expensive custom-made boots. Page 9 JJIt’s hard for people to stay calm about Kalm Clothing LLC, whether it’s Grammy-nominated rappers or lawyers and venture capitalists Page 10 JJFlint Farmers’ Market flourishes in former newspaper building. Page 12 JJWhat would happen if everyone in Flint came up with a business idea? Page 14
UPTOWN REINVESTMENT CORP.
A former Woolworth’s department store on Saginaw Street that has been vacant for at least a decade will re-open as the Mott Community College Culinary Arts Institute after a $13 million renovation.
Corp., a nonprofit economic development agency that spearheaded funding and whose partners include the C.S. Mott Foundation, the Ruth Mott Foundation and the Community Foundation of Flint. Herman is also president of the Flint & Genesee Chamber of Commerce. “This is going to create 15 new jobs as the institute expands, and it’s going to bring 200 to 250 students
downtown,” said Herman. “This will be another publicly accessible place on Saginaw Street, which is great for people like me who work downtown,” said Neal Hegarty, the vice president of programs for the C.S. Mott Foundation, which contributed a grant of $4 million for construction renovation. Because of restrictions tied to various tax credits, the building will be
owned by the URC for seven years and then donated to the college. A block away from the Culinary Arts Institute on Second Street, the $37 million renovation of the historic Capitol Theater is scheduled to be completed in mid-September. The theater has had two soft-opening shows, including one by The Moth, a storytelling event broadcast on National Public Radio. An official grand opening is planned for mid-September after finishing touches to the lighting and sound. Several other construction projects are underway within walking distance. “This is the most development I've seen in downtown Flint in my life,” said Herman, at 61 a lifelong resident of Flint who only left town to play basketball for Ferris State University. He began his career as an accountant for General Motors Corp. and later was finance director for the city of Flint and a county commissioner before becoming chamber president in 2006. “It’s taken a lot of hard work and a lot of commitment from a lot of different partners to get to this point.” SEE FLINT, PAGE 14
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
COM M U N IT Y We travel your roads and live on your streets so we know well what is important to your community. Local knowledge and personal understanding – it’s all connected.
Tim Goodrich opened Sutorial in Buckham Alley at what used to be a clock-repair shop.
Flint-made Sutorial Boots beloved by Kevin Bacon By Tom Henderson firstname.lastname@example.org
Tim Goodrich was an assistant pastor and youth counselor at Christ Community Church, a struggling inner-city Flint church that was about to close its doors, when he felt a new calling: To become an artisan making expensive custom-made boots. It was a dream that came true. Just ask actor Kevin Bacon. A friend of his bought him a pair for Christmas last year, and Bacon liked them well enough to post photos for his 200,000 followers on Instagram, which in turn generated more customers for Goodrich. As for his calling, Goodrich said: “I was in a phase in my life where I was making a lot of my own stuff, and the next thing was to try to make my own shoes. At first it was going to just be a hobby. I bought some tools and I got the bug. The more I looked into it, the more I realized that there was a world out there of high-end, custom-made shoes. It made sense to see if I could do this for a living.” Goodrich began Googling around and came across the website for Perry Ercolino Custom Shoemakers, a Doylestown, Pa.-based maker of very expensive leather, alligator and ostrich shoes. On his way to visit a friend in Virginia, Goodrich stopped by Ercolino’s shop. “The next thing I knew we were talking an apprenticeship. It wasn’t something I’d planned,” said Goodrich. Soon, he was back in Doylestown for an eight-month apprenticeship in boot-making, returning to Flint at the end of 2012 to try to start a business. Goodrich said he found a landlord who was looking for artisan and creative types to rent space in a unique location in an alley that ran behind stores along the west side of Saginaw Street, Flint’s main drag. The alley, called Buckham Alley, would soon be part of a Flint project
Need to know
JJFormer assistant pastor and youth counselor now sells artisan boots JJOpened shop in a downtown alley in 2013 JJActor Kevin Bacon posted photos of his Sutorial boots on Instagram
to make its downtown alleys safer and commercially viable. Strings of lights were hung overhead across alleys and merchants were encouraged to open alley-facing businesses to generate more foot traffic. Goodrich signed a lease in early 2013 and hung out a sign for his new store, Sutorial, at what used to be a clock-repair shop. “It ended up being a perfect spot. It had the look and feel of a shoe shop.” Goodrich gave it even more of an old-fashioned feel by scraping plaster off the walls and exposing the brick underneath, and peeling off dirty old plastic tile on the floor to reveal a wonderful, weathered hardwood floor. He knew he wasn’t going to be able to make a living out of the gate making $500 boots, so he took out ads on Google targeted at people looking for shoe repairs. An article in the Flint Journal helped, too. “I repaired shoes solely for two and a half years,” he said. “I had a couple of dry spells, but for the most part I had a decent amount of work.” In the spring of 2015, Goodrich thought it was time to transition to boot maker. He spent six months on designs and prototypes, had a video made and then launched a Kickstarter campaign on Oct. 15. He eventually raised $32,000 and sold 54 pairs of boots at $500 each. He hasn’t repaired a pair of shoes or boots since, and has sold 120 pairs of boots. The boots start at $550. There is one basic boot, called The Buckham, after the alleyway. Goodrich describes it as a classically
styled derby boot that is custom made for the shape of each foot and every step of which is crafted by hand. There are several variations on the one boot, including different heights and toe design. Goodrich said he is starting another Kickstarter in October to launch a second line of slip-on boots called the Chelsea. He will also be hiring two or possibly three employees. Goodrich will, if cajoled, make shoes of the customer’s design. That’s what led to Kevin Bacon getting his. Last fall, David Ollila, president and chief innovation officer of Flintbased Skypoint Ventures LLC, the venture-capital and real-estate development that recently opened the Ferris Wheel Innovation Center and business incubator in downtown Flint, talked Goodrich into making a boot of his design. “When you pick out the leather, have your foot measured and sketch out the design details with Tim, it’s no longer just buying a pair of boots — it’s the beginning of a life-long relationship with hand-made quality that you didn’t know still existed,” said Ollila. Goodrich liked them well enough that he posted photos of Ollila’s boots on Facebook and Instagram on Nov. 30. A friend of Bacon’s, actor Kevin Chapman, came across one the photos and two weeks later sent Goodrich an email saying he wanted to get Bacon a pair for Christmas. Bacon posted a photo of his boots on Instagram on Jan. 29. Goodrich said he quickly got two orders for boots from Bacon’s followers, then recently got a third order. “In fact, I’m getting ready to make a pair today for one of his followers,” said Goodrich in an interview at the end of July. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2
FISHBECK , THOMPSON, CARR & HUBER engineers | scientists | architects | constructors
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
CRAIN’S MICHIGAN BUSINESS: FLINT
Meet the Flint entrepreneur who’s ‘more Phil Knight than Phil Knight’
Flint influencers compare Kiara Tyler to fashion successes like the founder of Nike and Vera Wang
By Tom Henderson email@example.com
It’s hard for people to stay calm about Kalm Clothing LLC, whether it’s Grammy-nominated rappers posting photos of themselves wearing the company’s clothes, or normally staid lawyers, venture capitalists and advisers singing the praises of its 25-year-old founder and CEO, Kiara Tyler, a tenant in the Ferris Wheel Innovation Center in downtown Flint and a participant in its 100K Ideas business development program. “When I met her, the more I listened to her, I had this sense she might be the one person in a lifetime that has her preternatural sense for business. I said ‘Who are you? Where did you come from?’” said Michael Rizik, a longtime attorney in Grand Blanc. Tyler found him in a Google search for trademark attorneys and coldcalled him one morning in January. He was so impressed over the phone he told her to come by that afternoon and he’d clear time for her. Immediately after the meeting, he called his brother, Chris, CEO and fund manager of Ann Arbor-based Renaissance Venture Capital Fund, who has been hearing entrepreneurs’ pitches for more than 20 years. Tyler was com-
Need to know
Kalm Clothing founder Kiara Tyler is a tenant in the Ferris Wheel Innovation Center
Grammy-nominated rappers post photos of themselves wearing the company’s clothes Lawyers, venture capitalists and advisers impressed with her entrepreneurial spirit
pelling, said Michael, but she needed help. She knew nothing about taxes, didn’t have a bank account and had no employees or place of business. She drove to trade shows and fairs in the Midwest, selling her wares out of the trunk of her old car. She kept her inventory in stacks against a wall in her small apartment on the north side of Flint and mailed it out to people who found her on social media. “She’s a creative, driving force. She’s someone five years from now, everyone will know. She’ll be another Vera Wang,” said Rizik. “In almost 37 years of doing this, she’s the only one I’ve met starting a business who is as good as her.” Chris told his brother to send her to the 100K Ideas business incubator in
the newly-opened Ferris Wheel Innovation Center in downtown Flint, that she needed to talk to David Ollila. The Ferris Wheel building, a formerly vacant landmark in downtown Flint, had reopened in November after a $7.5 million renovation. Both it and 100K Ideas, the nonprofit incubator on the ground floor, were projects of Skypoint Ventures LLC, the venture-capital and real-estate arm for Phil Hagerman, co-founder and former chairman and CEO of Flint-based Diplomat Pharmacy Inc. (NYSE: DPLO), a national provider of specialty pharmaceutical services that had $4.5 billion in revenue last year. Ollila is president and chief innovation officer at Skypoint Ventures and president of 100K Ideas. He met Tyler at the Ferris Wheel in early March. “I came back to the office, and Phil had to scrape me off the ceiling. I have not met a more natural entrepreneur, one with more spirit and more determination,” Ollila said. “I told her: ‘You need to be here. I have a space for you right here.’” She’s been a tenant on the third floor of the Ferris Wheel ever since, and Ollila has been lining up equity funding for her. He hopes to have funding in place for her by Labor Day, which will allow
her to hire her first few employees to help with order fulfillment and will provide her with much-needed capital to order larger quantities from her supplier in Pakistan. Of significant additional importance to Ollila and Hagerman was the diversity that Tyler represented. She is an African American woman from the north side of Flint. From the beginning, Ollila and Hagerman say they have focused on making sure the incubator wasn’t just serving would-be entrepreneurs at Mott Community College or the University of Michigan-Flint, but minorities and those living on the north side, which was particularly hard hit by Flint’s water crisis. They waive payment for fee-based services at 100K Ideas to those who qualify, and did so for Tyler. Despite being a one-person operation with no access to credit for her business and no marketing other than her own mastery of social media, Tyler has done about $140,000 in sales since formally launching her company in October 2016, $40,000 of that in the last three months. “Kalm’s likely to be the first company to come through 100K ideas that gets funding. She’s more Phil Knight than Phil Knight," said Ollila, referring
Tax Law and Tax
In Your Corner.
Civil and criminal tax litigation
Represents Fortune 1000 companies in State and Local Tax (“SALT”) litigation Previously employed by the Department of Attorney General, State of Michigan as legal counsel to the Department of Treasury in tax litigation matters
First Tier Ranking in Tax Law and Tax Litigation
Contact Tom Kenny at firstname.lastname@example.org
Ann Arbor | Detroit | Grand Haven | Grand Rapids | Hastings | Kalamazoo | Lansing | Novi
Kiara Tyler models some of her clothing line, Kalm Clothing LLC.
to the legendary founder of Nike, who started his empire by designing a new kind of running shoe and selling it out of his car.
It started with shoes Tyler is a political science major with a minor in criminal justice from Notre Dame College in South Euclid, Ohio. The daughter of a soldier, she spent her early years in Flint, then followed him to various postings before becoming a track and field star in Jacksonville, Fla., earning all-league honors in discus and shotput and an athletic scholarship to Notre Dame College. There, she says she learned an invaluable lesson. She was a star athlete there, too, but not as big a star as she thought she was. “I was kicked off the team midway through college,” she said. “I thought I was the star. I thought they needed me. I started showing up late for practice. It turned out, they didn’t need me.” The lesson, she said, was to stay focused on a goal and to keep working hard at achieving it. After graduation in 2014, she returned to Flint and found an entry-level job as a paralegal. Barely able to pay her bills, she got the entrepreneurial itch. It was 2015, and there was a growing market in high-end collectible athletic shoes. She
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
who new out
ajor rom clid, she folfore ackhonathame
way ght I me. ce. It
got 015, t in She
Detroit rapper DeJ Loaf in a photo she posted to her Instagram account wearing Kalm Clothing.
designed large, logo-dominated boxes for collectors of Air Jordans and Christian Louboutin to store a dozen or more pairs of shoes. She posted photos on Instagram and orders started coming in, with prices ranging from $350 to $550. She said she soon got an email from Deion Sanders Jr., the son of the former professional baseball and football star, who said he loved the boxes, was interested in investing and wanted to set up a conference call with his father. Deion Sr., though, shot her down. He said it wasn’t a sustainable business — for one thing, she didn’t own the rights to use the logos. As she got bigger, she was certain to be shut down for copyright infringement. Apparel is where you want to be, all right, said Deion Sr. But think of something else. Think bigger. “He shut it down immediately. He said it’s just social media fad that’s gonna blow away. And it did,” she recounted of the shoe-box business. She had sold 22 of the boxes, but she followed his advice. Although she had no training, Tyler thought she could design a jacket with urban appeal. She Googled jacket manufacturers, found one in Pakistan, sent him some rough sketches and paid in advance for a prototype. It arrived but wasn’t well made, not fit for sale. She found another manufacturer in Pakistan, and another, and another, continuing to sample a series of unsuitable prototypes. Finally, she found an apparel maker who delivered just what she was looking for in a coat and in October 2016 she put out the word on social media. In three months, she sold 30 at $100 each. Originally she wanted to sell her clothes under the brand of Fly by Air, but a friend talked her into Kalm, instead, combining the “K” in her first name with “calm,” as in cool. She pays upfront for orders to her supplier and says she quickly sells out of each batch after she gets the word out that product is available. She has sold coats, jackets, sweatsuits, track suits, knitted sweater suits and a jacket that looks like a bullet-proof vest, but without the Kevlar. “It’s not designed to protect you, it’s just fashion. It was going to be a one-time thing but there was such big demand I had to bring it back,” she says. She has developed a following of young black celebrities who have posted photos of themselves wearing Tyler’s clothes on Instagram and other social media, including actor Joseph Simmons Jr.; Deja Trimble, better known as DeJ Loaf, a Grammy-nominated rapper from Detroit; comedian Jess Hilarious; and Teyana Taylor, a singer and actress who wore Kalm clothing in her movie “Honey: Rise Up and Dance.” “I can’t keep up with demand,” said Tyler. “People are actually getting pissed when I can’t fill orders.” Tyler said she has no intention of trying to get into brick-and-mortar retail outlets and is content to let people find her on social media or at www. kalmclothing.online. She’s retired the car as a sales tool, too. A recent visit to the site showed that most items were out of stock, but she said was expecting a shipment momentarily. Prices for available items ranged from $65 for an orange shorts set to $125 for a black-and-white windbreaker suit. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2
WHEREVER YOUR TRAVELS TAKE YOU. Experience travel the way it should be.
888-426-8999 | PentastarAviation.com | Private Jet Charter | Aircraft Management | Advisory Services Aircraft Maintenance | Avionics Services | Interior Services | Executive Terminal ©2018 Pentastar Aviation.
FOLLOW US ON
You know. The Motor City has both fueled and felt the power of the Laker Effect. Many of our students not only hail from the Detroit area, but they also return there: as analysts and engineers, biochemists and health professionals, as leaders in business and leaders of communities. Support them. Support us. And see the power of what can be.
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
CRAIN’S MICHIGAN BUSINESS: FLINT
Flint Farmers’ Market flourishes in former newspaper building By Tom Henderson
Need to know
A former Booth Newspaper printing plant is the perfect symbol for the decline and rebirth of Flint. From 2009-2014, the former printing plant for the Flint Journal served as a visible metaphor for Flint’s economic decline. Opened with much fanfare in 2003, it housed four massive, four-storytall high-volume printing presses. The millions spent by Booth came just as the Internet was cannibalizing classified and display advertising from newspapers, crashing revenues and leading to layoffs and precipitous circulation declines. In 2009, the plant was shuttered after the Journal and other Booth papers cut back to just three newspapers a week and moved its printing to another plant. In June 2014, it became a visible symbol of Flint’s rebirth when the Flint Farmers’ Market moved there from its former much smaller location half a mile to the north. The market’s 350-car parking lot is often filled on the market days of Tuesday, Thursday and Saturday, and the aisles inside are jammed with shoppers, who totaled 530,000 last year. Actually, the market is one of twin symbols of Flint’s decline and
J Farmers market moved to former printing press building in 2014 J 530,000 visitors shopped at the market last year J Buildings are part of $36 million Health and Wellness District
“There are about 50 vendors here, which is like having 50 clients, trying to accommodate all of them.” Shannon White
rebirth. Across the market’s parking lot is the historic old Flint Journal building, built by Albert Kahn in 1924 and added to the National Register of Historic Places in 2013, ironically a year after the Journal staff moved to a smaller space downtown and the Uptown Reinvestment Corp., a Flint-based economic development organization, bought both Journal buildings for $1.6 million. In 2014, the Kahn building became a Michigan State University College of Human Medicine facility following a $22 million renovation.
MSU has a 20-year-lease and pays $700,000 a year for 40,000 square feet. Both buildings are part of a $36 million redevelopment project for the area the URC has branded it the Health and Wellness District. The financing mix included historic, new market and brownfield tax credits, $3.6 million in equity funding from the Michigan Strategic Fund and a grant of $10.7 million from the C.S. Mott Foundation. That total cost included the $3 million implosion in 2013 of the Genesee Towers, an 19-story office complex that became Flint’s tallest building when it was completed in 1968. The original anchor tenant was the Genesee Merchants Bank & Trust Co. The site is now a park. The Health and Wellness District also includes Genesys Pace of Genesee County, an Ascension facility that offers care for those 55 and over who have a place to go at night but can’t be left alone unsupervised during the day. The main floor of the farmers’ market occupies 40,000 square feet, with another 5,000 square feet on the mezzanine. A pediatric clinic, the Sumathi Mukkamala Children’s Center, occupies 10,000 square feet at the south end of the
The main floor of the farmers’ market occupies 40,000 square feet, with another 5,000 square feet o
When A. William Golling Jr. founded Golling Auto Group in 1966 he needed an insurance broker ŚĞ ĐŽƵůĚ ƚƌƵƐƚ͘ EŽǁ Ă ƚŚŝƌĚͲŐĞŶĞƌĂƟŽŶ ĐŽŵƉĂŶǇ͕ ƚŚĞǇ ƐƟůů ƚƵƌŶ ƚŽ <ĂƉŶŝĐŬ ĨŽƌ͗ ŽŶƐŝƐƚĞŶĐǇ͕ ĚǀŝĐĞ͕KƉƟŽŶƐ͕&ĂŝƌWƌŝĐŝŶŐ͕^ĞƌǀŝĐĞ͕ZĞůŝĂďŝůŝƚǇ͘ ͞DĂƌŬĞƚĚǇŶĂŵŝĐƐŽĨƉƌŝĐŝŶŐĐŚĂŶŐĞƐŽǀĞƌƟŵĞ͕ĂŶĚǁĞůŽŽŬƚŽ<ĂƉŶŝĐŬƚŽŬĞĞƉŽƵƌƉƌĞŵŝƵŵƐ ĐŽŶƐŝƐƚĞŶƚǇĞĂƌƚŽǇĞĂƌ͕ǁŚĞƚŚĞƌŝƚ͛ƐĂƟŐŚƚŵĂƌŬĞƚŽƌŶŽƚ͘dŚĞǇŚĞůƉƵƐĚŽƐŽƚŚƌŽƵŐŚůŽƐƐ ĐŽŶƚƌŽůĂŶĚůŽŶŐͲƚĞƌŵƌĞůĂƟŽŶƐŚŝƉƐƚŚĂƚĞŶŚĂŶĐĞǀĂůƵĞ͘&ŝŌǇͲƚǁŽǇĞĂƌƐůĂƚĞƌ͕ǁĞĂƌĞƉƌŽƵĚƚŽ ƐƟůůďĞǁŝƚŚ<ĂƉŶŝĐŬ͘/ƚ͛ƐƚƌƵůǇĂƐƉĞĐŝĂůƌĞůĂƟŽŶƐŚŝƉ͘͟
In June 2014, the Flint Farmers’ Market (above) moved into a former Flint Journal building.
Want an insurance brokerage who’s in it for the long haul? Contact Kapnick today.
kapnick.com | 888.263.4656 Adrian • Troy • Ann Arbor
Signs (right) point to tenants which include Beirut Restaurant; Bongo’s Gourmet Popcorn; Chocolate Galore; the Chubby Duck Sushi; Charlie’s Smoking BBQ; the Great Harvest Bread Co.; Crust, a gourmet bakery; d’Vine Wines; Steady Eddy’s Cafe; Mexico at the Market; Art at the Market Gallery; J Dean’s Smokehouse; the Ebony Gemstone Co.; and a variety of stalls rented by farmers selling their wares.
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
at y; J
building. It is a Hurley Medical Center clinic that serves as a teaching facility in partnership with the MSU College of Human Medicine Facility. To make room for a 350-car parking lot, 30,000 square feet of warehouse space and 12 loading bays adjacent to the printing plant were demolished, part of $7 million construction budget overseen by architect Shannon White, the founding principal of the Flint-based architectural firm FUNchitecture LLC. “There are about 50 vendors here, which is like having 50 clients, trying to accommodate all of them,” said White. In addition to founding FUNchitecture, White is a partner in a new boutique called Shift on the ground floor of the restored Capitol Theatre two blocks from the market. One of her partners at Shift, which bills itself as “shifting Flint fashion forward,” is Meghan Hoffman, whose Floradora florist and wedding planning business is a tenant in the farmers’ market. A third partner in Shift is Heidi McAra, executive director of 100K Ideas, a nonprofit business incubator in the Ferris Wheel Innovation Center that opened in November on Saginaw Street downtown. As for being open only three days a week, White said: “It’s an idea we revisit every six months. But so many of our tenants are true farm vendors and they can’t be here six or seven days a week, and we don’t want to open and have the lights off in half of the space.” Tenants include Beirut Restaurant; Bongo’s Gourmet Popcorn; Chocolate Galore; the Chubby Duck Sushi; Charlie’s Smoking BBQ; the Great Harvest Bread Co.; Crust, a gourmet bakery; d’Vine Wines; Steady Eddy’s Cafe; Mexico at the Market; Art at the Market Gallery; J Dean’s Smokehouse; the Ebony Gemstone Co.; and a variety of stalls rented by farmers selling their wares. One other vendor drives in from the Upper Peninsula each Saturday to sell fresh-caught trout, whitefish and salmon. When the season and weather permit, up to 25 vendors rent outdoor space to sell sweet corn, lemonade, cider and doughnuts, jerky, fruits, honey, snacks, baked goods and a full range of produce. The market also hosts special events such as flower shows and arts and craft fairs every Saturday. The market holds classes in healthy eating and operates an incubator called Flint Food Works for would-be entrepreneurs wanting to test out their ideas for food-related businesses. That and a series of five-session entrepreneur food camps are run by Sean Gartland, the market’s culinary director and facilities manager. The owner of the Feast Cooking School in Fenton since 2010, Gartland also teaches cooking classes at the market. Gathering spots include a large atrium on the ground floor, an event space for rent that accommodates 200 called the Ramsdell Room and a rooftop terrace. “We host a ton of weddings and fundraisers,” said Karianne Martus, who has been the market’s manager since 2006.
Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2
er 5,000 square feet on the mezzanine.
Possible is everything. Boost your career and earning power
Lawrence Technological University’s MS in Information Technology program
Concentrate in business analytics, cybersecurity, or project management Choose from on-ground, online, or hybrid courses Add value with MBA and project management and cybersecurity grad certificate options For more information, visit: ltu.edu/msit
Architecture and Design | Arts and Sciences Business and Information Technology | Engineering
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
CRAIN’S MICHIGAN BUSINESS: FLINT
One in 100,000
What would happen if everyone in Flint came up with a business idea?
By Tom Henderson email@example.com
Gov. Rick Snyder, a venture capitalist by trade who has invested millions of dollars in early stage companies, knew a good thing when he saw it. So did Phil Hagerman, the co-founder of Flint-based Diplomat Pharmacy Inc., a $4.5-billion-a-year specialty pharmaceutical company. In 2014, a serial entrepreneur in the Upper Peninsula, David Ollila, created a program at Northern Michigan University in Marquette called Invent@NMU, a program where business, marketing and engineering students, among others, could help would-be entrepreneurs vet their ideas and provide them with business-development help. Snyder toured Invent@NMU in 2015. In the last two minutes of his State of the State speech in 2015 — a speech otherwise dominated by the Flint water crisis — Snyder used Invent@NMU as an example of how innovation can happen anywhere. In May 2016, Hagerman told the governor about his plan to invest in startup companies in Flint and create an incubator to help grow them. Snyder told him he ought to check out Invent@NMU. Hagerman flew to Marquette a week later, met Ollila and offered him a job. Today, Ollila is president and chief innovation officer at Skypoint Ventures LLC, Hagerman’s for-profit real-estate and venture-capital firm, and president of 100K Ideas, a nonprofit modeled after Invent@NMU that occupies a big chunk of the ground floor of the Ferris Wheel Innovation Center. 100K Ideas’ budget of $1.5 million
Michael Vitek: Still working on pitch deck.
Students in a variety of disciplines, from business students to mechanical and electrical engineers to graphic designers, from Kettering University, Mott Community College and the University of Michigan-Flint, work at the nonprofit.
is year is funded by Skypoint Ventures, the C.S. Mott Foundation, the Michigan Economic Development Corp., Huntington Bank and the Michigan Office of Energy. The MEDC has committed a total of $1.5 million over three years. The Ferris Wheel, a seven-story, 40,000-square-foot art deco building, opened in November after a $7.5 million renovation. It had sat empty for 30 years, an iconic building on downtown’s Saginaw Street
that once housed the Ferris Fur Co. The business model behind 100K is that most business ideas are, in fact, lousy. “It’s a high throughput model,” said Ollila. “We’re very honest. You might only get one in 100 ideas that ends up being a success. This is not a cradle to grave model. But there are 100,000 people in Flint. If every one brought in an idea, we could rebuild the middle class.” Anyone can walk in the front door
FLINT FROM PAGE 8
Two of the highest profile recent development projects are around the corner from the Capitol Theater and kitty-corner from the Culinary Arts Institute. In 2015, Flint-based Skypoint Ventures LLC reopened the Dryden Building after a $6.8 million renovation. It had once housed offices of the Durant-Dort Carriage Co., one of the Flint companies that at the turn of the 20th century morphed into the General Motors Corp., and later was home to one of the earliest J.C. Penney stores in the country. It had sat empty for 20 years. And last November, after a renovation costing $7.5 million, Skypoint Ventures opened the Ferris Wheel Innovation Center next door to the Dryden in the old Ferris Fur Co. building, an 87-year-old, seven-story, 50,000-square-foot art deco structure that for 30 years had only pigeons for tenants. It has a mix of retail tenants; 100K Ideas, a nonprofit business incubator on the first floor run by Skypoint; and early stage companies supported by 100K and Skypoint. Skypoint, which was formed in 2014, is the venture-capital and real-estate-development company owned by Phil Hagerman, the
KRAEMER DESIGN GROUP
Renderings have been completed for a new Hilton Garden Inn, a $36.5 million conversion of the historic former Genesee Savings Bank building on Saginaw Street.
co-founder and former chairman and CEO of Flint-based Diplomat Pharmacy Inc., which had $4.5 billion in sales last year. Two blocks west of the Capitol, two other recent economic development projects are enhancing the Health and Wellness District. The Flint Journal’s Albert Kahn-designed newsroom building, built in 1924 and put on the National Register of Historic Places in 2013 — four years after Journal employees moved
to a smaller location downtown — is now a Michigan State University College of Human Medicine facility. MSU pays $700,000 a year for 40,000 square feet in a 20-year-lease. Across the parking lot, the Journal’s once-state-of-the-art-printing plant, which had its ribbon cut to much fanfare in 2003, just ahead of the flight of classified advertising from print to the Internet and the collapse of daily journalism, is now the thriving Flint Farmers’ Market (see
and meet immediately with someone from the nonprofit and explain their idea. Staff includes three permanent paid employees and 12-15 students in a variety of disciplines, from business students to mechanical and electrical engineers to graphic designers, from Kettering University, Mott Community College and the University of Michigan-Flint, who are also paid for their time. To help drive traffic, two retail operations are prominent on the related story, Page 12). The printing plant and its four four-story presses were shut down in 2009 when it and other Booth newspapers began publishing just three days a week. In 2014, the Farmers’ Market moved operations there from a much humbler home half a mile to the north. Sharing the former printing plant, in 10,000 square feet at the east end of the building, is the Sumathi Mukkamala Children’s Center, a pediatric clinic. Other recent or current projects in or near downtown include: J In April, the Flint Institute of Arts opened its new Contemporary Craft Wing and Hot Shop, with displays of art and metal working and classes in working with glass, ceramics, metal and other contemporary crafts. It was funded with an $8.5 million grant from the C.S. Mott Foundation. J Contracts have been signed and renderings completed for a new Hilton Garden Inn, a $36.5 million conversion of the historic former Genesee Savings Bank building on Saginaw Street, a project overseen by the URC. It is scheduled to open in the fall of 2020 with about 100 guestrooms, an Italian restaurant on the ground floor, banquet center, rooftop deck and large green space. J A mixed-income development of apartments and townhouses, a $19.5 million project, is scheduled to open downtown in December 2019 on the
Heidi McAra: Women brought 30% of ideas.
ground floor, before you get to the 100K Ideas reception area — Foster Coffee and Flint Print, a printing shop and FedEx and UPS outlet. Some ideas will be dismissed out of hand. Those that have some promise get an in-depth assessment — a fourweek process that costs $200, which maps out a business strategy, assesses the competition and intellectual property and determines the minimum needed to get a product developed. The assessment fee is waived for those who qualify for financial support, funded by a grant of $50,000 by Huntington Bank. If more complicated things are needed, such as CAD drawings, the charge is $40 an hour. Most of those assessments will result in the would-be entrepreneur realizing his or her heart is no longer in it or it’s more work than they thought. In the first nine months, 170 ideas came through the front door, which led to 125 assessments. Thirty-five would-be entrepreneurs decided to continue at least for a while, with 24 still-active clients. SEE IDEAS, PAGE 15
site of the old YWCA. J A former Perry Drugstore on Saginaw Street is undergoing a $1.4 renovation and is expected to be completed this December. J The $37 million Flint River restoration project continues, with new parks being created and the river bottom being restored to a more natural condition that will allow for kayaking and fishing. The key was the removal of the 218-foot-long Hamilton Dam, whose demolition began in March. There is not a timetable for completion of the project. J The University of Michigan-Flint is in the design phase of a $39 million expansion of the William R. Murchie Science building, which will add 65,000 square feet and a third wing. The date for completion hasn’t been set. J A 17,000-square-foot factory built in 1916 for the Dort Motor Car Co. was renovated and turned into a community makerspace called the Factory Two on N. Grand Traverse Street. It opened in June 2017 and is now home to more than 250 members. It houses a full range of machines, including laser cutters, 3-D printers, table saws, planers, wood lathes and drill presses, with classes offered in its wood shop and textile shop. Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
SPECIAL REPORT: WOMEN IN LEADERSHIP
A few questions for Debora Matthews
President and CEO, The Children’s Center
Because the board members knew me and appreciated my financial ability, they offered it to me. What was that transition like?
Actually it was kind of scary, even though I had always been a person with a great deal of confidence. People knew me in my board role. They didn’t necessarily know my management style. Now I’m the boss and have to make tough decisions that affect people’s careers. They assumed I’d be easy because I’m a nice person. From a financial standpoint, the organization was not doing as well. I had to make tough decisions, as leaders do. Everybody didn’t agree and like it, so it was challenging initially. It took time, but people understood my best interest was to make sure our organization can survive, thrive and continue to work through our mission of helping children and families.
By Rachelle Damico
Special to Crain's Detroit Business
Debora Matthews is the president and CEO of The Children’s Center, a Detroit-based nonprofit organization that provides clinical, academic and behavioral health services to children in need. The center’s licensed psychiatrists, psychologists and therapists work with children who struggle with behavioral, emotional, educational and physical challenges and may have experienced trauma. Matthews received a bachelor of Business Administration degree from what is now the University of Michigan’s Ross School of Business in 1978. She began her career at Plante Moran PLLC, where she conducted audits for nonprofits and municipalities. Matthews worked as a CFO for more than 25 years with many nonprofit organizations. She joined the Children’s Center as finance director in the 1980s. She also volunteered as the center’s treasurer and served on the board of directors for 17 years before being appointed to president and CEO in 2006. Growing up, did you know what you wanted to do?
I wanted to do something in the service area, but I was a contemplative kid. My family was very poor, and I didn’t want to be poor. I realized social work didn’t pay well, so I took a financial path. However, I always desired to do something service-related. I volunteered at church and at children’s hospitals. While working at Plante Moran, I quickly learned
What was a challenging decision you made back then?
In late July, about two dozen teenagers from the Whaley Center in Flint, a home for kids who have suffered serious neglect and abuse, spent a morning at 100K Ideas learning about the program and running their own ideas past the staff and getting encouraged to think big and give their dreams a shot. Hagerman owns the Dryden Building next door to the Ferris, which opened in 2015 after a $6.8 million remodeling. Currently a 400seat music venue is being constructed on part of the ground floor. During the day, part of that venue will accommodate eight pop-up shops of 100 square feet each, where 100K Ideas’ clients can test the marketability of their products. The shops will line a series of large floorto-ceiling windows that run parallel to the sidewalk outside.
Two great ideas Two of the more interesting current clients are Kalm Clothing LLC, a clothing design company founded by an African-American native of Flint (see related story, Page 10) and S3D, the working name of a company that might be spun out from the
the mission. When the CEO position became available, I didn’t even think I could do it. Normally a social worker, a psychologist or psychiatrist, those kind of individuals lead an organization like the Children’s Center. “We can confidently say that the inclusion that these numbers represent exceeds those of traditional accelerators and incubators,” said McAra. Professor Kira Barton and postdoc Leo Tse are the UM researchers who did the research behind UM’s one granted patent and four pending patents for S3D’s technology. Tse’s doctoral thesis is at the core of S3D’s technology. The company got $100,000 from UM’s MTRAC (Michigan Translational Research and Commercialization) program and $50,000 from the MEDC to pursue commercialization. Mike Vitek, a veteran of 25 years in the auto supply chain and the former VP of Mercedes-Benz Technology in North America, has been engaged by the tech transfer office at UM to help launch the business. “S3D is short for specialty 3D print heads. The name will probably change. We’re reaching out to investors. We haven’t formed a company, yet, but we’re working it out. We’re still working on our pitch deck,” said Vitek, referring to the formal presentation package presented to would-be investors. “We’re going to try to formally start a company by the end of the year.” “They have developed and tested new technology that enables enhanced manufacturing of electrical components that increases design
freedom and testing standards while lowering capital investment,” said Ollila, who first met with Vitek in March. “This client is a big deal for 100K.” “What I really like about them is guys like Dave bring ideas to the table,” said Vitek. “He had an idea that we should make our print-head part of a vending solution,” said Vitek, referring to storage devices used in machine shops to dispense inventory and keep track of which employees are using what. The vending machine companies end up acting as distributors. “It was a light-bulb moment,” said Vitek. Ollila and McAra are both entrepreneurs themselves. In 1995, Ollila launched a magazine called UP Mountain Biking and later invented a helmet-mounted camera system that predated the GoPro. That system morphed into Viosport, a company in Marquette that sold $20 million worth of helmet cams from 2000-2009 and created 25 tech jobs. McAra, a lawyer by training, owns the Paw Palace, a dog day care in Fenton; was the CEO of the YWCA of Greater Flint from 2014 until March, when she joined 100K Ideas; and is co-owner of Shift, a new boutique that became the first tenant on the ground floor of the newly renovated Capitol Theater in downtown Flint.
The Ferris Wheel has a range of pricing options as it fills up its available space. At the low end, a mailbox and access to conference rooms and some services are $119 a month; at the higher end, corporate membership and offices on the seventh floor range from $550 a month to $700 a month. The building augments 100K by housing XLerateHealth, an accelerator focused on health care startups, and UM-Flint’s Innovation Incubator. Another tenant, Peckham Inc., which provides job training for those who have been jailed or face other barriers to employment, operates at the building on a grant from Genesee County. Other tenants include the Flint and Genesee Chamber of Commerce; MarxModa, an office designer and furnisher; the State Bank of Fenton; Choice Office Products; Play Frey Technologies, a web development company; and Fannie Lucille, a custom-made women’s apparel company. By early August, the building had 59 tenants, an occupancy rate of about 77 percent. “We want to be an American storefront for innovation,” said Ollila.
MG PHOTOGRAPHY & DESIGN OF ROCHESTER
FROM PAGE 14
Kira Barton: Did research behind S3D technology.
Leo Tse: Doctoral thesis at core of S3D technology.
University of Michigan to market a 3-D printer capable of printing features much smaller than currently possible — less than 10 microns, or about one-seventh the width of a human hair, versus nearly 100, now. Ollila and Heidi McAra, the executive director at 100K Ideas, like those two, in particular — Kalm because of Hagerman’s hope of making the incubator’s services available, and important, to the mostly black residents of Flint’s north side, who have been particularly hard hit by the water crisis; and S3D because it shows the incubator’s reach beyond Flint, with UM recommending that the technology’s researchers go to 100K for advice. According to McAra, women brought about 30 percent of those first 170 ideas, while 30 percent came from people who identified as African American and 10 percent as other.
I think there’s a great misconception in thinking all CEOs are alike. In a nonprofit organization, you don’t have all the extra benefits you may think a boss would have. CEOs of the average nonprofit are one of the workers in the trenches, rolling up our sleeves and doing just about everything they do. People also think of the boss as being able to come and go whenever they want, but I keep as steady of a schedule as everyone else does. I think it’s important for others to see that. I believe in leading by example. Being seen on campus, greeting people, being approachable and wanting to hear them and their concerns is very important. What’s the biggest challenge the Children’s Center is currently facing?
Are there any common misconceptions you hear about your job?
Within the first six months, I had to eliminate about 25 positions within the organization. We were somewhat overstaffed. Most of the positions were with programs that were no longer funded, or administrative positions where we had too many folks doing the same job. It was tough eliminating the positions of people who you love and care about, but I knew it was the best thing for the organization. The good news is, once I got to dig into the business model and the funding, we were able to grow substantially. We now have about 300 folks employed compared to 130 back then. Thirteen years ago we were also at about $12.5 million (in funding), and now we’re just under $30 million. I’m very proud of that growth, because
“It took time, but people understood my best interest was to make sure our organization can survive, thrive and continue to work through our mission of helping children and families.”
that the audits I absolutely loved were the nonprofit organizations. I knew I had to find a way to get more involved. When I joined the Children’s Center as finance director, I fell in love with
we’ve been able to add many additional programs, and we’ve penetrated deeper into the mental health arena.
Increasing our donor and volunteer base. We have about 1,000 volunteers that come through every year, but people’s lives and decisions change. You don’t have to have money to make a difference. For instance, you can be a foster parent, a host family, or you can come give birthday parties for kids. Government funding also continues to get tough, and you’re expected to do more with less. The only way we can continue to be successful is to build other sources of revenue from individuals, corporations and foundations that want to support kids. We believe if we help heal children we’re healing Detroit, our county, our state and our nation.
Tom Henderson: (231) 499-2817 Twitter: @TomHenderson2
C R A I N â€™ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
CRAIN'S LIST: LARGEST LOCAL AUTO DEALERS Company Address Rank Phone; website
Ranked by 2017 revenue
Revenue ($000,000) 2017
Revenue ($000,000) 2016
Number of dealerships
Number of new vehicles sold, leased 2017/2016
Number of used vehicles sold 2017/2016
The Suburban Collection 1795 Maplelawn Drive, Troy 48084 (877) 471-7100; www.SuburbanCollection.com
David Fischer chairman and CEO
Victory Automotive Group Inc. 46352 Michigan Ave., Canton Township 48188 (734) 495-3500; www.victoryautomotivegroup.com
Jeffrey Cappo president
35,915 B 31,336 B
19,400 B 18,312 B
LaFontaine Automotive Group 4000 W. Highland Road, Highland Township 48357 (248) 887-4747; www.thefamilydeal.com
Michael LaFontaine, chairman/owner; Maureen LaFontaine, president/owner Chris Snyder general manager
15,533 B 13,865
8,497 B 7,577
Southfield Chrysler Dodge Jeep Ram 28100 Telegraph Road, Southfield 48034 (248) 354-2950; southfieldchrysler.com
Stewart Management Group Inc. 20844 Harper Ave., Suite 100, Harper Woods 48225 (313) 432-6200; www.gordonchevrolet.com
Gordon Stewart president
6,674 6,595 B
3,769 4,184 B
Prestige Automotive 20200 E. Nine Mile Road, St. Clair Shores 48080 (586) 773-2369; www.prestigeautomotive.com
Gregory Jackson chairman and CEO
9,726 6,094 B
1,867 1,910 B
Elder Automotive Group 777 John R Road, Troy 48083 (248) 585-4000; www.elderautogroup.com
Tony Elder, president; Robert Elder, vice president
Jim Riehl's Friendly Automotive Group Inc. 32899 Van Dyke Ave., Warren 48093 (586) 979-8700; www.jimriehl.com
James Riehl Jr. president and CEO
Snethkamp Automotive Family 16400 Woodward Ave., Highland Park 48203 (313) 868-3300; www.snethkampauto.com
Mark Snethkamp president
Buff Whelan Chevrolet
Kerry Whelan president
Matick Automotive E 14001 Telegraph Road, Redford 48239 (313) 531-7100; www.matickauto.com
Karl Zimmermann owner and operator
Royal Oak Ford/Briarwood Ford
Eddie Hall Jr. president and CEO
Pat Milliken Ford Inc.
Bruce Godfrey, chairman; Brian Godfrey, president
Katie Bowman Coleman president and owner
Bill Perkins Automotive Group
Bill Perkins president
Jeffrey Tamaroff Automotive Family 28585 Telegraph Road, Southfield 48034-1928 (248) 353-1300; www.tamaroff.com
Jeffrey Tamaroff, chairman and CEO; Marvin Tamaroff, chairman emeritus
Ray Laethem Inc. 1677 Mack Ave., Detroit 48224 (313) 886-1700; www.raylaethem.com
Jeff Laethem president
Milosch's Palace Chrysler-Jeep-Dodge Inc.
Donald Milosch president
Gorno Automotive Group
Ed Jolliffe president
Avis Ford Inc.
Walter Douglas Sr., chairman; Mark Douglas, president
Village Ford Inc.
James Seavitt president and CEO
Roseville Chrysler Jeep Inc.
Michael Riehl president
Michael Bates owner
Van Dyke Ave., Sterling Heights 48313 10 40445 (586) 939-7300; www.buffwhelan.com
Woodward Ave., Royal Oak 48067 12 27550 (248) 548-4100; www.royaloakford.com Telegraph Road, Redford 48239-1492 13 9600 (313) 255-3100; www.patmillikenford.com Dixie Highway, Clarkston 48346 14 6750 (877) 433-5922; www.bowmanchevy.com S. Telegraph Road, Taylor 48180 15 13801 (734) 287-2600; www.taylorchevy.com
S. Lapeer Road, Lake Orion 48359 18 3800 (248) 393-2222; www.palacecjd.com Allen Road, Woodhaven 48183 19 22025 (734) 676-2200; www.gornoford.com
Telegraph Road, Southfield 48034 20 29200 (248) 355-7500; www.avisford.com Michigan Ave., Dearborn 48124 21 23535 (313) 565-3900; www.villageford.com Gratiot Ave., Roseville 48066 22 25800 (586) 859-2500; www.mikeriehls.com Michael Bates Chevrolet
Allen Road, Woodhaven 48183 23 23755 (734) 676-9600; www.michaelbateschevy.com Bob Jeannotte Buick GMC Inc.
Robert Jeannotte CEO
Glassman Automotive Group Inc.
George Glassman president
Sheldon Road, Plymouth 48170 24 14949 (734) 453-2500; www.jeannotte.com Telegraph Road, Southfield 48034 25 28000 (248) 354-3300; www.glassmanautogroup.com
This list of local auto dealers is an approximate compilation of the largest such businesses in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Dealership companies must have local stores to be included on this list. Penske Automotive Group is not on this list because, while it is locally headquartered, it doesnâ€™t have local car dealerships. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Actual revenue figures may vary. NA = not available.
B Automotive News. C Crain's estimate. D Four of the five dealerships are outside of Michigan. E Includes George Matick Chevrolet, Matick Toyota and Matick Auto Exchange. F Formerly Rodgers Chevrolet Inc. Bates purchased Rodgers Chevrolet in July 2017. LIST RESEARCHED BY SONYA D. HILL
C R A I N â€™ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
The world needs more women in technology fields, and these 26 women are doing their part to make that happen. Those who work closely with the NOTABLE WOMEN IN TECH describe them as analytical, confident and collaborative. They secure networks, write code and identify new revenue opportunities, all the while inspiring young girls to consider STEM careers. The women profiled here were nominated by their peers at work and in the community (read more about how they were chosen on Page S2). Share this content online at crainsdetroit.com/NotableTech
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
FARIDA ALI CEO and President, Dynamic Computer Corp., Farmington Hills Most recent education: Juris Doctor, Wayne State University Certifications: Minority Business Enterprise and Women Business-Owned Enterprise certifications “If we are not growing, we are dying.” Farida Ali’s motto and apparent drive have helped propel her family-owned company to success. Under her leadership, Dynamic Computer Corp. is the only Michigan company to win a Solutions for Enterprise-Wide Procurement (SEWP) V contract, allowing it to provide the latest IT products and services to federal agencies and their contractors. Known for staying ahead of market trends, Ali’s company provides IT and unified end point management for federal, medical device manufacturing, enterprise IT and financial clientele. Ali also is known for operating a welcoming corporate culture. The company provides unlimited discretionary time off, boosting transparency and employee loyalty. “She strives for a work/life balance for herself as well as her employees while maintaining an atmosphere of accountability. She is patient and understanding when things do not turn out as expected and reflects on lessons learned to improve future outcomes,” said DCC Client Services Manager Lisa Love. In addition to supporting her staff, Ali provides mentorship to other professionals through the Women Presidents’ Organization and Michigan Council of Women in Technology. She also builds STEAM opportunities at K-12 and university levels. Added Sassa Akervall, a WPO Michigan member and CEO of Akervall Technologies, “Farida … really provides IT insights for me to consider in my growing manufacturing and medical device products.”
SARA BLACKMER President, Rave Computer Association Inc., Sterling Heights Most recent education: Master of Business Administration and Master of Science in Global Supply Chain Management, Indiana University Sara Blackmer has implemented a reporting structure that allows Rave Computer, a technology consultant and computer manufacturer, to better forecast budgets and revenue. Under her direction, Rave developed several new initiatives and “groundbreaking” products including an artificial intelligence ecosystem, virtualization and a virtual- and alternate-reality optimized solution. “Sara radiates confidence. Her ability to comprehend a situation and quickly develop a plan of action spreads that confidence to her team,” said Tony Miller, Rave business unit manager. “She is an amazingly quick study of technology and its application.” A lieutenant colonel in the U.S. Air Force Reserve, Blackmer has been integral in leading Rave’s efforts to ensure compliance with Department of Defense requirements for protecting the confidentiality of Controlled Unclassified Information. Outside the office, she advocates for attracting more girls and women to STEM fields. She is a member of the National Defense Industrial Association, the Association for Unmanned Vehicle Systems International, Women in Defense and participates with numerous community organizations.
ROSEMARY BAYER Co-Founder and Chief Inspiration Officer, ardentCause L3C, Troy Most recent education: Master of Business Administration, Lawrence Technological University Rosemary Bayer rose from systems engineer at Sun Microsystems Inc. to general manager of the company’s General Motors team. A patent holder for several Control Data Corp. offerings, she helped establish ardentCause nine years ago to provide nonprofits with SAAS products and services. The company’s products, many of which Bayer invented, help nonprofits measure their impact, monitor their progress and collaborate and share measurements with others. Bayer is co-founder of the Michigan Council of Women in Technology and founder and past president of the MCWT Foundation, which has granted more than $1 million in scholarships to girls and women pursuing careers in technology. She also serves on numerous community boards, including NEW (Nonprofit Enterprise at Work) and SheHive. “Inforum was ardentCause’s first nonprofit customer. … In my experience, (Bayer) is brilliant at understanding and connecting customer requirements with the latest and greatest in technology. She helped us move to a completely new level of success. “In her subsequent involvement with Inforum, she was also key to helping us develop our proven female entrepreneurship program, inGage, where we have incubated over 100 would-be female entrepreneurs who have started over 42 companies and received 35 patents,” said Inforum President and CEO Terry Barclay.
“(Bayer) is brilliant at understanding and connecting customer requirements with the latest and greatest in technology.” — Terry Barclay about Rosemary Bayer, ardentCause L3C
“She is great at collaborating to develop strategies that result in solutions.” — Jennifer Fallis about Diana Bundschuh, Oakland Community Health Network
Director, Software Project Management, Harman International Industries Inc., Novi Most recent education: Bachelor of Science in Computer Engineering, University of Michigan-Dearborn
CIO and Interim CEO, Oakland Community Health Network, Troy Most recent education: Master of Science in Business Information Technology, Walsh College
Rhita Boufelliga, a patent holder in sports routes for vehicle navigation systems, has brought Wi-Fi, overthe-air updates, Apple CarPlay and Android auto to her Harman International customers. As director of Software Project Management, she oversees 110 people and the development and testing of software for 228 customer part releases in six locations around the world. While she is responsible for making presentations to customers, she also mentors her team members. “I am not sure where Rhita summons the extra willpower to always keep the team moving,” said Robert Haase, a technical fellow at Harman. Boufelliga is also Workplace Committee head of the Harman Women’s Network, which partners with the community to recruit women and girls into STEAM fields. “Rhita provides outstanding work and support for the Harman Diversity and Inclusion initiative,” said Dr. Parinaz Sayyah, senior engineer, Harman International. “She has volunteered many hours to help support this program that included recruitment activities and guest speakers with topics around communication, leadership and influencing skills. She has been a great support resource and advocate for issues that are important to women. She is indeed a role model.”
“Diana is always willing to get into the details, to work with our staff when we approach her with different challenges or concerns,” said Jennifer Fallis, director of Business Intelligence and Applications for Oakland Community Health Network. As CIO, Diana Bundschuh manages a staff of 10 responsible for tracking service delivery and personal health information data for 26,000 people in the public mental health system. In addition to leading the organization’s migration to Microsoft 365 and rewriting the agency’s HIPAA compliance policy, she promotes the use of dashboards to track data, oversees the IT infrastructure for OCHN’s 140,000-square-foot facility and advocates for telemedicine. At the same time, Bundschuh is performing the duties of interim CEO and managing the organization’s 170 employees. She also supports the recruiting and mentoring of young women by encouraging Human Resources to provide internship opportunities. As a public service, Bundschuh sits on the CEO Pre-paid Inpatient Health Plan workgroup formed by the Michigan Department of Health and Human Services. The group is responsible for identifying and resolving service delivery challenges that pertain to the state’s public mental health system. “She is great at collaborating to develop strategies that result in solutions,” Fallis added.
Litigation Support Senior Manager, FCA US LLC, Auburn Hills Most recent education: Bachelor of Arts in Human Resources, Concordia University Certifications: International Society for Computer Examiners (ISFCE) certified computer examiner, Certified eDiscovery Specialist, Relativity Certified Administrator, Relativity Certified Sales Professional, inData Trial Director Administration certificates, ITIL IT service management certification Barbara Bennett works at the intersection of law and technology. She works with internal attorneys, staff and outside counsel to encourage best practices surrounding advanced analytics tools. Her efforts streamlined the lifecycle and enhanced technology of eDiscovery software tools, significantly reducing the volume of data, and saved FCA hundreds of thousands of dollars in the last year alone. She also works with the company’s Artificial Intelligence Task Force Team, which is exploring potential uses of the technology across all business units. Those potential uses could be reducing risks and downtime, improving customer satisfaction and identifying trends. Bennett serves on the Advisory Board of the national chapter of the Association of Certified E-Discovery Specialists and as chapter liaison, where she mentors other women. For the Detroit chapter, she has helped design education sessions for the annual symposium. “Barb Bennett has created organizations and mentored some of the most notable legal professionals to include partners in Detroit and globally on behalf of ACEDS,” said Executive Director Mary Mack. “She is an invaluable member of our ACEDS community.”
HOW WE SELECTED THE NOTABLE WOMEN IN TECHNOLOGY Notable Women in Technology was produced by Crain Content Studio, the marketing storytelling division of Crain’s Detroit Business. The Crain’s newsroom was not involved in selecting these women or creating this content. The women featured here were selected based on their career accomplishments, their involvement in nonprofits and community organizations and evidence that they mentor others in their field, as outlined in an extensive nomination form that was written by journalists who cover the technology industry in Michigan. The nominators pay a processing fee to nominate the women; those chosen did not pay to be part of the section. Notable Women in Technology was managed by Leslie D. Green for Crain Content Studio. For questions about this report, contact Kristin Bull, Director of Crain Content Studio, at 313-446-1608 or firstname.lastname@example.org. For more Notable Women reports, visit crainsdetroit.com/NotableWomen
or of rdia
ciety miner, istra-
f law neys, actic-
nced antly hunlone. telliential units. and den-
e na-Dise she she nnual
and sionn beMack. mmu-
d . n -
d r r n
o n n t f r
Leading with Purpose
ongr atulations to Tamara Faber-Doty, Vice
President of Information Technology at
Consumers Energy, for being selected
among the Notable Women in Tech 2018. Since joining Consumers Energ y in 2013, Tamara’s results-driven focus and inherent ability to connect with people have helped her grow digital capabilities throughout the company. A Michigan native, she exemplifies our purpose of World Class Performance Delivering Hometown Service. Tamara blends innovative technology solutions with a strong learning culture to solve
“Life is short; love what you do and have fun doing it.” TAMARA FABER-DOTY Vice President, Information Technology Consumers Energy
business challenges and improve customer satisfaction. Her work on the advisory board of the Michigan Council of Women in Technology and as a mentor of a FIRST® LEGO® League Robotics team helps make a difference by promoting women and STEM fields at many levels.
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
AMY COURTER CEO, inerTrain Inc., Kalamazoo Most recent education: Bachelor of Arts in Psychology and Education with minors in Computer Science and Math, Kalamazoo College Certifications: Network Administration I and II, System Management, Database Administration and Software Development, Inbound Marketing, Lean Six Sigma, Project Management, IT Security, Business Administration, Nonprofit Board Education Amy Courter’s greatest strengths are her ability to take organizations in transition and help bring alignment, define and then implement a cohesive strategy that has full buy-in from an organization. In only 18 months at inerTrain — an online personal fitness trainer portal — she re-architected the technology platform into one that is extensible and hardened, added two products reaching target markets with new revenue streams, helped lead the team of certified personal trainers and improved performance. “Amy is a true leader with superior abilities to inspire her team and all people that work with her. With a clear grasp of technology and business matters, Amy exemplifies the modern IT/business leader that can lead a team to greatness,” said Valassis Senior Manager Leonardo Brito, who worked with Courter for 20 years at Valassis Communications Inc. Earlier this year, Courter won the Harriet A. Myer Leadership Award for her career accomplishments. She also speaks nationally about the importance of STEAM fields and has been involved in numerous industry organizations, including the National Defense Industrial Association, Women in Defense, InfraGard, Michigan Business and Professional Women and the Civil Air Patrol National Advisory Council.
KOMAL DOSHI Director of Mobility Programs, Ann Arbor Spark, Ann Arbor Most recent education: Master of Urban Design, University of Michigan Certifications: LEED certified Prior to joining Ann Arbor Spark last year, Komal Doshi co-developed the University of Michigan’s Mobi program at SMART (Sustainable Mobility & Accessibility Research & Transformation), which connects and supports new mobility entrepreneurs emerging around the globe. “Komal’s work within the field ensures a robust pipeline of companies in this space. She also facilitates an ongoing dialog between startups as they grow their networks with our partner organizations such as Mcity, the American Center for Mobility, Techstars Mobility, University of Michigan Transportation Research Institute, the Center for Automotive Research, Planet M and many others,” said Paul Krutko, president and CEO of Ann Arbor Spark. Now she works closely with entrepreneurs and tech companies and has been integral in attracting tech companies to the region. One such company is Trillium Secure Inc., a cybersecurity firm focused on automotive and internet-of-things networks. Charged with defining and implementing Ann Arbor Spark’s mobility strategy, Doshi also serves on the steering committee of the American Center for Mobility and is co-founder and leader of the A2 Mobility Tech Meetup group. “Her knowledge of the mobility ecosystem, the players, the issues, policies, challenges and opportunities make her a key partner in Michigan,” said Jessie Feller Hahn, executive director of Meeting of the Minds, a nonprofit that works toward sustainability and smart, equitable cities.
JENNIFER DUKARSKI Attorney and Shareholder, Butzel Long PC, Ann Arbor Most recent education: Juris Doctor, University of Detroit Mercy School of Law Certifications: Six Sigma Master Black Belt, senior member Institute of Electrical and Electronics Engineers “Jennifer Dukarski is a trusted resource on many of the new autonomous and connected car legal issues the automotive industry is facing,” said Steve Horaney, vice president of membership and sales at the Original Equipment Suppliers Association. Dukarski’s position as leader of Butzel Long’s Connected Car Working Group intersects her practice with communication and technology, such as digital media, cybersecurity, infotainment, vehicle safety and connected and autonomous cars. Her role includes aiding clients in technology areas. She has negotiated contracts for AV components; reviewed contracts involving wireless updates for in-vehicle technology; engaged in projects dealing with cryptocurrency, blockchain, data privacy and the internet of things; and advised clients on obtaining proper notice and consent to collect biometric data. Dukarski also helps attorneys and other staff understand cybersecurity and other data privacy concerns. “She brings many talents to her legal practice, including her 15 years prior to law school as an engineer leading a team of 200 people in North America for a tier 1 auto supplier. Her drive, focus and technical credentials provide her with a tremendous edge in the IT/mobility arena, where she has parlayed her expertise into national recognition,” said Claudia Rast, practice department chair of the IP, Cybersecurity & Emerging Technology Group at Butzel Long.
TAMARA FABER-DOTY Vice President, Information Technology, Consumers Energy Co., Jackson Most recent education: Master of Business Administration, Michigan State University Results-driven with a strategic mindset, Tamara Faber-Doty has been promoted five times in the past five years. Faber-Doty, who leads a team of more than 400 people, has helped bring innovation such as big data, visualization and mobility to the business. Her initiatives have resulted in improvements in billing and customer satisfaction. And her “Don’t Take the Bait” campaign to reduce the number of phishing emails that staff click on resulted in click rates dropping 14 percentage points. “Tamara is a true leader and advocate in the technology field — not only in her support and empowerment of strong, capable teams but also in her drive to pursue technology solutions to meet our customers’ needs and enhance their experiences,” said Patti Poppe, president and CEO of CMS Energy and Consumers Energy. Faber-Doty encourages staff from all departments to get involved in IT functions, resulting in 25 percent of the organization volunteering to develop IT skills. And she began a “Focused 40” program allowing anyone in IT 40 hours to learn any topic that interested them. A 2018 HCL Technologies CIO Choice winner, Faber-Doty mentors women at Consumers and serves on the Advisory Board of the Michigan Council of Women in Technology.
ANGELA EMMERLING SHAPIRO Attorney and Shareholder, Butzel Long PC, Detroit Most recent education: Juris Doctor, Michigan State University College of Law Certifications: Certified Electronic Discovery Specialist Angela Emmerling Shapiro has the rare ability to communicate equally well with information technology professionals and legal and business teams. She is an advocate for using technology, such as predictive analytics and artificial intelligence, to assess large quantities of data to find the most vital records necessary for legal success. She is able to effectively work directly with clients’ IT staff to develop targeted solutions to legal needs because she stays current on developments in information management and court-based electronic discovery disputes. “Angela is … both a talented litigator and techie, a combination that gives her the unique ability to craft technology solutions that meet the needs of the legal team through trial and minimize disruption to business operations,” said Beth S. Gotthelf, Butzel Long shareholder. Active in numerous industry organizations, Shapiro serves on the board of the Michigan Defense Trial Counsel and the regional Technology Committee for the Federal Bar Association and is a member of the national and Detroit chapters of the Academy of Certified E-Discovery Specialists. As chair of Butzel Long’s Women’s Leadership Committee, she has also organized several fundraisers for Gleaners Community Food Bank of Southeastern Michigan.
BETH GEBRAI Vice President, Global Process Leadership, Stefanini Inc., Southfield Most recent education: Master of Science in Computer Science, Ball State University Beth Gebrai led the opening of Stefanini’s first U.S.-based global Innovation Center, which earned the company the 2017 Innovation Excellence in Southfield Award. “This will be a major contribution to the business community, which will improve Southfield’s position as a global business destination,” said Tanya Markos-Vanno, president of the Southfield Area Chamber of Commerce. Gebrai leads more than 100 staff members and is responsible for directing her company’s innovation agenda and for harnessing ideas and turning them into strategies and solutions that benefit Stefanini’s customers. She also is skilled at understanding clients’ business needs and translating them into technology solutions. “The unique ability of Beth to solution, implement and reinforce Stefanini’s digital point of view has helped our company to strengthen its position as an agent of digital transformation, not only with our clients and partners but also with our employees, academia and the community in general,” said Stefanini CEO of North America, Spencer Gracias. Gebrai led the launch of an artificial intelligence platform, called Sophie, in North America with a focus on self-adaption, self-learning, self-healing and human-like interactive and contextual automation. And under her leadership, her team developed products to help businesses facing technological challenges.
“The unique ability of Beth to solution, implement and reinforce Stefanini’s digital point of view has helped our company to strengthen its position as an agent of digital transformation.” — Spencer Gracias about Beth Gebrai, Stefanini
2018 blaze G coun co’s and In work group bers behin to un the g prom In Acce inclu mob 113 skills try-le “B woul have help, mem be re up o indiv basis cess whol
As the Gene in-so “T place team earn playe bring ties, hard adm U impr arose ation in W oper team GM’s chan prise Ly For i that SWA chall Sh regio scho
“T pla lea
octor, e of
ty to noloShe edicsess cords
ents’ eeds nfordis-
hie, a craft legal busiLong
hapTrial e for f the Cer-
field of all
ness sition Marmber
nd is ation hem nini’s g cliech-
ment has as an r cliacaanini
ence a foand ation. prodchal-
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
Senior Vice President, Americas, Cisco Systems Inc., Southfield Most recent education: Bachelor of Arts in Finance, Michigan State University
Vice President and CIO, Adient plc, Plymouth Most recent education: Master of Arts in Information Systems, Grand Valley State University Certifications: Terp10 for SAP, Lean and Six Sigma
Alison Gleeson, named a 2018 Woman of IoT by Connected World, is a trailblazer. Gleeson, who leads more than 9,000 people in 35 countries, has played a critical role in advising on Cisco’s architectural approach to its security portfolio and on guiding customers through cyber roadmaps. In 1997, she established the Women’s Action Network for Sales and Engineering at Cisco. Today, the group, called Connected Women, has 7,000 members across 42 countries. Gleeson is the driving force behind CW’s external outreach programs. In addition to uniting employees, partners and customers across the globe for charity work, CW rallies volunteers to promote girls in STEM through school programs. In Oct. 2017, Gleeson launched the State Digital Acceleration initiative, which focuses on five areas, including promoting Michigan as a world leader in mobility. Today, nearly 6,000 students are enrolled in 113 networking academies; they are gaining job skills, technology proficiency and earning industry-leading certifications. “Being the leader of a $25 billion-plus business, it would be very easy for Alison to say ‘No, sorry, I don’t have the time’ when early-in-career women ask for help,” said Ashley Hillman, a Connected Women member. “That’s not Alison though. … While she may be remembered by thousands for her presentations up on stage, I will always remember her for all the individual young women she inspires on a day-to-day basis, including myself. It’s one thing to be a successful female leader. It’s another thing to inspire a whole new generation of female leaders.”
STACY LYNETT Executive Director and CIO, Global Information Technology, General Motors Co., Detroit Most recent education: Master of Science in Information Technology, Carnegie Mellon University As part of the senior executive team that executed the transformation from General Motors Corp. to General Motors Co., Stacy Lynett was integral in GM in-sourcing most of its IT expertise. “The IT organization — and GM overall — is a better place with Stacy being a part of the senior leadership team. When she joined the CIO staff, she quickly earned tremendous respect from everyone as a team player and knowledgeable big-problem solver. She brings a wide range of experiences, leadership qualities, work ethic and a great sense of humor that’s hard to find in one person,” said Sue Brann, chief administrative officer, Office of the CIO for GM IT. Under her leadership, Lynett’s team significantly improved first-response capabilities when issues arose with business applications; deployed an operations center in Austin, Texas, that mirrors the center in Warren; and led the streamlining of application operations through focused talent acquisition. Her team is also intimately involved in helping secure GM’s environment through application monitoring, change and release management and enterprise-wide patching. Lynett tirelessly works to make GM a better place. For instance, she implemented a “SolveIt” initiative that brought together hundreds of employees in a SWAT-like environment to solve some of the biggest challenges facing GM employees. She works to recruit women into STEM fields at regional colleges and by participating in junior high school presentations and Girls Who Code.
Sheryl Haislet was integral in the divestiture of IT systems from Johnson Controls when it spun off into Adient. Under her direction, the project was completed on time and under budget. Haislet, who leads a team of nearly 700 employees, has restructured Adient’s systems and increased efficiency and effectiveness. Her team streamlined the use of people data, expanded the use of Salesforce, upgraded and standardized plant-based systems, improved security and data-loss prevention, and modernized the overall IT environment. Modernization efforts included increased use of social, mobile, analytics and cloud, as well as the training of more than 200 employees on agile methodology. She also requires every team member to spend a “day in the life” of a business partner/customer to help them understand the needs of the business. “I can say unequivocally that Sheryl’s deep automotive industry experience, creative thinking and IT expertise make her stand out in a class of her own, enabling strategic business solutions,” said Cathy Ebacher, vice president and global general counsel for Adient. A member of industry and community organizations, Haislet serves as a member of the governing body of the Evanta Detroit CIO community, sits on the Board of Directors for the Southeast Michigan American Diabetes Association and serves as a mentor for Junior Achievement and United Way.
JANE HARPER Director, Privacy & Security Risk Management Services, Henry Ford Health System, Detroit Most recent education: Master of Science in Information Assurance, Walsh College Certifications: Certified Information Systems Security Professional, Certified Risk And Compliance Management Professional, Certified Information Systems Auditor Jane Harper lives by the philosophy of “Do the right things, at the right time, with the right people, the right way.” The former Crain’s 40 Under 40 honoree has been an innovative and strategic thinker as a risk, privacy, security and compliance expert in health care, insurance and financial services. At Henry Ford Health System, Harper has expanded security, privacy and risk practices; led the IT assessment process for more than 200 departments; automated annual assessment and issues management; developed a risk management program to assess and identify potential risk to Henry Ford; and developed a multiyear strategy for risk assessment of electronic protected health information. “Our program would not be this mature without Jane’s insight, knowledge, innovation, tenacity and support. Her ability to create strong, repeatable risk-management processes is impressive,” said Meredith Harper, chief information privacy and security officer at HFHS. (Meredith Harper and Jane Harper are not related.) Jane Harper serves as co-chair of the Third-Party Risk Subcommittee for the Michigan Healthcare Cybersecurity Council and on the Cybersecurity Program Advisory Group for Walsh College.
ERIKA LANGUIRAND Director of Training & Development, Detroit Labs LLC, Detroit Most recent education: Bachelor of Arts in Psychology, Hillsdale College Erika Languirand is not only technically minded but she also has the empathy, communication and leadership skills that help motivate and retain team members. She began overseeing software apprenticeships at Detroit Labs in 2015. Since then, she has trained about one-third of the company’s developers, and the number of underrepresented racial/ethnic groups in the program increased 28 percent. Now Languirand also leads training and development of developers. Her team focuses on non-technical continuing education, mentorships, internships, coaching, performance improvement and career guidance. “We began the program to help solve the problem of finding great developers; but instead, (Erika’s) work delivers life-changing, permanent successes to so many individuals who never would have had the opportunity to support their families, earn excellent wages, and express their true abilities and strengths,” said Nathan Hughes, co-founder of Detroit Labs. Adding to her commitment to training, Languirand co-founded the Detroit Chapter of Girl Develop It in 2012. The organization has almost 3,600 members and has trained 1,300 women to code. “(Erika’s) openness and willingness to welcome people in and connect new members to the people and resources they need to achieve their goals has enabled several new meetups, nonprofits and employment opportunities,” said Aisha Blake, chapter leader of Girl Develop It Detroit.
ANNETTE MARCATH CIO and Vice President, Health Alliance Plan Most recent education: Bachelor of Business Administration, Walsh College Certifications: SAFe, Project Management Professional, Health Insurance Association of America Known as an excellent collaborator, Annette Marcath excels at taking complex tasks and synthesizing them into efficiencies in her department and HAP. Since taking the role of chief information officer in 2013, she reorganized HAP’s IT department and saved millions of dollars, gained efficiencies and focused more attention on core processes. “Annette makes an extremely tough job look almost effortless. Her composed demeanor brings a sense of calm to situations that change rapidly and are time-sensitive. These qualities, combined with her deep knowledge and experience, make her a highly valued leader at HAP,” said HAP President and CEO Terri Kline. Marcath was key in HAP’s merger with HealthPlus. She implemented an integrated staffing model for IT to maintain operations of the merged entity and retain critical talent. She also helped renegotiate contracts for added savings. In addition, Marcath improved turnaround time and managed the implementation of SharePoint, which replaced an outdated intranet portal. As a member of Inforum Michigan, Marcath mentors young women in STEAM fields. She also is a member of the Information Systems Audit and Control Association and the Health Care Compliance Association. She is on the governing body of Evanta CIO and sits on the boards of Easter Seals of Michigan and Friends of Macomb County Veterans Treatment Center.
“The IT organization — and GM overall — is a better place with Stacy being a part of the senior leadership.” — Sue Brann about Stacy Lynett
WENDYE MINGO Managing Director, Information Technology and fellow honorees for being inducted into Crain’s Notable Women in Tech 2018
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
IT Manager, Visteon Corp., Van Buren Twp. Most recent education: Bachelor of Arts in Management Information Systems, Central Michigan University As Visteon evolved from operating as a multi-product tier 1 parts conglomerate to a leaner, flexible technology company focused on automotive cockpit electronics, Karen Merrill played a key role in ensuring Visteon’s IT systems aligned with its new profile. She helped decommission legacy applications and archival data and decentralize key applications to support company divestitures. Merrill facilitated the upgrade of Visteon’s Hyperion financial management and planning applications. She also helped select, implement and achieve secure integration of a new integration platform with Dell Boomi. “Karen is … responsible for creating a cloudbased architecture that will reduce the cost of integrating disparate application systems,” said Raman Mehta, Visteon vice president and chief information officer. “She also is deeply involved in community service initiatives at Visteon.” Twenty-five years ago, when Visteon was part of Ford Motor Co., Merrill began leading Operation Good Cheer, a charity that benefits children living in foster care. When Visteon spun off from Ford in 2000, she ensured that the company remained involved. As a result, employee donations increase yearly, and children receive wrapped gifts each Christmas morning. “The generosity of the team she coordinates at Visteon in providing gifts to Michigan’s foster care children year after year is just amazing,” said Sherry Brackenwagen, administrative director, Child and Family Services of Michigan Inc.
Managing Director, Information Technology, The Kresge Foundation, Troy Most recent education: Doctor of Philosophy in Instructional Technology, Wayne State University Certifications: Educational Specialist certification in Instructional Technology, Project Management Wendye Mingo’s greatest strengths are her technical knowledge, problem-solving abilities and willingness to help when needed. When a regional Alpha Kappa Alpha sorority website was hacked and a duplicate site was created, Mingo, a past president and current committee member, solved the problem and improved the organization’s cybersecurity system. Mingo also migrated The Kresge Foundation to an industry standard secure network and has been educating Kresge Foundation staff on vulnerability and security threats common in the industry. Mingo moved application servers and data to a virtual private cloud, resulting in improved stability, better security and 42 percent savings in run costs; built an interface between Human Resources and the matching gifts system to automate data sharing; and is currently helping with HR’s rollout of its Performance and Learning Management system. “Wendye has completely re-conceptualized what technology can, and should, do for The Kresge Foundation,” said Kresge President Rip Rapson. “She worked with our staff to systematically assess every nook and cranny of our IT infrastructure.” In the community, Mingo is past president of the Pearls of Promise Foundation. She also volunteers with high school programs and sponsors students.
Director, Automotive, QAD Inc., Farmington Hills Most recent education: Bachelor of Business Administration, Lawrence Technological University Certifications: AIAG certificate in Purchasing and Supply Chain, APICS certificate in risk management
Principal Mechanical Engineer, Lifestyle Car Audio, Harman International Industries Inc., Novi Most recent education: Master of Business Administration, Wayne State University In Amanda Pine’s short time at Harman International, she has delivered designs and analyses for three products, resolved significant supplier validation issues and become the go-to car audio expert for Design Failure Mode and Effect Analysis team members. She also developed and is validating the company’s highest processing and computing amplifier. Her greatest strength is the balanced combination of her passion for product excellence mixed with her technical capabilities. She is self-driven and has traveled overseas at short notice to ensure supplier issues were resolved swiftly. Pine is also passionate about serving the community. She volunteers at Detroit International Academy for Young Women, where she leads an all-female team of high school students in robotics competitions. “Amanda has been an inspiration to the young ladies of our First Robotics Team, The Pink Panthers, during the first season. Her dedicated mentorship has inspired the students to continue to explore and pursue STEM education and careers with robotics and computer science being one of them,” said Kavita Sadwal, coach of First Robotics Team 2048-The Pink Panthers at the Detroit International Academy for Young Women.
Terry Onica is passionate about leveraging technology to improve supply chain performance. She works closely with original equipment manufacturers, suppliers and global standards organizations to ensure QAD software helps them increase quality and efficiency, reduce costs and comply with industry regulations. Onica was an integral part of a team that designed QAD’s Easy On Boarding project methodology, which helped 75 suppliers achieve Materials Management Operations Guideline/Logistics Evaluation compliance to their OEM customers. She also travels to QAD employees and customers to train them on software as well as trends in the automotive industry and the impact of those trends. She has trained 300 QAD employees globally. AIAG and Wayne State University asked her to teach students about ERP and MMOG/LE. At the same time, she serves as a mentor to Wayne State students. “Terry’s passion for and commitment to her work and the automotive industry is relentless and a huge boon to the sector and to QAD,” said Pamela Lopker, chairman and president of QAD. “Terry’s incredible talent at building bonds and consensus has fueled real industry breakthroughs in automotive supply chain performance. That has helped QAD develop and deliver applications that impact the bottom line through the reduction of waste and costs.”
CRAIN’S IS THE HOME FOR
NOTABLE WOMEN IN MICHIGAN
At companies across Michigan, notable women elevate marketing campaigns to new heights, argue high-stakes legal cases and champion the causes of nonprofits. These women also mentor, teach and volunteer in their communities. Through this series, Crain’s Detroit Business will profile more than 200 women in business this year.
N O M I N AT I O N S N O W O P E N L TA B NO
WOMEN IN MARKETING PUBLISHES: OCT. 8
NOMINATIONS CLOSE: AUG. 24
PUBLISHES: NOV. 26
NOMINATIONS CLOSE: SEPT. 12
WOMEN IN NONPROFITS TA NO
PUBLISHES: DEC. 10
NOMINATIONS CLOSE: SEPT. 27
To nominate a Notable Woman you know, visit crainsdetroit.com/nominate
sette Sh teach every co-cr band acros own direc scho co-fo “T men has hom syste Broc Fr used Appr and hall hand teach “T scho Beat River our e plica
vi of State
time signs ficant o car Analvalicom-
ation h her traver is-
mmudemy male peti-
g lahers, rship and otics Kavi8-The demy
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
Educator and Co-Founder, Solutions for Teachers LLC, Ypsilanti Most recent education: Master of Arts in Music History, Literature and Theory, Eastern Michigan University Teacher and band director Josette Rechul entered the tech field by necessity. She sought a solution to band directors each teaching different lessons and rewriting their tests every year. After drafting 210 assessments, she co-created a system, with Matt Ridenour, that allows band directors to assess and monitor student data across all levels. Books allow students to go at their own pace and cloud-based software enables band directors to compare how they are doing with other schools across the country. She launched and co-founded AIM (Achievement in Music) in 2014. “The excellent construction of the (AIM) assessments combined with the thoughtful skill progression has been awesome. I have students practicing at home who haven’t practiced in three years. The AIM system improves your (band) program,” said David Brockington, of the Gibraltar School District. From there, Rechul recognized another need. She used her classroom experience to build the Tracking Appropriate Behaviors (TABS) app that tracks positive and negative behaviors schoolwide; provides digital hall passes; automates and changes how schools handle lockdowns; and provides school officials, teachers and security with open communication. “To see teachers stepping up like this to make schools better is incredibly refreshing,” said Jason Beatty, principal of University High School in Indian River. “We’re currently implementing the system, and our entire staff is very excited to see this (TABS) application in action.”
Executive Director, Michigan Council of Women in Technology Foundation, Southfield Most recent education: Master of Business Administration in International Business, University of
Chris Rydzewski’s primary focus as executive director at MCWT is to drive measurable impact for its K-8 programming, getting thousands of young girls interested in the field through hands-on technology experiences and by introducing them to women who are making a difference in the world through IT. She is known for regularly thinking out of the box with innovative professional programs and technology. Rydzewski also is a connector and builder of relationships who works with the nonprofit’s stakeholders to reverse the trend of gender disparity in IT. This means she collaborates with 90 partner companies and encourages significant financial support. Under Rydzewski’s leadership, MCWT, which has provided over $1 million in scholarships to women pursuing technology careers, runs about 35 events and 10 summer tech camps for middle school girls yearly, supports 13 after-school girls’ high school and middle school tech clubs, hosts an annual youth website design contest and facilitates a mentorship program for mid-career women. “Chris’s unselfish dedication to girls and women of all ages as it pairs with technology advancements has been an incredible passion to watch,” said Jane Sydlowski, vice president and board member of MCWT and CEO and president of AMI Strategies in Livonia.
NICOLE SCHEFFLER Engineering Strategy & Planning Leader, Americas Partner Organization, Cisco Systems Inc., Grand Rapids Most recent education: Master of Science in Information Technology, University of North Texas Certifications: CCNA/CCNP, CCDA, CCDP, CCIE Nicole Scheffler’s key responsibility is to create the strategy for channel engineers at Cisco. To do so, she created a peer advisory board. She is also helping with the shift to software-defined networking. “Nicole … immediately started to get the team to look at our traditional role in a nontraditional way. Through her leadership, she was able to get some IoT partners, that we were looking at in a very myopic way, more visibility and focus that brought benefit to both parties. Nicole’s energy and passion are contagious, and she is always looking at ways to increase the impact that she and the team can have for Cisco,” said Dennis Chesky, senior systems engineering manager at Cisco Systems. Scheffler enjoys sharing her knowledge with others. She teaches at Davenport University and created Diva Tech Talk, a podcast focused on women in technology. She also founded the nonprofit Michigan Technology Network, dedicated to education and networking. “Nicole has been an instrumental volunteer for the Michigan Council of Women in Technology Foundation … (and) has helped guide our growth strategy on the west side of our state. For about three years, she also provided needed MCWT media coverage as a reporter for MiTechNews, a leading online technology-oriented media channel,” said Kathleen Norton-Schock, marketing volunteer for MCWT.
JANE SYDLOWSKI CEO, President and Founder, AMI Strategies Inc., Livonia Most recent education: Master of Business Administration in International Marketing, Wayne State University Jane Sydlowski founded AMI Strategies, which provides software as a service to help clients correlate and track technology assets, invoices and contracts. AMI’s SaaS web application requires stringent security controls, and she ensures her team is vigilant about security. Her innovations include incorporating artificial intelligence into technology products and implementing human-centered design thinking, which resulted in the development of three new technology products. Sydlowski, whom Enterprising Women Magazine named to its 2015 list of Enterprising Women of the Year, is the only woman on the national board of the Enterprise Technology Management Association. She also serves as chair of the Greenpath board and vice president of the Michigan Council of Women in Technology. “Jane Sydlowski has been a major force in the Detroit area and nationally through the growth of her company AMI and through her tireless work to grow technology skills especially for young women. Her special interest in women in technology has been focused on MCWT and on their programs to provide scholarships and programs for K-12 girls,” said Teri Takai, executive director for Center for Digital Government, e.Republic.
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
SPOTLIGHT Focus: Hope taps Portia Roberson as CEO
Portia Roberson is leaving her role with the city of Detroit to become the new CEO of Focus: Hope. She succeeds interim CEO and board member Vernice Davis Anthony, who stepped in after former CEO Jason Lee left in January to lead Roberson the Detroit Employment Solutions Corp.’s Grow Detroit’s Young Talent program. Roberson, 48, will join Focus: Hope by mid-September. She’s served as group executive of the Detroit Civil Rights, Inclusion and Opportunity Department for the past four years.
Rockwell Medical hires new CEO
Rockwell Medical Inc., a Wixom-based bioscience technology company, has hired a new CEO after reaching a settlement that includes $1.5 million in payments to two former top executives and two directors over disagreements on how to sell Triferic, the company’s most promising drug. Paul Rockwell has hired Stuart Paul as CEO, effective Sept. 4. Paul, a veteran drug industry executive, will also join the Rockwell board of directors. The settlement agreement is between five current directors of Rockwell and former CEO Robert Chioini, former CFO Thomas Klema, former director Patrick Bagley
and director Ronald Boyd, who has agreed to resign from the board. Chioini and Klema were fired in late May.
Ernst & Young promotes first woman to lead Detroit office
Ernst & Young LLP has hired Angie Kelly to lead its Detroit office. She is the first woman to head up a Michigan outpost. She joined the Detroit office after graduating from Michigan State University two decades ago and Kelly has been promoted to managing partner. She will take the reins from George Lenyo on Sept. 30.
PEOPLE ACCOUNTING J Jacqueline Nicolas to partner, Cole, Newton & Duran CPAs, Livonia, from partner, Nicolas, Henaughen & Figurski LLC, Livonia.
CONSULTING Violeta Zdravkovic to managing director, O’Keefe & Associates Consulting LLC, Bloomfield Hills, from managing director, Conway MacKenzie Inc., Birmingham. Also, Keith Chulumovich to director, from consultant, UHY Advisors Inc., Southfield. J
HEALTH CARE J
Kimberly Veres to director of em-
ployee health services, McLaren Health Management Group, Davison, from corporate supervisor of medical operations and compliance, Fiat Chrysler Automobiles, Auburn Hills. Also, Tammy Hempfling to vice president of Homecare, McLaren Homecare, Davison, from quality and education manager, McLaren Homecare.
LAW J Thomas McNeill to division director — Litigation, Dickinson Wright PLLC, Detroit, from member. Also, Cynthia Moore to division director — Regulatory-Administration, Dickinson Wright PLLC, Troy, from practice department manager, Dickinson
Wright PLLC, Troy, and Philip Rettig to division director — Intellectual Property, Dickinson Wright PLLC, Troy, from practice department manager.
REAL ESTATE J Brenda Makarov to managing director, Valuation and Advisory Services, CBRE Inc., Detroit, from president, Terzo & Bologna Inc., Livonia.
To submit news of your new hires or promotions to People, go to crainsdetroit.com/peoplesubmit and fill out the online form. Please limit submissions to management- or partner-level positions.
CALENDAR WEDNESDAY, AUG. 15
Social Media for Business Growth. 9-11:30 a.m. Oakland County Economic and Community Affairs. Terry Bean, Motor City Connect, will present what works, what to avoid and how to use LinkedIn, YouTube, Facebook and Twitter. Topics include: three things to do to find success on each platform, how to use status updates that gain attention, ways to manage priorities, how to make posting simpler and fastest way to grow an audience. $40. Oakland County Executive Office Building Conference Center, Waterford. Phone: (248) 858-0783; email: smallbusiness@ oakgov.com
Government Contracting 101. 9 a.m.noon. Aug. 23. Schoolcraft College. Program covers services and resources available to a business pursuing the government market. $45. Schoolcraft College. Contact: Kara or Shannon, phone: (734) 462-4438; email: ptac@ schoolcraft.edu; website: schoolcraft. edu/college-events/2018/08/23/college-events/government-contracting-101.
THURSDAY, AUG. 16 Measuring the Effectiveness of Goals with Metrics. 8:30 a.m.-10:30 a.m. Michigan Manufacturing Technology Center. Program helps assess a company’s performance, establish relevant business metrics and prevent goals from being missed in the future. Workshop is focused on achieving positive organizational change. Michigan Manufacturing Technology Center, Plymouth. Free. Contact: Theresa Gaston, phone: (734) 451-4208; email: email@example.com; website: the-center.org Marshall Plan for Talent Workshop. 1-3:30 p.m. Lawrence Technological University. Roger Curtis, director of the Michigan Department of Talent and Economic Development, will provide an overview of Gov. Rick Snyder’s Marshall Plan for Talent to prepare students and adults for jobs. Free with online registration. Lawrence Technological University. Contact: Mark Brucki, email: mbrucki@ ltu.edu
Market Research Basics. 9-11:30 a.m. Aug. 30. Oakland County One Stop Shop Business Center. Workshop helps businesses find customers, identify competitors, perform competitive analysis, identify new site locations, target direct mail campaigns, reveal untapped markets and expand to new and appropriate markets. Oakland County Executive Office Building Conference Center, Waterford Township. Free. Registration required. Phone: (248) 858-0783; email: firstname.lastname@example.org; website: e v e n t b r i t e . c o m / e / m a r k e t- r e search-basics-august-30-registration-46439188864 Michigan’s Competitive Advantage: The URC, Economy and Our Collective Future. 11:30 a.m.-1:30 p.m. Sept. 5. Detroit Economic Club. Presidents from Michigan’s University Research Corridor will release findings from its 2018 Economic Impact Report by Anderson Economic Group. Includes: Interim Michigan State University President John Engler, University of Michigan President Mark Schlissel and Wayne State University President M. Roy Wilson, M.D. $45 members, $55 guests of members, $75 nonmembers. Westin Book Cadillac. Phone: (313) 963-8547; email: info@ econclub.org; website: econclub.org
ADVERTISING SECTION To place your listing, please visit: www.crainsdetroit.com/onthemove or for more information, call Debora Stein at (917) 226-5470, email: email@example.com
ENGINEERING & CONSULTING
Chuck A. Gemayel, PE
Daniel O. Roeser, PG
Chief Operating Officer / Senior Vice President
Chief Marketing Officer
Vice President of Real Estate and Financial Services
Plante Moran Real Estate Investment Advisors (REIA)
SME Chuck A. Gemayel, PE, has been appointed Chief Operating Officer (COO) and Senior Vice President (SVP) of SME. Chuck works closely with Group Leaders, Director of Regional Operations, Regional Vice Presidents and Regional Office Managers to continuously improve service delivery and ensure SME’s long-term success. Chuck also leads SME’s Leadership Development Group and participates on the Strategic Planning Group, working with the operations team to implement strategic initiatives.
SME Daniel O. Roeser, PG has been appointed Chief Marketing Officer (CMO) of SME. Dan is responsible for facilitating growth, sales and marketing strategy, and brand management. He leads SME’s client experience initiatives and manages the sales team and process. He also serves as Regional Vice President for the Plymouth, Shelby Township, Detroit, and Cleveland regional teams, leading them in a variety of geotechnical, environmental, construction materials, and facilities engineering projects.
Detroit Economic Growth Corporation In her new role, Kenyetta oversees a team of real estate and project managers focused on increasing investments across Detroit for the development of commercial, mixed-use and industrial infrastructures. With over 18 years of experience in Economic Development and formerly serving as the Director of Real Estate & Strategy, Kenyetta has helped facilitate business investment deals since 2005. Prior to joining the DEGC, she worked for the Suburban Mobility Authority for Regional Transportation.
LAW Thomas P. Bruetsch
Senior Vice President
Plante Moran Real Estate Investment Advisors (REIA) is pleased to announce the executive promotions of Doug Smith (pictured), Nick Gurica, and Joe Perez. Plante Moran REIA, an affiliate of business advisory firm Plante Moran, specializes in investment real estate consulting and has over $1 billion in assets under advisement. Plante Moran REIA has offices in Southfield and Chicago.
KNOW SOMEONE ON THE MOVE?
Ottenwess, Taweel, Schenk PLC Thomas P. Bruetsch has left Bodman to join Ottenwess, Taweel, & Schenk PLC and lead its growing commercial and governmental litigation practice. Mr. Bruetsch has represented banks, sports franchises, political leaders, governments, automotive firms, family businesses, and public utilities. “I am very excited to join Ottenwess”, Bruetsch said. “In today’s legal marketplace, small, elite firms can deliver a higher, personal level of service, while still getting the results our clients expect.”
For more information or questions regarding advertising in this section, please call Debora Stein at (917) 226-5470 or email: firstname.lastname@example.org
August 13, 2018
SS DETROIT BUSINESS C R A I N ’ S D E T R O ICTRAIN B ’U INES S // A U G U S T 1 3 , 2 0 1 8
CARDS FROM PAGE 1
One is the ironclad thirst of a diehard cadre of card collectors for hot rookies. In recent years, hobbyists have spent thousands of dollars at their stores chasing the like of baseball’s Shohei Ohtani and hockey’s Connor McDavid. The other factor is discipline from the card manufacturers. The granddaddy remains New York City-based The Topps Company Inc., which has the sole license for Major League Baseball cards. Instead of printing billions of cards in hopes that local shops and large retailers can create revenue via mass sales, Topps and other card makers have evolved their strategy to make fewer cards, up the quality, and offer specialty lines that include autographs and perks in the card packs such as snatches of jersey and baseball glove leather. Collectors chase those rookies and special insert cards, often in hopes of making thousands of dollars re-selling them, and that has helped the surviving sports card shops thrive. So has a trend of Gen Xers and even Boomers getting back into card buying with their kids. “The ones that are around, they’re thriving,” said Susan Lulgjuraj, Topps’ marketing communications manager. “It’s been a really good time to have a card shop.” The local owners agreed. “We have a pretty good base of customers. It’s a solid group that always comes back. That helps out a lot. That few stores are left is a bonus, too,” said Grand Slam owner Dave Rivetto. A quick Google search shows there are a couple of other sports card retailers in the area — Joe Manzella Sportscards in Farmington Hills, Collectible Investments of Berkley, and Prime Time Comics and Cards in Lake Orion — but most don’t move the same volume of new cards by the case and reams of vintage cardboard. Big-box retailers such as Target and Meijer sell cards, too, as do a swath of stores that offer them as a side product but primarily specialize in comics, pop culture, and other collectibles.
‘Boxes and boxes and boxes’ Rivetto, 56, was a longtime customer at Grand Slam, and became shop founder Raad Ankawi’s business partner several years ago. He then bought him out when Ankawi retired a couple of years ago. Rivetto works the store alone six days a week, keeping his overhead low. The shop, nestled into the corner of an L-shaped strip mall off 17 Mile Road, has glass cases filled with vintage sports cards. It also sells some sports merchandise, autographed items, and card supplies such as boxes and plastic sleeves. “Most people are still coming in for the newest stuff, but I’ve got a solid core of customers that come in looking for vintage cards to build sets,” Rivetto said, adding that he had 30,000 “common” cards from 1954 to late 1970s that collectors buy cheaply to fill out complete card sets from a particular year. But it’s that newest stuff that generates most of Rivetto’s revenue. He declined to talk dollar figures, but based on what he says he’s selling, revenue appears to easily top $100,000-plus. “We do very well. I make a very nice living,” he said. The big money is generated from collectors who want the boxes of new cards that hit the shelves each Wednesday. For example, the Topps Chrome
Grand Slam Sports Shop owner Dave Rivetto.
baseball card set arrived at stores on Aug. 1 and Rivetto said he sold about 25 boxes, which were either $100 or $200 each depending on the size of the box. “We get all our products direct the day they’re released,” Rivetto said. “People come in and buy boxes and boxes and boxes.” Another popular Topps series is the Heritage set of retro-style cards. Rivetto said he sold four cases of the Heritage set over a week two years ago, but this year sold 11 cases in four days. He said the addition of Ohtani autograph cards in the series fueled customer demand. “I have trouble getting enough product at times. Manufacturers will limit what a hobby shop can get,” he said. Even with such limits, Rivetto said his sales are up more than 30 percent versus the same point last year. He estimates that the shop has 20 to 30 “big spenders” that are regulars. Some spend $1,000 or more at a time. Grand Slam and Rochester Sports Cards both do a lot of business online — with the latter topping $100,000 annually in eBay sales, shop owner Steve Majkowski said. Online sales could be even more lucrative, but the card makers limit who can immediately sell the boxes of new products. “When you are a brick-and-mortar store, you cannot sell products online for a certain period of time unless you’re a online licensed dealer,” Rivetto said. His store’s average customer is a man in his 30 or 40s. Kids aren’t the main buyers anymore, and haven’t been for a long time. “It’s hard for them to buy a product because of cost,” Rivetto said. The most premium set — a box of Topps baseball cards with a single pack of 10 cards, each featuring an autograph or other perk such as actual diamonds — retails for $1,500. That’s for one pack of cards. “The amount of money you can sell one single card for, people know it’s another form of the lottery,” Rivetto said. But it’s not all adult collectors spending hundreds or thousands of dollars chasing a card they can resell for large sums. Rivetto told the story of a little boy that came into the shop recently with his grandmother, and in the very first $5 pack of baseball cards he bought was an autographed Ohtani card worth several hundred bucks. “It’s more fun to watch that than watching my regular customer spending hundreds of dollars trying to chase a big hit,” he said.
A changing industry How did the sports card industry get to its current state? What burst the bubble and left just a handful of survivors? Overproduction by the card manufacturers was the chief culprit, with literally billions of cards flooding the market to dilute value and confuse consumers. Other factors included the
BILL SHEA/CRAIN’S DETROIT BUSINESS
1994 baseball strike, the rise of the Internet and video games, alternative trading card games such as Pokémon and Magic: The Gathering and wider economic downturns. All of that was a witch’s brew for card shops. By one estimate, there were once 10,000 such stores across the United States. That’s dwindled, but there are still several hundred card shops left, Topps’ Lulgjuraj said. Saturday was the company’s National Baseball Card Day giveaway event and 22 Michigan locations are listed as participating. About 500 shops and retailers are on the list across the U.S. and Canada. Sales of new cards reportedly topped a billion dollars in the early 1990s, but shriveled to about $200 million in recent years, according to reports. Industry discipline and innovation has helped the remaining card shops survive. Those stores, along with big box and direct-to-consumer online sales, have been enough to keep Topps profitable, Lulgjuraj said. She declined to disclose the privately-owned company’s revenue, but did say sales have increased by double-digits recently. “The past couple years for us have been very good for us,” she said. But while the number of cards are limited compared to the earlier 1990s, Topps still produces about a million cards for a basic set. There are a lot of card products, different sets, and the business challenge for the store is to find the right inventory. “There’s so much, you have to be very selective on what’s going to sell,” Rivetto said. “Do you need 40 different types of baseball cards every year?” He said he’s lucky to land on six to eight solid products every year that sell briskly. The store gets a boost when there’s a high-profile rookie and collectors want their first cards. That can set off a mini-spending spree. A Detroit team wining a championship, such as the Red Wings’ Stanley Cup titles, fuel card spending, too, he said. When collectors, especially new ones, find a prize rookie in a pack, Rivetto encourages them to sell right it away because once that player hits the field, court or ice, they could turn out to be a bust. The could become a hall of famer, too, but that’s the risk. Odds are the card is at its peak value now, he said. A kid that spent 5 cents for a wax pack of Topps baseball card might have pulled the first Pete Rose card. By 1979, when James Beckett launched his monthly pricing guide, that first Rose card was listed for $5. In 2016, a mint-condition ‘63 Rose sold at auction for $717,000.
A different strategy Grand Slam doesn’t sell the high-profile non-sports trading cards — Pokémon and Magic: The Gathering game cards — but kids still come in ask-
ing for them, he said. Rivetto directs them to Target and Meijer. “I have enough with the sports cards,” Rivetto said, adding that he does carry a few popular non-sports sets such as Star Wars cards. That’s where Rochester Sports Cards differs. Majkowski, 53, opened his shop in October 2014 after spending decades as an mechanical engineer for Delphi, Dow and other companies. He loved collecting cards, so he put his analytical mind to work on crafting a business plan to service his local marketplace in downtown Rochester. Like Grand Slam, boxes of sports cards remain the revenue backbone — Majkowski said he sells $5,000 to $10,000 every weekend — but the shop also does a healthy business retailing non-sports cards, along with toys, novelties, apparel and autographs. His 2,000 square-foot store has space for Pokémon and Magic card tournaments, which helped build the shop’s reputation. “We are able to provide a safe environment for younger players,” Majkowski said. Sports card sales make up about 60 percent of his business, and 90 percent of that is boxes and packs of new cards. He estimated that he’ll hit $750,000 in revenue by the end of 2018. Majkowski said he has a price match policy on new releases that has limited his profit margins, but grew his customer base. That’s how he’s carved out a niche in the post-bust card market. By launching in 2014, just before the most recent crop of ultra-popular rookies that’s goosed the wider retail sports card market, the store was able to create wholesale relationships with both the manufacturers and third-party distributors that allows him to buy in bulk now, Majkowski said. “I got lucky in the time we opened it up — there were no great rookies, so we were able to get allocations pretty high initially,” Majkowski said. “We’ve built up some key customers around the country looking for hard to get allocated product, because we buy so
Page25 25 much.” The basic Topps product retails for $50 to $70 for a box of 36 card packs, he said. “We make the majority of our money on that,” Majkowski said.
A hobby for the wealthy In the end, cards are worth only what people will pay for them. Most will end up in a box in the basement or garage. For the lucky, some will be sold and traded to pay off debt or buy a house or boat. For the ultra-wealthy, card collecting is on par with buying fine art or wine. The prices are staggering for the investment-grade cards. Hobby shops generally don’t deal in those sales, which are handled by auction houses. Rivetto said the priciest card sold at his shop was a Connor McDavid for $5,000. Majkowski’s store has sold a 1986-87 Fleer Michael Jordan rookie card for $1,800 and a Mike Trout autographed card for $2,000. Vintage trading cards can be good investments, data shows, but so can cards from the post-bust 2000s. “Now the fastest-growing sector are cards produced in the last 20 years. Those are far outperforming vintage cards,” said PWCC Marketplace CEO Brent Huigens in a recent interview with Crain’s Cleveland. Oregon-based PWCC Marketplace hosts trading card auctions and compiles a performance index that is modeled after the S&P 500. Huigens said almost half of the sales on PWCC’s market stem from modern cards, led by the NBA thanks in large part to its international appeal. A PWCC auction saw a 2009 Bowman Chrome Gold Refractor Mike Trout card sell for $30,370 on July 16. “One of the great misconceptions in the general public is new cards aren’t worth anything,” Huigens said. Bill Shea: 313 (446-1626) Twitter: @Bill_Shea19 Crain’s Cleveland reporter Kevin Klepps contributed to this story.
LAKE MICHIGAN WATERFRONT
Fabulous business opportunity for entrepreneurs with excellent SEO and FaceBook marketing skills. This company has been in business since 1995 doing business across the USA. I am retiring and want to see my customers get continued service. No investment necessary, just take over! Call Sanford 313-350-6409
• Ultimate Quality Design + Construction • 4,722 sf… Timberframe • 10 years “New!” • 3 Hours from Detroit Suburbs Outstanding Value $999,000
(231) 409-9119 Call anytime between 7am and 10pm Email: email@example.com Website: joeblachy.com 420 Howard St., Petoskey, MI 49770
MISCELLANEOUS ù 52 acres cleared, Chesterfield Twp. Underground plans done. 112 lots, $675K ù 12 condo pads ready to build. Chesterfield Twp. $17,000 each. ù Pizza business in Troy. All equipt ready to use. $10K - Lease $1,700 per mon. located on Rochester Rd. Bill McMachen ~ 586-915-4441
The Crain’s Reader 26.5% influence the purchase of office/industrial and commerical space. Help them find you by advertising in Crain’s Real Estate Section. 313.446.6086 • FAX: 313.446. 034 7 E-Mail: firstname.lastname@example.org
ZERO COAL FROM PAGE 1
Consumers already uses natural gas to power 12 percent of its power plants and said it won’t increase that. Over the past decade, as it has closed coal-fired plants, Consumers has replaced those by purchasing gas plants to generate 1,488 megawatts of power. By 2040, Consumers says gas will fuel about 10 percent by upping other power sources, including solar arrays. DTE has been approved by the MPSC to build a 1,100-megawatt natural gas plant in East China Township by 2023 to replace three coal-fired plants. Several environmental and renewable energy groups are challenging DTE’s plans, but a reversal seems unlikely. DTE’s natural gas power generation now is 5 percent of production. Documents show that would grow to 20 percent and possibly even 30 percent by 2030 if the company builds a second $1 billion gas plant. However, DTE officials say its future fuel mix is unclear until it completes and files its own integrated resource plan, or IRP, by March 29 of next year. So far, planning documents filed with the state show DTE will add 4,000 megawatts of renewable energy, four times what it currently produces, to increase renewables to 25 percent of generation from 10 percent now. However, energy experts tell Crain’s they believe DTE could eventually ramp up renewable energy to 40 percent or more of fuel mix, especially if the cost of wind and solar installations continues to drop. DTE also currently generates 21 percent of its electricity from nuclear power, which Consumers plans to cut to zero by 2030 from 19 percent this year. Because of increasing renewable and natural gas, the percentage of DTE’s nuclear generation at Fermi 2 in Monroe County is expected to drop to about 10 percent by 2040. There is an outside chance nuclear could increase. While the company currently has no firm plans to expand it, DTE also in 2015 received a license to build Fermi 3, a 1,560-megawatt plant that would likely cost more than $10 billion. DTE officials have described the Fermi 3 license as a type of “insurance card,” and a decision could be made in the 2020s.
Future energy choices? Depends Consumer Energy’s IRP lays out its current thinking of how it plans to provide electricity to its 1.8 million Michigan customers. But CEO Patti Poppe told Crain’s those plans could change in the next three to five years when it files its next IRP as renewable energy technology changes or if state policies wind up requiring more instate generation. DTE is working on its IRP and expects to hold meetings this summer and into next spring to gather feedback for its five-year energy plan to supply 2.2 million customers, said Irene Dimitry, DTE’s vice president of business planning and development. “We have asked for input from people who intervened in the (certificate of necessity) to see what they would like, and we will run the scenarios and modeling requested of us,” Dimitry said. So, in 2040, when both DTE and Consumers are saying they will end the use of coal to power plants, what will be their energy mix?
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8 Both companies say their plans will likely change based on market conditions, but here’s what can be divined from the companies’ public filings and statements.
be in pan fired E gy a econ land peop prob clea biom B pect mor ener St MPS in E Cou scen will A with 2030 gene able perc perc plac D tend men ties bou mon
Consumers’ choices Consumers Energy has a carefully laid-out energy and fuel mix plan over the next 22 years. Its integrated resource plan calls for it to generate 37 percent renewable energy by 2030 and 43 percent renewable energy by 2040, when it will cut carbon emissions by 80 percent. Coal makes up 32 percent of Consumers’ supply today. The company plans to eliminate its coal as a power source by 2040 and also end power purchase agreements for nuclear and natural gas capacity. By 2030, coal would be down to 28 percent of generation and zero by 2040. Poppe said it is easier for Consumers to eliminate coal because “of basic math. We are closer to the finish line. That is indisputable. We have less to close.” Consumers has five remaining coal-fired units to close in Bay City, Karn, Holland and Campbell from 2021 to 2040. Natural gas in Consumers’ portfolio would increase slightly from 12 percent in 2018 to 18 percent in 2030 and then down to 10 percent in 2040. So, in 2040, renewable energy could account for 43 percent of electricity power, 10 percent natural gas, 6 percent from hydroelectric pump storage and battery sources and the remaining 41 percent of Consumers’ portfolio will come from regional market purchases, its IRP says. Consumers is ahead of DTE in its attitude concerning renewable energy. Poppe said. Consumers believes solar and wind are better investments for the company and shareholders than a large natural gas plant, so the company plans on massive expansion with the cleanest of energy sources. Consumers’ two gas plants and the hydro pumped storage facility provide enough baseload power to justify adding more renewables, especially when energy efficiency and demand response programs become a greater part of the company’s strategy, she said. Poppe also said advanced battery storage technologies coupled with renewable energy could eventually be just as dependable as baseload gas plants. She also said the 6 percent projected during the next 20 years from the hydro pumped storage and battery sources could be much, much higher. Experts said 10 percent is not an unreasonable goal. “We expect to add more storage, most likely there will be batteries,” Poppe said. “The technology is improving and storage with batteries makes renewables more effective.” While utility executives have argued in the past that their energy portfolio mix must include traditional, dependable power sources such as coal, natural gas or nuclear, Poppe said storage will turn renewables into such “baseload” power sources. Consumers also is projecting a need to purchase about 41 percent of its future electricity generation through regional market purchases through the Midcontinent Independent Service Operator. Consumers doesn’t purchase wholesale electricity now through MISO because it has excess generation within its system, Poppe said. “We are also saying that by 2040 that could change. There could be more constraints” imposed by the MPSC, or other changes. “The com-
DTE Energy Co. has invested in wind parks like these in Michigan’s Thumb area.
sumers doesn’t have a contract with Tendril and she declined to say if one might be in the works. But when all scenarios are combined, energy experts say it is possible by 2040 Consumers could have an energy mix of 43 percent or more renewable energy, 10 percent natural gas, 6 percent hydroelectric pump and battery storage. In addition, 19 percent could come from regional market purchases or increased renewable investment and 22 percent coming from efficiency and demand response energy reductions.
DTE’s energy choices
LISA SAWYER/CRAIN’S DETROIT BUSINESS
mission could instruct us how much local resources are required” to be generated in Michigan. “If so, we would change our plan,” she said. “Right now there is not a lot of excess private generation” in Michigan. Moreover, Poppe said Consumers is counting heavily, and at least now more so than DTE, on energy efficiency programs and demand response programs. Consumers has announced an aggressive plan to encourage saving electricity by increasing energy efficiency to 2.25 percent of annual electricity sales, up from the state-mandated 1 percent. This saves customers money but also Consumers because it won’t have to add costly electricity capacity. Coupled with other moves, Consumers hopes to bank what it calls “virtual power plants” to reduce energy demand by 22 percent by 2040, a far more ambitious goal than DTE’s current plans. Most people think of demand response as utilities asking large industrial customers to limit power on hot days when demand for electricity is high. Customers are given discounts
for participating and pay fees if they want to skip the request to power down. In June during a four-hour period, said Poppe, “We tested 22 megawatts (demand response), and it did exactly what it was asked to do. If you are on a hot day, it is hard to trust and manage people load. We think the technology today allows us to do that.” Poppe said Tendril Inc.’s Orchestrated Energy, a home automation software program, could enable forward-thinking utilities in the future to work with residential customers on demand response programs that won’t interrupt lifestyles or businesses as much as in the past. The Tendril system can calculate a home’s thermal mass, predict the residents’ behavior and work with connected devices at the home to manage electricity use. Peak load for air conditioning, one of the largest users of power, can be cut by up to 50 percent and overall electricity use by 20 percent. “Tendril believes you can pre-cool the house by using Wi-Fi thermostats and data analytics to reduce residential energy use, where the big numbers are,” Poppe said. “It makes us more bullish on demand response.” Con-
Over the next eight months before it files its IRP, DTE must make several critical choices. Will it increase renewable energy generation above the 25 percent goal it has in its current energy plan? Will it ramp up energy efficiency and demand response strategies as Consumers has? Will it open a second natural gas plant in 2029, as it has suggested in commission filings? DTE now says it will add 1,000 megawatts of renewable, mostly wind, by 2023 and 3,000 more megawatts more by 2040. DTE currently has 1,004 megawatts of renewable power, including 909 MW of wind, 71 MW of solar and 23 MW of landfill gas and biomass. Those numbers are steadily growing. But the majority of DTE’s renewable generation is scheduled to be added after 2030. It could speed up investment, experts say, because prices are at historic lows now and tax credits remain available. “We have a long-term process in mind. The earlier years are clearer. Time will tell exactly how it will happen,” Dimitry said. “We will end coal by 2040 and by 2030, 50 percent will be clean energy, half will be renewables.” DTE considers clean energy to include renewable sources and energy waste reduction and exclude fossil fuel and nuclear, Dimitry said. Experts believe DTE will build the second gas plant if for no other reason than the company has invested heavily in natural gas pipelines running hundreds of miles from Pennsylvania, Ohio, Indiana, Illinois, Michigan and Ontario. If it is built, it most likely will
Mo pla dil
B new will coal Bell D how trici pow clos tive gene whic Th plan Tren twee be r Clai D repl case view Th buil said and “I Dim tech and B plan can gram grid nati and D DTE and In expe leve that show cent sale erat savi “P ditio see we w Dim E
omsible ennewas, 6 batcent purvesteffiergy
re it veral
ergy oal it ill it deumural d in
,000 ind, watts ,004 inf sobioadily
able ded vestre at s re-
s in arer. hapal by l be es.” inergy fuel
the ason avily hunania, and will
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8 be in Monroe County, where the company plans to shutter its massive coalfired plant in 2040. Environmental and renewable energy advocates say it makes most sense economically and for the sake of saving land, air and sea from pollution and people from lung and heart health problems to invest more heavily in such clean energy sources as solar, wind, biomass and hydroelectric power. But DTE isn’t convinced and is expected by energy experts to spend more on natural gas than renewable energy to build out its energy portfolio. Still, according to filings with the MPSC on building its natural gas plant in East China Township in St. Clair County, DTE has advanced various scenarios on what its future fuel mix will be. A recent DTE workshop document with energy stakeholders shows that by 2030 the company could have a fuel generation mix of 25 percent renewable power, 19 percent natural gas, 19 percent nuclear, 30 percent coal and 8 percent an undetermined coal replacement power source. Dimitry told Crain’s DTE only intended the data in the workshop document to be viewed as interim possibilities for discussion. She said plans are bound to change over the next few months.
Monroe, Belle River coal plant replacement dilemma But even by more than doubling renewables by 2030 to 25 percent, DTE will still have to replace 38 percent of its coal-fired power, from the Monroe and Belle River plants. Dimitry said DTE doesn’t yet know how it will replace 30 percent of electricity generation from the Monroe power plant, which is scheduled to close in 2040. DTE also isn’t yet positive how it will replace the 8 percent generated at the Belle River plant, which will close by 2030, she said. The other three active DTE coal plants are in River Rouge, St. Clair and Trenton, which will all be closed between 2020 and 2023. Those plants will be replaced by the new gas plant in St. Clair County. DTE has suggested three options for replacing coal in company documents, case filings to the MPSC and in interviews with Crain’s. The first, most direct possibility is by building the second natural gas plant, said Dimitry. That could cost $1 billion and generate about 900 megawatts. “It’s not an apple-for-apple swap,” Dimitry said. “You have to factor in technologies, energy waste reduction and capacity needs.” But if DTE goes with this second gasplant option, experts believe DTE also can increase its demand response program, ramp up energy efficiencies and grid improvements and use the combination to partially replace the Monroe and Belle River plants. Dimitry said IRP process will help DTE decide how to replace Belle River and possibly Monroe. In company documents, DTE says it expects to go beyond the mandated levels of energy efficiency reductions that will slow demand. Documents show ranges of 1.5 percent to 2.5 percent, up from 1 percent of electricity sales now. DTE’s current plan is to generate 1.5 percent electric efficiency savings through 2019. “Part of the IRP will take a look at additional levels of energy efficiency, to see if makes sense and what scenarios we would need to go up to 2.5 percent,” Dimitry said. Energy experts say DTE could easily
go to 2 percent energy efficiency in the next few years now that Consumers has committed to hitting 2.25 percent. Another option in the future to replace some of the 38 percent coal-fired capacity is through what are known as “peaker” power sources driven by renewable energy coupled with battery and hydroelectric pump storage, Dimitry said. Over the next decade, DTE could increase its hydroelectric pump storage electricity generation as it is a co-owner with Consumers of the Ludington pump storage plant, Dimitry said. Currently, DTE generates about 3 percent of electricity at Ludington, but that amount could be increased to about 6 percent or more, she said. Experts estimate it could go to 10 percent. Traditionally, peaker power plants have been coal, oil or gas-fired turbines that run only when there is high demand for electricity. In the future, peaker power sources will most likely come more economically from renewable energy, including wind and solar, with electricity stored in newly developed, longer-life battery systems, experts said. Another DTE document shows that by 2040 additional electric capacity could come from 30 percent peaker power and hydroelectric pumped storage sources, 25 percent renewable, 20 percent gas and 10 percent nuclear. This scenario leaves 15 percent still undetermined. As a result, several energy sources told Crain’s they believe DTE will ultimately decide to up its renewable portfolio to a minimum of 40 percent, as Consumers already has pledged, and DTE has suggested in documents. But Dimitry said people reviewing DTE documents may have “misinterpreted” the company’s intentions with when it presented 40 percent renewable-energy targets. She acknowledged DTE has suggested going 40 percent renewable early in the IRP process when it filed documents last year to support its St. Clair natural gas plant. “That (40 percent renewable number) was filed in 2017, and a lot of modeling for that was done in 2016,” Dimitry said. “For modeling purposes, you have to make assumptions to replace coal plants” that DTE promised and to achieve 80 percent carbon reduction goals. Dimitry acknowledged that the DTE “didn’t put a lot of focus in the filing (for the St. Clair gas plant). We just wanted approval for the natural gas plant. We were focusing on the 2022 time frame. We had to have a placeholder for the 2030 time frame.” But when all scenarios are combined, energy experts say it is possible by 2040 that DTE could wind up with 40 percent or more renewable energy, 30 percent natural gas with two gas plants, 10 percent nuclear and 10 to 20 percent from pumped storage, demand response and energy efficiency programs. DTE also could purchase 10 percent capacity from the regional electricity market or increase pumped storage and energy waste reducing programs, experts say. The one wild card out of the hands of utility planning and energy generation pricing is the extent to which residential and industrial customers invest in community solar and wind farms. Customers generating their own electricity, selling excess power back to utilities could be substantial in the future, which could threaten the utilities’ business. Jay Greene: (313) 446-0325 Twitter: @jaybgreene
The Stroh Brewery Co. plant along Gratiot Avenue in Detroit.
STROH’S FROM PAGE 3
All three beers are heavy in Detroit marketing nostalgia, making them feel more like a local microbrew than the product of a once-gigantic mass brewer of cheap beer consumed on college campuses. The Perseverance IPA’s lion label is a rendition of Detroit artist Kobie Solomon’s “The Chimera” mural painted on the Russell Industrial Center. Spirit Wit’s label features Joe Louis’ fist. In many ways, the Pabst company is trying to reinvent Stroh’s in the city where its beer and brand was invented. “The idea we have is not just stick to what we’ve done in the past, but to engage the new beer consumer — the kind of things they might be look-
ing for,” Gurjian said. Stroh Brewery Co. got assistance in marketing its Detroit brews from Skidmore Studio, the downtown marketing and deKacha Azéma: sign agency. Get Stroh’s in “Andy and the Detroit story. team approached us and said, ‘Hey, we’re coming back to Detroit. We want to figure out how to get Stroh’s part of the Detroit story in a real authentic way,’ which I think was the meaningful challenge that we all wanted,” said Kacha Azéma, executive creative director for Skidmore Studio. Stroh’s is in Detroit’s DNA, Azéma said, and ‘claiming its place again’
among the city’s iconic food brands such as Faygo pop, Better Made potato chips and Vernors ginger ale (which is canned and bottled in Holland, Mich.). Whether Stroh’s re-establishes permanent roots in Detroit again remains to be seen. But the opportunity is certainly there. In fact, Ford happens to own a train station that could use an anchor tenant on the first-floor concourse. Maybe there’s a marriage of Detroit redemption here? Stroh Brewing Co. is working on more brewed-in-Detroit beers. “That’s the plan,” Gurjian said. Just what kind of new beers? “I can't say,” he replied. Chad Livengood: (313) 446-1654 Twitter: @ChadLivengood
HOW ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRACTICES IMPACT CORPORATE VALUE
FEATURED SPEAKERS INCLUDE:
Jackie VanderBrug Managing Director, Global Portfolio Solutions Bank of America Merrill Lynch
Matt Elliott Michigan Market President and Region Executive Bank of America Merrill Lynch
Mike DiClaudio Principal, Advisory KPMG LLP
Frank Venegas Jr. Chairman and CEO Ideal Group
Other Michigan company executives to be announced soon.
SEPT 6 • WATERVIEW LOFT AT PORT AUTHORITY • DETROIT
REGISTER TODAY: crainsdetroit.com/ESG
SPONSORED BY: General disclaimer for Bank of America Merrill Lynch, visit baml.com/disclaimer. ARP5KLCW
P OW E R E D B Y :
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
BEAUMONT FROM PAGE 3
Tenet Healthcare Corp., a Dallas-based investor-owned hospital chain that owns Detroit Medical Center, paid $244.2 million for alleged fraudulent activities at four Georgia hospitals. Crain’s reported in late February that DMC acknowledged an investigation by the U.S. Attorney’s Office in Detroit over potential improper patient referrals. In 2010, before DMC was sold to for-profit Vanguard Health System, the then-nonprofit hospital agreed to a $30 million settlement with the DOJ over improper financial arrangements with physicians. Beaumont’s internal estimates had ranges much lower. Sources based the higher numbers on a higher number of doctors and allegations contained in the four whistleblower lawsuits and the possibility of triple damages. In a statement, Beaumont said one reason it settled was to avoid the “triple damage multiplier” in which the fine can be tripled when a defendant loses a case at trial. Moreover, calculation of “per claim penalties” also could increase financial damages beyond what was agreed in the settlement. “The exposure (William Beaumont Hospitals) would have faced if it litigated against the government and lost the case would have been far greater than the settlement amount,” Beaumont said.
Physician involvement Since the 23-page settlement agreement was announced Aug. 2 by DOJ and Beaumont, Crain’s has attempted to reach out to the eight referring physicians implicated in the scheme. Like Beaumont, none has acknowledged wrongdoing or responsibility. But at least three of the doctors deny receiving excessive compensation or other benefits from Beaumont. Another doctor issued a statement of surprise over the allegations. The other four doctors haven’t responded or declined comment. While sources tell Crain’s those eight doctors will not be sued by the government for their alleged actions, DOJ officials declined to comment. On the other hand, what makes this case more unusual is that more than 21 physicians affiliated or employed by William Beaumont Hospitals were named in four whistleblower lawsuits as contributing to the pay-for-play scheme to pay doctors for patients. Seventeen of those doctors were not named in the settlement. Of the 21 named in the primary whistleblower case, only four of those current or former Beaumont doctors — cardiologists Robert Safian, Cindy Grines, David Haines and James Goldstein — were listed in the $84.5 million settlement agreement Beaumont signed with the DOJ last week. A fifth doctor, general surgeon Abdelkander Hawasli, M.D, was also named in the settlement and listed in one of the secondary whistleblower lawsuits along with Hawasli & Associates. Hawasli, who did not respond for an interview request, heads up four-physician Eastside Surgical Associates in St. Clair Shores. It is also not clear whether the government might still take action against the 17 or more physician defendants unnamed in the settlement. Many of them are well-known cardiologists and oncologists in metro Detroit. Whatever happens next, Beaumont agreed in the settlement to fully cooperate in possible future investigations.
In a statement, Beaumont said one reason it settled was to avoid the “triple damage multiplier” in which the fine can be tripled when a defendant loses a case at trial.
“(Beaumont) agrees to cooperate fully and truthfully with the U.S. investigation of individual and entities not released in this agreement,” according to the settlement. “Upon reasonable notice (Beaumont) shall encourage, and agrees not to impair, the cooperation of its directors, officers and employees.” As part of the settlement, Beaumont agreed to furnish the DOJ and Michigan attorney general’s office “complete and unredacted copies of all non-privileged documents, reports, memorandums of interviews and records in its possession, customer or control concerning any investigation.” Sources knowledgeable of the Beaumont investigation said it is possible that physicians listed in the whistleblower lawsuits but not named in the settlement could be subject to further investigation. But it is unclear whether the statute of limitations has expired on potential false claims and overbilling that physicians may have made. Two legal experts said there is a six-year statute of limitations on civil false billing. DOJ declined comment on possible future action against the doctors. While the names of the 17 other doctors and former Beaumont executives are publicly available in the four whistleblower lawsuits, Crain’s has decided at this time not to publish their names because the government has not charged them with any wrongdoing.
Three cardiologists deny involvement Three private practice cardiologists named in the settlement — Renato Ramos, Dinesh Shah and Joel Kahn — were not named or mentioned in any of the four whistleblower lawsuits. They deny involvement. Martin Crandall, a health care attorney with Clark Hill PLC in Birmingham, who represents Ramos, Shah and Kahn, said he has spoken with lawyers from the DOJ and Beaumont and is still in the dark why his clients were named. “I wanted to know how they made the determination and why they would include them in the settlement agreement when they were not named in any (whistleblower) complaints,” Crandall said. “These are doctors whose careers are amazing. They are of great stature. It is mind-boggling. I got no answers from the U.S. Attorney’s Office. Beaumont offered me no substance. I am confused by the stonewalling.” In an interview with Crain’s, Kahn vehemently denied receiving excessive compensation when he was medical director of cardiovascular rehabilitation from 2000 to 2011 and active at Beaumont in patient management and supervision of residents and fellows. He said he received about $50,000 annually from Beaumont for his duties, much less than the $700,000 to $800,000 other cardiologists named in the lawsuit received. Kahn said he did not receive free of-
fice space, employees, research funds or other economic benefits from Beaumont for his private practice. He said Shah and Ramos told him they didn’t either. Shah and Ramos declined to talk with Crain’s. “I have never ever been in a meeting, public or private, with any Beaumont administrator offering me inducements of any kind to refer patients or perform procedures that were not indicated,” Kahn said. “My entire career has been dedicated to advancing health in Michigan for the No. 1 killer we face (heart disease) even if it led me to leave lucrative practices and obtain advanced training.” Kahn, a Crain’s Health Care Hero in 2017, said Shah received only $10,000 a year from Beaumont as a medical director. Ramos, who has been a Beaumont doctor for more than 50 years, also received much less than $50,000 a year, Crandall said. Ramos and Shah are private practice doctors, like Kahn, and have been on the Beaumont medical staff for many years. Ramos began as a fellow at Beaumont in 1969. Shah has been in practice 21 years and also is on the medical staff at DMC. “I do not know how the three of us were added. (We are) lower-volume admitters. (There is) less risk naming and upsetting and defaming us than naming a large group swinging big dollars,” Kahn said in an email to Crain’s. “The three of us had small contracts, no office space or employees provided by Beaumont. ... All angry smoke. Three should not be on the list.” Kahn said he was part of an eight-member Michigan Heart Group from 1993 to 2011, when he joined Detroit Medical Center as director of preventive cardiology. “I was not named in the original 2010 (whistleblower) complaint for a reason. I did nothing wrong,” Kahn said. “My name has surfaced for a small administrative role with small compensation relative to so many other cardiologists. ... Others received contracts six to seven times bigger and had other situations.” One source, who asked to remain anonymous, explained to Crain’s one way Kahn, Ramos and Shah could have landed on the DOJ settlement list without being named in any of the four whistleblower complaints as defendants. Once DOJ received the four whistleblower complaints and began investigating, Beaumont was asked to provide documentation of the physician contracts. Using Beaumont contracts and documents, DOJ then evaluated and judged independently whether doctors had received excessive compensation and perks. The sources told Crain’s that DOJ’s analysis was that the eight doctors named in the settlement were among those who had contracts that were in excess of fair market value. However, that doesn’t explain why more than a dozen other Beaumont doctors with
higher employment contracts were not named in the settlement, said another source who is familiar with the investigation. In a statement, Beaumont said the DOJ conducted a “wide-ranging investigation involving physician compensation relationships. At the end of that investigation, the government came to us with allegations about some of those relationships. We settled those allegations. Beaumont did not create the list and cannot change who appears on it.” But Crandall said he believes the way the DOJ concluded the settlement was unfair and inappropriate. “To besmirch the careers of talented and dedicated medical professionals ... is a miscarriage of justice,” he said.
Whistleblower David Felten and the ‘Royal Family’ Of the four whistleblower complaints filed in 2010 and 2011, the first was from David Felten, M.D., a nationally renowned neuroscientist hired in 2005 as vice president for research and medical director of the Research Institute at William Beaumont Hospital. He worked at Beaumont until 2013. Felten’s allegations, some of which were incorporated into the settlement, included paying David Felten: “The Royal FamiFiled first ly,” a nickname for complaint. a group of physicians that some fellow doctors viewed as getting special treatment. Crain’s has learned the Royal Family includes Haines, Safian, Grines, Goldstein, and several other doctors not named in the Beaumont settlement, but named in Felten’s complaint. Crain’s attempted to contact all the doctors named in the settlement. Grines left Beaumont in 2011 for Detroit Medical Center. In 2017, she resigned as vice president of DMC’s Cardiovascular Institute. She is now chief of cardiology with 21-hospital Northwell Health System in New York. She did not respond to requests by Crain’s for comment. Safian, Haines and Goldstein are senior partners in eight-physician Beaumont Academic Heart and Vascular PLLC in Royal Oak. Haines was contacted by Crain’s and said he would issue a statement after it was “vetted,” but he later replied he couldn’t on advice of counsel. In a lengthy statement to Crain’s, Safian, Beaumont’s director of Center for Innovation and Research in Cardiovascular Disease and a practicing cardiologist for 39 years, said he was surprised at Felten’s allegations. He requested the entire statement to Crain’s be used in this story. “I was surprised to see the comments that Dr. Felten made in the press and in his (whistleblower) complaint, which I saw for the first time a few days ago,” Safian said. “I never met him, but I had one phone or email interaction with him at least 10 years ago. I wrote a book chapter on blood flow to the brain, and he kindly provided me with a book he had written, which I enjoyed reading. “I have always abided by a code of ethical, personal and professional conduct that is antithetical to Dr. Felten’s comments. “With regard to Beaumont, I was recruited to Beaumont from Harvard in 1991. I have never practiced in any other Michigan hospitals. My wife and I
raised four children in our community; all were born at Beaumont. “During my career, I’ve had the privilege of working with and becoming personal friends with hundreds of incredible physicians, fellows, residents, nurses and ancillary staff, who work tirelessly every day to support our patients and families. I’ve trained about 400 cardiologists while at Beaumont, including many who currently practice here; all are leaders in our specialty. There is nothing that can be said or written about me or my group that will interfere with the work I do every day to create the very best programs in teaching, education, research and patient care; this is not just my mission, it is the mission of everyone at Beaumont.” Safian declined further comment.
Pawlusiak complaint outlines compensation A second whistleblower lawsuit filed in 2011 by Cathryn Pawlusiak, a former clinical services line manager in cardiology and oncology, said Beaumont offered several top cardiologists with Academic Heart and Vascular additional pay because they were being recruited by Henry Ford Health System and the University of Michigan in 2006. Recruiting superstar physicians is quite common among hospitals. Doctors often play one hospital off another to increase their compensation, clinical practice and research opportunities. “Beaumont was concerned that the referrals and admissions generated for Beaumont by the AHV group would be transferred to a competing facility,” Pawlusiak said in her complaint. “Beaumont wanted to retain the AHV members on staff and ensure de facto exclusivity in terms of admissions; therefore Beaumont actively worked to negotiate new five-year agreements with AHV members.” But Pawlusiak said the cardiologists already were receiving excessive payments. Under the new contracts, the following cardiologists received additional medical directorship fees. J David Haines: $550,000 in 2006 to $734,218 in 2007. J Cindy Grines: $519,549 in 2006 to $704,687 in 2007. J James Goldstein: $500,000 in 2006 to $677,075 in 2007. J Robert Safian: $500,000 in 2006 to $671,304 in 2007. J Simon Dixon: $200,000 in 2006 to $450,000 in 2007. J George Hanzel: $160,000 in 2006 to $430,000 in 2007. Dixon and Hanzel were not named in the Beaumont settlement agreement. Before 2006, the six AHV members received about $2.4 million for the title of part-time medical directors, but in 2007 their pay increased to $3.7 million. Pawlusiak said the doctors also received compensation for other duties on top of their medical directorships. In 2007, hospitals paid physicians to serve as service line medical directors between $50,000 to $200,000, said a survey by the Medical Group Management Association. However, Beaumont paid the AHV members $430,000 to $734,218, Pawlusiak said. Moreover, hospitals’ average total compensation for employed doctors in 2007 ranged between $373,000 and $773,000. This includes medical directorships, plus salaries and clinical service reimbursement, MGMA said. Experts estimated private billings for an average of two days a week of office work for cardiologists could amount to an additional $500,000 annually on top of the Beaumont income.
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
EDDYSTONE FROM PAGE 3
However, the family’s Olympia Development of Michigan says it is still moving forward with the Eddystone redevelopment, announced last year as a 96-unit project that was part of 686 units planned across four historic rehabilitations and two new-builds. The company began cleaning the building a year ago. Olympia said in a statement that it remains “committed to restoring and redeveloping the former Eddystone hotel into new residential housing, 20 percent of which will be designated as affordable units.” “Planning, partnership and financing work continues, as our previously announced developer is no longer participating on the project. Restoration is expected to begin next month, with the installation of new, historically accurate windows.” But Arthur Jemison, Duggan’s chief of services and infrastructure who moved into that job after sever-
al years working on affordable housing, said the city is working with Olympia to compel the company to bring the building up to code, which includes installing the windows. A 2015 agreement with the Downtown Development Authority says the company has one year from the issuance of a temporary or permanent certificate of occupancy for the new arena to redevelop the 13-story Eddystone building that opened in 1924. The temporary certificate was issued Sept. 12, 2017, said John Roach, director of media relations for Duggan. The Eddystone was spared from demolition in a compromise agreement with the city that allowed Olympia to implode the former Hotel Park Avenue nearby in 2015. Legal action is possible to enforce the deadline, Jemison said, but is just one of the options the city has. Detroit-based American Community Developers Inc. was slated to redevelop the Eddystone. In addition, ACD was to build two new residential buildings and redevelop the
Eddystone at 110 Sproat St., the Hotel Fort Wayne at 408 Temple St. and the Alhambra Apartments at 100 Temple St. Now it’s not known what developer or developers are working on the redevelopment of the Hotel Eddystone, the Hotel Fort Wayne and the Alhambra Apartments. Olympia did not respond to follow-up questions. Earlier this year, Olympia revealed that it was no longer planning on constructing the two new buildings for residential units. Instead, it shifted plans to devote those projects for office space. Bagley Development Group LLC, which is led by longtime Detroit developer Emmett Moten Jr., is leading the redevelopment of the United Artists Theatre building at 150 Bagley St. Jemison said progress is being made on that project. “ACD is no longer involved in any projects in the District Detroit,” said Mike Essian, vice president of ACD, said in a statement. “We currently have four other affordable housing developments under construction
in the city and we recently announced our newest mixed-income development in Brush Park with the mayor’s office. We remain committed to developing high-quality housing within the city — both market-rate and affordable.” In addition, Detroit-based Ventra LLC, which had been serving as the multifamily consultant to Olympia on its projects, is no longer working with the company as of earlier this year. George Jackson, the former head of the Detroit Economic Growth Corp. who left that organization to start Ventra, declined comment. Projects like the Wayne State University Mike Ilitch School of Business and the Little Caesars Global Resources Center, both on Woodward Avenue south of the arena, are nearing completion. A Detroit Medical Center sports medicine facility was announced two months ago, to be flanked by the business school and the arena.
REPORTERS Tyler Clifford Breaking news. (313) 446-1612 or email@example.com Annalise Frank Breaking news. (313) 446-0416 or firstname.lastname@example.org Jay Greene, senior reporter Covers health care. (313) 446-0325 or email@example.com Chad Livengood Covers Detroit rising. (313) 446-1654 or firstname.lastname@example.org Kurt Nagl Breaking news. (313) 446-0337 or email@example.com Kirk Pinho Covers real estate. (313) 446-0412 or firstname.lastname@example.org Bill Shea, enterprise editor Covers the business of sports. (313) 446-1626 or email@example.com Dustin Walsh, senior reporter Covers economic issues. (313) 446-6042 or firstname.lastname@example.org Sherri Welch, senior reporter Covers nonprofits and philanthropy. (313) 446-1694 or email@example.com
Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB
TARIFFS FROM PAGE 1
The tariffs are implemented across a broad spectrum of imported products that use aluminum and steel, all covered under specific classifications. Each part has a classification, some broad and others very specific. Companies can appeal to the U.S. Customs and Border Protection to reclassify products, some of which were initially improperly classified, which made little difference before the tariffs. But this process can take months to more than three years, said Paul Vandevert, principal at Dearborn-based law firm Ochim Trade Law PLC and former in-house trade attorney for Ford Motor Co. “In this environment in 2018, looking to reclassify a product, right or wrong, could take years and I imagine will get great scrutiny,” Vandevert said. Alternatively, companies can reclassify products themselves, without permission from customs, and take the high-risk gamble that customs officials will either agree with the reclassification at some later date or not notice it’s been changed at all. “This is an ethical dilemma,” Vandevert said. “If you’re using an incorrect classification to avoid tariffs, it’s a legal violation. But if a company is doing a risk assessment and looking at these tariffs as temporary, and expensive, they could make a case. It takes customs, and all government entities, a while to catch on to the new bad things people are doing. I would never recommend this because it’s illegal, but if you’re asking whether companies are doing this: Yes. Yes, they are.” The move to improperly classify imported products can result in steep civil penalties and even criminal liability in some cases, according to U.S. Customs rules. Ford and other automotive companies have been investigated in the past for improper classification, which often times can be caused by a clerical error. “I can’t tell you I’ve never seen a company (knowingly violate classification rules), but the penalties are very stiff,” said Mark Aiello, partner at Foley & Lardner LLP in Detroit. “No one has come to me to ask if they should do this, as I’d actively recommend they do not do it, but I guess if
www.crainsdetroit.com Editor-in-Chief Keith E. Crain President KC Crain Group Publisher Mary Kramer, (313) 446-0399 or firstname.lastname@example.org Managing Editor Michael Lee, (313) 446-1630 or email@example.com Product Director Kim Waatti, (313) 446-6764 or firstname.lastname@example.org Digital Product Manager Carlos Portocarrero, (313) 446-6056 or email@example.com Creative Director David Kordalski, (216) 771-5169 or firstname.lastname@example.org Assistant Managing Editor Dawn Riffenburg, (313) 446-5400 or email@example.com News Editor Beth Reeber Valone, (313) 446-5875 or firstname.lastname@example.org Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or email@example.com Design and Copy Editor Beth Jachman, (313) 446-0356 or firstname.lastname@example.org Research and Data Editor Sonya Hill, (313) 446-0402 or email@example.com Newsroom (313) 446-0329, FAX (313) 446-1687, TIP LINE (313) 446-6766
MEMBERSHIPS CLASSIC $169/yr. (Can/Mex: $210, International: $340), ENHANCED $399/yr. (Can/Mex: $499, International: $799), PREMIER $1,299/yr. (Can/Mex/International: $1,299). To become a member visit www.crainsdetroit.com/ membership or call (877) 824-9374
Steel is among the products facing tariffs from the Trump administration.
someone was going to take this route they wouldn’t go ask their lawyers.” Nonetheless, suppliers are all combing over their product classifications to determine whether they are coded accurately in the event they could be changed to avoid tariffs, Aiello said. “There are a lot of questions coming in (to the firm) about classifications,” he said. “It’s part of a multifaceted strategy to really determine their exposure to these tariffs and future tariffs.” Last month, Livonia-based AlphaUSA told Crain’s the vast majority of its products, mostly high-volume, low-margin steel fasteners, are unprofitable due to the tariffs. The supplier is currently planning how to address the issue with its customers. Auburn Hills automotive hinge manufacturer Lucerne International launched a media blitz, publishing op-eds in several publications including Crain’s Detroit Business, before testifying in front of members from the U.S. Trade Representative’s office in Washington, D.C., in May. The company ultimately was successful in getting its product classification removed from the tariff list. Ultimately, everyone impacted by
the tariffs is looking at the various legal avenues to find relief from tariff-related price increases. That includes several legal options that probably won’t work, such as force majeure clauses, Aiello said. Force majeure is a legal clause excusing a supplier of its obligation to deliver parts upon the occurrence of an “act of god,” or an event beyond the party’s control. Suppliers are traditionally charged hundreds of thousands of dollars for every minute an automaker plant is shut down due to lack of parts supply. A force majeure can prevent them from that contractual penalty. Some recent high-profile force majeure cases include the 2016 earthquake in Japan that stifled Toyota production and the 2012 explosion at the Evonik Industries plant in Germany that decimated the supply of PA-12 — a resin used to make fuel tanks, brake components and seat fabrics — and caused supply slowdowns at several metro Detroit auto suppliers. Force majeure, however, will be a tough legal battle to mount, Sharkey and Aiello agree. “It’s a very limited option because it all comes down to the contract; not every force majeure clause is the
same,” Aiello said. “Most clauses arguably would not commit relief in the event of increased tariffs.” Sharkey, in a presentation to the Original Equipment Suppliers Association in July, noted that the courts have historically taken a very narrow definition of force majeure and it’s unlikely to change now. The reality is most companies are assessing whether they can resource materials or move production to avoid tariffs, Aiello said. Mexico is on the list of most suppliers, as it could source metal from anywhere and ship to more countries as Mexico has nearly twice as many countries covered in free trade agreements than the U.S. The tariff issue holds the power to move production, but also to sow discontent between suppliers seeking relief and automakers seeking maximum profits. But so far, it’s remained mostly in good faith, Aiello said. “Everyone wants to be ahead of the curve and, honestly, this is just another issue companies are facing,” Aiello said. “At this point, the issue hasn’t become confrontational as it’s still in the planning stages, but it could.” Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh
ADVERTISING Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Director of Sales Lisa Rudy Director, Crain Custom Content Kristin Bull, (313) 446-1608 or firstname.lastname@example.org Senior Account Manager/Political Specialist Maria Marcantonio Advertising Sales Lindsey Apoctol, Heidi Martin, Sharon Mulroy, Diane Owen, Kate Rozek Classified Sales Kate Rozek, (313) 446-6086 Events Director Kacey Anderson Director of Marketing Christina Fabugais-Dimovska Senior Art Director Sylvia Kolaski Director of Media Services Joseph Tanooki (Sam), (313) 446-0400 or email@example.com Integrated Marketing Specialist Keenan Covington Sales Support Suzanne Janik CUSTOMER SERVICE Single copy purchases, publication information, or membership inquiries: Call (877) 824-9374 or firstname.lastname@example.org Reprints: Laura Picariello (732) 723-0569 or email@example.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 1st issue in January and 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 2018 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.
C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 1 3 , 2 0 1 8
THE WEEK ON THE WEB
Henry Ford Health signs direct contract with GM
Thanedar doubles DeVos in cost per vote
AUGUST 3-9 | For more, visit crainsdetroit.com
enry Ford Health System in Detroit has signed a direct contract to provide a wide range of health care services for up to 24,000 salaried General Motors employees and their dependents in Southeast Michigan. The direct contract with GM is the first of its kind in Michigan. Only about 3 percent of self-insured companies nationally have some form of direct contracts with providers, said the National Business Group on Health. But a growing number of large self-insured employers — Boeing, Walmart, Lowe’s, Whole Foods, Disney and Intel — have found that one sure way to reduce employee health care costs and improve service is to cut out middle-men health insurers and develop integrated health care delivery systems that share cost savings and pay based on value. Under the five-year contract for GM ConnectedCare, Henry Ford must hit an annual financial budget and will be held accountable for hitting key quality, cost and utilization of services metrics on a wide range of services, said Bruce Muma, M.D., chief medical officer and interim president and CEO of Henry Ford Physician Network. Metrics include targets for customer service, preventive care, such chronic conditions as heart disease and diabetes and ER visits, Muma said. Though Henry Ford Health was established in 1915 by Henry Ford, founder of Ford Motor Co., the health system has no current connection with the rival automaker. ConnectedCare with Henry Ford is available for GM salaried employees during open enrollment starting in October with coverage to begin Jan. 1. Eligible employees and dependents will be covered in Wayne, Macomb, Oakland, Washtenaw, Livingston, Lapeer and St. Clair counties. The plan is not being offered to union employees. Blue Cross Blue Shield of Michigan will be the contract’s third-party administrator, processing and paying for claims and services and auditing data for reconciliation of shared savings at the end of each year under the PPO contract, Henry Ford and GM said. A key difference is that GM and Henry Ford will use pricing they have agreed on, rather than Blue Cross network pricing. If Henry Ford stays under total annual cost terms and hits 19 agreed-upon metrics, the six-hospital system will split the savings with GM. If those targets are not reached under the riskbased contract, Henry Ford could lose money.
BUSINESS NEWS J Women’s fashion retailer Madewell is coming to a central block of Woodward Avenue in downtown Detroit, but it’s unclear exactly where or when. An employee at the retailer’s Troy Somerset Collection location described the store as “next to the Shinola Hotel.” J A new $510 million dairy processing complex that would be the largest in the state, sprawled across 146 acres, is being planned in mid-Michigan and would create 300 jobs. The two-
HENRY FORD HEALTH SYSTEM
Henry Ford Health System’s direct contract with General Motors is the first of its kind in Michigan.
Detroit digits A numbers-focused look at last week’s headlines:
The amount Macomb Community College accrued in its largest-ever fundraising campaign, beating its $10 million goal for the five-year endeavor.
The amount in cash grants Motor City Match awarded last week to 14 businesses, including a cable television music video channel and multisports complex.
The number of votes by which SMART transit millage renewal passed in Macomb County during last Tuesday's primary election.
part development will be in St. Johns, about 25 miles north of Lansing. Spartan Michigan LLC aims to develop a $425 million dairy processing facility that is expected to create 259 jobs. Proliant Dairy Ingredients is building an adjoining $85 million whey powder manufacturing plant that will be staffed with an expected 30-38 workers. J The student-led Zell Lurie Founders Fund at the University of Michigan has made a seed investment of $100,000 in Chicago-based Mindwell Snacks LLC, which makes and markets jerky made from plants. Mindwell was founded by two entrepreneurs with master’s degrees from UM: Allyson Stewart, who got hers in business administration, and Bridget Henley, who got hers in public health. J Fast-growing automotive lender Credit Acceptance Corp. purchased the two-building Raleigh Officentre at Telegraph and 10 Mile roads in Southfield to consolidate its office footprint and expand its payroll in the next several years. It expects to spend $35 million to $40 million investment and build-out, with the large property slated to house about 800 people at first and grow to 2,000 in the next five years. J The minds behind Detroit Shipping Co. are planning a $2.4 million mixeduse development in Midtown. The team would convert a 13,000-squarefoot vacant building at 3700 Third St. into 10 single-unit apartments on the second floor and 6,500 square feet of
restaurant and retail space on the lower level. The first confirmed tenant is fast-casual slider eatery Slyde Detroit. J AfroTech, an annual minority technology conference in San Francisco, is branching out for the first time to shine its light on Detroit’s tech community. The forum hosted by Los Angeles media company Blavity Inc. will hold its first regional tech conference Aug.18 at Cobo Center. It will gather about 400 founders, techies and employees of fast-growing startups and highlight Detroit’s African-American entrepreneurs in the industry.
OTHER NEWS J Attorney General Bill Schuette and former state Sen. Gretchen Whitmer emerged winners in Michigan’s gubernatorial primaries last Tuesday, catapulting the career politicians toward what is expected to be a costly and bruising general election showdown. The election day last week saw more than 2 million cast their ballots — a 40-year record for gubernatorial primaries. Former Michigan state Rep. Rashida Tlaib won the Democratic nomination to run unopposed in November for the seat vacated by former U.S. Rep. John Conyers. Tlaib is set to become the first Muslim woman elected to Congress, as no Republicans or third-party candidates ran against her in the primary. J Also last Tuesday, the SMART bus millage renewal passed by a razor-thin 23-vote margin in Macomb County, while easily passing in Oakland and Wayne counties, according to unofficial results. The tax is by communities that have opted into the bus system in Wayne and Oakland counties, but it is a countywide ballot measure in Macomb. Failure would have ended SMART bus and other transit services in Macomb by the end of the year. J The city of Ferndale expects to break ground in around six months on its first mixed-use parking garage after around two years of planning and public input, as it aims to increase density in the downtown core. Including a residential structure planned adjacent to the parking deck, Ferndale has 1,000 residential units under construction or in the works. J Badly needed construction on Mound Road in Macomb County is on track to begin in 20 months now that a $97.8 million U.S. Department of Transportation Infrastructure for Rebuilding America grant has been approved. The Innovate Mound project will tackle a critical nine-mile, eight-lane connection between I-696 and M-59, costing $184.6 million.
usinessmen Shri Thanedar, Sandy Pensler and Jim Hines collectively burned through at least $18 million of their personal fortunes financing campaigns for public office that went down in flames in last Tuesday’s primaries. Thanedar and Hines’ last-place finishes in the Democratic and Republican gubernatorial primaries and Pensler’s loss in the GOP U.S. Senate primary make them among the latest Michigan millionaires who have bet big and lost campaigns for public office. That political graveyard includes the $3.35 million former Secretary of State Terri Lynn Land spent from her family’s real estate fortune on a failed U.S. Senate campaign in 2014 and the $1 million Grand Rapids investment adviser Brian Ellis spent that year trying to unseat U.S. Rep. Justin Amash in a GOP primary. Grand Rapids billionaire Dick DeVos remains the all-time highest spender among self-financing candidates, having poured $35 million into his failed campaign for governor in 2006. But Thanedar more than doubled DeVos in the cost per vote earned. Thanedar, a chemist and entrepreneur from Ann Arbor, spent at least $53.58 per vote as he finished a distant third place behind Abdul El-
Sayed and Democratic gubernatorial nominee Gretchen Whitmer. DeVos, a Republican mega donor, spent $21.97 per vote in a losing battle to unseat incumbent Democratic Gov. Jennifer Granholm. Hines, a wealthy Saginaw obstetrician, topped DeVos in the cost-pervote category, spending $2.47 million or $22.85 per vote. Pensler, owner of Korex Cos., a contract manufacturer for cleaning detergents, spent $5 million or $11.68 per vote as he lost the Senate primary against John E. James, CEO of Renaissance Global Logistics in Detroit. Through July 22, Thanedar had spent at least $10.69 million, though public records show he contributed as much as $12.9 million for his campaign in the days leading up to the primary. If Thanedar, founder of the Ann Arbor chemical testing company Avomeen Analytical Services LLC, spent it all — his barrage of television, radio, digital, mail and billboard advertising suggests he probably did — his cost per vote would have been nearly $65. Saying he has “zero regrets,” Thanedar said he’s not sure what he’ll do next after spending a third of his self-reported personal wealth on the campaign. “I did not have a Plan B,” he said.
The 5,000-square-foot restaurant and small-batch brewery planned by Motor City Brewing Works on Livernois Avenue in Detroit is projected to be open by spring 2019.
Motor City Brewing Works teams with Angelina bistro M
otor City Brewing Works is partnering with the owner of shuttered Angelina Italian Bistro for the brewery’s second location planned along the Livernois Avenue of Fashion in Detroit. Brewery co-owner John Linardos said he has worked out a deal for Tom Agosta to handle food at the new location. Agosta’s Italian restaurant left its longtime spot in the Madison Building in downtown Detroit in October because of rising rent. The new MCBW location at the former Hunter’s Supper Club building at 19350 Livernois Ave., which owners originally planned to open last summer, will depart from the beer-centric, cut-up design of the 470 W. Canfield St. location. There will be
plenty of beer. But, while much of the original location — the second-oldest microbrewery in Michigan — is dedicated to brewing operations, only 10 percent of the new space will serve to produce brews, and they will all be small-batch. The 5,000-square-foot location on Livernois will be much more open than the Canfield spot, and design will be driven by the natural uniqueness of the building, Linardos said. A courtyard and beer garden will add to the charm. Harkening back to Motor City Brewing Works’ beginning, Linardos plans to resurrect the Ghettoblaster recording sessions and bring in local artists and musicians to the Livernois location.
INVEST IN THEIR TALENT.
WHY LEADERSHIP ACADEMY? We surveyed graduates from the past three cohorts of the Academy. Here’s what they had to say: 100% agree or strongly agree that the Academy provided skills and tools that will help them grow as a leader 100% agree or strongly agree that the Leadership Academy helped them think differently about leadership 100% are satisfied or extremely satisfied with their Leadership Academy experience
INVEST in your company’s talent and future.
Nominate a blossoming leader at crainsdetroit.com/leadershipacademy HOSTED BY
Contact Keenan Covington at firstname.lastname@example.org or (313)446-0417 for more information.
HAP doesn’t treat small businesses any differently. No matter how many employees you have, HAP lets you offer multiple plan options — to make everyone happy. Featuring options with: • Local provider networks – some of the lowest rates in the area • Statewide provider network – top doctors and hospitals across Michigan • National provider network – see doctors across the USA And all of our plans come with a commitment to personal customer service, including your HAP dedicated account representative — someone you can call directly to help you manage your plan.
Learn how HAP can build a better choice for you! Call your agent or (888) 995-8890 Or visit hap.org/4all
HAP gives your employees a choice! # of Employees
# of HAP Plans You Can Offer
10 or less
Crain's Detroit Business is the premier business publication for Southeast Michigan. This is the issue published Aug. 13, 2018. You can find...
Published on Aug 12, 2018
Crain's Detroit Business is the premier business publication for Southeast Michigan. This is the issue published Aug. 13, 2018. You can find...