Crain's Grand Rapids Business, June 12, 2023

Re ned plans raise cost of pediatric center

Amphitheater developer to seek new incentives

Transformational Brown eld Program is used sparingly in state

BY KATE CARLSON

A 12,000-capacity riverfront amphitheater is the latest Grand Rapids project where developers plan to apply for rarely used “transformational” brown eld tax incentives.

Grand Action 2.0 — a group of executives who have played a role in developing some of the city’s largest projects in recent years — is the lead developer and fundraiser for the proposed amphitheater.

Grand Action 2.0 o cials told Crain’s Grand Rapids Business

that they plan to seek transformational brown eld incentives as state lawmakers advance a bill to expand the tool for contaminated or blighted properties.

Just three projects in Michigan over the past six years have been approved for the Transformational Brown eld Program, which allows developers to keep a portion of post-construction income taxes generated by their projects.

A bill in Lansing would dou-

ble the annual cap on available post-construction income tax captures, from $40 million to $80 million, and also allow developers to keep portions of future sales and use taxes after projects are completed.

Lawmakers also recently amended Senate Bill 289, which passed the state Senate with bipartisan support last month and is now under consideration in the House, to set aside portions of available funding for municipalities outside the city of Detroit, Crain’s Detroit Business reported.

By Mark Sanchez

e need to recruit mental health care providers amid an acute sta ng shortage, the addition of more outpatient capabilities, and in ation’s e ects on construction materials combined to drive up the price for a new pediatric center at Pine Rest Christian Mental Health Services.

e project that Pine Rest wants to develop in partnership with Corewell Health’s Helen

DeVos Children’s Hospital originally carried a $62 million estimated cost. e cost estimate has since grown to $86 million, an increase that includes about $6.2 million to recruit mental health professionals to Grand Rapids that are in short supply nationally.

“ ere’s plenty of beds, there’s not plenty of sta , and that’s been the primary problem,” Pine Rest Vice President and Chief Operating O cer Bob Nykamp said. “We’re partnering to try to bring in a whole bunch of new experts from outside of the state of Michigan into the state of Michigan in this project, so there’s a lot more dollars allocated to workforce development

Lakeshore Advantage plans new $15.3M

Downtown Holland facility also would house a startup incubator

By Kayleigh Van Wyk

Lakeshore Advantage Corp., the economic development organization serving Ottawa and Allegan counties, has unveiled plans for a $15.3 million development in downtown Holland that would house a business incubator as well as the organization’s new headquarters.

e “Next Center,” planned at 65 E. Seventh St., will serve as a hub for innovation and business growth by providing resources to help grow startups.

“What this means for Lakeshore

Advantage is that we will now be able to co-locate with the startup ecosystem,” said Beth Blanton, vice president of engagement at Lakeshore Advantage.

Lakeshore Advantage announced the center late last

A view of the 12,000-capacity amphitheater from the Grand River, looking east. From this view, the amphitheater stage faces north toward the downtown skyline. | PROGRESSIVE AE INC. AND ROSSETTI INC.

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Partners begin work on crisis center

Facility will provide 24-hour access to behavioral health treatment

By Mark Sanchez

Network180 and Trinity Health Grand Rapids have started work on a new center where people in a mental health crisis can access immediate treatment.

The partners target the $22 million Behavioral Health Crisis Center to open in early 2024 at Trinity Health Grand Rapids’ hospital campus, providing new 24hour access to mental health care.

The center results from a pub-

lic-private collaboration that included health care, law enforcement, education and Kent County to improve access to mental health care locally.

“The result of their work is the creation of a ‘no wrong door’ system of crisis care for all of Kent County’s adults, regardless of income, insurance type or ZIP code,” said Bill Ward, executive director of Network180, Kent County’s community mental health authority. “When open, the Behavioral Health Crisis Cen-

ter will be available 24/7. A person experiencing a crisis will be assessed in a safe environment and connected to the right level of care.”

Officials from Trinity Health, Network180 and others involved in the project held a “wall-breaking” ceremony May 22 to mark the start of the renovation of space at the hospital to house the Behavioral Health Crisis Center.

A stabilization unit that will

Soaring labor costs push fruit growers to the brink

BY ABBY POIRIER

By Kate Carlson

Once a regular ingredient in the mixed-use development formula, office space is now rarely included in new projects as developers respond to market conditions caused by the pandemic and hybrid work environments.

Brokers say West Michigan’s rising office vacancy rates coming out of the pandemic have resulted in virtually no new office construction. Corewell Health’s new Center for Transformation and Innovation office campus is one exception, though the health system will be vacating more than a dozen leased office spaces in Grand Rapids when it consolidates at the location, adding a “significant amount of new vacancy to the market later this year,” according to commercial real estate firm JLL.

Kevin O’Reilly, director of multifamily investment for NAI Wisinski of West Michigan, said mixed-use project developers more broadly are no longer focused on attracting office tenants.

While many farmers today are turning to automation to meet their production needs and save on labor costs, Crossroads Blueberry Farm LLC likes to ensure a large percentage of its crop is picked by hand.

The reason: Blueberries picked the traditional way by farm worker hand labor stay in better shape on market shelves, said Luke DeHaan, who manages the third-generation, West Ol-

ive-based farm that sells blueberries at its farm stand and via wholesale.

“Quality standards have increased in stores substantially in the last three years,” he said.

“They expect great quality, and we feel that hand labor is the best way to do that.”

In Michigan, blueberry season runs from July to September, which is when operations get busy at Crossroads. To keep up

with the harvesting schedule, DeHaan hires foreign agricultural workers on temporary H-2A visas to get the job done.

The laborers work from around the 10th of July, or “whenever the berries are ready,” to roughly mid-September, DeHaan said. This year, Crossroads will employ 450 temporary agricultural workers to get its fruit harvested and ready for consumption.

For farms like Crossroads, how-

ever, that labor will come with a hefty price increase this year. For 2023, the hourly cost of H-2A labor rose 12.8 percent in Michigan, bringing the hourly wage from $15.37 to $17.34.

While the Department of Homeland Security issues the visas, the labor cost for H-2A workers is determined by the U.S. Department of Labor’s adverse

This is evident in three of the largest mixed-use projects proposed in Grand Rapids right now: The 526-unit project on the former Display Pack Inc. site in the Creston neighborhood; the 438-unit project planned at the former Sligh Furniture Co. factory; and the 467-unit Factory Yards project.

“We tried very hard to turn the Display Pack building into an office building for years and had to shift with the market,” said Don

Renderings show the new $22 million Behavioral Health Crisis Center, a partnership between Network180 and Trinity Health Grand Rapids. | NETWORK180

Most are responding to market by dropping separate workspaces from new projects

Zoning change would permit taller buildings

Amendment applies to properties surrounding the city center

By Kate Carlson

Developers would be able to build 20-story buildings on the periphery of downtown Grand Rapids under a zoning ordinance amendment the city planning commission passed unanimously at its first reading.

The zoning amendment would allow additional building height by right in several zoning districts around the core of downtown Grand Rapids and eliminate the city’s height bonus tool except for properties located in the Grand River Overlay district. Building heights are not capped within the core of downtown.

The zoning amendment would apply to property surrounding the city center that stretches roughly from Seward Avenue on the west, Lafayette Avenue on the east, Wealthy Street to the south and along the Grand River north of downtown.

The height of buildings allowed by right in one of the city’s Downtown Height Overlay Districts (DH2a) would increase from 10 to 20 stories under the zoning amendment. The height allowed by right would increase from seven to 10 stories in the city’s second, transitional Downtown Overlay District (DH2b), and from four to five stories in the Transitional City Center Zone District.

When an ordinance allows a use “by right,” that particular part of a site plan does not need to go through the planning commission’s public approval process and can be considered administratively by city staff. Under the city’s current height bonus tool, developers are able to “earn” the right to build past the 10-story

building maximum in the larger Downtown Height Overlay District (DH2a) up to 16 stories if they incorporate mixed-income housing, green elements and public art into their site plan.

wasn’t being used, so we’re just saying let’s allow people to build up to 20 stories by right. Let’s make it easier to build, and if we want things like public art, then we need to find other ways to be able to do that.”

community to amend their height ordinance, Turkelson said.

dent Jay Johnson declined to comment on the request to amend the zoning height ordinance prior to the May 25 planning commission meeting.

“Sometimes we just can’t do everything in the timeframe that we all want it to be done, so I look at this as our partners, our development community, saying we’ll help you get this done,” Turkelson said. “Obviously, there is a benefit to them. They have projects that would succeed from this, but that’s sort of secondary in my mind because as a staff, we’re looking for what’s in the best interest of the city. So while it may have a benefit for one or two particular developers, it will have impacts to the entire downtown development area.”

Housing remains one of the “key drivers” for amending the city’s height ordinance, according to Turkelson, who noted most of her conversations about projects that would be allowed under the amendment have focused on housing. Others have talked about mixed-use projects potentially integrating hotels and housing, she said.

“Mixed-income housing wasn’t making a lot of financial sense (for developers) because of the market,” said Grand Rapids Planning Director Kristin Turkelson. “It

The Grand Rapids Planning Department and Downtown Grand Rapids Inc. (DGRI) staff have been discussing the need to amend the city’s height incentive structure over the past few years to better align with the city’s goals and as market conditions and rising construction costs favor more density in developments, Turkelson said. City staff have not had the bandwidth to address height restrictions around downtown but welcomed a partnership with the development

Chicago-based CIG Management LLC hired Progressive AE to craft a zoning ordinance amendment for the planning commission, which unanimously approved the first reading of the amendment at its May 25 meeting.

CIG Management LLC purchased River Flats at 820 Monroe for $22.6 million at the end of 2022. As well, the company acquired Bradford Station, a mixeduse, carbon-neutral apartment development in 2022 for $4.65 million. The company also owns Gallery Apartments at 10 Commerce Ave. SW above the former Urban Institute for Contemporary Arts, located along Fulton Street west of Division Avenue in downtown Grand Rapids.

CIG Management LLC Presi-

“We want to be an area where we’re attractive for future development,” Turkelson said. “We know that from an economic investment perspective, it makes sense to build in areas downtown where there is already suitable infrastructure available to support it. This would allow us to provide population density that is really necessary to have these vibrant business districts that we all want.”

The height bonus tool proposed in the zoning ordinance amendment for properties along the river changes the amenities developers would have to provide to earn more height for projects. Currently, the height bonus tool focuses on providing mixed-income and affordable housing, but the proposed change lets developers go higher by giving more public and trail access.

Lounge-style art gallery eyes former ELK Brewing

bring.”

The gallery plans to offer alcohol, light food and space for visitors to relax and enjoy the art on display.

the Wealthy Street neighborhood, where “people bring their whole selves,” according to a statement.

By Abby Poirier

New owners plan to breathe life into the vacant ELK Brewing location on the bustling Wealthy Street corridor in Grand Rapids.

The concept for 700 Wealthy St. SE calls for converting the 1,600-square-foot space into The Grey Rabbit, which is billed as a lounge-style art gallery. Partners aim to open the new concept in September 2023.

A spokesperson for LIV Collective, which purchased the building for $715,000 in April, said the new gallery will feature the work of local, national and internation-

al artists in a “relaxed and peaceful setting” that “builds on the thriving pulse of Wealthy Street in GR.”

“We feel strongly that art presented the right way allows for so much that is positive and interpretive in people and our culture, and we are excited to add our take to those in GR’s community that already do this so well,” a spokes-

person for LIV Collective said in an emailed statement to Crain’s Grand Rapids Business.

The company also wants to work with and involve the surrounding community in its plans, according to a statement, which described the partners behind the concept as “local folks looking to build on the positive energy Wealthy Street and Grand Rapids

Previously, the building at 700 Wealthy St. had been home to ELK Brewing since its inception in 2014. Owner Jeff DeLongchamp announced the brewery’s closure in August 2022, citing “these unprecedented times.” The company also closed its production brewery and taproom space in Comstock Park in May 2022.

LIV Collective has started cleanup on the space, where the team hopes to get renovations at the building underway in the next several weeks.

The Grey Rabbit name stems from the importance of understanding of gray areas in perspective and art, according to a statement. The backers say they hope the gallery adds to the “magic” of

The plans for Grey Rabbit are taking shape in what’s been an active part of the Wealthy Street corridor. Across the street at 701 Wealthy St. SE, Good Truckin’ Diner plans to open in the former Royals location and offer all-day breakfast, as well as gluten-free and vegan options, as Crain’s Grand Rapids Business previously reported.

Nearby, Central Lake-based Mammoth Distilling LLC is opening a tasting room at 710 Wealthy St. SE, its sixth location across the state. As well, developer Terra Firma Properties LLC detailed plans in January to build a new two-story mixed-use project at 680 Wealthy St. at the intersection with Henry Avenue.

Terra Firma also owns the property at 701 and 710 Wealthy.

Grand Rapids officials are considering zoning changes that would permit additional building height by right in several zoning districts around downtown. | EXPERIENCE GRAND RAPIDS

Venture is the latest to announce plans for Wealthy Streets corridor

The Grey Rabbit will take over space formerly occupied by ELK Brewing at 700 Wealthy St. SE in Grand Rapids. | GOOGLE STREET VIEW

“Mixed-income housing wasn’t making a lot of financial sense (for developers) because of the market.”

Kristin Turkelson, Grand Rapids Planning Director

MI angel investors expect a rebound after 29% drop in ’22

IT, life sciences are most popular investment categories

By

Mark Sanchez

Angel investing in Michigan followed a national trend in 2022 with sharp declines in both the number of deals and the amount of capital invested.

Active angel investors across the state put $46.3 million into 79 Michigan-based startup companies last year, a 29 percent decline from the statewide deal flow in 2021 and a 33 percent decrease in the amount invested, according to an annual report from Ann Arbor-based Michigan Angel Community.

The decline in angel investment activity in 2022 was “likely the result of inflation and broader market uncertainty last year” that affected investors and led to the lowest deal flow and amount invested in five years, according to data in the annual report.

“It’s not much of a surprise when you look at the macro environment,” said Mike Flanagan, managing member for Michigan Angel Community and primary author of the annual report. “The public markets were fluctuating and down, and then with interest rates and inflation, all that had an impact on investors.”

Across several counties in the southwestern Lower Peninsula that include Grand Rapids and Kalamazoo, angel investing held up comparatively well to other regions on the state. Angel investors put $18.2 million into 16 deals involving technology startup companies based in the region, which compares to 17 deals in 2021 for

experienced increased deal flow since the first quarter, “and I would imagine other angel groups are having similar experiences,” he said.

“What we’re finding is there’s a good number of angels investing, and I think as the macro environment improves, we’ll see improvement and angel investing bouncing back,” Flanagan said. “We had some macro headwinds last year and it seems like some of that is starting to taper and not be as pronounced as we were wor-

ried about maybe a couple of months ago.”

Some of the deal flow could come from startups closing capital rounds that began in 2022 and had to extend into 2023, Flanagan said.

Information technology companies accounted for the largest number of investments across Michigan in 2022 with 31 deals, followed by life sciences at 24 deals.

In terms of dollars invested, life sciences drew the most angel money at $22.5 million. The IT

sector was next at $16.6 million.

Last year, Michigan had 16 angel groups — including five affiliated with Grand Rapids-based Michigan Capital Network — that combined had 686 active angel investors.

Including individual investors who are not affiliated with an investment group, there were 933 angels who invested in deals in Michigan last year.

One positive note in Michigan Angel Community’s annual report was a significant increase in the diversity of investments over the last five years. Women-owned

businesses accounted for 35 angel investment deals in Michigan in 2022, which compares to 20 in 2021 and 14 in 2017.

Minority-owned business accounted for 33 deals last year, down slightly from 37 in 2021, but well above six deals five years earlier, according to the annual report.

“At the end of the day, investors are just wanting to invest in the best companies that are there and so it seems the cream rising to the top happen to be women- and minority-owned businesses over the last few years,” Flanagan said.

$16.4 million.

The statewide angel activity for 2022 follows an up year in 2021, when deals increased 10 percent and angel dollars invested grew 40 percent from 2020, which was beset with the economic effects of the pandemic.

After the statewide declines last year, Flanagan expects 2023 investment activity to rebound and grow again as inflation shows signs of easing, rising interest rates seem to have peaked, and uncertainty wanes from the March failure of Silicon Valley Bank, a provider of debt financing for angel and venture capital deals.

Michigan Angel Community remains “optimistic” about angel investing in 2023, Flanagan wrote in the annual report. He’s said he’s also been hearing from angel groups around the state that they are now seeing increased deal flow after a slow start to 2023 in the first quarter.

The Ann Arbor-based Michigan Angel Fund, where Flanagan serves as a managing director, has

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“It’s not much of a surprise when you look at the macro environment.”

Mike Flanagan, managing member for Michigan Angel Community

CRAIN’S LIST TOP AREA LAW FIRMS

Ranked by number of West Michigan lawyers

Warner Norcross + Judd LLP 150 Ottawa Ave. NW, Suite 1500 Grand Rapids 49503 p (616) 752-2000 f 752-2500 wnj.com

Varnum LLP 333 Bridge St. NW Grand Rapids 49504 p (616) 336-6000 f 336-7000 varnumlaw.com

Miller Johnson 45 Ottawa Ave. SW, Suite 1100 Grand Rapids 49503 p (616) 831-1700 f 831-1701 millerjohnson.com

Smith Haughey Rice & Roegge

100 Monroe Center NW Grand Rapids 49503 p (616) 774-8000 f 774-2461 shrr.com

Rhoades McKee PC 55 Campau Ave. NW, Suite 300 Grand Rapids 49503 p (616) 235-3500 f 459-5102 rhoadesmckee.com

Mika Meyers PLC

900 Monroe Ave. NW Grand Rapids 49503 p (616) 632-8000 f 632-8002 mikameyers.com

Barnes & Thornburg LLP

171 Monroe Ave. NW, Suite 1000 Grand Rapids 49503-2694 p (616) 742-3930 f 742-3999 btlaw.com

Foster Swift Collins & Smith PC 1700 East Beltline Ave. NE, Suite 200 Grand Rapids 49525 p (616) 726-2200 f 726-2299 fosterswift.com

Dickinson Wright PLLC

200 Ottawa Ave. NW, Suite 1000 Grand Rapids 49503 p (616) 458-1300 f 670-6009 dickinsonwright.com

Honigman LLP

300 Ottawa Ave. NW, Suite 400 Grand Rapids 49503 p (616) 649-1900 honigman.com

Price Heneveld LLP

695 Kenmoor Ave. SE Grand Rapids 49546

p (616) 949-9610 f 957-8196 priceheneveld.com

Clark Hill PLC

200 Ottawa Ave. NW, Suite 500 Grand Rapids 49503 p (616) 608-1100 f 608-1199 clarkhill.com

Bodman PLC

99 Monroe Ave. NW, Suite 300 Grand Rapids 49503 p (616) 205-4330

bodmanlaw.com

Scholten Fant

100 N. Third St., P.O. Box 454 Grand Haven 49417

p (616) 842-3030 f 846-6621

scholtenfant.com

Wheeler Upham PC

250 Monroe Ave. NW, Suite 100 Grand Rapids 49503

p (616) 459-7100 f 459-6366 wuattorneys.com

Mark Wassink1931

Ronald DeWaard Scott Hill

David Buday1959

Matthew Wikander1941 536220

19Business and corporate, litigation and trial, labor and employment, intellectual property, trusts and estates, real estate, family law

11Corporate/M&A, commercial litigation, labor and employment, estate planning and private clients, real estate and regulatory

12Business/corporate, including M&A, real estate, tax, cybersecurity; employee benefits and executive compensation; employment and labor; litigation, including medical recovery insurance reimbursement; private client including estate planning and family law

9Litigation and trial services, medical malpractice defense, health law, professional liability defense and business law

Anthony Pearson1960 525236

1951

Scott Dwyer

Mark Nettleton

Daniel Broxup

Robert Stead2003

2974618

6Business and commercial litigation, insurance defense, estate planning and probate, real estate and construction, family law

2Business, municipal, litigation, labor and employment, real estate, energy, environmental, family law, trusts and estates

2Corporate (including finance, M&A and intellectual property), labor and employment, real estate, environmental, litigation, construction, Native American law, aviation, estate planning, municipal law, conservatorships

Anne Seurynck2005

282825

4Business, litigation, municipal law, health care, employment

2748516

Leslee Lewis1989

Tracy Larsen2016

223508

1Banking and finance, corporate law, commercial litigation, municipal law and public finance, health care, real estate

3Mergers and acquisitions, corporate/ securities, intellectual property, litigation, real estate

Brian Cheslek1952 191922

0Intellectual property

James Stadler2006

167089

1Banking and finance, education, labor and employment, litigation, tax and estate planning

Floyd Gates Jr.2017

141666

0Banking, tax, business litigation, labor and employment, intellectual property/patent

Robert Sullivan1957

141415

2Family law, business law, estate planning and elder law, real estate, municipal

Glenn Smith Michael TerBeek

8

1Commercial litigation, business law, insurance defense, estate planning, employment law

CRAIN’S LIST TOP AREA LAW FIRMS

Ranked

by number of West Michigan lawyers

Bloom Sluggett PC

161 Ottawa Ave. NW, Suite 400 Grand Rapids 49503

p (616) 965-9340 f 965-9350 bloomsluggett.com

Parmenter Law

601 Terrace St. Muskegon 49440

Gruel Mills Nims & Pylman PLLC 99 Monroe Ave. NW, Suite 800 Grand Rapids 49503

p (616) 235-5500 f 235-5550 gmnp.com

Miller, Canfield, Paddock & Stone PLC 99 Monroe Ave. NW Grand Rapids 49503

3996

p

45

Christopher

Anna Duggins

Behm1985 101010

3Auto accidents, motor vehicle accidents, construction accidents, sexual abuse, medical malpractice

Andrew Blum1983 102056 0Business

and

Mark Hofstee1977 8 8 9 3Family law, probate and estate planning, personal injury, business law, collections

G. Williams2001 8 8DND DNDPatents, trademarks, copyrights, litigation

40

Pearl St. NW, Suite 1020 Grand Rapids 49503

p

80

Ottawa Ave. NW, Suite 200

Grand

(616) 454-8300 f 226-4071 dca-lawyers.com

333

Grand

(616) 254-8400

Kuiper Kraemer PC

Rapids 49503

(616) 454-3700 f 454-0441

2851

Terence Linn Karl Ondersma Matthew Kendall Catherine Collins 2011 7 7 2 4Intellectual property; patents, trademarks, copyrights and related litigation

employment/

2011 3 3 1

LIST STORE: Download this list now at crainsgrandrapids.com in Excel or PDF format. | The Book of Lists and other lists are also available.

real estate and

preservation, corporate,

planning

general civil litigation, alternative dispute

defense, municipal law, labor and employment law, elder law and estate planning, community association and real estate law

0Commercial litigation, corporate law/financial services/real estate, family law/trusts and estates, construction law, environmental, labor and employment

CRAIN’S LIST TOP INTELLECTUAL PROPERTY LAW FIRMS

Ranked by number of intellectual property lawyers in West Michigan

Warner Norcross + Judd LLP

150 Ottawa Ave. NW, Suite 1500 Grand Rapids 49503

p (616) 752-2000 f 752-2500 wnj.com

Price Heneveld LLP

695 Kenmoor Ave. SE Grand Rapids 49546

p (616) 949-9610 f 957-8196 priceheneveld.com

Gardner, Linn, Burkhart & Ondersma LLP

2900 Charlevoix Drive SE, Suite 300 Grand Rapids 49546 p (616) 975-5500 f 975-5505 gardner-linn.com

McGarry Bair

45 Ottawa Ave. SW, Suite 700 Grand Rapids 49503 p (616) 742-3500 f 742-1010 mcgarrybair.com

Mika Meyers PLC

900 Monroe Ave. NW Grand Rapids 49503 p (616) 632-8000 f 632-8002 mikameyers.com

Honigman LLP

300 Ottawa Ave. NW, Suite 400 Grand Rapids 49503 p (616) 649-1900 f honigman.com

Practice group leader

Vito Ciaravino

No. of W. Mich.

intellectual property attorneys Major intellectual property clients Areas of expertise

20Alticor, ARaymond, Bissell Inc., Cascade Engineering, Denso International America Inc., Dow, Gentex Corp., Haworth Inc., Ranir LLC, Spectrum Health, Stryker Corp., UTBattelle, UV Partners Inc., Van Andel Institute, Warrior Sports, Wolverine Worldwide

Patents, trademarks, copyrights, technology and IP licensing; internet, social media, privacy and information security; rights of publicity; joint development and nondisclosure agreements; IP due diligence; IP litigation and enforcement

Brian Cheslek

19Ford Global Technologies LLC, Whirlpool Corporation, Gentex Corporation, Steelcase Inc., Corning Incorporated, NIBCO Inc.

Patent and trademark prosecution and litigation, trade dress, trade secrets and unfair competition

Terence Linn

Karl Ondersma

Matthew Kendall

Catherine Collins

8Burke Porter Group, Dematic Corp., Byrne Electrical Specialists Inc., Magna Electronics, Sun Bum LLC

Patents, trademarks, litigation, copyright and related issues

Patents, trademarks, copyrights, litigation

Jonathan O'Brien

6Beaumont Health, Google LLC, Herman Miller Inc., Magna Electronics Inc., Magna Mirrors of America Inc., Neogen, Shape Corp., Perrigo Company and Kellogg’s

Trademark and copyright protection, registration, licensing and enforcement; counseling regarding trade secrets, data privacy, data protection and security; technology development, procurement, transfer and licensing; negotiation, drafting and enforcement of related contracts, policies, terms and conditions and other documents; commercial and intellectual property litigation and proceedings in front of the Trademark Trial and Appeals Board

Patent, trademark, copyright, trade secrets, IP litigation

p (616) 552-6400 f 469-1553 kotzsangster.com

Crain's Grand Rapids Business list of top area intellectual property law firms, ranked by number of intellectual property lawyers in West Michigan, is the most comprehensive available. Crain's Grand Rapids Business defines "West Michigan" as Allegan, Kent, Ottawa and Muskegon counties. Crain's Grand Rapids Business surveyed 159 law firms; 12 responded and 12 are listed. To be considered for future lists, email danielle.nelson@crain.com DND = Did not disclose

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CRAIN’S LIST TOP IT SERVICES AND NETWORKING FIRMS

Ranked by 2022 West Michigan revenue

Rehmann Technology Solutions

3145 Prairie St. SW, Suite 101 Grandville 49418

p (616) 222-9200

rehmann.com/services/technologysolutions

Applied Innovation

5555 Glenwood Hills Pkwy. SE Grand Rapids 49512

p (616) 554-5200

appliedinnovation.com

Hungerford Technologies

2910 Lucerne Drive SE Grand Rapids 49546 p (616) 949-4020 f 949-3016

hungerford.tech

SJA Solutions

550 3 Mile Road

Grand Rapids 49544 p (616) 451-2045 f 451-2848 sja-solutions.com

BizStream

11480 53rd Ave., Suite A

Allendale 49401 p (720) 412-3223 bizstream.com

West Michigan Technology and Design Solutions

8232 Morning Dew Court Byron Center 49315 p (616) 485-7600 wmtds.com

Arbor Solutions Inc.

1345 Monroe Ave. NW

Grand Rapids 49505

p (616) 451-2500 f 451-2571 arbsol.com

Envizion IT

59 W Washington Ave., Suite A

Zeeland 49464

p (616) 741-1144 envizionit.com

CMIT Solutions

1971 E. Beltline NE, Suite 106 #212 Grand Rapids 49525

p (616) 419-8838 cmitsolutions.com/grandrapids

expertIT Inc.

1676 Viewpond Drive SE, Suite 7B Grand Rapids 49508 p (616) 485-1300 f 259-9146 expertIT.us.com

Konica Minolta Business Solutions

201 Front Ave. SW, Suite 102 Grand Rapids 49504 p (616) 608-1506 kmbs.konicaminolta.us

Real IT Solutions Inc.

866 3 Mile Road NW Grand Rapids 49544 p (616) 209-8900 realitsolutions.com

Jim Bruxvoort Julianna Keeven

45Managed security, managed IT, managed cloud, IT and cybersecurity assessments/audits/consulting, professional services/project management, hardware and software solutions, telecommunication services, etc.

SOC 2 Type 2, HIPAA Seal of Compliance (Compliancy Group), Barracuda Premier, Cisco Premier, Dell EMC Gold, HP Synergy/HPE T2 Solution Provider, Microsoft Gold, Veeam Gold, VMware Advanced, WatchGuard Platinum

John Lowery2014$7.99M

$11.55M

Matt Clarin1999$5.67M

$6.51M

59Help desk, infrastructure management: business continuity, data security services, professional services, virtual CIO, public and private cloud; infrastructure, end user hardware, data center, networking, backup and disaster recovery

30IT advisory and support services, Cisco Webex, web development, VoIP phone systems, web development, cloud backup and recovery, cloudbased productivity suites, encrypted email, cyber security assessments, wireless network deployment, infrastructure services, managed IT services, spam and virus filtering, phishing testing and training

Microsoft Gold Partner - Cloud Productivity and Small and Midmarket Cloud Solutions, Microsoft Silver PartnerMidmarket Solution Provider and Silver Data center, Datto Blue Partner

Microsoft MSCE, Cisco CCNA

Sean Agerson2005$5.5M

$4.74M

42Managed services, professional services (project management and implementation services), security services

VMware Partner, Lenovo Partner, HP Partner, Microsoft Partner, Veeam Partner, Dell Partner, SentinelOne Partner, Google Partner, 3CX Partner, Cisco Partner

Mark Schmidt Brian McKeiver

2001$4.64M

$3.52M

J.R. Muller1983$4.5M

$3.5M

36BizStream is a full-service digital agency focused on brands, websites and products. We specialize in strategy, custom design and complex implementations. We have extensive experience with a wide range of online tools and technologies.

4 Kentico Xperience Sites of the Year awards, 14 Kentico Xperience Sites of the Month awards, West Michigan and National Best and Brightest Companies to Work For

1IT support, website design and hosting, consultingDND

Michael Miller1991$3M DND

Mark Veldhoff Bill Johnson

Jeremy Squires Michael Mandeville

2019$1.74M $1.38M

Larry Deniston2013$890,000

$735,000

John Yenchar2005$170,000

$167,000

Greg Duggins1997DND DND

17Software Engineering services, IBM power servers and SANs, IBM hardware/software products, Fortinet and networking products, network engineering, business intelligence services

12IT Services, networking, microsoft suite, cloud services, security

5Managed cybersecurity services, 24x7 IT help desk, managed IT services, backup disaster recovery services, business continuity

4IT strategy and support services, managed and hybrid IT, private cloud, consulting, project management, network design, implementation, security and management, wired and wireless networking, phone and printing services

17Managed IT, cloud, professional, specialty and security services. Service desk, mobile device management, IT lifecycle and deployment practice, end user security training, compliance services, vulnerability and pen testing

IBM Power Systems & Storage, Fortinet, VMware, VEEAM, Cybernetics VTL,

Cisco Partner, Microsoft Silver Partner

CCFE, CCFS

Microsoft MCSE, Cisco CCNA

Matt Kahle Adam Peterson

1996DND DND

22RealCare managed service, managed backup and disaster recovery, VOIP, managed IT security, consulting and projects

1,100 nationwide engineers, Cisco Premier Partner, Dell Premier Partner, VP Ware professional certifications, Datto and Fortinet Premier Partners, MCSC engineering certifications MCSE A++, Senior Microsoft Windows Engineers, Apple Expertise via Mac Professionals which we own.

A+, Network+, Security+, Linux, Novell, Microsoft, PMP, CMMC.

Crain's Grand Rapids Business list of top area IT services and networking companies, ranked by 2022 West Michigan revenue, is the most comprehensive available. The list is based on responses to Crain's Grand Rapids Business surveys. Crain's Grand Rapids Business defines "West Michigan" as Allegan, Kent, Ottawa and Muskegon counties. Crain's Grand Rapids Business surveyed 49 companies; 12 returned surveys and 12 are listed. To be considered for future lists, email danielle.nelson@crain.com. DND = did not disclose

Named Best Bank by Newsweek

Federal pilot aims to streamline patent process

Program targets inventors in historically underserved geographic and economic areas

By Danielle Nelson

A new United States Patent and Trademark Office pilot program aims to make the patent process faster and more accessible for first-time applicants.

The USPTO launched the FirstTime Filer Expedited Examination pilot program earlier this year to help make an otherwise cumbersome process more accessible. By improving accessibility, the program also aims to help inventors in “historically underserved geographic and economic areas,” according to a USPTO filing in the Federal Register.

The program started accepting applications in early March. As of May 30, nine patent applications had been granted under the pilot program, according to the USPTO.

The pilot program expedites the patent process by awarding special status to certain applications, which speeds up an examiner review process that can otherwise take upwards of 18 months to two years.

Filers must meet three requirements to qualify for the expedited pilot program:

w Inventors or joint inventors can’t be named on any other nonprovisional application.

w Applicants must qualify for micro-entity status and fall under a certain gross income.

w Applicants must be “reasonably trained” on the basics of the USPTO’s patent application process.

Brett Krueger, co-leader of the patent practice group at Honigman LLP in Grand Rapids, said seeking a patent is a “long process” that “generally takes a couple of years.”

“It can be an expensive process if the application goes through several rounds of (USPTO) actions or even rounds of examinations with the examiner. The examiner can finally reject something and then you can request continued examination, opening another round of examination,” Krueger

said. “That can go on for a number of rounds until you can reach issuance.”

The USPTO’s initial response, known as the first Office action, is typically either a rejection or an allowance of a patent application. Krueger said patent applications are often rejected the first time.

“The examiner wants to put a stake in the ground to try to force you to differentiate your invention from what has been done before,” he said. “The examiner will cite references, printed publications, indicating what the reference discloses, and then indicating that your invention is either anticipated by or in obvious view of this reference. You then have to explain why it’s not or amend your claims to distinguish over those references.”

Once an inventor is awarded a place in the expedited program based on the USPTO’s initial response, the application follows the traditional patent process.

Attorneys with Boston, Mass.based Hamilton, Brook, Smith & Reynolds P.C. wrote in March that the expedited review and response from an examiner is meant to “allow inventors and small businesses to make key business decisions at an earlier stage.”

The pilot program stems from a 2018 USPTO survey of granted U.S. patents that showed the underrepresentation of women and minorities among inventors.

“In view of the survey’s findings, the Council for Inclusive Innovation helped the USPTO develop a national strategy for increasing the involvement of women and minorities as inventors, entrepreneurs and innovation leaders,” Hamilton, Brook, Smith & Reynolds attorneys wrote. “However, the first-time filer pilot program is open to any qualifying inventor.”

Applications under the expedited pilot program will be open until March 11, 2024, or until 1,000 applicants are accepted into the program, whichever comes first, according to the USPTO.

The USPTO launched the First-Time Filer Expedited Examination pilot program earlier this year to help make an otherwise cumbersome process more accessible. GETTY IMAGES

Heritage Hill’s ‘Lamos House’ gets total renovation

president of Old Kent Bank.

Mary Grey-Lughod has left her mark — quite literally — on an 1890 home in Grand Rapids that needed some tough love when she bought it six months ago.

Grey-Lughod is a designer with Grand Rapids-based Blackbird Homes LLC, a small home renovation company she co-founded in 2016 with her husband, Jawad Abu-Lughod, as a post-retirement project following her 21-year career as a doctor.

She’s a native of Grand Rapids’ West Side who moved back to the city 30 years ago after decades spent traveling the world. Returning to her roots, she rekindled her love of local history and architecture.

In her remodeling work, she specializes in turning old homes into eclectic, modern masterpieces while preserving as many period-specific features as possible.

She and her husband have renovated 15 or 16 historic homes over the past seven years.

The latest addition to their collection is the Lamos House, at 241 Madison Ave. SE in Grand Rapids’ Heritage Hill historic district.

They bought the 4,487-squarefoot, three-story home for $325,000 last November and, after extensive renovations, are now selling it for $774,900.

“I always buy old homes that have a lot of character,” GreyLughod said. “I feel like I’ve got to get ‘the feeling’ — the feeling of the house and what it has. There’s an emotional connection to the homes, and I don’t know if I’m going to get that until I walk into the house.”

She got it with 241 Madison, spending six months absorbing its intricacies and bringing it back up to prime condition.

As with many of the homes Grey-Lughod flips, she’s left her signature blackbird calling card at 241 Madison. In this case, it came in the form of bird wallpaper in the dining room and three birdshaped coat hooks in the back mudroom.

According to the Heritage Hill Association’s property database, 241 Madison was built by Horace A. Lamos, a restaurateur at the Union Depot.

The database states that between 1918 and 1952, it was the home of Eugene Congers, a former

Congers moved to Grand Rapids in 1884, began his career as a bookkeeper at the former Grand Rapids Telegram, then took control of the Telegram with a partner and operated it until 1888, when it merged with the Grand Rapids Herald, the predecessor of the Grand Rapids Press.

In 1901, Congers was named a director of the People’s Savings Bank, which then merged with Old National Bank in 1924 to become Old Kent Bank. Fifth Third Bank acquired Old Kent in 2000.

Many Heritage Hill homes incorporate multiple architectural styles, and 241 Madison is no different. It features Classical Revival influences with a pillared and pilastered porch and a curved Regency-style roofline on a front dormer.

Grey-Lughod’s favorite features of the home are the switchback central staircase with the curved bay window at the middle landing, the half-cylindrical window/wall in the foyer, the open floor plan that needed no reconfiguring, and the many windows on every exterior wall.

“There’s so much light; it’s really airy,” she said. “You don’t feel cramped and … I didn’t take down any walls because so many times, in the Heritage Hill houses, there’s these tiny rooms bumping into each other, and this one just really has a gorgeous flow.”

In addition to seeking out that

worth of plaster and whatnot just from the demo that we had to do to fix the basic stuff like the electric, plumbing and HVAC,” she said. “That was really the bulk of the work.”

All the ceilings had to be converted from plaster to drywall, not just because of the wiring and ductwork upgrades, but because some of them were cracked, peeling or even caving in when they bought the house.

Other than those changes, Grey-Lughod said she tried to keep the home as traditional as possible while adding her own touches.

choices.

In the vestibule, there’s a candelabra light; in the foyer, there’s a fixture that looks like a collection of cells. A series of pendant lights are sprinkled throughout the rest of the home in varying shapes and sizes — spheres, stars, polygons and crystal chandeliers.

There’s even a lantern-style pendant fixture on the porch that is dropped low enough to be visible from the foyer.

pending on the buyer’s preference.

In the basement, while not technically finished because the ceiling and ductwork are still open, they repainted it a vibrant green to show off the black-and-white checkered tile flooring.

“I love it all. My husband really almost wanted to move there,” Grey-Lughod said.

Buyer interest so far

elusive “feeling,” Grey-Lughod also tends to buy homes that are extremely run-down.

“I like to buy houses that need a lot of help but that you can see the potential of,” she said. “You also have to look at the business side of it, like, is it going to be a return on your investment?”

The house at 241 Madison needed to be stripped of all the knoband-tube wiring and to have updated HVAC and plumbing installed.

The crews only knocked down one wall in the house — removing a butler’s pantry attached to the kitchen to transform the room from 10 feet wide to 15 feet wide.

But the amount of plaster they hauled out felt over the top, GreyLughod said.

“We had I think five dumpsters

With every home she buys, Grey-Lughod kicks off the interior design by choosing the lighting first.

“I find the light, and then the whole house sort of revolves around that,” she said.

For this project, the focal point of the home is the stairway. When she did her first walkthrough, the leaded glass bay window at the top of the middle landing was blocked by ancient lace curtains that, when she pulled them down, disintegrated in her hands.

After the curtains were out of the way, the stairway was transformed with sunlight, and she knew whatever light fixture she found had to be installed over the landing to give it extra grandeur.

She found a four-armed chandelier-style light encased in a 36inch globe, and that became the piece around which she anchored the rest of her lighting and design

Grey-Lughod was delighted when there were rooms that needed very little work. She did nothing to the dining room except to paint it and replace the wallpaper. It came with “gorgeous built-ins and lovely leaded-glass windows in the front,” which she kept intact.

She chose gray marbled stone for the kitchen surfaces and painted the cabinets a light blue-green. Her builders helped her salvage some oak cabinets from the butler’s pantry, which they cut to fit the kitchen dimensions and reinstalled as a built-in pantry.

The existing bathrooms were in pretty bad shape, so they mostly had to be redone, with only a small portion of the checkered tile being salvageable in one of them and some of the powder room under the stairs left as-is. They also converted one of the bathrooms upstairs into a full bath.

Formerly, the house had five bedrooms, but they converted the fifth into a laundry room. At the same time, they refinished the attic as a flex room with a connected walk-in closet that could serve as either a bedroom or an office, de-

Tanya Craig, a broker with the Katie K. team at Keller Williams GR East, is the listing agent for the home, which has been on the market since May 14.

She suspects the home will sell quickly compared to similar homes.

“I would say there’s been a fair (number) of showings for the price point,” she said, noting it’s set at $173 per square foot. “We had (it) open during the Heritage Hill Home Tour, and probably had 50-some people come through there and had really great feedback.”

Craig has worked with GreyLughod on many real estate deals, and she said she greatly admires the Blackbird Homes approach to design.

“She always puts a little spin, whether it’s done with tile, or this time with wallpaper or other little things. She does have a little signature style of (putting) something ‘blackbird’ in the house,” Craig said.

“She puts a lot of heart and soul into it.”

The so-called Lamos House at 241 Madison Ave. SE in Grand Rapids’ Heritage Hill neighborhood is for sale for $774,900. | KATIE K TEAM, KELLER WILLIAMS GR EAST

Designer was able to keep some of the special touches

By Rachel Watson

“I always buy old homes that have a lot of character.”

—Mary Grey-Lughod, Blackbird Homes LLC

Denver outdoor sports retailer plans Grand Rapids store

Owner is relocating to West Michigan, too

By Abby Poirier

Feral owner and founder Jimmy Funkhouser is relocating from Denver, Colo. to the Grand Rapids area this year to open the outdoor sports gear and apparel retailer’s third location.

The company is targeting a late 2023 opening for Feral at 1031 Wealthy St. SE in what’s become a bustling retail corridor in the city over the last few years.

Feral’s proposed Grand Rapids location will place the retailer beside coffee shop Scorpion Hearts Club and across from software company Atomic Object. The space formerly housed Wealthy Street Legal, a dba of the Law Firm of Wayne F. Crowe Jr. PLLC.

An entity tied to Funkhouser purchased the building from the law firm on May 15 for $380,000, according to city property records.

Funkhouser founded Feral Mountain Co. in 2016 with the dream of “creating adventure.” The retailer since then has grown to include two Colorado locations, one in Denver and one in the suburb of Idaho Springs, where it offers a range of new and used gear at accessible price points, in addition to rentals, gear repair and cleaning.

Expansion plans for the busi-

ness have Funkhouser planning to leave his Denver home base to establish the company’s first Midwest store in Grand Rapids.

“It’s a little odd, I guess, to see a small business expanding across the country like that,” Funkhouser said. “We were really looking for a market that has good outdoor recreational access. When you think about the Midwest, Michigan rises to the top as far as great access to the outdoors and unique recreational opportunities. Michigan made a lot of sense to us.”

Funkhouser also has personal ties to the region, having been born in Michigan and raised in neighboring Indiana.

“For me, it’s kind of a homecoming,” he said, adding that he and his partner, Rachel, are looking forward to settling closer to family in the Midwest.

While expanding a small, independently owned business across several states is a major undertaking, Funkhouser has prior experience operating national retail stores, having spent eight years in varying regional managerial positions for Toys R Us.

In 2016, he left his corporate career and used $90,000 in savings to launch Feral in a storefront in a renovated home.

Funkhouser hopes the 1,600-square-foot Wealthy Street location will revisit the charm of his first location in Denver.

“The space is actually very similar to our original shop,” he said. “When we opened in Denver, we opened in a small bungalow that had been converted into a commercial space. We eventually moved into a larger building four years later, but I have mixed feelings, missing the fun energy of being in a smaller building. This space is (a) beautiful opportunity for us to recapture some of the magic of what it was like to really grow a community with our first shop.”

Funkhouser said he’s excited to join the Wealthy Street corridor, adding that he hopes to find a home in the East Grand Rapids area and feels “just as excited” to move personally as he is to have found a space for Feral.

“When we went to Grand Rapids, we knew immediately that we wanted to be on Wealthy Street because it’s exactly what we’re used to,” he said. “We love the neighborhood. We love the local vibe.”

In its first quarter 2023 retail market report, commercial brokerage firm Colliers also highlighted the vibrancy of the Wealthy Street corridor.

“Over the course of the last sev-

A NEW CENTURY OF SERVICE AND IMPACT

eral years, Grand Rapids has seen the East Hills district grow exponentially with an emphasis on local businesses,” the report stated. While Feral doesn’t plan any structural changes to the building, Funkhouser said he anticipates updating the interior and exterior with some paint and new awnings to give it a fresh start as a retail space. He’s especially excited about the building’s backyard, which offers space for Feral’s roster of small business events, film showings

and community gatherings.

“We had (a backyard) at our original shop and I’ve missed that so much,” he said.

Funkhouser has not set an opening date for the Wealthy Street location, but is aiming for late fall this year or early spring 2024.

“I feel very fortunate that I have a company that I feel like can provide a great service to the local community here, and something that I would be proud to continue locally once we make that move,” he said.

Grand Rapids Community Foundation connects people and their passions with resources to meet our region’s toughest challenges. To connect with us, visit GRFoundation.org.

To overcome racial, social and economic inequities, we must respond with intention and care. Our partners inspire, motivate and guide our work.

Denver-based Feral sells a range of new and used gear, in addition to offering rentals, gear repair and cleaning. FERAL

Grand Rapids directs $5M in ARPA funding to new housing

w Genesis Non-Profit Housing Corp.: $1.2 million for the 55-unit Leonard Apartments project.

By Rachel Watson

The Grand Rapids City Commission voted to allocate nearly $5 million in federal American Rescue Plan Act funding toward eight affordable housing proposals.

The commission approved the allocations recommended by the Affordable Housing Fund Board totaling $4,965,081 for eight of the 35 applicants that submitted requests for funding, following a request for proposals issued in February.

Deputy City Manager Kate Berens said at a May 23 Committee of the Whole meeting that the funding is split into two service awards and six awards for capital construction projects.

“We would be working with each of those organizations to enter into a funding agreement … (and) we’ll start that process very quickly and hope to get the dollars out the door as fast as we can,” Berens said.

The city’s Affordable Housing Fund Board earlier this year re-

ceived 35 funding requests totaling more than $32 million for creating potentially 910 new affordable housing units.

Of those, the city allocated funding to the following:

w Amplify GR: $540,000 for phase two of the Boston Square Together project, which will add 57 housing units.

w Commonwealth Development

w LINC UP Nonprofit Housing Corp.: $394,418 to develop and rehab 20 units in the Avenue II Apartments project.

w New Development Corp.: $240,000 to develop or rehab two housing units.

w 61st District Court: $220,663 for the Eviction Diversion Initiative.

w AYA Youth Collective: $270,000 for the expansion of its Supportive Housing for Youth program.

The city commission created the Affordable Housing Fund under a September 2021 policy with funding from several sources. The Grand Rapids Community Foundation serves as the fund’s fiduciary.

affordability levels below 80% AMI.

The board that oversees the fund was established in July 2022 and includes 11 members with backgrounds in housing development, finance, lived experience and service providers.

The board was set up to oversee the use of up to $5 million for affordable housing out of the city’s $92 million in ARPA relief funds.

said last month that the city staff, commission and the board felt they should prioritize applicants that were shovel-ready.

“The way that the city commission really intended this fund was to kind of be the last dollar to get these things going,” he said.

Corp. of America: $1.5 million to convert Lexington School into 39 apartment units.

w Dwelling Place of Grand Rapids: $600,000 to develop 42 homes as part of the 2080 Union project.

The policy stipulates several objectives for using the fund, including expanding affordable rental housing units for residents earning at or below 80% of area median income (AMI) and creating homeownership opportunities for people earning at or below 100% AMI, with a preference for

In February 2023, the Affordable Housing Fund Board issued a request for proposals to allocate the $5 million in ARPA dollars, specifying that it could go toward rehabilitating existing housing, developing new units and providing housing-related services.

Jim Talen, chairperson of the Affordable Housing Fund Board,

Meanwhile, the city’s fiscal year 2024 budget that was adopted last month includes another $1.5 million in ARPA funding for affordable housing. The city and the Affordable Housing Fund Board have not yet determined the process for allocating the next round of ARPA funding, Talen said.

Options include choosing projects from the previous pool of applicants or restarting by issuing another RFP, since additional projects have entered the pipeline since February.

First Merchants bankers are 100% interested in your success.

More than 200 residential units will be affected across the eight proposals

Dwelling Place’s 2080 Union housing project, which calls for 42 homes, will receive $600,000 in federal ARPA funding. | DESTIGTER ARCHITECTURE LLC

“The way that the city commission really intended this fund was to kind of be the last dollar to get these things going.”

Jim Talen, chairperson

of the Affordable Housing Fund Board

Gentex suffers ransomware attack

Manufacturers are becoming popular targets for cybercriminals

By Kayleigh Van Wyk

In confirming that it suffered a cyberattack, Zeeland-based Gentex Corp. joins the growing ranks of manufacturers nationwide and locally to have experienced a data breach.

The Tier-1 automotive supplier of automatic-dimming rearview mirrors and electronics for the automotive, aerospace and fire protection industries confirmed to Crain’s Grand Rapids Business that it had suffered a ransomware attack.

“Gentex is aware of the data breach that occurred several months ago, and we have communicated to all affected parties. It’s important to note that the breach has not had an impact on our operations,” the company said in an emailed statement that did not address other questions about the incident.

Newton, Mass.-based TechTarget Inc., a business-to-business provider of content serving technology buyers, first reported on the data breach last month after being contacted by ransomware group Dunghill.

According to TechTarget, a Dunghill operator reached out with a link to what the group claims is 5 terabytes of sensitive corporate data from Gentex, including client documents and personal employee information.

The report indicated Dunghill posted the stolen information on the dark web as well as shared the data with unspecified foreign and domestic manufacturers after Gentex “refused to cooperate.”

Threats against companies in the manufacturing industry have become more prevalent and more costly as of late. According to an annual report from IBM, the cost of a data breach for the industrial sector — which includes chemical, engineering and manufacturing companies — increased 5.4 percent on a yearover-year basis to $4.47 million in 2022.

While the health care industry experienced the highest annual costs from data breaches in the two most recent years according to the IBM report, other experts

say the manufacturing industry is growing increasingly vulnerable.

An executive from the Forbes Technology Council recently highlighted manufacturing among five targeted industries aside from health care. Because manufacturing companies have started to rely more heavily on technology and digital systems in recent years, they have opened new avenues for cybercriminals.

“In addition to data theft for ransom, (cybercriminals) target the manufacturing industry since it allows for large-scale disruptions and geopolitical repercussions,” Abdul Subhani, president and CEO of IT consulting company Centex Technologies, wrote for Forbes. “Even though the manufacturing industry is not publicly facing and may not be as easily accessible as other industries, it still has a risk of being targeted due to its high disruption factor.”

Indeed, in its most recent 10-K annual filing, Gentex (Nasdaq: GNTX) specifically identified cybersecurity and threats to IT infrastructure as key risk factors. The company disclosed that it maintains “an extensive network” of measures to help address any threats, including technical security controls, policy enforcement mechanisms, monitoring systems and management oversight. However, Gentex recognized that despite the implementation of security measures, its IT systems, “like all IT systems,” are vulnerable to damages from cyberattacks, computer viruses or similar disruptions.

“To the extent that any disruptions or security breach results in a loss or damage to our data, or an inappropriate disclosure of confidential or customer information, it could cause significant damage to our reputation, affect our relationships with our customers, lead to claims against the company and ultimately harm our business, reputation, financial condition, and/or results of operations,” the company said in the filing with federal securities regulators.

In late 2020, Grand Rapids-based office furniture giant Steelcase Inc. reported a ransomware attack in a filing with the U.S. Securities and Exchange Commission. The company followed up with an additional filing indicating it had shut down global operations for two weeks because of the incident.

Gentex Corp. headquarters in Zeeland. | GOOGLE STREET VIEW

Northern Michigan housing shortage at ‘crisis point’

Businesses having tough time securing spots for seasonal workers

By Rachel Watson

Hospitality and service workers power Northern Michigan’s vacation destinations. But as affordable housing grows increasingly scarce, leaders across the region are searching for solutions.

For years, employers Up North have provided housing for their workers, especially those in temporary agricultural and tourism jobs. Examples are the Grand Hotel, Mission Point Resort and Chippewa Hotel on Mackinac Island, all of which are expanding their housing. Short’s Brewing Co. in Bellaire last year bought the 26-room Bellaire Inn and converted it to transitional housing for workers. Glen Arbor-based Cherry Republic offers temporary housing for seasonal employees, mostly in Maple City on the Leelanau Peninsula. Others, such as tribal entities, are building or adding to employee housing.

But as tourism counties see yearround population growth due to remote work opportunities and other societal shifts, it’s getting more difficult for builders to meet the growing housing demand across the spectrum. Contributing factors include COVID-19 pandemic-driven supply chain woes, skyrocketing materials costs, infla-

tion and higher interest rates.

“I was just talking to a building contractor … and he said, ‘There’s no such thing as affordable housing right now,’” Dave Lorenz, vice president of Travel Michigan within the Michigan Economic Development Corp., said recently.

“We’re looking at all these issues that are crashing down at once. I’m just hoping that we can get to that sweet spot where inflation comes down.”

Justin Winslow is president and CEO of the Michigan Restaurant & Lodging Association, which has about 500 member companies Up North. He said the first step to addressing the issue is admitting there’s a problem.

“You will not have to work hard to find a story from any business out there who has hired someone and then they rescinded the offer because that person couldn’t find housing in a close enough locale to make that work,” Winslow said.

“(The shortage) is on a trajectory to reach a crisis point in the not-toodistant future, and I think it’s at a point where at least everyone recognizes that and is starting to work toward solutions.”

The MRLA does work in the housing advocacy space as a member of the Housing Michigan Coalition.

Traverse City-based Housing North is a founding member of Housing Michigan. The nonprofit formed in 2018 covers 10 counties: Antrim, Benzie, Charlevoix, Emmet, Grand Traverse, Kalkaska, Leelanau, Manistee, Missaukee and Wexford. The group is addressing barriers to housing that are embedded in zoning laws, development financing, policy and public-private partnerships.

Executive Director Yarrow Brown said Housing North is working on an updated housing needs assessment for its service area. The most recent target market analysis completed in 2019 showed the 10-county region would need 15,000 new units between 2020 and

2024. According to data Housing North shared from the U.S. Department of Housing and Urban Development, about 4,146 building permits were issued in the 10-county area between 2020 and February 2023, the most recent month for which data is available. But that doesn’t mean all of those housing units have come online yet.

“The bulk of the need is in Grand Traverse County, but we do need housing across the income spectrum and across the board,” she said. “… We haven’t made a whole lot of progress toward that — we’ve made some, but what we’re seeing is still a lot of single-family home development.”

Housing North has had several recent wins on the state level, including serving on the executive committee of the Housing Michigan Coalition, which advocated for the passage of four housing bills that Gov. Gretchen Whitmer signed in December. Thanks to the legislation, local governments can now develop Payment in Lieu of Taxes programs to support development; create Neighborhood Enterprise Zones to facilitate infill; give tax exemptions to property owners who build in designated “attainable housing districts” via the Attainable Housing Facilities Act; and grant Residential Facilities Exemptions, or temporary tax abatements,

to developers that build five or more single- or multifamily units for those making less than 120 percent of the area median income.

On the local level, Housing North has added four Housing Ready Program directors who have facilitated zoning and master plan updates in more than 20 communities, developed housing opportunity maps, launched accessory dwelling unit and deed restriction programs in the Charlevoix and Petoskey areas, and helped secured approval for the Lofts at Lumber Square project in Petoskey through advocacy work. That project is expected to come online in the next few years.

Brown said there is much work yet to be done to create an environment that fosters more housing development.

“I think (to people it) feels like … we’re not making a ton of progress every day, but what we are doing is getting embedded in our communities and trying to help them realize their housing goals, which takes a long time,” she said. “We still have a lot of opposition; people often don’t want change. So we’re just trying to work within our communities from the ground up and throughout the system, to make sure … some of these communities are ready and prepared for when the housing opportunities come.”

EMPOWERING WOMEN IN THE WORKPLACE: HOW EMPLOYERS OF ALL SIZES CAN MAKE A DIFFERENCE

From childbearing to menopause (and everything in between), women face a unique set of challenges throughout their working career that many employers are not prepared to support, including infertility, hormonal changes, and matters of mental health. The result?

An exodus of talented women from the workforce. This trend has triggered alarm bells across the nation as it jeopardizes valuable talent that the labor force is ill-prepared to replace and is slowing the progress that’s been made in closing the gender gap and workplace inequalities. The time is now for employers of all sizes to provide enhanced and practical support to ensure women are not only present but empowered in every aspect of their professional lives.

Education: Empowerment through Knowledge

Education is the cornerstone of empowerment. HR departments should be aware of the resources available to women and create opportunities to educate employees on how to access them. This includes enlightening employees about healthcare reimbursements, fertility treatment scholarships, prescription drug cost variations among different pharmacies, and more. Many specialists are willing to speak to

groups free of charge. Offer these opportunities as lunch and learns or incorporate them into wellness programs to help build a wellinformed workforce.

Financial Stressors: Promoting Financial Well-being

According to Metlife’s Employee Benefit Trends Study 2023, financial health among women has seen a 13% decline since 2022, three times the rate for men, with 50% of women attributing their poor mental health to financial stress. Employers can take steps to address this issue. Conducting pay equity audits ensures that women are paid fairly and equitably, fostering an environment where women feel valued and respected. Offering competitive compensation packages that include benefits like healthcare, retirement plans, and paid parental leave can alleviate financial burdens, allowing women to focus on their professional growth without worrying about stability.

Mental Health Support: Nurturing Emotional Well-being

Women often face unique mental health challenges stemming from societal expectations, work-life balance pressures, and gender biases. Employers can support their employees by providing mental health resources and fostering a culture that

promotes well-being. This may involve offering counseling services, mental health days, and Employee Assistance Programs (EAPs). By establishing open lines of communication and

Flexibility: Balancing Personal and Professional Lives

Flexibility is a crucial aspect of empowering women in the workforce. While progress has been made, women still bear the brunt of child and elder care responsibilities. Beyond this, doctors’ appointments are increased for women experiencing infertility, pregnancy, mental health problems, and menopause. Flexible work arrangements, such as remote work options, flexible hours and compressed workweeks empower women to handle their personal and professional responsibilities more effectively, reducing stress and enhancing job satisfaction. Additionally, implementing parental leave policies, offering childcare support, or on-site facilities can alleviate the burden of childcare responsibilities, enabling women to pursue career advancement opportunities with confidence.

By facilitating these relationships, employers create a culture of learning and growth, while also increasing visibility and opportunities for women within the organization.

These opportunities to enhance the experience for women at your organization are relatively easy to implement and have little impact on your total rewards program spend yet have the potential to significantly impact your talent retention rates. The employee benefits consultants at Lighthouse, an Alera Group Company, are prepared to help you build and deploy a program custom to your organization’s population, goals and budget.

Sources:

1. Centers for Disease Control and Prevention. (2023, April 26). Infertility FAQs. Centers for Disease Control and Prevention.

2. Clementson, G. (2021, November 30). Pausing to Learn More About Menopause. Mayo Clinic Health System.

3. Metlife. (2023, April 26). Closing the care gap: How to care for women in the workplace.

destigmatizing discussions around mental health, employers encourage all employees to seek help when needed and create a supportive workplace environment.

Mentorship Programs: Unlocking Potential Mentorship programs provide invaluable support and guidance to women employees. Employers can establish formal mentorship programs that pair experienced professionals with women at different stages of their careers. Mentors can share knowledge, offer career advice, and help women navigate workplace challenges.

Dave Lorenz, vice president of Travel Michigan

Tech firms partner to ease AI deployment for companies

Technology’s recognition rising as it becomes more mainstream

By Kayleigh Van Wyk

Two Grand Rapids-based tech companies have partnered to help clients readily deploy artificial intelligence into their digital products and operational technology.

Software design and development consultancy Atomic Object LLC recently teamed up with AI startup Iris Technology Inc. to pilot webAI, Iris’ computer vision platform, for a select group of Atomic Object clients. Computer vision involves a field of AI that enables computers to detect and analyze information or objects from images, and is applied in technology such as facial recognition or self-driving cars.

Founded in 2019, Iris introduced webAI earlier this year as a new approach to computer vision models that use less data and deploy faster. Iris co-CEOs James Meeks and David Stout had a vision for Iris to build the critical infrastructure necessary for a democratized and decentralized approach to AI.

“What gets us very excited about Iris is that they’re taking a fundamentally different approach to artificial intelligence, which requires smaller data sets, shorter times to train models, (and) our customers also are getting to have control over the data,” said Shawn Crowley, co-CEO at Atomic Object.

The Iris team opened early access to webAI for 200 users on Jan.

5. Prior to that launch, webAI’s technology was piloted in a variety of applications across several industries, including health care, transportation, retail and logistics, and archaeology. For example, a manufacturer could deploy webAI to detect a damaged item on a production line, or a delivery company could detect damaged packages from porch drop-off photos.

Now, Iris’ partnership with Atomic Object is the first step in a rollout to other software developers.

The two companies became connected through their involvement in the tech ecosystem in Grand Rapids. After an initial meeting last year to explore a potential partnership, executives at Atomic Object said it became apparent that Iris’ early work with webAI was yielding impressive results.

“(That first meeting) gave us a lot of excitement around the potential the technology could bring to our clients, and so it became the obvious next step to continue building and growing that relationship,” said Mike Marsiglia, coCEO at Atomic Object.

Marsiglia and Crowley said the Atomic Object team had started to observe a growing interest in AI among their clients.

“We have more and more powerful tools to start to leverage some

new ways of solving problems. … We’re seeing it from some of our clients as well, and the conversation within corporate boardrooms now is them asking themselves, ‘OK, this fundamental technology shift is happening, are there ways that our business can leverage it to improve our goods and services or potentially bring another good and service to the table?’” Marsiglia said. “The questions are being raised within Corporate America of, ‘How can we leverage these tools to enhance our offering?”

With this new partnership, the Atomic team sets up consultations with interested clients to help them understand if webAI is a good fit for their software needs. If the technology appears to be a fit, the Iris and Atomic teams work to create a pilot program for the clients to adopt the technology.

For Atomic Object, webAI is a helpful resource to meet a growing need for custom software, and the tool’s ability to rapidly prototype and iterate models makes it ideal for Atomic’s clients as it reduces the lag between idea and deployment.

Meeks said the partnership with Atomic Object is a valuable opportunity for the Iris team to work with a longstanding leader in the technology industry as the team works to perfect webAI before a broader release.

“The most exciting thing for us is to have somebody who has been in software development for 20 years and has a good pattern of recognition for what goes right and what goes wrong with software development products and processes,” Meeks said. “For them to give their vote of confidence in us — having vetted our AI solution against the rest of the market — is something that we’re very encouraged by.”

As AI and its capabilities continue to capture global attention, Meeks said the Iris team isn’t surprised by the technology’s recognition as it becomes more mainstream.

“We always believed that AI would be a revolutionary technology and that it could frankly touch every industry, whether

for-profit, nonprofit, academic or government,” Meeks said. “So, we’re not surprised by the attention that is finally coming to recognition because once people get the chance to actually play with AI and experience it, they start to see the incredible productivity that it can bring to their operations and their daily life.”

While various concerns have emerged surrounding the potential risks of AI, such as data security and the potential for AI to replace jobs, Crowley said Atomic Object’s mindset is to try to seize opportunities with ever-changing technology.

“I think it’s arguable and likely true that we’re seeing change at an accelerated pace in our lifetime than maybe the pace of technology 50 or 60 years ago,” he said.

Holland manufacturing plant is laying off 171

ITW Drawform experiences ‘dramatic’ downturn

By Kayleigh Van Wyk

An “unforeseeable, dramatic downturn in client demand” has caused a company to abruptly close its Holland manufacturing plant and permanently lay off 171 employees.

ITW Drawform, a division of Illinois Tool Works Inc. (NYSE: ITW), disclosed the layoffs in a Worker Adjustment and Retraining Notification (WARN) Act filing to the state on May 30, the same date as the facility closure and layoffs. Company officials cited the swift downturn in demand as the reason for the closure.

“Due to a decision by a Drawform customer to shift their business to an alternative supplier, we were disappointed and saddened to have to eliminate the roles of approximately 170 Drawform associates that supported this program at our Holland, Michigan, facility,” a company spokesperson said in an emailed statement. “We express our deepest gratitude to all of our associates impacted by this decision and we are committed to supporting them through this transition.”

Founded in the 1970s, ITW Drawform originated as a family-owned business specializing in the airbag industry. Today, the company operates as a manufacturer of precision deep drawn metal stampings and assemblies with five locations across the globe. ITW’s capabilities include solutions for the automotive, battery and industrial sectors.

Parent company ITW generated $4 billion in revenue for the threemonth period that ended March 31, growth of 2 percent compared to the same period a year ago, according to an earnings statement. The company reported $714 million in net income for the quarter, up nearly 8 percent from 2022.

E. Scott Santi, chairperson and CEO of ITW, cited “the resilience of our diversified high-quality business portfolio” for the company’s first quarter performance.

According to the WARN notice, the laid off ITW Drawform employees in Holland include 67 full-time production associates and 25 parttime production associates. The company will provide severance, according to a spokesperson.

From left: Shawn Crowley, David Stout, Mike Marsiglia and James Meeks. TABITHA BLANSKI FOR ATOMIC OBJECT

Downtown brunch spot offers nightclub vibe sans late nights

Daisies Place will feature a new concept in ‘day parties’

By Abby Poirier

The former owner of KD’s Sports Bar in Wyoming is planning a new venture in downtown Grand Rapids, this time focusing on daytime festivities where patrons can gather around plated southern dishes.

Karmin Dixon-Kyle is branching out with Daisies Place, a new brunch restaurant catering to day parties.

She anticipates opening Daisies Place this summer at 15 Ionia Ave. SW. #140, sandwiched between downtown staples HopCat and Divani. The location formerly housed Sparks BBQ.

Dixon-Kyle aims to feature a different menu concept at Daisies Place, offering plated, preplanned brunches that rotate weekly. She said the concept is inspired by brunch spots that entertain day parties in larger cities.

“I’m over 40, I don’t like to go out at night,” she said. “I can’t party at night because by 8:30, I’m ready to go to bed.”

The day party concept caters to people looking for all the fun, dancing, drinks and socializing of a nightclub without the late hours. The concept has grown in popularity in recent years, with locations like Trust Detroit, a nightclub on the state’s east side, offering boozy brunches from noon to 4 p.m. on weekends.

“I’ve been to several cities where there’s places like this and it’s awesome,” she said. “People are waiting in line to get in places like this. I’m hoping to bring that same feel to downtown Grand Rapids.”

Previously, Dixon-Kyle and her husband operated KD’s Sports Bar on 36th St. in Wyoming, host-

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ing sports watch parties and live music. The bar opened in 2019 and closed soon after in 2020.

“When COVID hit, that was a huge blow,” said Dixon-Kyle, noting she’s back on her feet and ready to again jump into the restaurant scene with Daisies Place.

“This is my baby and my opportunity to kind of step out and do something that I want to do, that I see myself enjoying,” she said, adding that she’s excited about the new opportunity to build a brand.

Dixon-Kyle has worked in administration at a dialysis center for almost 10 years, and has been in the health care field even longer. She believes the care for patients she brings to her work in dialysis “goes hand in hand” with customer service, which comes down to caring for others.

Along with the fun, unique atmosphere she’s cultivating, Dixon-Kyle is going for an “inviting, colorful and modern” theme at Daisies Place.

“I want people who walk in to (say), ‘Oh my gosh, this is beautiful,’” she said.

The name of her restaurant pays homage to Dixon-Kyle’s grandmother, named Daisy, and incorporates the flower in its logo and interior design.

Dixon-Kyle signed a lease earlier this year and has been prepping her space for the last several months. Now, she’s waiting for her liquor license to be approved by the city and state while completing her final pre-opening inspections.

She said she’s still finalizing menu plans and last-minute details but tentatively hopes to open in June in time for summer foot traffic.

“We’re still brainstorming exactly what we want (the menu) to look like and what will define us as a business,” she said in midMay.

C

25 YEARS AND STILL SPARKLING

Successful wealth management entails numbers, and Greenleaf Trust has good ones to share – 25 years in business, $17 billion in assets under advisement, six offices, 190 team members, more than 15% annualized growth in terms of new assets on an annualized basis, and, most impressive,

over 99% client retention.

But more than just numbers, wealth management is about our trusted relationships with clients and helping them align their wants, needs and values with their financial well-being. So, thank you, dear friends and clients, for making these 25 years so rewarding. Cheers to many more sparkling years to come!

Daisies Place expects to open this summer at 15 Ionia Ave. SW. #140, between HopCat and Divani in downtown Grand Rapids. | ABBY POIRIER, CRAIN’S GRAND RAPIDS BUSINESS

Mega-Bev to open second Grand Rapids-area store

This is the company’s first new ground-up storefront

By Abby Poirier

Michigan-based family-owned beverage retailer Mega-Bev is opening its second Grand Rapids-area store with a new location on Lake Michigan Drive west of Standale.

Owner Scott Niecko said the Battle Creek-based Mega-Bev is planning a late July opening date for the 12,000-square-foot store at 545 Lake Michigan Drive in Tallmadge Township, its eighth in the state.

The new location is Mega-Bev’s first new ground-up storefront, Niecko said.

Executives first heard about the Tallmadge Township property after the company moved to Grand Rapids in 2019 at the former location of Russo’s International Market at 2770 29th St. SE. A regular customer there recommended Niecko consider the property as a potential space for another location.

Niecko was busy getting the 29th Street store up and running and did not pursue the idea until recently.

“I called him back a year and a half later and the lot was still available, so we bought it and started putting together the building,” Niecko said.

An entity registered to Niecko purchased the property in December 2021 for $375,000, according to property records.

The process has been a new one for Mega-Bev, since the re-

tailer had purchased existing facilities for its other stores until this opportunity presented itself.

“It’s our first model for what we would like to duplicate in the future,” Niecko said. “We’re hoping to put some more of them around Michigan.”

The design and building process for the store took just under two years. Grand Rapids-based Construction Simplified served as the construction manager on the build-out.

According to Niecko, supply chain shortages slowed the process considerably, but the team hopes to replicate the model in the future.

“We’ve really established that 12,000 square feet is a really good size to have ample selection without overdoing it,” he said. “It’s a good size to move through product and keep things fresh.”

The Tallmadge Township Mega-Bev will offer a selection of 15,000 to 20,000 different beer, wine and spirits options.

“Every week we’re bringing in new items and letting old items go,” Niecko said. “We’re a family business. We put our customers first, so once we’re established somewhere, we usually do fairly well.”

The store is planning a “lowkey” opening for late July, but has not yet set a date, he said.

Ag groups applaud federal legislation to freeze wages

By Abby Poirier

As West Michigan farmers grapple with spiking labor costs, bipartisan federal legislation is proposing some temporary relief.

The central issue for many farm operations across the region hinges on labor cost increases for agricultural workers in the country on temporary H-2A visas. The federally mandated minimum hourly wage for H-2A workers in Michigan spiked 12.8 percent for 2023, on top of other higher processing fees that the Biden administration has proposed for farms using the program.

Farms that rely on H-2A workers to harvest their crops, which include many fruit and vegetable operations in West Michigan, say the higher costs have them worried about their long-term profitability.

These issues have caught the attention of Michigan lawmakers, including U.S. Rep. Dan Kildee, a Democrat from Flint, who in May introduced new bipartisan legislation to support farms that use H-2A labor.

Kildee’s proposed Farm Operations Support Act would temporarily freeze labor cost increases for seasonal farm workers until the end of 2023, giving Congress more time to address the rising costs for farmers.

“My bipartisan bill will provide relief to Michigan farmers as Congress works on a long-term, sustainable solution for our agricultural community,” Kildee said in a statement.

Kildee co-sponsored the bill with U.S. Rep. Joe Wilson, a Republican from South Carolina. Sens. Jon Ossoff, a Democrat from Georgia, and Thom Tillis, a Republican from North Carolina, introduced a companion piece of legislation in the U.S. Senate.

While the Department of Home-

land Security issues the H-2A visas, the labor cost for the temporary workers is determined by the U.S. Department of Labor’s adverse effect wage rate (AEWR), which sets a non-negotiable floor for the workers’ pay.

For 2023, the minimum hourly wage of H-2A workers is $17.34, which compares to $15.37 a year ago. It’s the highest wage hike on record, according to Kildee, who frames the wage freeze as a matter of ensuring U.S. farms can still compete with other countries.

At the same time wages are increasing, the Biden administration proposed in January to raise the cost of the H-2A petitions that farms pay from $460 to $530 or $1,090, depending on the nature of the worker. Processing fees also increased on May 30 from $190 to $205 per person.

The higher visa fees also drew criticism from Michigan’s congressional delegation.

In an April 28 letter to Department of Homeland Security (DHS) Secretary Alejandro Mayorkas, 12 of Michigan’s 13 congressional leaders, including Kildee and U.S. Reps. Hillary Scholten, a Democrat from Grand Rapids, and Bill Huizenga, a Republican from Holland, expressed “serious concerns” with the “significant” fee increases.

“While we understand the need for DHS to occasionally review visa fees, we believe such a sharp increase in fees would compound the impact of the increased costs the agriculture economy is facing right now. We are concerned this will make running an agricultural operation more difficult, limit job opportunities for Americans, raise prices for consumers, and harm our nation’s food security,” they said in the letter.

Managing labor costs is crucial for farm operations, where more than 60% of the total cost of pro-

duction can be attributed to labor, Diane Smith, executive director of the Michigan Apple Committee, said in a statement.

“The harvest of Michigan apples requires farm worker hand labor,” Smith said in voicing support for Kildee’s legislation, noting the wage freeze will “prevent irreparable harm to the Michigan apple industry and other specialty crops.”

Kildee’s bipartisan proposal garnered support from a host of other statewide agricultural interests, including the Michigan Farm Bureau, the Michigan Nursery and Landscape Association, the Michigan Vegetable Council and the Michigan Agri-Business Association.

“The H-2A visa program has brought needed structure and support to farm labor. Many vegetable growers have great things to say about the H-2A visa guest workers. However, the AEWR and its increases are not sustainable,” Greg Bird, executive director of the Michigan Vegetable Council, said in a statement.

To that end, the many farmers can no longer afford to grow specialty crops and are switching to row crops, which do not require the same kind of skilled farm labor. Michigan Potato Council Executive Director Kelly Turner noted that the state’s growers have “lost considerable market share” because of that transition over the last five years.

“Our family-owned nursery and greenhouse growers rely on the H-2A program for the skilled labor needed to grow and get our plant material to market,” said Amy Upton, executive director of the Michigan Nursery and Landscape Association. “With the historic increases in input costs, on top of the continued crisis-level shortage of domestic labor, this year’s Adverse Effect Wage Rate increase has created additional hardships for our growers. We ask for this pause on the rate increase and for long-term solutions that will keep Michigan’s growers in business.”

West Michigan farmers are facing escalating wage costs for workers on H-2A visas. TERRA SLAYBAUGH VIA UNSPLASH

Without it, they fear for long-term viability of farms

Mega-Bev is building a new store at 545 Lake Michigan Drive in Tallmadge Township, west of Walker. | COURTESY PHOTO

From Detroit to Grand Rapids, vibrant urban centers are essential

Isat down with Detroit Mayor Mike Duggan for a Crain’s podcast interview the morning after he announced a sweeping plan to alter how property is taxed in the city.

His goal is to spur economic development by cutting taxes on homes and other buildings while raising taxes on land, which he said would primarily impact owners of vacant lots, scrap yards and businesses with excess property.

His voice was hoarse from so many conversations at the Mackinac Policy Conference, but he was focused on selling his proposal.

“The response is overwhelmingly positive. The business community now knows that if I build in Detroit, my taxes are comparable to if I build in Farmington or if I build in Ferndale. And that’s a huge advantage for them,” Duggan said. “And, of course, homeowners. You don’t have to explain to homeowners how high property taxes are in Detroit.”

Across the state in Grand Rapids, the economic circumstances on the ground are quite different in a city that has shown strong growth in recent years. But one thing is the same: a desire to make improvements.

One example is at Grand Valley State University, which has been an important economic engine for Grand Rapids. And the university is far from done.

GVSU President Philomena Mantella

COMMENTARY

joined Crain’s reporter Rachel Watson for a podcast interview on Mackinac Island, and a key focus of the conversation was GVSU’s master plan that calls for expansion of the university’s downtown presence.

“Where we’re going next is to allow students to have a fully urban experience if

they choose it,” Mantella said. “Grand Rapids is the home to our professional programs and it has the closest connection with business and industry in the region, so I think it’s really important to build out those partnerships, those relationships to create synergy and value for the business-

es as well as vibrance for the community. So we see it as a win-win.”

As has been made abundantly clear by now, Michigan faces a serious challenge to grow its population. While it’s true the west side of the state has fared better than metro Detroit when it comes to population growth, it is not immune from the challenge in the years ahead.

Educating, retaining and attracting young people with vibrant core cities will be central to Michigan’s success if it is to beat its dim demographic projections. To be sure, we also need vibrancy in our other population and economic centers, from Ann Arbor to Traverse City, Kalamazoo to Marquette – but as Michigan’s two largest cities, a healthy Detroit and Grand Rapids are key.

Detroit is especially critical. Even with its diminished population, the city of Detroit remains more than three times larger than Grand Rapids and metro Detroit, with more than 4 million people, is the second-largest metro region in the Midwest, behind the Chicago area.

While a lot of details are yet to be known, Mayor Duggan’s tax proposal appears to be a bold effort toward solving a decades-old problem in Detroit that has served as a disincentive for new development. Meanwhile, as GVSU and others pump investment into Grand Rapids, Michigan’s population center on the west side appears poised to keep growing that region.

The two cities certainly have their differences, economic and otherwise, but they share a common bond in that the state needs both of them to be strong as we compete for talent and strive to grow Michigan.

Restricting tobacco sales can help businesses and more

Iwas so excited when my parents let me, at 10 years old, display a “smoke-free home” sticker on our front door. While we were a smoke-free home, I didn’t realize we hadn’t always been.

My dad was a smoker when I was a toddler, and I was sick a lot. With much encouragement and persistent urging from my mom, he realized the harm of secondhand smoke and stopped “cold turkey.”

There are a few other things we as a community and us as elected officials can stop “cold turkey” to improve the health of our community. I ran for office to use policy and influence to make a difference. So, when I learned the insidious ways the tobacco industry has long targeted the Black community and young people through marketing and other techniques to increase smoking and their profits – like promoting easier-to-smoke men-

thols in Black communities and making kid-friendly fruit and candy flavors – while causing long term health issues, I was ready to act.

To my surprise, Michigan state law prevents local governments from enacting ordinances regulating the sale of tobacco products. This practice (called preemption) suppresses local policymaking and benefits the tobacco industry – not our community. With concerning rates of addiction, mental health challenges, and inequitable health outcomes, preemption prevents legislators like me from taking much-needed steps to protect and promote desirable health outcomes for all.

In addition to empowering local communities by removing preemption, our Legislature could also pass meaningful tobacco prevention policies themselves. For

example, Michigan should follow the lead of practically all other states and require tobacco retailers to obtain a license like other retailers who sell products that we want to keep out of reach of kids, such as alcohol and cannabis.

Last year, to address these issues, the U.S. Food and Drug Administration (FDA) announced plans to take menthol cigarettes and flavored cigars off the market. I support this long-overdue step and urge them to implement their plans without delay.

While the FDA should finish the job, we also shouldn’t wait. We should end the sale of all flavored tobacco products in Michigan to stop lifetimes of addiction and their associated health risks. We see the impact of tobacco industry targeting today: According to the Centers for Disease Control and Prevention, 85% of Black people who smoke use menthols versus 30% percent of white people who smoke. Research finds Black Americans have a harder time quitting smoking and face

higher rates of death and disease.

While disease and premature deaths place an enormous burden on individuals and families, smoking also has a significant impact on employers and our state’s economy. Smoking costs Michigan over $15 billion each year — more than $5 billion in excess health care costs and more than $11 billion in lost productivity. Reducing tobacco use is not just good for health — it’s good for business.

It is an honor to serve the people of Grand Rapids. To address challenges like tobacco use and health disparities, I and others need access to the right tools.

Grand Rapids and all Michigan municipalities should be empowered — not preempted — from regulating tobacco sales. I am excited to work with my colleagues on the Grand Rapids City Commission and in the Legislature to make headway on this and other important issues that will advance equity and quality of life across the state.

KATE CARLSON

Kelsey Perdue is a Third Ward commissioner for the city of Grand Rapids.

Mickey Ciokajlo is the executive editor of Crain’s Grand Rapids Business and Crain’s Detroit Business.

Small business keeps growing despite workforce woes

SBAM report finds Michigan ranks fourth in four-year degrees, tech credentials

By Jay Davis

Michigan’s small business economy continues to grow despite a significant drop in workforce numbers coming out of the COVID-19 pandemic, according to a new report from the Small Business Association of Michigan.

The 19th annual SBAM Entrepreneurial Score Card, released May 24 by the SBAM Foundation, analyzes the state’s economy to assess Michigan’s entrepreneurial climate.

Small businesses in the state continue to outperform the U.S. as a whole as it relates to the number of small businesses open and revenue, the report states. In Michigan, small business revenue has increased by 24.2 percent since 2020, more than triple the nationwide figure of 8 percent, the report states. Michigan has 8.5 percent more small businesses open than it did at the start of 2020, when the pan-

demic began — a figure similar to the 2022 scorecard. That number remains higher than the national average increase of 3.1 percent, according to the SBAM report.

“It is a widely held rule of thumb that more than half of new small businesses fail within five years,”

SBAM President and CEO Brian Calley said in a news release on the report. “However, since 2020, Michigan has seen the five-year survival rate notably improve. An increase in new business starts combined with more businesses surviving past the five-year mark is a powerful combination for growth.”

Graham Toft, owner of Florida-based Growth Economics Inc. who publishes the annual scorecard, said the new report shows a positive shift across the state.

“The bottom line for me as I look at where Michigan has been is it’s no longer a Rust Belt state,” Toft said recently during a briefing on the report. “It’s a remarkable gradual turnaround. There’s been a lot of ups and downs and hardships, a lot of difficulties because of the national economy and international trade, but overall, the state has taken a remarkable upswing.”

That upswing also includes the state adding to its tech-educated

ranks.

Michigan ranks fourth in the country in four-year degrees and tech credentials, according to the report. That talent pool is critical for Michigan’s future tech and nontech growth companies, the report states.

The small business community in Michigan is thriving despite a handful of lingering issues.

of the coronavirus pandemic.

The report found there were about 200,000 unemployed Michigan residents at the end of 2022 and nearly 400,000 job openings. Labor force participation has increased among those age 65 and up, from 13.2 percent in 2000 to 12.2 percent in 2021. The biggest drop came among workers aged 16-19, a group that has seen a 23 percent drop since 2000. College-aged workers during that same time dropped by more than 9 percent.

has improved over the last decade, but is still a net negative, meaning the prospect of workers coming into the state from other areas is not promising. Migration into Michigan fell below 5,000 in 2021 at the height of the pandemic. That number bumped up to about 20,000 last year.

“That’s been a godsend,” Calley said.

Inflation also remains an issue for small businesses, as it was in 2022.

Michigan has about 721,000 fewer residents in the workforce than it did in January 2000, according to the SBAM scorecard. Labor force participation peaked at 68.8 percent at the turn of the 21st century. The state currently hovers around 60 percent, with about 4.86 million residents in the workforce, according to U.S. Bureau of Labor Statistics data. Michigan’s labor force as of the end of 2022 was down more than 97,000 workers since the start

University of Michigan Health-West open-heart program gets $3.1M

Also on deck are plans for a new cardiac care facility

By Mark Sanchez

Donations totaling $3.1 million are helping University of Michigan Health-West defray the startup costs of launching open-heart surgery in 2022, which to date has exceeded projected patient volumes.

The contributions came from a trio of benefactors to University of Michigan Health-West that included what President and CEO

Dr. Peter Hahn called a large “transformational gift” from the Steve and Amy Van Andel Foundation, plus the family of Stephen Klotz and an anonymous donor. Klotz is the CEO of Grand Rapids-based Huizenga Group and an emeritus board member of the University of Michigan HealthWest Foundation.

The health system secured the contributions after reaching out to long-time benefactors a few months ago for financial support for the open-heart program.

The donations paid to build and equip a cardiovascular operating room and an advanced electrophysiology lab to diagnose and treat abnormal heart rhythms. They collectively represent one of the largest contributions ever to University of Michigan HealthWest.

“It really was the cornerstone of launching open heart. We couldn’t have done it without it,” Hahn said of the donations. “We are building a region-leading cardiovascular program, a destination for people

seeking the best options in their fight against heart disease. This gift brings that better future within reach.”

University of Michigan HealthWest began performing openheart surgery at its Wyoming hospital in October 2022 through the Cardiovascular Network of West Michigan, a joint venture formed with Trinity Health in Grand Rapids and Muskegon and Michigan Medicine’s Frankel Cardiovascular Center in Ann Arbor.

Since October, the health system has performed nearly 70 open-heart surgeries, far surpassing its goal to do 50 procedures in the first 12 months. Hahn expects the health system, after starting slowly to ensure quality, will perform close to 140 open-heart procedures in the first 12 months and could do nearly 200 in the second year.

“We’re way ahead of plan,” he said. “It’s exceeding all expectations. I do think patients want

choice and the Michigan Medicine tie brings something very unique. This is a place known for cardiovascular care.”

Most of University of Michigan Health-West’s heart surgery patients came from Kent, Ottawa and Allegan counties, Hahn said.

In launching open-heart surgery last fall, University of Michigan Health-West brought a competing program to Kent County, where Corewell Health for more than two decades was the only health system performing the procedure. Until then, Grand Rapids was the largest market in the state with just one open-heart program. The nearest competitors were Trinity Health Muskegon and health systems in Lansing, Kalamazoo and St. Joseph.

“West Michigan patients now have even greater local access to leading heart experts, researchers and surgeons, and that’s just the beginning. We know that there are more exciting advancements ahead,” said Steve Van Andel, the co-chair of Amway Corp. who also chairs the University of Michigan Health-West board of directors.

In the years ahead, the health system may develop a separate cardiac care facility with the Cardiovascular Network of West Michigan, Hahn said.

The health system has had preliminary plans drafted for a facility and building the project “is not a matter of if, but when” within the next decade, Hahn said.

A demographic shift is also having a negative effect on the workforce. The percentage of the state population between age 25-54 was nearly 37 percent in 2021, down from about 40 percent in 2000.

“That doesn’t bode well for our future if people are getting into the workforce later,” Calley said. “We’re struggling with some challenges for the future. We have to work with what we have. Things like criminal justice reform and access to child care will be more important as we work to capture more of the working age labor pool.”

The report also deemed that new domestic migration to Michigan

Calley called Michigan entrepreneurs resilient in the face of some critical issues.

“Michigan citizens appear to be turning to entrepreneurship more than ever before, even as the rising costs of inflation and worker shortages pose challenges, and a potential economic slowdown looms on the horizon,” Calley said.

“I’m excited about where entrepreneurship is going. I think it bodes well for our future. There’s a resilience that comes from having a robust small business community in the state because it means you’re not putting all your eggs in one basket. That diversity is important to a business community.”

Jay Davis is a reporter for Crain’s Detroit Business.

PEOPLEON THE MOVE

EDUCATION

HEALTHCARE

Western Governors University Western Governors University (WGU) recently named Robert Upton, Jr. as Strategic Partnerships Manager of WGU’s Central Region, which includes Michigan. Upton brings a strong track record of working with higher education where he led student recruitment and strategic partnerships. In Upton’s new role, he will develop and sustain relationships between the university and Michigan organizations to provide pathways to exible and affordable higher education options for students across the state.

Marsh McLennan Agency

Andrew Milnes joins Marsh McLennan Agency’s Michigan Employee Health & Bene ts practices as an Account Director based in Grand Rapids. With over 25 years of experience in the employee bene ts industry, Andrew’s specialties include bene ts consulting, client management, employee engagement, vendor management, carrier selection and contract negotiations.

NEW GIG?

Shelby Brown joins Marsh McLennan Agency’s Michigan Employee Health & Bene ts practice as an Account Director based in Troy. Drawing upon over 20 years of experience in human resources and employee bene ts, Shelby has a proven record of creative bene t strategy, focusing on cost containment and budget stability.

Operating room at University of Michigan Health-West. COURTESY PHOTO

“The bottom line for me as I look at where Michigan has been is it’s no longer a Rust Belt state.”

—Graham

Toft, owner of Floridabased Growth Economics Inc.

Meanwhile, the amphitheater is part of a larger vision of redeveloping 31 acres along the Grand River.

While Grand Action 2.0 is only focused on the amphitheater at 201 Market Ave. SW and some adjacent parcels, Executive Director Kara Wood said the organization is working with the city and nearby property owners to submit a transformational brownfield plan encompassing the broader 31-acre riverfront redevelopment.

Environmental assessments completed for the amphitheater indicate that the site meets the definition of a contaminated property under state law based on soil contamination, though “potential exposure to users will be minimal,” according to planning documents.

Wood said the development team is waiting on the outcome of S.B. 289 to submit the plan.

The city of Grand Rapids is tracking the legislation closely, said Grand Rapids Director of Economic Development Jeremiah Gracia.

“That will be an important piece of legislative change that will be beneficial for our continued work and development of the amphitheater and the riverfront,” Gracia said.

The riverfront development is the second recent Grand Rapids project where developers hope to secure transformational brownfield incentives.

The development team behind the proposed Factory Yards at a 13-acre property southwest of downtown Grand Rapids announced plans earlier this year to seek up to $103 million through the Transformational Brownfield Program.

The local interest in the Transformational Brownfield Program comes as just three developments have used the incentives since the law was enacted in 2017. Most recently, the Michigan Strategic Fund approved a $615 million transformational brownfield plan for the District Detroit project, which is backed by the Ilitch family and billionaire developer Stephen Ross. The other two are Dan Gilbert-backed developments in downtown Detroit and the redevelopment of a defunct paper mill in Vicksburg.

Wood also noted that amphitheater construction costs continue to rise from the initial $116 million forecasted cost.

“I don’t have a final budget at this point, but certainly we’ve seen increases in costs as a result of the

LAKESHORE

From Page 1

month during the organization’s 20th anniversary celebration with more than 250 business and community leaders.

“The startup community is important to the ecosystem of even mature businesses,” Neil Boehm, Lakeshore Advantage’s board chair and chief technology officer at Zeeland-based Gentex Corp, said in a statement. “We work with

current economic situation, the material costs and financing costs for a project of this size,” Wood said.

In addition to as-yet-undetermined tax incentives, the amphitheater project secured $30 million in the latest state budget, which will help offset various design and construction costs.

Grand Action 2.0 disclosed its plan to seek transformational brownfield incentives as new design and economic impact details recently emerged as part of the city’s planning approval process.

The amphitheater could generate $490 million in economic spinoff and create 825 new jobs over 30 years while also spurring the development of up to 1,700 nearby housing units, according to plans filed with the city as Grand Action 2.0 seeks several special land use approvals for the venue and adjacent properties.

The planning application also details how the venue would be used to draw about 300,000 visitors per season from April to October. Events would include a mix of community programs and concerts totaling about 50 events every season, according to the planning memo. The amphitheater would operate seven days a week, with part of the development open to the public, including a park area north of the amphitheater, a lawn area and walkways that access the riverwalk.

The amphitheater is still in the “schematic design phase,” and the design team at Progressive AE Inc. explored several options for the 12,000-capacity venue, Wood said.

The latest designs filed with the city of Grand Rapids aim to “maximize the value of the project for the community,” Wood said.

The Grand Rapids Planning Commission will consider the site plan for the project at its June 22 meeting. Key design changes in recent months have the venue stage facing north toward the downtown skyline, and factor in more greenspace.

“The current orientation definitely enhances the design and how it interacts with the surrounding areas based on our evaluation criteria,” Wood said. “One of the things that was kept in mind during the design process was that surface parking is not the highest and best use of property, so the hope is that we would put as minimal amount of parking on the site as needed for the facility. Consideration was also taken into account with the city based on the availability of other parking sur-

startups all the time. Many times, they are thought leaders in technology. I think it’s going to add so much into the community.”

The three-story, 20,000-squarefoot facility will be owned and operated by Lakeshore Advantage and house a business incubator, community education space and offices for the organization. Lakeshore Advantage would move its headquarters from Zeeland to downtown Holland as part of the plan. As well, Lakeshore Advantage’s Surge Center startup incu-

face lots, parking decks and mobility options within a 15-minute walking radius (about a threequarter-mile distance).”

The development calls for a 116-space onsite parking lot, which is above the maximum 86 spaces allowed in the traditional neighborhood-city center zoning (TN-CC) district where the venue would be located. An estimated 18,500 parking spaces are located in a 15-minute walking radius from the site.

“The hope would be that the (116-space) surface parking lot is temporary, and if there was future development to occur on the site, (the surface lot) would be made available for development to occur over,” Wood said. “Just like all surface parking lots in the city, it’s not the highest and best use in the urban core in the city, and the hope is we increase density on those.”

The development would be set on multiple parcels at 201, 225, 233 and 301 Market Ave. SW. The property is owned by the city and bounded by the Grand River to the west, Market Avenue to the east, U.S 131 to the north, and a railroad to the south. The stage, seating bowl and lawn seating berm would face north toward the Grand River and U.S. 131.

The Grand Rapids-Kent County Convention/Arena Authority (CAA) expects to exercise a $24.3 million option agreement with the city of Grand Rapids to purchase the Market Avenue parcels. The option has been extended multiple times, with a current property sale deadline of June 30. The property would be split, and the 50 feet closest to the river would remain under city ownership, according to the planning memo.

The CAA would serve as the owner of the amphitheater once it is completed, and ASM Global would manage the venue. ASM Global also manages the Van Andel Arena, DeVos Place and DeVos Performance Hall.

Five municipal buildings currently on the property house various city services, including public works, parks and recreation, forestry, and fleet and facilities management.

City officials in March approved a $2.2 million contract with Bergmann Associates Inc. to create a site plan for 1500 Scribner Ave. NW, which is where the city services would eventually relocate. The Scribner Avenue site currently houses Kent County Road Commission offices and facilities, which will be relocated to 1900 Four Mile Road NW at the WalkerView Industrial Park in Walker.

From Page 1

than we had in our original plan.”

Pine Rest could steer the money to recruit direct-care staff to offering assistance to pay off college debt, helping with relocation costs, and providing sign-on bonuses, Nykamp said.

When it opens, the Pediatric Behavioral Health Center of Excellence on Pine Rest’s 68th Street campus in Cutlerville will include psychiatric urgent care, a crisis stabilization unit, and specialty outpatient clinics to prevent mental health crises for conditions such as depression, anxiety and eating disorders.

In late May, Pine Rest filed a letter of intent with the Michigan Department of Health and Human Services that begins the regulatory approval process for the project. Pine Rest planned to file a full application to the state earlier this month seeking an expedited project review, which normally takes up to six months.

Pine Rest hopes to complete the review process and secure approval from the state in time to begin construction this fall and open the Pediatric Behavioral Health Center of Excellence in late 2025, Nykamp said.

“This is a sense of anxiousness that we have to get this done as soon as possible,” he said.

Pine Rest and Helen DeVos Children’s Hospital have been planning the pediatric center since 2018 and publicly unveiled their plans in July 2022. Directors at Pine Rest decided to refine and expand on the original plan, including adding more outpatient capabilities and capacity to meet growing demand for mental health care that accelerated during the pandemic, Nykamp said.

“They basically challenged us: ‘You know what? The minute you open it, you’re going to say it’s too small,’” he said. “The numbers since COVID have only gotten worse in terms of the demand for kids’ services and the clog in the system statewide.”

Getting an outpatient appointment with a psychiatrist at Pine Rest can now take up to 150 days and the wait time for a psychological assessment for Attention-Deficit/Hyperactivity Disorder (ADHD) is about 250 days, Nykamp said.

The refined plans for the Pediatric Behavioral Health Center of Excellence would expand Pine Rest’s child and adolescent outpatient capacity by about 50 per-

cent over what was previously planned, Nykamp said. The plan also expands the number of child and adolescent inpatient beds from 36 to 76.

The additional outpatient capacity and capabilities will go for specialty mental health care to treat issues such as eating disorders, substance abuse, developmental disabilities and neuropsychology, according to Nykamp.

Beyond talent recruitment and the additional outpatient capacity, inflation also has driven up construction estimates by 30 percent to 40 percent, further adding to the overall project cost, Nykamp said. Inflation could add $10 million to $15 million to the final cost of the project, although “this is only a hypothetical projection as we will not begin receiving bids until later this summer,” he said.

Pine Rest seeks to finance the project with a combination of state funding and philanthropy.

The state committed $36 million toward the project and Pine Rest looks to raise up to $50 million through an ongoing capital campaign that Nykamp said is presently in its “quiet” phase with appeals to potential major donors across the state.

So far, Pine Rest has secured “significant millions of dollars in pledges from the great philanthropists in the West Michigan area and actually statewide since it’s really going to serve kids from all over the state,” Nykamp said. Organizers hope to have a “significant portion” of the capital campaign wrapped up by September. “It’s going very well,” he said of the capital campaign. “We’ve had so many people say to us over the years, ‘Hey, when you do something for kids, come see us.’ That’s exactly what we’re doing.”

Pine Rest and Corewell Health each plan to seek grants for the project from funding that state legislators and Gov. Gretchen Whitmer appropriated last year, Nykamp said. The state’s present fiscal year budget allocated $50 million for competitive grants to expand pediatric psychiatric capacity across Michigan. The Michigan Health & Hospital Association administers the grants.

Lawmakers last summer initially earmarked $50 million for the project in a budget deal with the governor. Legislators later reduced that amount to $38 million with the understanding that Pine Rest could apply for grant funding from the state money appropriated for pediatric mental health care, Nykamp said.

bator at 44 E. Eighth St. in Holland will relocate to the new building.

The Next Center’s first floor will feature a multifunctional business incubator with room for up to 50 tenants. The second floor will serve as the new headquarters for Lakeshore Advantage, as well as a home to second-stage startup companies. An anchor company and partner for incubating startups will be housed on the top floor.

“We’re going to be able to better support those 34 startups that are members at our incubator right

now, which we hope to grow to be beyond 50,” Blanton said. “… But we want this to be vibrant and active not only for the startups, but with this 50-person learning lab where we envision great programming and learning. We’re excited about the opportunities this is going to bring, not just for the startups, but really for the broader established businesses as well.”

The center is located within the Holland SmartZone, which the state approved in 2016 as a satellite for the Grand Rapids SmartZone.

Lakeshore Advantage seeks to raise $2.3 million in additional funding to complete the roughly $15.3 million project.

Construction on the center would begin this fall and be completed by the end of 2024, pending city approvals.

Holland-based EV Construction and Grand Rapids-based GMB Architecture + Engineering are set to lead project construction and design, respectively. An EV Construction affiliate currently owns the Seventh Street property.

DEVELOPERS

Shoemaker, principal at Franklin Partners, which owns and is developing the Display Pack project.

While the office market is more stable in Grand Rapids compared to some other cities, office is a “bad word” in the finance world right now, Shoemaker said.

Recent brokerage reports show a negative net absorption rate and rising vacancy rates for downtown Grand Rapids office space, which had vacancy rates ranging from 8.7 to 14.9 percent in the first quarter of 2023, based on varying estimates.

Aside from about 10,800 square feet of office space under development in the Grand Rapids suburbs, NAI Wisinski forecasted no new office construction in the first quarter of this year. That compares to about 500,000 square feet of new office space that was under construction in the first quarter of 2020, according to NAI Wisinski.

Magnus Capital Partners LLC specializes in multi-family residential projects, with several recently completed and ongoing projects across West Michigan under the HoM Flats brand.

LABOR

From Page 3

effect wage rate, which sets a non-negotiable floor for the workers’ pay in each state.

The nearly $2 per hour hike will add around $900 for every hour of H-2A labor at Crossroads, an increase that DeHaan said makes him “really nervous.”

“But on the same hand, we need to get the blueberries picked. They don’t wait for us,” he said.

The USDA updated farmers on the H-2A wage increase in its semi-annual Farm Labor Report in late November, leaving farms like Crossroads little time to plan and adjust for the additional wages.

DeHaan said he’s hoping for a good crop this year so that Crossroads can withstand the new wage requirement, adding that it’s “a lot to incur from a cost standpoint.”

Hourly wages for temporary agricultural workers have fluctuated in the past, but farmers have had to shoulder a 32% increase over the last five years. That spike is driving uncertainty and becoming a cause for concern for West Michigan farmers.

At sixth-generation apple farm Rasch Family Orchards in Alpine Township, office manager Katie Vargas hires 80 H-2A workers to hand-pick apples during the summer, many of whom have been working with the farm annually since 2014.

Vargas said the farm has tried unsuccessfully for years to recruit local workers to do the work.

“Over the past three years, we’ve only had one hire locally,” she said. “We wouldn’t be able to function if we didn’t have H-2A.”

While H-2A wages continue to escalate, farms are trapped between needing workers to harvest their crops and an inability to sustain the high cost of that labor.

Magnus Capital Partners executives have focused on maximizing the number of housing units at their developments, although they do have commercial suites planned at two projects in the final development stage, said Lori Pung, director of development at Magnus Capital Partners.

While the commercial suites could be used for office tenants, Magnus Capital is focused on landing retail tenants such as coffee shops, pet boutiques and child care providers that would complement its tenants’ lifestyles, Pung said via email.

As well, HoM Flats projects have design elements that cater to resi-

“The reason why farmers today are using the H-2A program is because we don’t have a domestic supply of labor like we’ve had in the past,” said John Kran, national legislative counsel at the Michigan Farm Bureau. “This is really the only other option they have to get workers. H-2A is cumbersome, it’s clunky, it’s expensive. You’ve got three federal agencies and one state agency involved in the process (and) it takes a lot of pre-planning.

“It’s not the ideal option, it’s just what we have today.”

In addition to hourly wage increases, other costs associated with H-2A visas also are climbing for 2023. In particular, the Department of Labor issued a new rule that changed how workers are classified by position and could potentially increase wages for workers who engage in jobs outside of their work description, even if only for a small percentage of their time.

Kran cited the example of operations needing a couple of workers to hold commercial drivers licenses to be able to drive the crews around. Even though the workers spend the bulk of their time planting or harvesting crops, the rule would require them to be bumped into a higher wage category, Kran said.

As a result, farmers are now having to reassess how they distribute work to ensure that higher wages apply to only a small number of workers, said Kim Clarke, an immigration attorney at Varnum LLP.

“It’s another hurdle thrown in and it really eliminates flexibility for the ag employer,” Clarke said.

At the same time, the Biden administration proposed in January to raise the cost of H-2A petitions that farms pay from $460 to $530 or $1,090 per person, depending on the nature of the worker. Pro-

dents who work from home.

“Our onsite amenities include co-work lounges with free wifi and printing for residents who like to have a change in scenery in their workday along with complimentary hot beverages to help provide a coffee shop vibe,” Pung said. “On a daily basis, we see residents working in the indoor cowork lounges as well as outside on the rooftop terraces. We find a number of single households also prefer a two-bedroom apartment so they have the additional space for a home office, and have intentionally increased the number of two-bedroom apartments within our communities.”

cessing fees also increased on May 30 from $190 to $205 per person.

“You might not think $15 is that big a deal, but if you’ve got 30 or 40 workers, that adds up,” Clarke said.

Michigan Farm Bureau’s Kran said the increased wages and fees all eat into farmers’ profitability, especially since “there isn’t really room to pick this up in (their) margins.”

“We’ve seen food inflation, but that money isn’t getting passed on to the farmer,” Kran said. “Big picture: Farmers need a predictable wage rate. (When) that’s something that could go up 12.8% one

From Page 3

become a key element of the Behavioral Health Crisis Center will have the capacity to treat up to 16 people at a time. The unit can provide an alternative to hospital emergency rooms for people seeking immediate care for a mental health crisis.

“We know most people in crisis can be stabilized within 24 hours. With the Crisis Stabilization Unit, a person in crisis can remain in a safe, secure and supportive setting for up to 72 hours,” Ward said. “Our ability to combine the behavioral health expertise of Network180 with the medical expertise of Trinity Health Grand Rapids will allow for individuals requiring a higher level of care to be assessed and receive the medical clearance they need in order to get rapid access to a more intensive level of care when necessary.”

The stabilization unit also offers law enforcement and emergency medical responders an alternative to an ER or jail to transport a person who’s experiencing a mental health crisis.

over 70%.

“We don’t also necessarily want to pass along these costs to consumers. At the end of the day, it is the labor cost that’s keeping us worried about taking the farm further and depending on it as our source of income. It’s making us question where this farm is going to be in five years.”

While automation might seem like the obvious fix to agricultural labor issues, the answer remains complex for many operators.

State lawmakers and Gov. Gretchen Whitmer last year allocated $5 million in the state’s current fiscal year budget to support their planned mental health crisis stabilization center.

“There is nothing else in our community, or in our state, like this revolutionary model of medical and behavioral health care, created by a unique collaboration of public and private entities,” said Trinity Health Grand Rapids President Dr. Matt Biersack. “In fact, others are looking at our Behavioral Health Crisis Center model to see if it may work for their communities.”

erate whatever equipment it is.”

The cost pressures also come amid a period of consolidation and change within the agricultural industry itself. The number of farms in Michigan declined nearly 15 percent from 2007 to 2017, the most recent year for which data are available from the USDA’s Census of Agriculture. Farms also are consolidating among larger operators, with the average size of farms increasing by 14.5 percent over the same 10-year period.

year and 7% the next year, how do you plan long term? How do you make business decisions about planting new blocks of apples or blueberries or even bringing another family member into the farm?”

Looking ahead, many farmers are nervous that their operations will become unprofitable if the costs continue to escalate. That’s leading some operations, including Rasch Family Orchards, to weigh their options.

“To be completely honest, it’s really hard,” Vargas said. “We’re looking at $130,000 more in our payroll this year. As far as what our income is for our product, we don’t set that (but) over the past five years, (the selling) price has gone up 26% but our costs have gone up

Mechanization is expensive and may not be cost-effective for small to mid-size growers, and the equipment also takes time to install, implement and to train workers to use. That’s time many agricultural operations simply lack, given that annual crops need to be planted yearly in prepared soil and perennial crops like fruits need regular upkeep and consistent care. Most farmers have very little space to pivot to new forms of labor and mechanization.

“We need to continue investing in mechanization, but it’s not going to come fast enough to solve all of our labor needs,” Kran said. “And some things are just really difficult to do mechanically versus with a person.”

Echoing DeHaan at Crossroads Blueberry Farm, Vargas said Rasch Family Orchards has found harvesting apples by hand results in a better product.

“Apples are just such a delicate fruit,” she said. “They can bruise very easily. They take a lot of skill to get off the trees and into the bins without damaging them. There hasn’t been an efficient way to take apples off the trees without people. Even if we did, in the best-case scenario, we’d still need people to op-

Kran said in the coming years, West Michigan farmers will face “tough choices” when it comes to staying in business. Like Vargas, he’s concerned that losing farmers will cause irreparable harm to the local rural landscape.

“When we lose these businesses, there’s generations of understanding of how to grow fruits and vegetables that we’re just not going to get back. We need to help the public understand that these costs are really putting a lot of strain on farmers and people are already making tough decisions to (either) change their business models or exit the industry,” he said.

As a result of the challenges, Kran anticipates seeing more imported produce on store shelves in the years ahead.

“As farmers are faced with these increased costs, our consumers are going to have to decide whether we want U.S.-produced fruit and vegetables or do we want to get it somewhere else,” he said, adding that some farms will need to close as a result of the economic conditions.

At Rasch Family Orchards, Vargas is doing everything she can to stop that from happening.

“Right now we’re asking: How much longer can we do this? We want to keep going, but we just don’t know how much longer we can,” she said. “I try to be positive, but I would say that this one’s got me stuck.”

Franklin Partners’ mixed-use project at the former Display Pack site in Grand Rapids will not include an office component. | COURTESY OF GHAFARI ASSOCIATES

Rendering of a patient room in the new Behavioral Health Crisis Center. | NETWORK180

“The reason why farmers today are using the H-2A program is because we don’t have a domestic supply of labor like we’ve had in the past.”

John Kran, national legislative counsel at the Michigan Farm Bureau

Coming from Cuba at 20, she’s now led legal teams at region’s largest firms

A career detour based on her mother’s intuition led Ileana McAlary from classrooms in Cuba to the legal departments at some of West Michigan’s largest companies. Growing up in Cuba, McAlary started a career in teaching before making the switch to law. She attended law school at the University of Havana before immigrating to the U.S., following in the footsteps of her relatives who came to Grand Rapids for work opportunities. After attending Grand Valley State University and Wayne State University, McAlary worked at a private law firm before pivoting to in-house legal roles at some of West Michigan’s most notable companies, including Wolverine World Wide, Meijer and Amway. McAlary now serves as executive vice president, chief legal officer and corporate secretary at SpartanNash Co., a role she was promoted to in March after joining the food distributor and retailer in 2021. As a veteran attorney with more than 20 years of experience, McAlary has found a way to combine her passion for law with her business-oriented mindset. She recently spoke with Crain’s Grand Rapids Business about her SpartanNash promotion, career journey and why she loves West Michigan. |

BY KAYLEIGH VAN WYK

Did you always expect to go into a career in law?

My interest in law started when I was a young girl. I seemed to take pleasure advocating for friends and family members, and my mother said, ‘Listen, you probably should pursue law because you sure like to argue a lot.’ I grew up in Havana, Cuba, and I thought I wanted to be a teacher despite my mom’s prediction. I actually went into teaching and did a couple of years of teaching — not just taking classes, but teaching kids that were only two years younger than me due to the shortage of teachers in the early 1990s. I liked it, but I always had that passion for law. After two years, I decided to listen to my mother’s intuition and pursue law, and I fell in love with it.

How did you end up in Michigan?

I lived in Cuba until I was 20 years old, but most of my family had immigrated in the late 1960s or early 1970s to the U.S. At the time, immigration was based on labor demands, and West Michigan had a tremendous need for labor, especially in the manufacturing industry. My family got on a list for legal immigration, and they ended up being sponsored to come to Grand Rapids. When it was time for me to immigrate, given the political situation in Cuba, Grand Rapids seemed like a great choice. I came on a beautiful spring day and fell in love with Grand Rapids and West Michigan in general, and I ended up staying here and going to Grand Valley State University for undergrad, studying international relations and business.

What made you fall in love with Grand Rapids?

My family had been very welcome in this area and flourished in West Michigan. It’s a wonderful and diverse community. It’s still small enough to be welcoming, but it’s growing and becoming more of a destination for people to discover and make their home. I was considering moving out of state at one point, but my then-boyfriend who’s now my husband proposed

to me, and we decided to make Grand Rapids our home.

What was your first job in the legal field?

I went to Wayne State Law School, and during my second year, I interviewed with the firm Miller Johnson, Snell & Cummiskey. They offered me a clerkship in the summer, and I had a great summer of learning, but also of meeting attorneys who became my friends (and are) now still today. When I finished my summer clerkship, the firm extended me an offer to come work for them when I graduated from law school.

That was my very first legal job before I went into in-house roles.

After working in private practice, what appealed to you about switching to in-house gigs?

Although I enjoyed my time at the firm, I’ve always been very business-minded and always had a desire to manage work from beginning to end, instead of just focusing on aspects of supporting a corporate client. Having the opportunity to transition to in-house roles gave me great insight into what it’s like to manage a business, manage all the legal needs of a business, and just

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become an integral part of the strategic growth of a company. That’s something that in-house lawyers are uniquely positioned to do. After executive legal roles at some of West Michigan’s largest companies, why did you accept a position at SpartanNash?

I had heard about the new management the company had under the leadership of Tony Sarsam, our CEO, and the things he was doing to drive the company forward. I’m thankful that SpartanNash reached out to me and asked me to join this team that creates an environment where everyone wants to support each other and do excellent work for our customers. Having the opportunity to work for other major Grand Rapids-based companies like Amway, Meijer and Wolverine World Wide gave me what I needed to succeed at this job. What does your role at SpartanNash look like now after this recent promotion?

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Tell me about life outside of work.

Being a mom is my most important job. I have two kids — my daughter is a senior at Hudsonville High School, and she will be a Spartan at Michigan State University this fall. My son is a sophomore in high school. They’re both involved in sports, and they keep me busy with cheering for them at various sporting events.

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Ileana McAlary, executive vice president, chief legal officer and corporate secretary at SpartanNash Co.

“My interest in law started when I was a young girl. I seemed to take pleasure advocating for friends and family members, and my mother said, ‘Listen, you probably should pursue law because you sure like to argue a lot.’”

Ileana McAlar y, executive vice president, chief legal officer and corporate secretary at SpartanNash Co.

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