Crain's Grand Rapids Business, Jan 22, 2024

CRAINSGRANDRAPIDS.COM I JANUARY 22, 2024

Annual wage report shows slight easing in tight labor market Study by West Michigan company finds compensation to remain competitive

By Mark Sanchez

Corewell Health over the past four years has bought 14 parcels shown here in the Monroe North neighborhood for a new office campus and potentially housing projects. | CHRIS GATES

Corewell Health buying spree tops $57 million Properties are being used for a new Grand Rapids campus

By Kate Carlson

Corewell Health has spent nearly $60 million to acquire more than a dozen properties in Grand Rapids’ Monroe North neighborhood, where the health system is developing a new office campus, a Crain’s Grand Rapids Business analysis has found.

Most recently, Corewell Health paid $1.6 million last month to acquire the former Rocky’s Bar and Grill property at 633 Ottawa Ave. NW, property records show. It marked the latest property acquisition around 13 other parcels the health system bought up over the last four years in mostly separate deals.

The sites included dilapidated properties as well as a range of local businesses, including a former distillery and an auto repair shop where the owners used the proceeds from their property sales to expand their businesses.

Real estate experts say the See COREWELL on Page 21

The tight labor market that worsened in the pandemic showed signs of slightly easing in late 2023, although employers will still have difficulty filling open positions for years to come and will need to continually adjust what they pay.

That’s the conclusion in an annual compensation report issued by the Grand Rapids-area office of staffing company Express Employment Professionals. The West Michigan report noted that the firm expects the demand for labor to continue to outstrip supply in the new year and beyond.

“As we begin 2024, we are seeing a slight leveling off from the ‘talent crisis’ we’ve been experiencing since mid-2020. Many companies have slowed their pace of hiring and have stabilized their workforce,” David Robb, co-owner and managing partner of Express Employment Professionals, and co-founder Janis Petrini wrote in the firm’s 2024 compensation report.

“While the extreme talent crisis may be showing signs of easing, we continue to predict that

David Robb, co-owner and managing partner of Express Employment Professionals’ office in Wyoming. | COURTESY PHOTO

for the foreseeable future we will be in a low unemployment market that is defined by an overall shortage of labor with greater demand than supply,” the executives wrote.

Express Employment Professionals reported that between 2013 and 2017, West Michigan had two to four times as many job openings as people seeking employment. That began to See STAFFING on Page 20

New life for iconic Harris Building Owners hope to land restaurant, retail at 132-year-old site

By Kate Carlson

Three local real estate investors have acquired the 132-year-old Harris Building and two adjacent properties in hopes of attracting a restaurant, bar or retail to activate Grand Rapids’ South Division Avenue corridor.

Doing business as Bluefin Ventures LLC, local software entrepreneur Chris Ake and two part-

ners in early December closed on the Harris Building, located at 111 S. Division Ave. just north of Cherry Street in the Heartside neighborhood.

Ake declined to disclose the price of the purchase from former owner Gregory Cooksey of Grosse Pointe, doing business as 111 Division LLC. Ake, who founded Grand Apps Development while in college in

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2011 and is now one of the managing partners of Grand Rapids-based software firm Kyros Digital, also acquired two adjacent properties to the south with partners Brent Fisher and Nicholas Lovelace.

The properties at 115 and 117 S. Division Ave. — also previously owned by Cooksey — were See HARRIS on Page 20

Bluefin Ventures recently acquired the Harris Building on South Division Avenue, along with two adjacent properties. | ANDY BALASKOVITZ

REAL ESTATE Developer sticks with ‘huge market’ on East Beltline

TECHNOLOGY Health care cyberattacks are up and it’s getting worse

FINANCE Venture capital investments in state companies fall again

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Soccer stadium developer engages community Sports venue may also include restaurant, retail space

By Kate Carlson

An 8,500-capacity soccer stadium eyed for an 8.2-acre site on Grand Rapids’ west side would rely on thousands of nearby parking spaces for visitors, include an onsite retail store and restaurant, and potentially spur hundreds of housing units on adjacent properties.

These were some of the new project details that emerged Jan. 10 during a presentation from the stadium developer and designer to about 25 people during a local

neighborhood group meeting.

The meeting marked project developer Grand Action 2.0’s official start of its community engagement effort for the proposed soccer stadium. While the property between the downtown YMCA and US-131 hasn’t been formally selected for the stadium, it’s the only site Grand Action 2.0 is actively considering.

However, that formal site selection could come within the next few months, as the development team hopes to submit a special

land use request to city planning staff by the end of February.

During the meeting, some main concerns from neighbors involved parking capacity and whether another use, such as housing, might better suit the property and the city’s needs.

Specifically, the project as proposed wouldn’t include onsite parking. The development itself would eat into 779 existing surface parking spots on city-owned DASH commuter parking lots and the YMCA’s parking lot.

See STADIUM on Page 21

Grand Action 2.0 has started the community engagement process for a proposed soccer stadium eyed for the city’s west side. | PROGRESSIVE AE INC.

Developer sticks with ‘huge market’ on East Beltline Wheeler Development Group building 96-unit townhome community

By Rachel Watson

Oprah Winfrey speaks during her portrait unveiling ceremony at the Smithsonian National Portrait Gallery on Dec. 13, 2023. | GETTY IMAGES

Oprah Winfrey to speak at 35th annual Econ Club dinner in May Performer follows such luminaries as QB Tom Brady and two U.S. presidents | By Kate Carlson Legendary talk show host, actress and entrepreneur Oprah Winfrey will be the keynote speaker at The Economic Club of Grand Rapids’ 35th annual dinner on May 28 at DeVos Place, Crain’s Grand Rapids Business has learned.

The celebrity, who has served as a household staple for millions of people over the years by way of “The Oprah Winfrey Show,” is the latest in a list of high-profile celebrities, athletes and politicians who have spoken at the Econ Club’s annual dinner over the years. Past speakers include former Secretary of State Hillary Clinton (2013), former Presidents

George W. Bush (2010) and Bill Clinton (2007), and most recently, seven-time Super Bowl champion Tom Brady in 2023.

An Econ Club representative did not respond to a request for comment, although multiple sources with knowledge of the event confirmed Winfrey’s booking. The event is open only to Econ Club members and their guests.

Winfrey is no stranger to Grand Rapids, having led a discussion for a “60 Minutes” segment in the city in 2017 featuring 14 West Michigan residents with a range of political views. She returned to Grand Rapids the following Janu-

ary to follow up with the 14 people who were part of the political roundtable discussion at Mitten Brewing Co., where they gathered and spent three hours talking over pizza and beer, according to reporting from MLive.

The discussion was meant to highlight the political divide in the country, similar to some of the controversial topics featured on “The Oprah Winfrey Show” throughout the 25 years it was on the air from 1986 to 2011. Some of the show’s 4,561 episodes featured extravagant giveaways to studio audience members and celebrity interviews, but they also frequently touched on more seri-

ous societal issues like sexual abuse, racism, world conflict, and the AIDS epidemic.

Winfrey’s most recent project is serving as one of the producers for the 2023 remake of “The Color Purple” movie. Winfrey also starred in the original 1985 version of the film.

Winfrey’s speaking fee at events is estimated to range from $1.5 million to $2.5 million, according to Anthem Talent Agency.

According to the Econ Club’s most recent tax filings with the IRS, the organization generated $1.2 million and $2.2 million in revenue from its annual dinner the past two years.

A Grand Rapids-based multifamily housing developer is doubling down on investments along East Beltline Avenue after a project it completed there last year “filled up immediately” amid high demand for housing in West Michigan.

Grand Rapids-based Wheeler Development Group (WDG) said that it’s building a 96-unit market-rate rental townhomes community called Meadowood Townhomes at 3300 East Beltline Ave. NE, south of Four Mile Road in Grand Rapids Township.

A groundbreaking for the project was scheduled for Jan. 17.

The first of the 24 buildings of two- and three-bedroom townhouses will be move-in ready by late summer 2024, and the entire project is expected to be complete in early 2025.

The project is across the Beltline from Evergreen Townhomes, a 52unit development WDG completed a year ago at 3431 E. Beltline Ave. NE that “filled up immediately,” according to Jason Wheeler, See WHEELER on Page 20

Early conceptual renderings for Wheeler Development Group’s 96-unit townhome project on East Beltline Avenue in Grand Rapids Township. | PROGRESSIVE AE January 22, 2024 | CRAIN’S GRAND RAPIDS BUSINESS | 3

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Health care cyberattacks are up; it’s getting worse

By Dustin Walsh

As Santa returned to the North Pole, more than 1 million Corewell Health patients were informed their personal information had been compromised in yet another cyberattack.

A third-party vendor suffered a data breach that exposed valuable patient information such as Social Security numbers, names, addresses, billing information and much more.

It was the second major breach tied to Corewell announced in December alone. A previous breach was announced Dec. 1 from a different third-party vendor that also exposed the data of a million patients.

A month earlier, McLaren Health reported a data breach that exposed the data of roughly 2.5 million patients.

The list goes on and on and on of similar announcements that highlight the growing problem of cyberattacks — especially in health care, where sensitive patient information and big money combine to make organizations tempting targets for an increasingly organized cybercriminal underworld.

Cyberattacks are costly to prevent and even costlier in the aftermath.

And last year was the worst year for cyberattacks on record, with roughly a third of the U.S. population affected by attacks on health care organizations, more than double the number impacted in 2022.

They are even impacting patient care: A cyberattack on Tennessee-based Ardent Health over the Thanksgiving holiday shut down emergency departments at several hospitals across three states.

And all indications are the attacks will get worse in 2024 as administrators in Michigan and beyond contend with the ever-present threats.

“Michigan had a very active cy-

bersecurity year,” said Jack Kufahl, chief information security officer for Michigan Medicine in Ann Arbor. “We’ve not seen the peak. We see growth in the costs and attacks and the number of successful attacks year over year. There’s no reason to think 2024 isn’t going to be a challenging year for cybersecurity in health care.”

Roughly 88% of health care companies experienced at least one cyberattack in the past 12 months, according to the 2023 Cyber Insecurity in Healthcare report published last year by the Ponemon Institute, a renowned cybersecurity research organization headquartered in Traverse City.

The average number of cyberattacks experienced by those with at least one attack was 40, according to the report.

Kufahl said that health care systems are under constant attack, but it’s not an all-encompassing threat at all times. Most of the attacks are thwarted, but even the small fraction that gets through is dangerous and expensive.

“Cybersecurity looks more like infection control than the military,” Kufahl said. “Your body is under constant attack by viruses, bacteria and infection, but it does a good job of preventing those threats. Occasionally there is a breakthrough.

So we have to constantly update our hygiene practices.”

Preventing access to data is paramount as the average cost of a data breach to an organization in health care is $4.9 million, according to the Ponemon report.

More than half of the 654 companies surveyed by Ponemon reported ransomware attacks over the past two years — that is where hackers hold medical records or control of systems hostage in exchange for a payout. Of those that had a ransomware attack, they experienced an average of four incidents.

Ransomware is a growing prob-

Hospitals and health care systems have become increasingly tempting targets for cyberattacks. | DALE G. YOUNG

lem in all sectors, not just health care.

Qilin, a ransomware group affiliated with hacker gangs in Russia, hijacked the IT systems of auto supplier Yanfeng, which shut down auto production at Stellantis in November. Yenfeng did not disclose whether it paid the ransom to the hacker group.

“The biggest attack vector (in health care) is ransomware,” said Tom Wojcinski, principal of the cybersecurity and technology management practice of Milwaukee-based consulting firm Wipfli LLP. “They keep happening because companies keep paying the ransom. It’s a big payday for cybercriminals.”

For example, the widely reported ransomware attack of Colonial Pipeline in 2021 resulted in a ransom payment of $4.4 million, some of which federal agencies were able to recover.

Corewell and McLaren did not disclose whether the cyberattacks impacting their patients were tied to ransomware.

Wojcinski said the health care industry is ripe for ransomware attacks because of patient risk and the large piles of cash many systems hold.

Corewell, for instance, had $1.92 billion in cash on hand at the end

of 2022.

“If a hacker can take (emergency medical records) offline, it’s going to be very difficult for that organization to provide (care), you can’t intake new patients into the ER, etc.,” Wojcinkski said. “There is just a higher urgency if those systems are offline. A health care system has a lower pain tolerance than a metal vendor doing tier three work in the auto supply chain. A health care organization is going to reach the decision to pay faster.”

But it’s not just the ransom that’s of value to cybercriminals. Medical records fetch top dollar on the dark web, Wojcinski said. Referencing a 2019 study by Trustwave Global, Wojcinski said medical records retail for up to $250 per record on the dark web, far more than a credit card number, which retails for up to $5.40.

“How the data is going to be used is critical to the conversation,” Wojcinski said. “Is the attacker trying to set up fraudulent identities or is the payoff the ransom? My hunch is the ransom is the largest target, but those smaller individual targets are relevant as well.”

When identities are exposed, most health care companies provide a limited time of credit report monitoring to those affected.

Michigan Medicine did so for the

roughly 36,000 patients impacted by a data breach in 2022.

That breach was instigated by a phishing attack, where an employee opened an email that unleashed malware that gained access to the employee’s log-in credentials, a common scam for attackers.

Kufahl said the cyberattack sphere operates much like a supply chain, where certain criminals gain access to data and then send that data up the chain to other criminals who combine it with other data to create a more viable threat to organizations.

“Phishing is a relatively low-cost and highly effective way of gathering information like passwords,” Kufahl said. “There are actors who are in charge of nothing more than collecting large data sets of passwords, then they sell it. They can then tie that credential to a piece of malware and start combining more credentials and malware. It works like a supply chain. There aren’t many soup-to-nuts malicious actors.”

Kufahl, however, said the industry is getting more and more sophisticated and is collaborating on solutions. Michigan Medicine, for instance, develops its own threat intelligence to better understand how a cyberattack may happen and by whom.

Wojcinski and Kufalh are worried about generative artificial intelligence that is flooding into the health care space in the name of cost savings and efficiency.

“There are unintended consequences of using AI within organizations,” Wojcinski said. “If people aren’t aware, they are sending data to a public cloud that can make it vulnerable. We are making it harder and harder for bad guys to get into the data but then offering up new vulnerabilities all the time.

Right now, they have the advantage and we’re playing catch-up.”

Dustin Walsh is a reporter for Crain’s Detroit Business.

LMCU names replacement for retiring longtime CEO

By Mark Sanchez

Sandra Jelinski, who has led Lake Michigan Credit Union through unprecedented growth to become the largest credit union based in Michigan, plans to retire in March after more than two decades as president and CEO. Directors at the Grand Rapids-based LMCU named Julie Leonard to succeed Jelinski starting March 4. Leonard currently serves as executive vice president and chief financial officer of Tampa, Fla.-based Suncoast Credit Union, which ranks as the 10th largest credit union in the U.S. with more than $17 billion in assets.

During Jelinski’s 23-year tenure, LMCU grew from $300 million in total assets to about $13 billion with nearly 500,000 members. The credit union extended across the state, opening offices in several markets, and in the last decade moved into Florida through the

acquisition of community banks in markets on the Gulf Coast.

LMCU ranks as the 16th largest credit union in the U.S. “LMCU has been my professional home, and so much more, so the decision to retire is certainly bittersweet,” Jelinski said in an announcement on the leadership transition. “Working alongside our Michigan and Florida teams, who are more than 1,650 strong, it has been a true privilege to help our members realize their financial dreams and goals. LMCU is blessed to have one of the absolute best management teams and Board of Directors, whose combined experience, talent, and drive will benefit my successor as they work together to drive the credit union to new heights and execute our longterm growth strategies.”

LMCU presently has 69 offices, including 48 in Michigan and 21 in Southwest and Central Florida. The credit union reported it had $12.94

Jelinski

Leonard

billion in total assets and more than 483,500 members, according to a Sept. 30 quarterly financial statement filed with federal regulators. LMCU also had $11.6 billion in total deposits and $11.35 billion in loans, which included $1.51 billion in commercial loans. It recorded $126.8 million in net income for the first nine months of 2023.

Jelinski’s “vision to transform the credit union into one of the leading financial institutions in the country, including expanding operations in Michigan and Florida, has positively shaped the last several decades,” Gretchen Tell-

man, board chair for LMCU, said in a statement. “We wish Sandy all the best in her well-deserved retirement and are so very grateful for the leadership she has provided to LMCU, as well as the unwavering commitment she has had to serving our members, staff, and local communities.”

In Leonard, LMCU gets a new CEO with experience as an executive at a large credit union.

Suncoast Credit Union had $17 billion in assets and $1.46 billion in deposits with more than 1.1 million members, according to a Sept. 30 quarterly report to the National Credit Union Administration. The credit union, which has 77 branch offices across Florida, recorded $116.6 million in net income during the first three quarters of 2023.

Leonard “brings a great depth of experience in financial services, and a keen understanding of the Florida market, as well as being a

Michigan native,” Tellman said.

“She has clearly demonstrated that she is a charismatic, capable, and experienced leader, as well as a great team builder who is deeply engaged with the community. We are confident she will continue LMCU’s remarkable growth trajectory and solid commitment to always doing what is right for our members.”

Leonard said in LMCU’s announcement that she was “thrilled to be selected as the leader of such an amazing and successful credit union.”

“What an honor to join such a talented team that improves the lives of its members and has such a positive impact on communities across Michigan and Florida,” she said. “I look forward to working closely with the LMCU team to serve and positively impact our members by building on the impressive success LMCU has experienced under Sandy Jelinski’s leadership.”

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City sets aside 19 parcels for ready-to-build housing

By Rachel Watson

Habitat for Humanity has listed its ReStore near Grand Rapids for $1.4 million. | COURTESY OF HABITAT FOR HUMANITY OF KENT COUNTY

Habitat for Humanity lists south side ReStore for $1.4M

By Abby Poirier

Habitat for Humanity of Kent County is consolidating one of its two Grand Rapids-area ReStores with office operations and has closed a Division Avenue store amid a pending $1.4 million offer on the property.

The anticipated combined campus with offices and a ReStore is intended to boost the efficiency of the organization’s local programs. The ReStores sell new and gently used building materials and appliances at discounted prices to help make home improvement products more affordable.

Velly Bounprasay, general manager at Habitat Kent’s Division Avenue ReStore, said the store, which originally opened in 2004 at 5701 S. Division Ave. in Wyoming, was scheduled to close to the public on Jan. 13, just shy of its 20th anniversary.

Habitat Kent’s ReStore program operated two Grand Rapids-area facilities, the Division Avenue location and another at 5920 Alpine Ave. NW in Alpine Township, which will remain in operation as a standalone ReStore. The organization’s main offices are at 425 Pleasant St. SW near downtown Grand Rapids.

Eventually, the offices would be combined with the Wyoming ReStore operation.

While Habitat Kent is still searching for property for the new ReStore and office headquarters, Bounprasay said the goal is to remain in Grand Rapids.

“Our focus is trying to move all of our operations in one place,” he said. “That allows us to provide more resources more efficiently

for our families and our communities. With everybody in one location collaborating with our team, (it’s) going to be a lot easier.

Once everybody’s combined in one location, the goal is for a better customer experience.”

Commercial brokerage JLL has the 26,000-square-foot Division Avenue building and 2.4-acre property listed for $1.4 million. A sale is pending, according to the listing.

As Habitat Kent looks for a new space, the ReStore on Division, which employs five part-time workers, will remain closed and employees will be moved to other areas of the company during the transition.

The Pleasant Street offices, however, will remain open and fully staffed until the as-yet undetermined new location opens.

While Habitat Kent owns the office space, the building is not on the market while the organization explores options for relocation.

The new space will house Habitat Kent’s main offices, ReStore and construction program in one location. Bounprasay said the combination of construction and ReStore in one space will help boost efficiency between the programs and eliminate wait times for construction needs.

While the organization has yet to find a building, Bounprasay said Habitat officials are hoping to reopen the new ReStore “as soon as possible” to support the local community. “(Our) hope is just (to) provide great customer service for our customers, (create) easy access for any materials that we have and make sure everybody leaves with a big smile,” he said.

Habitat for Humanity’s ReStores sell new and gently used building materials and appliances at discounted prices. | COURTESY OF HABITAT FOR HUMANITY OF KENT COUNTY

The city of Grand Rapids said it will hold onto 19 vacant state land bank parcels it controls until the spring as it works to roll out free permit-ready plan sets and financing opportunities to encourage denser infill housing development.

At the city’s Economic Development Project Team meeting on Jan. 9, interim economic development director Jono Klooster provided an update to elected officials on work that’s underway to complete a set of permit-ready housing plans that small and emerging developers can use in certain neighborhoods to defray development costs.

Klooster said as his team works to finalize the permit-ready plans, the city will hold onto 19 parcels owned by the State Land Bank Authority and controlled by the city within the traditional neighborhood zone districts, primarily on the southeast side, so that the land isn’t sold to developers who only intend to put single-family houses on the lots.

The city identified those 19 sites out of the 60 state land bank-owned parcels in Grand Rapids because they are currently zoned for duplexes or could potentially be rezoned for three- or four-unit homes.

“If we sold them for single-family homes, that might be a generally positive outcome, but we would be getting rid of the only real estate resource we have that can be used for duplexes (or triplexes or quads),” Klooster told Crain’s Grand Rapids Business.

He said during the meeting that the city sees vacant land as a “limited commodity” and wants to protect it for the highest and best use.

“We don’t have an expectation that we’re going to be coming into ownership of a lot of properties through tax foreclosure in the near future, which, on the one hand, is good, but since this is a limited resource, we want to make sure that we reserve those properties and leverage those for this opportunity,” he said.

The city plans to continue fine-tuning the permit-ready plan sets while also working on assembling financing options that would be available to first-time or emerging developers who intend to build housing.

Their goal is to release the plan sets, paired with information on financing opportunities, this spring, at which time the city would make those 19 undeveloped parcels available for purchase.

Klooster said during the meeting that this is just one of many initiatives his team is working on to meet the goals of the city commission, the Equitable Economic Development and Mobility Strategic Plan and the Grand Rapids Affordable Housing Fund Board.

He said the point of this particular initiative is to foster small-scale development instead of directing the city’s “limited resources” solely

This duplex rendering is part of the Michigan Municipal League’s open-source “pattern-book homes” project. Grand Rapids’ permit-ready homes designs were influenced by the pattern-book homes project. | MICHIGAN MUNICIPAL LEAGUE

to “a large, $10 million project,” for instance.

“If we’re thinking about the real estate development industry and helping move the needle in our community, we believe that providing resources on this sort of small, starting scale, with an incremental project … is an appropriate approach,” he said. “We know that there are a lot of complexities associated with land development, especially in an urban environment.

Some of those are related to city processes, and others are things outside of our control. We’re focused specifically on things that can help navigate and save time and money associated with city processes.”

The free, permit-ready plan sets will include a few single-family house designs, as well as designs for duplexes, triplexes and quadplexes, designed specifically to fit “typical Grand Rapids lots” and be “architecturally/aesthetically consistent with the character of our traditional neighborhoods,” Klooster said. The city has made the most progress on the duplex designs so far, he added.

The plans will be available on an ongoing basis for any member of the public, including developers who are targeting privately owned land for infill housing development.

The plan sets also could be used by developers who buy any of the other 41 land bank properties, which are best-suited for single-family homes, Klooster said.

The plans are influenced by an open-source “pattern-book homes” project designed by the Michigan Municipal League with funding from the Michigan Economic Development Corp.

MML Program Manager Melissa Milton-Pung has been advising the city of Grand Rapids over the past several months on the adoption of the plans, which she helped design alongside fellow MML Program Manager Richard Murphy.

Milton-Pung is an architectural historian and said she was inspired by the “catalog homes” of the first half of the 20th century, including the pre-World War II Sears-Roebuck kit homes that are scattered across West Michigan.

She said MML hopes the pattern-book homes initiative will give municipalities a toolkit for building homes that better fit with the character of existing neighborhoods.

“What we were doing was putting out there the idea that this is the type of development that we can see happen that won’t stick out like a sore thumb in our existing neighborhoods,” she said. “There are a lot of potential ways that housing can be created, and this is one of them.”

Milton-Pung and Murphy said several Michigan cities — including Dearborn, Kalamazoo and Cassopolis, a small town in Cass County — are in the process of adapting the open-source pattern-book home templates. Outside of Michigan, the idea is percolating in South Bend, Ind., and in a few municipalities in Ohio, she said.

“We’re growing the ideas … to help provide the tools for people so they can help manifest it in their communities,” Milton-Pung said.

Ryan Kilpatrick, former executive director of Housing Next and owner and principal of Grand Rapids-based Flywheel Community Development, is a consultant for the city working to assemble financing options to go with the permit-ready plan sets.

He said at the meeting that, while nothing is finalized, he is considering various sources including grant funding, brownfield tax increment financing, pre-development support funds and the Kent County revolving loan fund.

Kilpatrick also hopes to obtain an investment commitment from an undisclosed Community Development Financial Institution (CDFI), which could give developers access to funding of anywhere from $25,000 to $150,000 per project, depending on the scope and size of the development.

“Our goal is to really build up a small cadre of local developers who are from the neighborhoods who are able to take on some of those early projects and leverage the land bank properties, leverage zoning reforms and the pre-approved plan sets and become part of the development ecosystem in our community,” he said.

Kilpatrick added: “As we think about our overall housing need across the city, almost 15,000 units are needed. We’re not going to build 15,000 units with small-scale developers, but over time, we might get to 25% or 30% of the overall need with those small-scale developers.”

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Ronald McDonald House lays groundwork for second expansion The project expands the Grand Rapids Ronald McDonald House As Ronald McDonald House from 17 to 25 suites and upgraded West Michigan Charities prepares other areas. Existing suites and to open an expansion and renova- public and kitchen areas re-opened tion that provides much-needed in November after renovations. The added capacity, the organization eight new suites will open in has already started the early plan- mid-February after the end of conning to accommodate future struction, which is managed by Holland-based EV Construction. growth.

Founded in 1990, the Ronald The nonprofit Ronald McDonald House that provides lodging for McDonald House serves 330 to 350 families with hospitalized children families annually who come to receiving medical care in Grand Grand Rapids from at least 30 miles Rapids knows that it will need even away and around the state. Famimore capacity in the years ahead lies are primarily referred by Helen after Mary Free Bed Rehabilitation DeVos Children’s Hospital. The faHospital and Pine Rest Christian cility also gets referrals from Mary Mental Health Services open new Free Bed, Pine Rest, Forest View Hospital and Trinity Health Grand pediatric hospitals.

Seeing both projects as drawing Rapids, Carpenter said.

The Ronald McDonald House more pediatric and adolescent patients to Grand Rapids from out- also includes laundry facilities, common areas, a play side the area and creating space for siblings, a dina greater need to support ing room, and a kitchen families while they’re in for families who wish to town, leaders at the local prepare meals. Families Ronald McDonald House stay for an average of 20 are already laying the nights as their child regroundwork for another ceives treatment in potential expansion to Grand Rapids for an exadd rooms and create tended period. more capacity.

Carpenter The lodging is free for The organization has families, many of whom begun conversations with executives at Mary Free Bed and come from surrounding counties Pine Rest to determine “what kind and are often unable to afford of numbers that we need here to lodging while in Grand Rapids support those families” once the during a child’s hospital stay, Cartwo new pediatric hospitals open, penter said.

“We take away all of their worsaid Executive Director Ellen Carpenter. Logic “would say we’re go- ries about their basic needs while ing to probably add more rooms,” they’re here,” she said.

Plans for the present expansion Carpenter said. “How many, we and renovation originated early in don’t know yet.”

“We feel lucky to be in a com- the COVID-19 pandemic when remunity that is really investing in strictions limited capacity at the pediatric health,” she said of the Ronald McDonald House, which Mary Free Bed and Pine Rest proj- in normal times was often full and ects. “As we embarked on this, all had to put families on a waiting of their plans began to unfold, and list. The slower period led leaders so now we’re thinking, ‘This is go- to begin formulating plans for an ing to impact us even more. How expansion, Carpenter said.

Directors had discussed expando we get ready?

“We’re going to be busier and it’s sion in the past and finally decided during the pandemic that “now going to create more demand.”

Ronald McDonald House has is the time” to proceed and mount “long served as a place of hope and a capital campaign to pay for it, healing for families with children she said.

“COVID gave us a lot of time to in rehabilitation at Mary Free Bed,” Kent Riddle, the rehab hospital’s look around and say, ‘How could CEO, wrote in an email to Crain’s we get more capacity out of this Grand Rapids Business. “We’re ex- space?’ We weren’t full, so we cited for their expansion and our thought now was the time to probcontinuing partnership. Our pa- lem solve how do we add capacitients and community are fortu- ty,” Carpenter said. “We concludnate to have this home away from ed that we have a building here that is wildly underutilized and home.”

As early planning for the future how can we reimagine that space proceeds, Ronald McDonald and how can we raise that kind of House works to complete a $2.7 money to make that happen.”

The latest project included upmillion expansion and renovation of its home in a farmhouse on a grading existing suites and trans5-acre site on Cedar Street NE, east forming an adjoining building that was previously used for storage of Fuller Avenue.

By Mark Sanchez

Ronald McDonald House West Michigan Charities embarked last March on a $2.7 million capital campaign to renovate and expand its facilities in Grand Rapids. The organization has so far raised $2.1 million from donors to cover construction costs. | COURTESY PHOTOS

and meetings into additional suites.

To pay for the project, Ronald McDonald House West Michigan Charities embarked last March on a $2.7 million capital campaign.

The organization has so far raised $2.1 million from donors to cover construction costs and has several outstanding requests to prospective contributors. It seeks to raise the remaining $600,000 to support operations and to create family rooms at the new Mary Free Bed and Pine Rest facilities and at Helen DeVos Children’s Hospital, Carpenter said.

Ronald McDonald House West

Michigan Charities is one of nearly 400 Ronald McDonald House programs globally that provide about 2.2 million overnight stays annually for families, saving them $611 million for lodging and meals. The charity is affiliated with the Chicago-based fast-food giant but does not receive direct financial support from the corporation.

Support for the capital campaign has come from hospitals, including Pine Rest, Helen DeVos Children’s Hospital, Mary Free Bed and Trinity Health Grand Rapids, as well as family foundations and other donors large and small, Carpenter said.

As the Ronald McDonald House proceeded with the capital campaign, prospective benefactors were more apt to give once they learned that the charity does not receive financial support from the corporation, Carpenter said. She’s confident that the More Rooms, More Love campaign will reach its final fundraising goal.

“The more people know about us and are aware that we aren’t McDonald’s funded, it’s a hard mission not to get behind. The more that we build on our awareness, the more partners are going to help us get there,” Carpenter said. “Once we explain that, then they’re in.”

6 | CRAIN’S GRAND RAPIDS BUSINESS | January 22, 2024

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1/17/24 10:52 AM

PE-backed firm helps campgrounds step into digital age

By Rachel Watson

The private equity firm that founded the booking platform Campspot is ramping up its efforts to bring the camping industry, which has long been dominated by under-resourced mom-and-pop operators, into the digital age.

Northgate Resorts, a division of Grand Rapids-based private equity firm Northgate Holdings LLC that acquires and develops luxury camping resorts across the U.S., is building out a slate of technology and management offerings that will help campgrounds, which often are multigenerational, family-owned passion projects, catch up to the age of digitally driven sales and marketing.

“The campground industry is kind of like the ag industry: It always seems like it’s 10 years behind,” said Tessa McCrackin, Northgate’s chief marketing officer, who joined the firm in 2016. “We thought we could really leverage our expertise and offer hospitality plus technology to bring website management tools and SEO to other campground owners, because we’ve been at the forefront of marketing, tech and development of this industry.”

James Bossenbroek founded Northgate Holdings LLC in 1993.

Today, the firm is owned and led by James Bossenbroek, his son Zach Bossenbroek, and partner Caleb Hartung. They launched the Northgate Resorts division in 2013.

Over the past decade, Northgate Resorts has built a portfolio of 28 campgrounds and recreational vehicle resorts under the Jellystone Park, Margaritaville and Camp Fimfo brands.

It also has acquired a few independent RV resorts like Leelanau Pines Campground on Lake Leelanau, northwest of Traverse City.

The property is the firm’s sole Michigan holding, at least for now.

Far from being just a collection of campsites, the parks Northgate develops typically include amenities like multilevel play structures and alpine roller coasters.

Northgate in 2016 launched the online booking platform Campspot, of which it is now a part owner, to give travelers across the U.S. a tool similar to Expedia, but for campgrounds. Its Airbnb-like interface lets campers find and book sites across the U.S., customized by type of campsite, like tent or RV, as well as by desired amenities.

Now, the firm is further building out its technology solutions for outdoor hospitality operators.

In 2021, Northgate became a minority investor in White Pine Digital, a Grand Rapids-based firm founded by Campspot’s former lead software engineer, Sam Berry.

The company helps campgrounds enter the 21st century by building search-optimized websites with booking capabilities, including integrations to the Campspot platform.

“If you look at campground websites, a lot of times, they look straight out of 2004,” McCrackin said. “These are hardworking people, and they don’t have time to work on their websites. Sam’s been working on building a platform where people can really take control of their online presence and get into the modern age in an affordable way.”

Since launch, the business has signed at least three dozen clients, McCrackin said, including Northgate Resorts, which is using it to upgrade the websites of the campgrounds in its portfolio.

Northgate’s latest endeavor is forming Northgate Resorts Management, a third-party management division for campgrounds.

Since 2013, Grand Rapids-based Northgate Resorts has spent about $1 billion on resort construction and expansion. The private equity-backed firm generated $160 million in revenue last year from its campground and resort business. | COURTESY PHOTO

Lucas Jones, vice president of operations for Northgate Holdings, said Northgate Resorts has technically been offering management services since its inception, but this latest step is to formalize and market that offering, including to resorts that are not owned by or affiliated with Northgate.

“This is a new avenue (for) us to serve a need that we saw growing in the industry, which is that there’s a lot of investor dollars and a lot of people that are really excited about being in outdoor hospitality … but that lack the operational bandwidth or expertise (to manage their investments),” he said.

Jones said Northgate Resorts Management will offer a range of management options to prospective partners, including the ability to sign brand or franchise affiliation agreements with Northgate Resorts or remain independently owned and operated.

Northgate hopes to sign clients that hold multiple properties so the firm can quickly scale the division.

Jones likens the model to how hotel chains generate the majority of their revenues through management fees.

“We officially launched the platform in its current state about three or four months ago, and we’re already seeing fantastic feedback,” Jones said. “We’re very, very close to signing our first enterprise-level agreement with a group out of central Texas. We see it as a massive area of opportunity for growth for the company and to help owners of all sizes across the country.”

Northgate also has a portfolio of other holdings, including Tommy’s Express car washes, multifamily housing, and other business-to-business tech-based offerings. Through those equity investments, it offers leadership, guidance and management services similar to what it provides through its resorts business.

The firm, which employs 80 people at its administrative headquarters at 38 Commerce Ave. SW in downtown Grand Rapids and up to

3,000 workers during peak camping season, has experienced the most growth in its Northgate Resorts division and related investments.

Since 2013, the firm has spent about $1 billion on resort construction and expansion, about half of which occurred during the past four to five years, Jones said. The funding for that largely comes from its undisclosed investor partners, which include publicly traded real estate investment trusts, family offices and other private equity firms.

“For the past 10 years, we’ve been focused on the camping resorts,” McCrackin said. “In 2013, (we) bought three properties … (but) we’ve seen really rapid growth, especially in the past few years. Since the camping boom from the pandemic, we’ve actually doubled in size (by number of resorts). It’s been a wild, wild ride.”

Northgate Resorts reported to Crain’s Grand Rapids Business that it generated approximately $160 million in revenue last year across the parks it operates, a 20% increase from its 2022 revenue of $133 million for the division.

Northgate completed half of its 28 campground and RV resort acquisitions since 2020 amid a boom in demand for camping.

The numbers don’t lie. Outdoor recreation added about $563.7 billion to the U.S. gross domestic product in 2022, accounting for about 2.2% of the nation’s overall GDP, according to data released in November by the Bureau of Economic Analysis. The inflation-adjusted GDP for the U.S. outdoor recreation economy increased 4.8% in 2022, compared with a 1.9% increase for the overall national GDP. This followed a year of 22.7% growth for the U.S. outdoor recreation economy in 2021 during the height of the COVID-19 pandemic.

Adobe debuts new name, relocation and expansion plans

By Abby Poirier

The owner of local restaurant group Adobe In & Out is kicking off the new year with a host of changes for the third-generation Grand Rapids-area family business.

Spencer Boorsma announced earlier this month that the operation would take on a new name, Adobe Mexican Kitchen, and relocate its west side restaurant to 527 Bridge St. NW. Additionally, Boorsma detailed the company’s plans for a third location that’s slated to open in Walker in June.

“I think now’s the perfect time to change the brand,” said Boorsma, who noted that the company, which was founded in 1969, has been around for more than 50 years. “The industry is changing a lot right now. I think the Adobe Mexican Kitchen (name) better reflects what we are and (what) we’re about.”

The family-owned business currently operates two restaurants at 617 W. Fulton St. and 4410 Chicago

Drive SW. A third location, proposed for 3970 Lake Michigan Drive NW in Walker, the site of the former Rosedale Floral building, is currently taking shape with plans to open in June 2024.

The new 2,200-square-foot restaurant will include seasonal outdoor seating, a takeout counter and a two-window drive-thru system, a new addition to the Adobe blueprint which, alongside the addition of a third cook line, will help the restaurant operate more efficiently for customers, said Boorsma, who also recently brought on veteran Gordon Food Service exec Tim Phillips as a partner.

“This is the first (Adobe) I get to build from scratch, so I get to put all the efficiencies I’ve learned over the past 10 years into the building,” Boorsma said.

At the same time, Boorsma anticipates more efficiency on the technological side of the restaurant business, with plans to introduce online ordering through Adobe’s website to help customers get their

Adobe In & Out plans to relocate its Fulton Street location later this year. | ABBY POIRIER

meals quicker. He also hopes to implement self-service kiosks at some point to “add to the experience” for customers.

“I think technology and learning how to utilize that within the business is a great move forward,” Boorsma said. “I don’t think that (tech) is going to replace our workers and giving good customer service. I think that will help move our brand along and help service our customers better.”

Another update for Adobe this year will be the relocation of its “flagship location” on Fulton Street.

After more than five decades on Fulton Street, the restaurant is moving to Bridge Street to the site of former 40-year competitor El Sombrero, which is owned by an affiliate of Sibsco LLC. Boorsma said the move is a response to waning lunchtime crowds at the Fulton Street location

and the hope of dipping into Bridge Street’s nightlife.

“With El Sombrero closing down, they’ve been a longtime competitor of ours, and I saw that as a great opportunity to move over to a further developed area (while) still staying on the west side,” he said. “We’ve been a west side staple for so long (that we) definitely did not want to move from the west side. But a couple blocks north of that location, I think we can still service all the regular customers that we currently have (and) also pick up the bar crowd.”

Grand Rapids-based Construction Simplified is serving as the general contractor for the Bridge Street renovations and the expansion in Walker, while MEM Design LLC is the project architect for both.

Boorsma expects the Bridge Street restaurant to open in August and will maintain service at the current Fulton Street location until the new place opens.

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1/17/24 10:56 AM

Man charged in mPerks scheme VC investments in that cost Meijer at least $1M state companies

again fall slightly

By David Eggert

A Michigan man is facing charges for allegedly selling Meijer customers’ mPerks account information to others in a multi-state scheme that cost the retailer more than $1 million to make the customers whole, the state attorney general said.

Nicholas Mui, a 22-year-old Grand Haven resident, was arraigned earlier this month in Kent County on counts of conducting a criminal enterprise, using a computer to commit a crime and identity theft. The charges relate to seven victims in Bay, Emmet, Ingham, Kent, Livingston, Marquette and St. Joseph counties, but there were hundreds of victims overall, according to Attorney General Dana Nessel.

Mui is accused of obtaining login credentials from a past data hack, the 2018 MyFitnessPal app breach, deploying software to crosscheck usernames and passwords in mPerks, and selling the information to people who used account balances to make online and instore purchases.

“With these charges, we believe we’ve apprehended the main operative and driver of this sophisticated, widespread criminal enterprise,” Nessel said during a news conference.

Investigators seized more than $20,000 in cash and $460,000 in cryptocurrency such as Bitcoin while executing a search warrant at

By Mark Sanchez

Meijer Inc. store in Grand Haven. | MARK SANCHEZ

Mui’s residence. The probe is ongoing. It began after Walker-based Meijer received consumers complaints in April and May and contacted the Michigan State Police.

The name of Mui’s lawyer was not immediately released. A message seeking comment was left for Meijer.

Nessel urged consumers to “exercise smart password discipline.”

Those notified of a data breach should change their login credentials on that platform and all others for which they have the same credentials. They also should change their passwords at regular intervals and not use the same usernames and passwords across their accounts, she said.

The mPerks loyalty and rewards program offers customers incentives such as 2% or more back on qualifying purchases and digital coupons. The points accrued can

be used as cash value toward purchases.

It is not believed that Meijer was directly breached. It lost at least $1 million reinstating the balances of affected customers who suffered verified thefts, said Nessel, who a year ago formed a unit and “FORCE Team” to target retail crimes. Companies that have partnered on investigations include Sam’s Club/ Walmart, Target, Home Depot, TJ Maxx, Rite Aid, Lulelemon, Ulta Beauty and Lowe’s.

The state will seek restitution for Meijer from assets seized in the investigation, Nessel said.

Assistant Attorney General Eric Sterbis said authorities may be able to pinpoint how much Mui made from the scheme down the line. The total number of victims could end up being in the thousands, he said.

David Eggert is a reporter with Crain’s Detroit Business.

Venture capital investing dipped in Michigan in 2023, trailing a sharp national decline in deal volume and the amount of funds invested.

Last year, venture capital investors put $1.05 billion into 169 deals for Michigan-based companies, the second straight year for decline, according to a quarterly report by PitchBook and the National Venture Capital Association.

The 2023 results compared to $1.08 billion invested in 186 companies in 2022.

While both the annual deal volume and the amount of funds invested in the state were off from the peak in 2021, they remained well above any year prior to 2020.

As well, Michigan largely avoided the steep nearly 30% decline in venture capital deals nationally.

The amount of capital invested also dipped 10.3% across the country.

Paul D’Amato, the CEO and a managing director at Michigan Capital Network, wrote in an email to Crain’s Grand Rapids Business that last year followed a 2022 that was still one of the strongest years for venture capital nationally and the best year ever for the Grand Rapids-based investment firm.

“So, to have 2023 come very close to those peak levels is great to see and may be a sign of economic recovery,” D’Amato said.

“Michigan does appear to be doing well versus the rest of the country.”

Michigan Capital Network manages four venture capital funds and five angel investor groups: Grand Angels in Grand Rapids, Ka-zoo Angels in Kalamazoo, Woodward Angels in Detroit, Flint Angels, and BlueWater Angels in Midland. The firm last year closed on a $37.5 million raise for its fourth venture capital fund, and in November began raising a targeted $10 million for the new Michigan Capital Network Opportunity Fund L.P. to make follow-on investments in existing portfolio companies.

The first half of 2023 was “quite slow” for Michigan Capital Network, D’Amato said. Activity picked up in the latter half of the year, and the fourth quarter was “quite busy,” he said.

Michigan Capital Network invested $10 million in 2023, versus $10.5 million in the prior year, over a similar number of deals, according to D’Amato.

Dale Grogan, a managing director at Michigan Capital Network, said 2023 was “arguably somewhere off the euphoria of 2021 and 2022, there are fewer new financings — mostly fol-

low-on rounds of existing portfolio companies — which would dampen the overall deal count.”

Michigan “is a bit of a laggard as it relates to VC trends as compared to the coasts,” Grogan said.

That’s because of “the velocity of deals, including pace and amount, is substantially more volatile on the coasts as compared to the Midwest.” As well, startup businesses that receive venture capital investments in the Midwest are generally life sciences, advanced manufacturing and technology companies that “tend to have financings that are attached to longer, more specific benchmarks with less volatility.”

“But ultimately, Michigan plods, not too flashy, but … just quietly getting the job done,” Grogan said.

In the fourth quarter alone, Michigan had 25 venture capital deals for $216.6 million, which compared to $231.4 million in 45 deals in the final three months of 2022.

The largest venture capital deal in the state in the fourth quarter involved May Mobility Inc., an Ann Arbor-based autonomous vehicle company that closed on a $105 million Series D round, according the PitchBook and the NVCA. Censys Inc., a cybersecurity and internet intelligence company also based in Ann Arbor, had the second-largest deal with a $75 million Series C funding round that closed in October.

Among the top West Michigan deals in the quarter was $2.7 million for Antrum Inc., a Grand Rapids-based sensor technology company that specializes in indoor air quality monitoring for commercial HVAC systems.

Antrum closed on the later-stage funding round in mid-December.

Nationally, the NVCA and PitchBook counted 15,766 venture capital deals for all of 2023 for $170.6 billion, which compares to 17,592 deals for $242.2 billion in the prior year. In the fourth quarter alone, venture capital investors nationally invested $37.5 billion in 2,879 deals, down from $39.8 billion in 3,787 deals in the final three months of 2022.

Venture capital fundraising and exits also declined nationally last year.

“While the continued drop in activity does not lend itself to optimism, it would be a mistake to declare the market in crisis. Rather, the market has changed,” NVCA President and CEO Bobby Franklin wrote in the fourth quarter Venture Monitor report.

“From interest rates to foreign conflict, the world looks very different than it did two years ago, and a new set of problems needs to be solved.”

8 | CRAIN’S GRAND RAPIDS BUSINESS | January 22, 2024

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1/17/24 10:57 AM

Architecture firms merge to build statewide reach

By Kate Carlson

A pair of architectural design firms in Grand Rapids and Detroit that have partnered for about four years have now formally merged in a deal that executives say will expand both companies’ presence across the state.

Grand Rapids-based Lott3Metz Architecture LLC and Detroit-based Crutcher Studio Inc. have inked a deal to create Lott3Metz Crutcher Architecture (L3MC), the culmination of a recent partnership that merges design companies each founded more than two decades ago. The firm’s Detroit office is based downtown while its Grand Rapids office is in the city’s East Hills neighborhood.

“One of the things about the partnership is how closely we align in values as designers, so there is a lot of overlap in our expertise, which is helpful to us in our communication and how we execute projects,” said Ted Lott, the founder of Lott3Metz who serves as partner at L3MC. “What we’re really doing is expanding our geographic footprint. Detroit is the biggest market in Michigan, and it’s an important place and we want to be a part of it.”

Greg Metz, the other principal

of Lott3Metz, and Lott both have strong ties to Detroit and have wanted to do more work there, Lott said. Most of their firm’s work since it was founded in 2001 has been on the west side of the state, he added.

Lott and Metz join forces with Ken Crutcher, a fixture in the southeast Michigan design community who founded Crutcher Studio in 1998. Crutcher serves as the third principal of L3MC. Crutcher is a longtime adjunct professor at Lawrence Technological University and has served for more than 15 years on the city of Farmington’s planning commission.

The new company has five employees in Grand Rapids and four in Detroit. Lott said they aim to add more people to ownership roles in the future.

The merger is “an equal partnership” with no major changes anticipated in how the firms do business, Lott added.

“We’re envisioning a very busy 2024 and we anticipate adding staff (this year),” Lott said. “One of the great things about having partners and a place in Detroit is there is a much bigger market and it has additional talent to access as well.

It’s not just the sales and architecture deals — it’s also the access to

talent.”

The Black-owned Crutcher Studio stands out in a sector with a relative lack of diversity. According to the National Council of Architectural Registration Boards, the racial and ethnic makeup of U.S. architects has experienced minimal change since 2018. While architects earlier in their career are gradually becoming more diverse, about 83% of architects certified by the NCARB in 2022 identified as white.

“Asians made up 6.6% of all NCARB Certificate holders in 2022. Hispanic or Latino architects made up 4.9%, and Black or African Americans made up 1.8% — showing minimal change since 2018,” according to NCARB’s 2023 “by the numbers” report.

Crutcher also previously served as vice president of the Detroit chapter of the National Organization of Minority Architects.

Lott credited Crutcher’s longtime presence in the metro Detroit design community as a key aspect of the merger.

“We’re just really fortunate that we’re able to be part of Ken’s world and it’s even more gratifying the additional skills he brings to the table as it relates to working with folks in the office,” Lott said. “He is a longtime member of the design

Lott3Metz Crutcher Architecture’s Grand Rapids location is a midcentury modern-style office in a historic neighborhood that the firm’s principals renovated nearly 15 years ago. | ANDY BALASKOVITZ

community in Detroit and he is one of the folks that knows everybody, and he is a patient and considerate designer that I very much appreciate.”

Specializing in historic preservation and urban infill, Lott3Metz is the designer on several West Michigan projects under construction, including the nearly completed 120-unit Victory on Leonard affordable housing project on Grand Rapids’ west side.

Among other projects, the firm is designing the 150-unit Union Suites on Michael senior housing

project in the city of Wyoming at a former AT&T call center, which followed work with the same developer on a two-phase affordable housing project in the city’s Belknap Lookout neighborhood.

Crutcher Studio serves a range of commercial, private and multifamily residential, and nonprofit clients, with several projects under construction or in the design phase. Recent projects include the Lola restaurant in downtown Detroit as well as a series of multifamily units near the city’s Midtown neighborhood.

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Partners begin multifamily passive housing project

By Rachel Watson

Pinnacle Construction Group has started building what will be the first multifamily certified passive housing development in the state of Michigan.

The Grand Rapids-based design-build firm began site work last month and held a groundbreaking Jan. 12 for Samaritas Spring Lake, a 53-unit affordable housing rental project at 734 E. Savidge St. in Spring Lake Township.

Michigan-based nonprofit social services and affordable housing provider Samaritas will be the majority owner-operator of the approximately $16.3 million development. Pinnacle Construction Group is the architect, contractor and a minority owner of the project, along with Manistee-based Little River Development LLC, the real estate development arm of the Little River Band of Ottawa Indians.

Construction is expected to wrap in February 2025.

When completed, the development will be certified through the Passive House Institute U.S. Inc., or PHIUS, an advanced sustainable building certification program that focuses on reducing energy to zero or near-zero carbon emissions through elements such as high-performance insulation, windows and walls.

Joel Lautenbach, executive director of affordable living development for Samaritas, said the nonprofit chose to pursue passive housing certification in part because it would earn the project extra points from the state’s low-income housing tax credit program, which has a highly competitive application process.

“You can score points in your application for pursuing those green energy programs beyond the baseline,” he said. “A few of them are three points, and the passive house one is four points. … We felt confident that by pursuing the passive house certification that we’d be a more competitive project when we went in for tax credits.”

In January 2023, the Michigan State Housing Development Authority awarded the project Low Income Housing Tax Credits (LIHTC) worth nearly $15 million over a 10-year period.

Renderings from Pinnacle Construction Group show designs for Samaritas Spring Lake at 734 E. Savidge St. in Spring Lake Township. | COURTESY IMAGE

James Lewis, director of real estate development for Pinnacle Construction Group, is PHIUS certified and will be working with third-party consultants Chicago-based Eco Achievers and Chris West of Eco Houses of Vermont to

family passive house project to be certified in the state of Michigan.”

The passive house movement PHIUS is a Chicago-based nonprofit founded in 2003 as the U.S. offshoot of the global passive house movement that gained steam in the

“A passive house is what would be considered an advanced green or sustainable certification process. This one focuses primarily on energy usage and the reduction thereof.”

— James Lewis, director of real estate development for Pinnacle Construction Group ensure the project is compliant with program standards.

The Samaritas Spring Lake project will be about as close to zero carbon emissions as it can possibly be, Lewis said.

“A passive house is what would be considered an advanced green or sustainable certification process. This one focuses primarily on energy usage and the reduction thereof,” he said. “It does also have a bunch of indoor air quality and water management and a bunch of stuff that LEED also incorporates in their program. But the primary focus of it and why ‘passive house’ came to be is to set energy targets for buildings that are very ambitious. This will be the first multi-

years following the oil embargoes of the 1970s that caused skyrocketing energy costs.

Lewis obtained his PHIUS certification in 2014 and two years later completed his first multifamily passive house project in Madison, Wis., while working for Heartland Housing Inc. PHIUS started out as a single-family program but quickly branched into the multifamily space.

Lewis said that multifamily buildings can more easily and cost effectively achieve the passive house standards because of their scale.

“I would say multifamily is substantially more cost effective,” he said. “Part of what happens in a single-family house is there’s a lot

of wall area to livable area, and because the standard is so focused on putting a bunch of insulation in the walls, when you get that volume to wall area ratio down so low, you just have to spend a lot more money making your walls a lot thicker, in terms of insulation.”

Additionally, multifamily units are much smaller than single-family homes, so there’s more “internal heat load” to the building, which means less heating is needed in a passive apartment project than in a single-family home “because of the intensity of the occupancy,” he said.

Lewis said that combination of factors allows developers of passive multifamily projects to keep costs “pretty close” to industry standards for new construction.

According to Lautenbach, the reduction in energy costs that will result from the passive housing construction also will save residents who will pay their own utilities costs in the long term, which is another consideration in the LIHTC process.

Based on tracking data from Heartland’s project in Madison, Lewis expects that residents at Samaritas Spring Lake will pay about one-third less in utility costs than they would in a similar new construction building that is not passive house-certified.

Samaritas currently operates 17 affordable living communities

across the state, with plans to double the number of locations over the next 10 years.

Lautenbach said Samaritas hopes to continue pursuing passive housing certification in future projects.

Pinnacle expects to do the same with other projects, Lewis said.

The partners bought 1.85 acres across several combined parcels for $520,000 in December from Spring Lake Presbyterian Church, located next door at 760 E. Savidge.

It originally contained two houses. One was demolished to make room for the apartments and the other will be used as a residence for the Samaritas caretaker who will oversee the apartments and provide supportive services.

The project backers said the church had been reserving the land to be used for affordable housing development, and Samaritas ended up being the right partner.

The four-story building will have 43 one-bedrooms ranging from 625 to 650 square feet apiece, and 10 two-bedroom units ranging from 875 to 975 square feet.

The housing will be designated for individuals, couples, families and seniors making 30% to 80% of Ottawa County’s area median income, which was $23,910 to $63,760 for a two-person household in 2023, according to the U.S. Department of Housing and Urban Development.

The development will include a community room, library, outdoor patios and greenspace. Residents will have access to the church’s gazebo and playground next door via a path that will connect the two properties.

Eight of the 53 apartments will be reserved for people with disabilities, and another eight will be targeted toward members or descendants of members of the Little River Band of Ottawa Indians.

Besides the LIHTC credits, the project partners also received $1.5 million in funding from Ottawa County’s American Rescue Plan Act funding.

The remainder of the project financing will come from deferred developer fees and a permanent loan through Chicago-based nonprofit lender IFF via the Ottawa County affordable housing revolving loan fund.

Michigan Capital Network tabs Grand Angels leader

By Mark Sanchez

Michigan Capital Network has named Meagan Malm as the new director for Grand Angels, a Grand Rapids-based angel investing group.

Malm joined the Grand Rapids investment firm in 2020 Malm as a part-time analyst and was named a principal in December 2022. In that role, she’s worked on deal review and due diligence on prospective investments, as well as sourced deals and managed portfolio companies.

As a director, she’ll also work on

member engagement and attraction and lead reviews and selection of prospective investments.

“Meagan is a tremendous organizational leader who has a great working knowledge of the Grand Angels group and its mission,” Paul D’Amato, CEO and managing director at Michigan Capital Network, said in a statement. “She has the Malm full faith and confidence of the member-investors and her insight will help grow the organization going forward.”

A Grayling native, Malm graduated in 2018 from the University of Michigan’s Ross School of Business in with a degree in business that was concentrated in strategy and entrepreneurial studies.

After graduating, she studied Swahili and lived in Tanzania for a year and a half, from mid-2018 until the end of 2019. In Tanzania, she worked on an independent research project studying the effects of micro-financing tools on small businesses.

Malm, 27, returned to the U.S. wanting to become involved in financial technology. After she saw a job posting, Malm applied for and secured a position at Michigan Capital Network.

One of Crain’s Grand Rapids Business’s 40 Under 40 business leaders for 2023, she has credited D’Amato for serving as a mentor and playing a “crucial role” in her success and professional development. Malm worked alongside D’Amato and other senior partners, Dale Grogan and Jody Vanderwel, to raise $38 million in commitments from investors for a

fourth venture capital fund.

Malm presently serves on the board of directors of Poppy Flowers, a Washington, D.C.-based online floral business that specializes in weddings. Michigan Capital Network recently led a group of investors in a $6.5 million Series A financing round for Poppy Flowers.

Michigan Capital Network operates five regional angel investment groups in Grand Rapids, Kalamazoo, Detroit, Flint and Midland that combined have more than 200 individual investors or members, plus four venture capital funds.

10 | CRAIN’S GRAND RAPIDS BUSINESS | January 22, 2024

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1/17/24 11:46 AM

HealthBar partners with data analytics firm for better insight

By Mark Sanchez

Nathan Baar and Jeff Skinner of HealthBar. | MARK SANCHEZ

they’re spending their money on health care can lead to improved costs, Skinner said.

“If that money could be reinvested into the business or reinvested into the employee or the

development of the employee … that could be a really big economic driver,” he said.

MANUFACTURING

Partnering with a Pittsburgh-area data analytics company gives HealthBar LLC a platform that can support and generate future growth.

Through the alliance with Innovu LLC, Grand Rapids-based HealthBar gets a partner that can perform a deeper dive than it’s presently able to do in analyzing an employer’s claims trends data.

The two companies can grow together in the years ahead in an era when self-funded employers are increasingly considering onsite medical clinics to provide primary care for employees and their families to contain and lower costs.

Through their alliance, HealthBar and Innovu can refer business to one another, said Jeff Skinner, director of operations at HealthBar and a registered nurse.

“An alliance like this has a lot of opportunity for growth and opportunity for progress and that’s what we’re excited about,” Skinner said.

“It gives us an opportunity for growth, which is scalability. It scales with us very nicely as we grow,” he said. “We’re bringing business to Innovu, but Innovu also has the potential to bring business to us. As we grow, they’ll grow. As they grow, we grow.”

Founded in May 2020, HealthBar operates and staffs onsite medical clinics and offers virtual care for employers that self-fund their health benefits. The clinics provide basic primary care for employees and their families. The company works with about 50 businesses, mostly in West Michigan, and focuses primarily on employers with 200 to 1,000 employees.

HealthBar also provides nurses for school districts across the state that cover about 32,000 students, and has a concierge medical service for businesses.

The alliance with Innovu reflects today’s greater use of third-party vendors to collect and analyze vast troves of raw claims data for employers to measure results, reduce waste, make decisions on how to fashion health benefits, and contain ever-rising costs. Additionally, employers can benchmark their data and trends against market norms.

Insurance brokers representing HealthBar to employers can use the data analytics platform at no cost, Skinner said.

Using Innovu’s analytics platform, HealthBar can “fully dive into the available data and further improve decisions, transparency in reporting, and ultimately, population health for our customers,” he said.

That enhanced ability to analyze and report data on spending for medical care and prescription drugs can provide clients better

insight and understanding on how well their health benefits work and make any needed adjustments.

Innovu analyzes data and provides results in a format that’s readily understandable for employers and insurance brokers to act on, Skinner said.

“There is a need for brokers and businesses to understand their health care data and we’re starting to get clinicians onsite and giving them access to the data, not necessarily just the (electronic health record),” he said. “When you can put all that together, it’s like now we can create positive feedback loops that are productive. One of the things that we’ve done as an organization is we’ve said that as we grow and as our businesses grow, there will be things that are right for the time. This is right for the time right now. Health care is data-rich and there’s big data out there.”

Innovu started in 2014 and works with employers and their benefit advisers to analyze and curate data from clients that’s often “incomprehensible” or “unintelligible” in its raw forms, CEO Hugh O’Toole said. For example, the company examines whether a client’s employees who have chronic medical conditions are adhering to the prescribed medications that control their diseases, or their use of lower-cost generic drugs that are just as effective, O’Toole said.

The company collaborates with about 400 benefits advisers and 2,000 employers.

By mining data to understand claims trends and issues such as medication adherence, employers can learn exactly how employees use their health benefits. In instances when a person may not be able to afford a prescription drug to manage a chronic medical condition such as diabetes or hypertension, an employer can adjust their drug benefit accordingly, O’Toole said.

“When you have a perfect alignment between what’s good for the participant and what’s actually good for the employer, that alignment means that you can act swiftly to take corrective action,” he said.

By analyzing claims data, employers also can direct employers to higher-quality and lower-cost care providers, identify the proper care setting for a medical issue, and “rip out” waste, fraud and abuse, O’Toole said. Without that data, “you cannot hold anybody accountable,” he added.

The kind of data analytics that Innovu provides has been becoming the norm in health care, as employers seek to better gauge the return generated for what they spend on health benefits. Creating greater insight through data analytics enables employers to better understand where and how

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January 22, 2024 | CRAIN’S GRAND RAPIDS BUSINESS | 11

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1/17/24 11:49 AM

Vacation homes market expects a boost as rates drop

By Rachel Watson

the month’s end.

Realtors in some of West Michigan’s vacation hotspots say they expect sales activity to pick up in 2024 amid lower interest rates, flat or declining home prices, and improving financial markets.

According to a Dec. 5 Redfin report, 2024 will be the year U.S. homebuyers finally catch a break, with new listings ticking upward, home prices projected to drop 1%, and home sales expected to increase 5% year over year.

Realtor.com forecasts mortgage rates will be at 6.5% by year’s end, down from a high of almost 7.8% in 2023.

Meanwhile, Lake Homes Realty’s winter 2023-24 lakefront real estate report forecasts that the number of lakeshore properties sold in the U.S. will jump 10% to 15% year over year in 2024, largely thanks to an increase in inventory.

Multiple offers

Inventory optimism Several residential brokers who represent clients along the coast of Lake Michigan told Crain’s Grand Rapids Business they are optimistic more properties will hit the market in 2024.

Kyle Geenen, of The Geenen Group of Coldwell Banker Woodland Schmidt in Holland, represents vacation home buyers and sellers primarily from South Haven and north to Grand Haven.

He said as is typical, December was a slow month for listings, but he’s seeing signs that will change in the new year.

“Quite a few people have reached out and said, ‘In January, February, March, we want to get our house on

This nearly 5,000-square-foot four-bed, four-bath house on Lake Macatawa in Park Township — known locally as the “Wedding Cake House” — is for sale for $2.4 million. | MICHIGAN HOMES AND COTTAGES

the market,’ and I would say it’s been quite an uptick from what we had the year prior,” he said.

Donna Wilkens represents clients through Beacon Sotheby’s International Realty in Saugatuck

interest rates don’t affect the higher end (of the market), but I think having the interest rates under 7% will certainly be helpful.”

Geenen said he’s having one of the busiest winters he’s ever had when it comes to buyer activity, and he projects a “very competitive market come spring.”

Lauri Sisson and Kersh Ruhl are the co-owners of Michigan Homes and Cottages/Coldwell Banker Woodland Schmidt in Park Township, primarily serving the areas of Grand Haven, Spring Lake, Holland, Saugatuck and South Haven, though they’ve closed deals as far north as Manistee.

They said lower interest rates, combined with a positive outlook for the stock market in 2024, led to “a great month” for them in December, with three vacation home sales that were expected to close by

Home prices projected to drop 1%, and home sales expected to increase 5% year over year. and Jameson Sotheby’s in Chicago, closing deals from coastal southwest Michigan up to Manistee. She echoed Geenen’s observation about inventory.

“I think people are waiting, as is normal, to list their properties probably in mid-February, so my optimism is that we’re going to have some more inventory,” she said. “And you know, sometimes

As interest rates taper down, Geenen said he believes sellers can look forward to the return of multiple offers per listing as was common early during the pandemic, when interest rates were in the 2% to 4% range, and remote work drove a spike in demand from wealthy out-of-market buyers.

“We just had a buyer submit an offer on a house that had eight offers on it, and then … I just sold a condo on Lake (Macatawa) and it’s listed at $685,000 and we had three offers on that, all cash,” he said.

Wilkens said even though inventory and multiple offers may pick back up, Sotheby’s is giving its Realtors guidance to be cautious with pricing.

“This is not the time to overprice,” she said. “It’s the time to be practical with pricing and not think that you’re getting prices like during COVID, and not to start high — to be on task with what the comps actually are.”

Out-of-state buyers Brokers expect the pandemic-fueled trend of second-home buyers coming from outside the Midwest to continue into 2024.

Geenen said he has noticed more East Coast and West Coast buyers in the past few years.

Sisson and Ruhl said prior to 2020, most of their vacation home buyers came from Chicago and northern Indiana. During the pandemic, they began to see buyers from Texas, California and Florida, and that trend hasn’t slowed.

“You have to remember, in West Michigan, we have low property taxes, our natural resources are a blessing, and people are looking at quality of life, traffic and (cost of living),” Sisson said.

Ruhl added: “The ‘climate haven’ thing has resonated with people, and they understand that access to fresh water is a real (concern).”

Short-term rentals If anything can kill vacation home buyers’ buzz, it’s concerns over short-term rental regulations, brokers agreed.

“If there’s some kind of pain point that we would be looking for, it’s that maybe the pressure that’s been put on the short-term rental markets in different municipalities, that is going to affect some of our vacation homes, only because for a lot of these people, they can’t necessarily afford it without being able to rent it,” Ruhl said.

He specifically cited an ongoing legal battle over whether to allow short-term rentals in residential areas of Park Township, adjacent to Holland. An Ottawa County judge temporarily blocked a ban that took effect in October, but the dispute has not yet been resolved.

“We don’t want to sell to someone saying, ‘Well, it’s going be fine, and you’ll be able to rent it,’ because we just don’t know,” Ruhl said.

Geenen said it will be interesting to see how that case shakes out, because it could potentially affect vacation home values over time, as well as tourism to the area.

“I think that the areas that do find solutions to allow that are going to thrive better than the areas that outright ban it,” he said.

Wolverine World Wide sells Sperry brand in $130M deal

By Kayleigh Van Wyk

Wolverine World Wide Inc. has sold its Sperry brand in a $130 million deal with a brand management firm whose portfolio includes Forever 21, Reebok, Nine West and Brooks Brothers.

Wolverine World Wide (NYSE: WWW) executives for months have hinted at alternatives for Sperry — which is known for its boat shoes for men, women and children — but hadn’t disclosed how it might offload the brand.

The Rockford-based marketer and licenser of footwear and apparel on Jan. 10 closed the sale for Sperry to New York-based Authentic Brands Group Inc. in partnership with the ALDO Group, which is headquartered in Canada.

The proceeds of the sale will help pay down debt and further strengthen the company’s balance sheet amid an ongoing “turnaround” process, executives said.

“The sale of the Sperry brand is the next step in our turnaround and strategic transformation,” Chris Hufnagel, who was appointed Wolverine’s president and CEO in August 2023, said in a state-

ment. “We conducted a rigorous process that considered a comprehensive set of strategic alternatives for the brand, and we believe this is the best outcome for the company and our vision for the future.”

The company initially said in May 2023 that it was considering strategic alternatives for the Sperry brand, which executives said at the time could be a sale, joint venture or licensing agreement.

“As we look foward to 2024 … it just became apparent that Sperry was going to continue to require investment that was going to take away from where we think the upside is,” former CEO Brendan Hoffman said during a call with analysts in May. At that time, Sperry’s sales had declined 13% in the latest quarter, more than the forecasted high single-digit decline related to lower sell-throughs of certain styles that the company had attributed to unfavorable spring weather conditions.

Now, brand management firm Authentic Brands Group has acquired the Sperry brand, adding to its portfolio of subsidiaries that in-

Sperry is known for its iconic boat shoes. | COURTESY PHOTO

cludes Forever 21, Reebok, Nine West, Brooks Brothers, Nautica and Aéropostale.

The ALDO Group is partnering with Authentic to serve as Sperry’s North American operating partner for wholesale, e-commerce and store operations, as well as footwear design, production and global distribution, according to a news release from the ALDO Group.

New York-based Centerview Partners LLC served as financial advisers to Wolverine World Wide, and Honigman LLP and Warner, Norcross + Judd LLP served as legal advisers on the sale.

The Sperry deal builds on Wolverine’s previous divestitures that collectively generated nearly $250 million in cash in 2023. These include the sale of Keds, the offloading of the Hush Puppies intellectual property in China, the sale of the U.S. Wolverine Leathers business and a recent divestiture from Merrell and Saucony in China along with the sale of the Asia leathers business.

The Sperry deal also comes days after Wolverine executives presented preliminary fourth-quarter financial results and a broader company update at the annual ICR Conference in Orlando, Fla.

The company expects $521 million in overall fourth-quarter revenue and full-year revenue of $2.2 billion, each in line with updated guidance provided in November.

Preliminary financial results also show non-core asset sales totaling nearly $250 million in 2023, including $91 million in the fourth quarter, which have helped pay down debt to about $750 million.

Executives also noted that the company’s strategic initiatives have helped to reduce inventory by nearly 40% on a year-over-year basis.

“In a very short time, we have meaningfully reshaped Wolverine Worldwide — simplifying the portfolio, reducing our debt, and redesigning the organization to drive improved performance and profitability,” Hufnagel said in a Jan. 11 statement on the Sperry sale.

“These efforts have enhanced the company’s capacity to invest in our brands and platforms, and I am excited about the next chapter in our turnaround — focused squarely on building consumer-obsessed global brands and delivering greater value for our shareholders,” he said.

12 | CRAIN’S GRAND RAPIDS BUSINESS | January 22, 2024

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1/17/24 11:51 AM

Construction Simplified bets on West Fulton with apartments

By Kate Carlson

Bro’s Doughs opened in 2020 at Knapp’s Crossing. | COURTESY PHOTO

Owners list pair of Grand Rapids doughnut shops for sale

By Abby Poirier

Months after expanding with a second doughnut shop in Grand Rapids, the owners of Bro’s Doughs LLC are now trying to sell the business.

Husband-and-wife duo Brodie and Meghan Hock cited a decision to pursue other interests as the driving factor in their pursuit of a buyer for the business.

“We feel like the business is primed and ready to be built upon,” the Hocks said in an emailed statement to Crain’s Grand Rapids Business.

Bro’s Doughs opened its first 785-square-foot store in 2020 at Knapp’s Crossing, offering freshly made, gourmet mini doughnuts in a wide range of flavor combinations and toppings. In addition to 50 flavors of handmade doughnuts made fresh daily, Bro’s Doughs also offers event catering on a first come, first served basis.

The business took off, leading the pair to open a second 966-square-foot location in the Midtown neighborhood at 465 Fuller Ave. NE in June 2023. However, they now want to step back from the business and are seeking a new owner to take over Bro’s Doughs.

“We have laid a great foundation and someone else can go from there. The potential is immense, as proven by our second location being profitable within the first month of opening,” the Hocks said in a statement.

The Hocks are working with local real estate broker Darrell DeWard, who listed the Knapp’s Crossing location at 2024 E. Beltline Ave. NW for $500,000 and the Fuller Avenue store for $300,000.

Bro’s Doughs currently leases both locations.

The Hocks said they can offer a “large discount” to a buyer interested in both locations, indicating they prefer to sell both stores together “due to the simplicity of working with and helping ensure one owner’s success.”

The businesses are being sold turnkey, with all equipment, vendor relationships and infrastructure included. The Hocks expect the current staff also will remain

with the business.

The Hocks added that they are hopeful that the business will be purchased by a new owner with “a broader vision” for Bro’s Doughs who can expand the business and invest in what they built.

“In addition to the essentials like equipment, furniture, recipes, and branding, we’re sharing practical ideas born from our experience — the successes and the lessons learned, in addition to some ideas Darrell has shared with us that could take this business to a next level,” the Hocks said. “It’s a complete transfer of not just assets, but also the insights and strategies that will propel the business to new heights.”

DeWard anticipates selling both locations together, noting that so far, interest in the business has been “tremendous.”

“This is a result of the brand and quality that Bro’s Doughs has created, the vibrant customer base they have earned, and the profitability of their business,” he said.

“You don’t see businesses of this type with this kind of profit and success being sold very often.”

DeWard is encouraging potential buyers to think big about the purchase.

“I could see, with the right buyer, Bro’s Doughs scaling quite significantly — regionally, statewide and even nationally,” he said, pointing to the success the business has seen so far.

“The framework has been established and the second location was successful in the first month of opening,” he said. “This shows that scaling is not only possible but has a high probability of being quite lucrative.”

As they move on from the business, the Hocks said they’re looking forward to pursuing new interests, as well as spending more time with their young family and their church. They added that they have “no intention” of returning to the food business in the coming years.

“The last four years have been great,” the Hocks said, noting that the local reception to Bro’s Doughs “superseded our expectations.”

Construction Simplified is set to break ground in the coming months on two apartment projects near the company’s headquarters, underscoring the Grand Rapids construction firm’s commitment to the city’s west side.

Construction crews are expected to break ground on The Anthony at 851 W. Fulton St. this month, followed by The Annex at 657 W. Fulton St. in the spring. The two projects will add 31 total apartment units with a range of sizes.

Construction Simplified owns several properties along the West Fulton Street corridor and has been in various planning stages to develop them over the years.

Both projects are near the company’s offices at 625 W. Fulton St., which opened in May. Construction Simplified is now renting its previous office at 895 W. Fulton St. to tech and marketing firm Carnevale, after the company relocated from another part of the city.

“I’ve taken a liking to West Fulton,” said Brent Gibson, president of Construction Simplified. “It’s a fun area and nobody else sees the value there to the extent that we do.”

The Anthony is an adaptive reuse project that will include larger apartments with a mix of two-, three-, and four-bedroom units.

The Grand Rapids City Commission approved an Obsolete Prop-

The Anthony is a $2 million adaptive reuse of a former industrial building that will include relatively large apartments. | CONSTRUCTION SIMPLIFIED

erty Rehabilitation (OPRA) district for the project in November. The building is currently vacant and was deemed “functionally obsolete” by the city on Aug. 31.

The site previously housed a vacuum store as well as Ferris Coffee & Nut Co. A company affiliated with Construction Simplified purchased the property at 851 W. Fulton St. for $895,000, according to property records.

“This will be a really cool repurpose development,” Gibson said.

“We’re not adding a square foot, we’re just improving the building.

We don’t want to add anything else to the exterior and we’re keeping all of the structural walls up. There is a coolness factor that worked out really well here. You don’t see a ton of industrial repurposed projects like this because a lot of things had to align.”

All of the building’s glass doors will be replaced with new glass,

and workers are installing private entries and storage space for future tenants, Gibson said. The smallest units in the $2 million project are around 1,200 square feet, but rents are expected to be similar to smaller two-bedroom units around the city, Gibson said.

“It really checked all the boxes and it’s in a desirable neighborhood,” he said. “It’s a really cool urban infill project and we’re excited to bring it to West Fulton and continue our journey here.”

Three blocks east of The Anthony on Fulton Street, Construction Simplified is developing The Annex. Site plans for The Annex call for the construction of two, three-story buildings that will contain a total of 23 one-bedroom apartments that will all be about 550 square feet. A 500-square-foot retail space will also be located on the ground floor, and the site will contain 25 parking spaces.

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January 22, 2024 | CRAIN’S GRAND RAPIDS BUSINESS | 13

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1/17/24 11:54 AM

Sen. Brinks on 2024: Economic development will be a key priority for Michigan Democrats

By Andy Balaskovitz

While the Michigan Legislature adjourned early for its latest session after House Democrats lost their two-person majority when two lawmakers won local elections, Senate Majority Leader Winnie Brinks says discussions have been ongoing around key policy priorities for 2024.

Specifically, that includes a four-part economic development bill package that could revise a large incentives fund used to lure businesses by requiring more community benefits, as well as a new tax credit for research and development.

After several policy wins for Democrats in 2023, Brinks — the Grand Rapids Democrat who is the first woman to serve as Senate Majority Leader — said economic development will be a key priority in 2024. In an interview with Crain’s Grand Rapids Business, Brinks detailed how West Michigan and the state at large could benefit from new bipartisan measures to lure new investments, what she envisions with paid family and medical leave reforms, and how the state can generate population growth.

What’s on your radar heading into 2024?

We’re having a lot of continued conversation about economic and community development. You’ll see those themes represented in our budget conversations that are already starting, but also in our policy conversations. We’ve got several economic development pieces of legislation that are in progress right now, so we’ll work to finish those up. But we will also be talking about what’s next in terms of adding to those economic development tools, updating some things that were already in our toolbox, but also talking about things like public transit, continuing to upskill and retool our workforce to meet the needs of the future and continued investment in K-12 education.

A bill awaiting Gov. Gretchen Whitmer’s signature would give Kent County the ability to raise hotel/motel taxes with voter approval, which could help fund major economic development projects proposed in the city. How did this proposal come together and what would this mean for Grand Rapids?

This is a great opportunity for Grand Rapids to be able to talk to the voters about what they’d like to invest in here in West Michigan.

Obviously, Grand Rapids is the largest city in the area, and so it’s the center of a lot of economic ac-

tivity, but this was really all about economic activity for the entire West Michigan region. We’re really excited about the prospect here of building big sports attractions with the potential to see how that goes and build on that for other big ideas in the future. This legislation would provide that mechanism, and if it goes well, I think we could even see this model in other parts of the state.

Were the amphitheater and soccer stadium key drivers behind this legislation?

It certainly was a big part of the conversation. There’s a lot of excitement about those two projects, and as we talked about creative ways to figure out how to pay for it, this was one of the things that the city and the county came to us with and said, ‘This could be a tool for us.’

We really love the idea that it’s locally driven, so each area of the state — should they be interested in doing this — can drive what they’d like to do. And we really love the idea that they have to go to the voters in that area to talk about how to pay for it and to get approval for that.

What is your vision around economic development incentives and how something like the SOAR fund might be altered?

It’s been a huge topic for the entire year that (Democrats have) been serving in the majority. … We are trying to infuse some of our values into the SOAR fund, or what’s now called the Make it in Michigan Fund. We really are talking more about investments in the community that would accompany the investments in those big projects or places. Things like investing in education to ensure that folks have the skills necessary in the area where those jobs would go. Things like the potential to in-

Sen. Winnie Brinks speaks at a bill signing ceremony at Grand Valley State University on Dec. 18, 2023. | COURTESY OF THE GOVERNOR’S OFFICE

Sen. Winnie Brinks was recognized on National Women Support Women Day in early December as Michigan’s first woman Senate Majority Leader. | MICHIGAN SENATE DEMOCRATS

economic development? Why is this a priority?

We’ve been in progress trying to remake some of the economic incentive stuff that the state already does to align it more with Democratic values. Most of this stuff was put in place previously under Republican-led leadership in the House and Senate. There’s some good elements there, but it wasn’t exactly what we really wanted to see our continued investment in exactly. So we had looked to remake some of those old tools and to add some new tools like a research and development tax credit. That all goes along with an increased investment in workforce training, helping get people back into jobs that are really good, that can pay the bills and just helping recover after

Brinks — the Grand Rapids Democrat who is the first woman to serve as Senate Majority Leader — said economic development will be a key priority in 2024. vest in housing or public transit or community infrastructure like parks and increasing walkability.

Making our whole community attractive and adding those things that make it possible to improve quality of life, not just provide a good job, but also provide an excellent place to raise a family and to really build a career here in Michigan.

What’s driving this focus on

COVID. I think it’s an important role for the state to be able to kickstart what’s next in promising sectors like clean energy.

Can you provide an update on where discussions are with that R&D tax credit?

There’s legislation that has moved through the House. The Senate will take up conversations around that in the coming weeks and months. We have four big

pieces of economic development legislation. That’s one of them.

Have there been any new discussions around statewide paid family and medical leave requirements, and what specifically would you like to see in such a package?

I personally have a pretty open mind about what it could look like.

We have one example of legislation that was introduced in the Senate. We are also taking a look at other states and what they’re doing, how they pay for it, what’s covered, how do you opt into it, who is either required to be part of it or able to be part of it. All of those details are incredibly important in terms of how we put it together.

We’re very much in an evaluation phase right now of what it could look like. … This is a big deal, and I think it will take some time for us to really land on the policy we’d like to see move. Right now, I would characterize it as an ongoing conversation.

The state’s population growth council just issued some recommendations on growing the state over the long term.

What was your reaction to those findings, and did you hope or expect more concrete planning or funding mechanisms to advance some of these ideas?

We were excited to see what they had to say. I think there’s a lot of good work that’s been done to assess where we’re at as a state and to figure out what that means

for us going forward. It’s no secret that Democrats like the idea of trying to invest in our communities through investing in our workforce, investing in our education system. So the conversation about more of a K-14 system, I think, was well received. In addition, a conversation about public transit and making sure that people have the ability to get to and from work and their homes and all the other things that they need to do for a healthy and productive life, that is all stuff that we are very open to.

On figuring out how to pay for things: We would love it if somebody actually had a nice, neat solution for us that they could put in front of us and we can just move through the legislative process.

Parts of this region and along the lakeshore have had some of the state’s highest population growth rates in the past decade. What do you think West Michigan is doing right?

We’ve got a diverse economy.

We’ve got some really strong educational institutions. We’ve got fantastic environmental amenities. I’m only about 40 minutes from Lake Michigan, and we know that lots of folks are talking about the natural environment as a big draw for them when they pick where to live. I know that’s certainly true for my family. Having great parks and things like that is important. So I think all of that comes together in a really positive way for people. We have a good quality of life here.

We have things to work on, though. As we’ve seen all across the state, there’s a lot of pressure on housing. There’s always room for improvement in how we are working on our education system so that they are really preparing students for what’s next. We know we can’t just do things the way we’ve always done them, but as we see Kent County and West Michigan grow, it’s a diverse community. I believe it’s a little younger than some other parts of the state.

So we are feeling really optimistic here and it really shows with our opportunities, but also I think our attitude.

14 | CRAIN’S GRAND RAPIDS BUSINESS | January 22, 2024

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1/17/24 6:14 PM

Senate Republican leader calls 2023 a ‘missed opportunity’

By David Eggert

Senate Minority Leader Aric Nesbitt said 2023 was a “missed opportunity” for the Democratic legislative majority, saying he hopes there is bipartisanship with Republicans to pass pro-growth business policies, reform aggregate mining and increase government transparency in 2024.

Nesbitt, of Van Buren County’s Porter Township, is the top Republican in the chamber, where Democrats have a 20-18 margin.

In an interview with Crain’s in December, he discussed priorities while criticizing Democratic-enacted laws he said will raise business costs. He also questioned the majority’s decision to adjourn early, in November, due to a temporarily deadlocked House and to put the laws into effect sooner.

The interview has been edited for length and clarity.

How do you assess 2023?

If I could describe this past year in a couple words, it would be ‘missed opportunity.’ With this Democrat majority pushing to start their Christmas break early, it seems my description will remain accurate. At every opportunity to work toward a common-sense, middle-of-the-road solution, the Democrat majority made the conscious choice to sprint to the far left. It was always about getting out of town early ever since January, following the orders of the Biden White House and Gov. Whitmer and the DNC to move the presidential primary up ’til February, one that would disenfranchise half the voters in the state of Michigan. They knew they were going to have to leave town early to effect that instead of finding a common-sense solution, such as moving the primary three days later to March 1. Another good example of how partisan this new majority is — the minute that there’s an even, bipartisan split in the Michigan House, 54-54, the Democrats losing their majority, the Democrats headed out of town early on a Christmas vacation.

What should be done in 2024? Is there potential for bipartisan work?

The budget surplus is gone. Our economy and its growth need to be based on attracting more businesses here and making Michigan the best place to raise a family, invest, grow jobs, start a career and retire. That means getting away from the government picking winners and losers. We need overall pro-growth policies that attract investment, allow small businesses to hire more people — not what we’ve seen over the last year that has increased the cost of doing business here in the state. (He cited the repeal of “right-to-work” laws, the reinstatement of the pre-

vailing wage law, the passage of energy mandates, the decision to not let an income tax cut be permanent and the spending of a multibillion-dollar surplus without, he said, adequately fixing roads and bridges.)

Another opportunity going into the next year is government accountability. It was a good first step with the financial disclosures that we passed in a bipartisan way this fall. There’s more to do on FOIA reform, subjecting our Legislature and the governor to the same transparency requirements we subject local governments to.

There’s other ways to increase financial disclosures going into the future and reform campaign finance potentially.

Student progress has stalled, and it’s even going to go backward with these accountability measures that have been removed.

(New laws will rescind a provision that enabled third-graders to be held back for poor reading scores, repeal a school ranking system and change teacher evaluations.)

Let’s find ways to provide families choice. Short term, there’s ways we can help fund tutors, put more resources directly to the students.

Long term, we need to figure out better options.

There’s ways to find better workforce development options to help with our economic development projects instead of just doing massive corporate cash handouts.

There’s a lot of ways we can find landing spots and some ways to lower the cost of doing business, such as allowing for state siting for sand and gravel mines. That would lower the cost of actually fixing our roads and bridges and our underground sewer system. Things that will help our local clerks institute elections better such as moving the August primary to earlier in the year. There’s a lot of options. But bi-

Senate Minority Leader Aric Nesbitt, R-Porter Township, is shown during session in March. He says 2023 was a “missed opportunity” for majority Democrats who passed laws he opposes. | DALE G. YOUNG

cost of doing business in Michigan instead of increasing it. Let’s get serious about rebuilding our state.

Senate Republican Leader Aric Nesbit, R-Porter Township, is joined by his wife, Trisha, and their children, Catherine and William, on the Senate floor as Michigan Supreme Court Chief Justice Elizabeth T. Clement administers the oath of office before the first session of the 102nd Legislature. | SENATORARICNESBITT.COM

It’ll make it even more expensive to do a deal. (He ripped a law that directs up to $1.5 billion to SOAR over three fiscal years, saying it could have been used to fix roads or offer a research-and-development tax credit rather than “bribe businesses with cash offers.”)

The Michigan Supreme Court is considering the constitutionality of a 2018 tactic by which Republican legislators passed minimum wage and paid sick leave ballot initiatives and later weakened them to be more

The budget surplus is gone. Our economy and its growth need to be based on attracting more businesses here and making Michigan the best place to raise a family, invest, grow jobs, start a career and retire.

— Aric Nesbitt, Senate Minority Leader partisanship doesn’t mean that the governor just gets everything she wants and then there’s a hope and a prayer and a wish that legislative Republicans just fall over.

What do you make of a Democratic proposal to require that at least 20% of an incentives package from the Strategic Outreach Attraction and Reserve fund be for direct investment in the local community, for items such as child care or housing?

palatable for businesses. Do you expect that might be an issue the Legislature will have to deal with?

I hope the majority on the Supreme Court can figure out how to read the state’s constitution and the laws of Michigan. There’s an initiated legislative process that the people can take to the Legislature and if they don’t act they can put it on the ballot. In the future, the Legislature can change those.

If it’s a vote of the people, it’s a supermajority. If it’s adopted by the

Legislature, it’s a simple majority.

It’s clearly spelled out in the Constitution. It’s one of those things: You either have a Supreme Court that knows how to read or one that doesn’t.

You mentioned aggregate legislation, which would prohibit local regulation of sand and gravel mining and trucking and transfer permitting to the state. Do you anticipate momentum after the passage of a contentious law giving the state siting authority over large-scale renewable energy projects?

We didn’t decide where these important natural resources lie, like oil and natural gas. The same with sand and gravel. It’s such an important resource. If we’re serious about rebuilding our roads and bridges and our local communities’ underground infrastructure, let’s stop importing it from other states that double or triple the price or stop traveling 100 miles to bring it into metro Detroit. Let’s make sure we have access to these necessary resources to rebuild our state. I would hope (for action) after slamming through a partisan energy package that’s going to probably wipe away 300,000-plus acres of farmland for the industrialization of farmland.

That’s something where you could still have use for the land after you extract the gravel and sand. That’s a necessary resource. My hope is that this opens up a pathway to getting this done. Let’s actually find something that lowers the

What policies will Senate Republicans propose in early 2024?

We’re going to continue to work on finding ways to provide accountability in our schools and provide families more choices for their children. We’re going to find ways to make sure that families are safe. That could mean being serious on this fentanyl crisis, being serious on violent crime and making sure that these woke prosecutors are actually prosecuting violent felons. There’s also some possibilities on further government accountability and transparency reforms that are needed. Those are kind of the three larger topics, along with taxes and energy some perspectives on lowering the cost of actually doing business here in the state of Michigan.

Do you have more specifics on school choice? Are you referring to vouchers, charter schools, the system that lets students attend other districts?

I’m working with the caucus on what those ideas look like. I think something similar to what you’ve seen in the past on creating a scholarship system for lower-income families to be able to have school choice. (Whitmer in 2021 vetoed similar legislation.)

Are you concerned that the Michigan Republican Party’s woes will hurt efforts to retake the House in 2024 and the Senate and other statewide offices in 2026?

I think you’ve seen next year that (House Minority Leader Matt) Hall continues to raise more money than the House Democrats have. That’s not easy to do in the minority. It’s something where he continues to work to recruit candidates that can win next year on messages that can win. I believe that there’s three House Democrats in seats that Trump won in 2020. I think the high-water mark for the Democrats was last year, and they barely squeaked out at 56-54 majority and a 20-18 majority.

David Eggert is a reporter for Crain’s Detroit Business.

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Recent deals raise Huizenga Group’s automation profile

By Kayleigh Van Wyk

After scaling up and eventually selling lakeshore Industry 4.0 powerhouse JR Automation over two decades, Kentwood-based manufacturing investment firm Huizenga Group in recent years has leaned back into its automation portfolio.

Huizenga Group’s sale of JR Automation to New York City private equity firm Crestview Partners in 2015 included a five-year non-compete stipulation that prevented Huizenga Group from growing in the automation space, Huizenga Group CEO Steve Klotz recently told Crain’s Grand Rapids Business.

In the 20 years of owning JR Automation, Huizenga Group grew the company’s annual revenue from $14 million in 1995 to about $180 million at the time of the sale to Crestview in 2015. In 2019, Crestview went on to sell JR Automation to Japanese conglomerate Hitachi Ltd. for $1.42 billion.

While the five-year noncompete

in the Huizenga-Crestview deal prevented Huizenga Group from being “in that automation space,” Klotz said: “We always liked (automation) and liked the companies we had in our portfolio at that time.”

Indeed, the company has made a string of acquisitions since forming an automation division in 2021.

That includes Lansing-based GSE

manufacturing companies Adaptek Systems and API Alliance, while Bulldog Factory Service acquired Livonia-based Spectrum Automation Company. Both deals, of which the terms were undisclosed, were announced in late 2023.

According to Bloomfield Hillsbased M&A firm Blue River Financial Group, industrial automation acquisitions in the third quarter of 2023 had dipped slightly from the first two quarters of last year, mirroring Q3 trends across industries.

However, the number of industrial automation deals year-to-date had remained roughly on par with the prior five years.

Huizenga Group’s recent addition of Adaptek Systems and API Alliance to the portfolio adds service and capabilities in a wider variety of industries, according to Klotz.

“Our primary automation companies today service, I’ll say, 80% to 90% automotive,” Klotz said. “This

“Our primary automation companies today service, I’ll say, 80% to 90% automotive.”

— Steve Klotz, CEO Huizenga Group Automation in 2021, Churchill Technologies in Grand Haven in early 2022, and Madison Heightsbased Bulldog Factory Service in August 2022.

More recently, Huizenga Group acquired Fort Wayne, Ind.-based

(addition) had a more diverse base — it served the medical industry as well as consumer products and some automotive. So it brought us into some different markets, which we hope we’ll be able to exploit with other automation companies as well.”

As well, the Spectrum Automation deal expands Huizenga Group’s footprint in metro Detroit.

“We are excited to announce our partnership with the team at Spectrum,” Vince Lowell, president of Huizenga Group Automation, said in a statement on the deal, adding that Spectrum’s leadership team members “have been great to work with over the past couple months and we look forward to learning from them and helping them grow their company.”

Founded in 1969, Spectrum Automation designs, develops and manufactures specialty parts for feeding and material handling systems. The company serves multiple industries, including automotive, agriculture, fastener, medical,

hardware, food and beverage, aerospace and munitions.

Bulldog Factory Automation, formerly known as Bulldog Factory Service, was rebranded following its acquisition by the Huizenga Group in 2022. The company previously was a part of Madison Heights-based Santanna Tool & Design Co. Huizenga Group Automation and Bulldog Factory Automation were advised by Miller Johnson and Inxcorp Business Advisors advised Huizenga Group and Bulldog Automation in the late 2023 deals.

Spectrum Automation operates from a 24,600-square-foot facility in Livonia.

“Spectrum has been part of my family for over 50 years, and the transition to Huizenga Group Automation will allow the legacy of our family to continue and our employees to be able to grow with a larger organization,” Tom Zimmerman, former owner of Spectrum Automation, said in a statement.

Several key new state laws are taking effect this year

By David Eggert

The Democratic-led Legislature and Gov. Gretchen Whitmer enacted more than 320 laws in 2023.

Many of the biggest ones, those with little or no bipartisan support, will take effect Feb. 13 because Republicans opposed a procedural step to put them into effect immediately. In other cases, the majority favored a 2024 effective date or the laws kicked in in 2023.

Following is a rundown of some key new laws that will go into effect this year or — in one case — an old one that gives a raise to minimum wage workers each year:

Minimum wage The minimum wage rose to $10.33 an hour on Jan. 1, up from $10.10, under a 2018 law that adjusts it each year. The hourly rate for minors is $8.78. The tip credit, now $3.93, can be paid to employees as long as that plus their tips is at least $10.33.

Tax cuts/economic development Starting Feb. 13, the state will send checks averaging $550 to more than 700,000 lower-wage households that are eligible for an expanded earned income tax credit, which is retroactive to the 2022 tax year. It is one provision in a sweeping law that also will: w Gradually expand tax deductions for retirement income over a four-year period, a change estimated to aid 500,000 households and largely undo a 2011-enacted “pension tax.” Households will save an average of $1,000. w Earmark up to $500 million a year in corporate income tax revenue from the general fund to the Strategic Outreach and Attraction

mestic violence offenders from having them for eight years after sentencing.

LGBTQ rights

The Michigan House is shown in session in March 2023. | DALE G. YOUNG

Reserve Fund over three fiscal years. The SOAR account is used to support large-scale business expansion projects and prepare sites for development. w Shift $100 million annually to the Michigan Housing and Community Development Fund and the Revitalization and Placemaking Fund.

Income tax The 4.05% individual income tax rose back to 4.25% on Jan. 1. It automatically dropped in 2023 because tax revenues for the general fund exceeded 1.425 times the inflation rate. The Whitmer administration interpreted a 2015 law to mean the tax cut is temporary.

On Dec. 21, Court of Claims Judge Elizabeth Gleicher ruled in favor of Whitmer’s administration.

The Mackinac Center Legal Foundation, which sued on behalf of business groups, Republican legislators and taxpayers, said it will appeal.

‘Right-to-work’ gone Private-sector unions will again be able to negotiate contracts requiring union-represented work-

ers to join or financially support the union after the repeal of the “right to work” law.

Energy A wide-ranging law will require a significant increase in renewable sources to produce electricity by 2030 and 100% “clean energy” by 2040. Most immediately, the state in late 2024 will have authority to approve construction permits for large-scale wind, solar and battery-storage facilities that have hit local opposition.

Prevailing wage A requirement that union-scale construction wages and benefits be paid on state-funded building, school and other public works projects will be restored.

Gun control Laws will require universal background checks for people who want to buy guns, safe-storage requirements to keep them locked away from minors, allow extreme-risk protection orders to seize firearms from those who might be a danger and ban do-

Anti-discrimination protections for LGBTQ people will be codified in Michigan’s civil rights law. Discrimination based on sexual orientation and gender identity or expression will be prohibited in employment, public accommodations and public services, educational facilities, and housing and real estate.

Lead testing Beginning Jan. 1, physicians had to start ordering all young children to be tested for lead exposure at certain ages unless a parent or guardian objects. Kids enrolled in Medicaid already are being tested for lead.

Filters Laws in effect for two months will require schools and child care centers to install water filters to protect against lead contamination — work that will kick into high gear this year. They will have until January 2025 to develop a drinking water management plan and to schedule regular testing. The deadline for schools to install filtered bottle-filling stations or faucet filters and to shut off non-compliant outlets is the end of the 2025-26 school year. The state allotted $50 million to cover the costs.

Presidential primary Michigan will have an earlier presidential primary, on Feb. 27, after Democrats successfully pushed the Democratic National Committee for more clout. While

President Joe Biden is unlikely to face much of a challenge, the date will make the state more important in 2028 if it is not changed. It violates the Republican National Committee rules, however, so only 30% of the GOP delegates will be decided in the primary. The rest will be determined at a convention March 2.

Abortion An unenforced old abortion ban will be removed from the books.

Also going away are regulations specific to abortion clinics and a prohibition against insurance coverage of elective abortions unless supplemental policies, or riders, are bought. The laws were enacted following voters’ approval of an abortion-rights constitutional amendment in 2022.

Voting Voters will get more options under laws implementing a 2022 voter-approved constitutional amendment. They include a nineday early voting period, early processing and counting of absentee ballots, prepaid postage for absentee ballot applications and envelopes, a minimum number of drop boxes and the ability to automatically get a ballot in all future elections without having to apply each time.

Financial disclosure Starting in April, the governor, lieutenant governor, attorney general, secretary of state and lawmakers — along with candidates for those offices — will file annual financial disclosure reports.The requirement was passed to implement a 2022 constitutional amendment approved by voters.

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COMMENTARY

At the Rose Bowl, a reminder to strive for respect

I

saw the young man’s shirt as soon as the hotel elevator door opened. It was a dark red, with an instantly recognizable slogan: Alabama.

Here I was, in Southern California, the morning of New Year’s Day, face to face with the enemy as I sported my opposing uniform — a blue T-shirt with a maize block M on the chest.

Then, to my surprise, the young man uttered something quietly that I found both disarming and, well, respectful.

“Go Blue,” he said, then walked away.

“Roll Tide,” I responded without hesitation.

It was the morning before the Rose Bowl, which would turn out to be an epic contest between two of college football’s most formidable programs. It was also literally the dawn of Mickey a new year, always a Ciokajlo is executive editor time that offers hope for renewal and opportuniof Crain’s Detroit Business ty to resolve to do better.

It was a fleeting moand Crain’s ment, but one I appreciGrand Rapids ated. He could have said Business. nothing, or something dismissive or confrontational. Instead, he chose to demonstrate an understanding, and perhaps appreciation, for his opponent, as well as make an offer toward common ground.

It’s a feeling I’d like to hold on to in 2024 which, as we all know, is an election year, and will inevitably bring its challenging moments. It seems the potential for division exists throughout society these days, but, as I experienced during my time in Pasadena, there are opportunities to bring us together, especially if we seek them out.

Alabama and Michigan fans co-mingled

Fans of the University of Michigan and the University of Alabama mingle at the Rose Bowl in Pasadena, Calif., on New Year’s Day. | MICKEY CIOKAJLO

before the game outside the stadium to get their pictures in front of the iconic Rose Bowl sign. Multiple Alabama fans offered to take pictures of me and my teenage son and I, turn, gladly offered to return the favor. It wasn’t lost on me that these folks in their crimson (“dark red”) shirts from a dark red, politically speaking, Southern state, were enjoying the moment just as much as their counterparts in maize and blue gear from the purple swing state Up North.

Of course there were differences. But whether it was standing in line at a food

truck for chicken sandwiches and cheese fries, or watching parents and their kids throw a football at the “fan fest” gathering prior to the game, there were also plenty of moments that brought people together.

It was great to see generations of families, on both sides, gather to support their team while appreciating and respecting their opponent.

It demonstrated for my teenage son, whose grandfather has had season tickets at the Big House since the 1970s, that Wolverine fans aren’t the only ones with such deep passions for their program. In fact,

after the game he expressed admiration for the Alabama fans and their traditions, including their hearty shout of “Roll Tide” every time their offense made a first down.

I suppose it was a bit easier to feel magnanimous after a win (a thrilling 27-20 overtime victory for Michigan), but I’ll take it.

I’m resolved to remain hopeful in 2024 — and to keep striving to understand and appreciate situations from other points of view — be it a football game, politics, family life, or at work.

Happy New Year — and Roll Tide.

COMMENTARY

Protect pharmacy benefits for mental health patients

H

patients included — now have ere in Michigan and across access to prescription drugs that, the country, we are facing in conjunction with counseling, a mental health crisis. allows them to live full and According to 2021 research by healthy lives. This is why I’ve althe National Alliance on Mental ways been a strong supporter of Illness, over 1.3 million adults in pharmacy benefits; they lower Michigan have a mental health the cost of prescription drugs and condition and about 38% do not increase patients’ access to these receive the care they need. I be- Laurel treatments through convenient came a mental health counselor Backing, MA, options like home delivery. in Michigan two years ago be- is a mental As the need for mental health cause I believe that everyone de- health serves access to quality mental counselor based support has grown, so has the cost of health care — and mental health care. in Comstock health care is no exception.

Mental health care looks differ- Park.

Thankfully, pharmacy benefits ent for all my patients. For some, help ensure affordable, accessiit means one-on-one counseling, while others benefit from exposure thera- ble care, saving Michiganders an average py, eye movement desensitization and re- of more than $1,000 per year.

Those savings are essential for my paprocessing therapy, accelerated resolution tients, especially with inflation still so therapy, or medication.

Thanks to medical breakthroughs and high. Many Michigan families also have research, millions more Americans — my access to pharmacy benefits that are

proven to increase adherence. That includes options that deliver prescriptions right to your door and even cost less than having to go to a pharmacy to pick them up — a convenient and cost-effective win-win. For example, some plans offer delivery of three months’ worth of your prescription at the cost of only two months’ copay.

The reality is patients don’t take their prescribed medications if they can’t afford it, even if it means neglecting their mental health — I’ve seen it firsthand many times.

And with big drug companies increasing their prices year after year, it’s my hope that our lawmakers will prioritize protecting our pharmacy benefits and keeping prescription drug costs low for patients.

Instead of attacking pharmacy benefits, lawmakers should focus on holding the

pharmaceutical industry accountable for its role in rising health care costs.

For the first time in my career, politicians now talk openly about the mental health crisis and what should be done to solve it. This is a big deal. As our lawmakers return to Lansing this legislative session, we can’t have them lose sight of pro-

As the need for mental health support has grown, so has the cost of health care — and mental health care is no excaeption. tecting access to prescription drugs for Michiganders struggling with their mental health.

We’ve come so far when it comes to normalizing and addressing mental health.

Let’s not go backward.

Sound off: Send a column for the Opinion page to tim.gortsema@crain.com. Please include a phone number for verification purposes, and limit submissions to 500 words or fewer. Please include a headshot, title and organization name with the submission.

18 | CRAIN’S GRAND RAPIDS BUSINESS | January 22, 2024

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‘House on fire’ — event focuses on state’s population, income Leaders of Gov. Gretchen Whitmer’s population council sounded the alarm recently over the state’s trajectory, demanding urgency to turn the tide and calling for bipartisanship to tackle a problem they said will take decades to fix.

Population growth was the focus at the Detroit Regional Chamber’s annual Detroit Policy Conference a month after the Growing Michigan Together Council released recommendations to the Democratic governor.

“Michigan’s house is on fire,” chamber President and CEO Sandy Baruah, a council member, said while opening the event at MotorCity Casino Hotel.

The state ranks 49th in population growth since 2020, according to the council’s report. The U.S. population will likely have grown by more than 20 million by 2050, but Michigan’s population is projected to fall in that period.

The state is getting older and poorer, Baruah said. He noted its median household income is 34th and its percentage of the national median was 91% in 2020, down from 106% in 2010, 114% in 1990 and 117% in 1970.

The state ranks 49th in population growth since 2020, according to the council’s report.

Walbridge CEO John Rakolta Jr., a Republican who co-chaired the council with Democratic Wayne State University Board of Governors member Shirley Stancato, said Michigan will be “lucky” if it is the same size in 2050. He pointed to demographics including a low birth rate, high death rate, less international immigration and people leaving for other states.

“There are just enormous implications as a result of that,” he said. “The tax base can’t grow.

Our federal influence will wane and just the general overall perception of Michigan will be negative. So that’s the bad news. The good news is that what takes place to grow population over 100 years and all of the things in the report are exactly what has to happen for us to increase the prosperity. So let’s not focus on population growth. It’s an outcome of what we have to do to increase our prosperity. We should focus more on our per-capita income. … We’ve got to do a much better job of increasing productivity.”

The council has backed, among other things, two additional years of free education beyond high school, the development of regional public transit systems and changes in education governance. Many proposals would require funding, which the council of governor-appointed business, educator, labor and political leaders did not explore in depth other than to note that the state’s combined state and local tax burden

as a percentage of personal income is lower than in all but four states.

Republicans in the Democratic-led Legislature have said the report is a guise for tax hikes, and the lone GOP legislator who sat on the council voted no.

Rakolta criticized that tack from his party, saying it is “an easy way to throw a red herring into the mix and distract everybody in the press that it’s all about new taxes. It isn’t about new taxes. It’s about the fact that the state of Michigan is broken.” He said the state should be able to find 5% to 10% waste in the state budget

and redirect that spending to more effective purposes.

“We can’t go to the citizens and ask for more money until we are absolutely certain that the money we’re spending today is all being spent as efficiently as possible and getting the kind of return that our citizens are expecting,” he later told reporters.

Stancato said she is confident the report will not sit on shelf like past ones because Whitmer appointed Hilary Doe as the state’s first chief growth officer and business leaders and others in the audience are committed to implementing it. She specifically

expressed concern that only 30% of fourth-graders are reading at grade level and said junior college completion rates are too low.

“Doing nothing is not an option,” said Stancato, who was among several council members featured at the conference.

Another council member, ITC Holdings Corp. President and CEO Linda Apsey, said data presented in the report is “staggering” in almost every category. It was important, she said, to define the problems because “they’re deep, they’re structural and they’re going to take decades and decades for us to turn

it around.”

The council had a limited expertise and time — months — to dig into the issues, but the report is a “great start,” she said.

Whitmer has a chance to propose some initial policy prescriptions in her upcoming State of the State address and budget presentation.

“The more that we can keep the conversation focused on ‘what is the problem?’ then I think we can at least have more opportunity to bring everybody together to solve it,” Apsey said.

David Eggert is a reporter for Crain’s Detroit Business.

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JANUARY 22, 2024 | CRAIN’S GRAND RAPIDS BUSINESS | 19

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WHEELER From Page 3

WDG’s vice president of community relations and son of WDG founder and CEO John Wheeler.

Jason Wheeler said WDG has always had a long-range goal to keep building housing along East Beltline Avenue, with its 10-minute proximity to downtown and lifestyle amenities like the Knapp’s Corner shopping center, Frederik Meijer Gardens & Sculpture Park and Celebration Cinema. He added that John Wheeler and fellow WDG partner Mike Maier have a 40-year history of building housing along East Beltline, dating back to their days as partners at Rockford Development Group.

But the team got serious about building Meadowood in this location after the rental units at Evergreen “flew off the shelf,” with pre-leasing before the development was even completed that resulted in a “large, exhaustive waitlist” of prospective customers, Jason Wheeler said.

“When we completed the project, we still had 30 or 40 people who were continuing to contact us

HARRIS From Page 1

acquired for a total of $1 million on Dec. 8. The Harris Building still features illuminated exterior signage and is located in the once-branded “SoDiv” area between Wealthy and Fulton streets.

“There is definitely some money being poured into this area and there is potential here,” Ake said.

“It was a right place, right time kind of thing, and we knew the sellers and thought we could make

STAFFING From Page 1

change in 2019 as the labor market tightened and a surplus of talent shifted to a deficit.

In Kent County today, there are four job seekers for every 10 job openings. Neighboring Ottawa County has seven job seekers for every 10 openings, according to data from Express Employment Professionals, which has offices on 44th Street in Wyoming.

The continued tight labor market means employers will need to ensure their compensation remains competitive to draw and keep talent.

Robb told Crain’s Grand Rapids Business that the labor market will remain tight partly from Baby Boomers retiring and low population growth, although West Michigan of late has been experiencing a labor market that’s “more of where we were” in 2019, prior to the pandemic.

The region remains in a labor deficit “where we do have more job openings than people on unemployment,” even as the deficit has been shrinking over the last 12 months and the company noted a higher number of applicants for

saying, ‘Hey, I’m still looking for a home in Rockford, Northview or Forest Hills, and I can’t find anything. Do you guys have availability?’” Wheeler said. “So that’s why we turned around so quickly with Meadowood, because we saw a huge market there.”

WDG has developed many other market-rate townhome communities across greater Grand Rapids, including Michigan Meadows in the Michigan Oaks neighborhood of Grand Rapids, Hanover Townhomes in Caledonia and Preserve Townhomes in Spring Lake.

Oak Brook, Ill.-based Franklin Partners LLC bought the property on which Meadowood will be built from Sunshine Community Church in 2017. The firm intended the land for multifamily development and obtained a residential planned unit development (PUD) rezoning from the township in 2018. However, the development never came to fruition amid opposition from neighbors, according to past media reports.

The original land purchase included 72 acres before it was subsequently divided. Franklin Partners sold 24 acres on the northern

part of the property to Terre Haute, Ind.-based Thompson Thrift Residential, which opened a 320-unit luxury apartment community called The Grove on the site in 2022.

A Holland-based entity with an undisclosed owner acquired 35 acres to the south of The Grove for $1.37 million in September 2021.

WDG signed a $2.15 million purchase agreement for that acreage in 2022, closing the transaction in May 2023 after Grand Rapids Township approved a PUD amendment to accommodate WDG’s townhouse plans in April.

Wheeler said he believes the townhomes at Meadowood — which they initially dubbed “Evergreen East” — will nicely complement The Grove’s three- and four-story apartment buildings.

The two developments will be connected by a pass-through street accessed off East Beltline that was formerly Ranger Drive and now will be called Sunshine Drive.

The floor plans at Meadowood are similar to the designs used at Evergreen Townhomes, Wheeler said, with slight modifications made to better suit the natural fea-

tures of the site, like window orientation for optimal views and siting and layout of shared amenities.

“Our efforts to continue to provide high-quality housing along this major travel corridor of West Michigan is important to us,” Wheeler said. “We’re doing our best as a developer to bring these townhomes to the market with a

sense of who our user is and how to make their lifestyle as convenient as possible.”

The units will range from about 1,400 to 1,800 square feet, and rents are expected to be similar to what they are at Evergreen — about $2,195 to $2,895 a month per unit, depending on size.

Wheeler said the townhomes are designed to give renters a “single-family homeowner experience,” with attached garages, “upscale” finishes like custom kitchen cabinets, quartz countertops, fireplaces, and master suites with walk-in closets and full baths.

Additionally, some of the units will have walkout basements.

The development also will offer a resident event pavilion, dog park and 10 acres of designated green space.

Progressive AE is the architect on the project. WDG is the developer/owner, its affiliate WDG Construction is the construction manager, and Mercantile Bank is providing financing for the project, the cost of which was not disclosed.

PURE Real Estate Management will be the property manager and will begin pre-leasing this spring.

something happen with it. The goal is making money as a real estate investor and doing something cool with it. It’s an iconic building, and one of those you’re proud to own and add to your portfolio.”

Lovelace is involved with multiple affordable housing developments across metro Grand Rapids, including the Union Suites projects in Grand Rapids and Wyoming, while Fisher is the CEO of Virgin Soil Real Estate, where he also serves as a commercial agent and developer.

Ake said he had been examining

the South Division area for nearly seven years and maintained contact with the prior owner during the time.

The majority of the first floor of the Harris Building is vacant and is where Ake and his investment partners are working to attract tenants. The first floor most recently housed Little Space Studio LLC and The Mortals coffee shop, which both moved out of the space in 2023. Little Space still operates some co-working space on the third floor of the building, and a wedding venue is housed on the

second floor.

The Harris Building was constructed in 1892 and served as the home to The Knights of Pythias, a secret fraternal organization, then later housed The Harris Sample Furniture Co., which operated in the building from 1909 to 1969.

The Division Avenue Arts Collective operated out of 115 South Division Ave. before relocating in 2013.

Short-term, the first floor of the Harris Building might be leased to some office tenants based on its current design. However, the goal

is to get a more active hospitality use there and in the other two buildings, Ake said. Future tenants could include more than one business, such as a restaurant, bar or tasting room, Ake added.

“We’d love to be an anchor tenant for that strip to bring back retail and what it was back in the day, that was one of the main roads and strips,” Ake said. “We’re not flippers, we actively hold for quite some time. My philosophy is hold forever, or as long as you can and we want to make something cool.”

job openings at client employers, Robb said.

“For employers who are hoping for a very easy talent market, or that they’re not going to have trouble hiring, we’re not expecting that,” Robb said. “Because of those demographic trends and population trends that have been evolving for a long time, it’s going to remain a competitive talent market for the foreseeable future, really.”

In response to the tight labor market, employers in the last couple of years have been increasing wages by rates higher than historical norms to attract and retain staff, although the rate of the increases has started to level off, Robb said.

As Crain’s Grand Rapids Business reported in November, the 310 employers responding to an annual wage and salary survey by The Employers’ Association collectively implemented pay raises of 4.12% for 2023 across 18 major job classifications and 363 specific jobs. That compares with 5.2% raises the 292 respondents reported in 2022 for 348 specific jobs, mostly in Kent and Ottawa counties, and average raises of 4.4% in 2021.

Until 2021, The Employers’ Association’s annual wage survey found that average pay increases in the

Grand Rapids area ran 2% to 3% annually.

Data from Express Employment Professionals’ 2024 compensation report specifically reflects how entry-level wages grew in the last few years.

In 2020, the year the COVID-19 pandemic began, 24% of all entry-level jobs that Express Employment Professionals filled for employers in the Grand Rapids area paid $13 to $14 an hour. Another 22% paid $14 to $16 an hour to start.

By 2023, none of the entry-level jobs that Express Employment Professionals filled for clients paid less than $15 an hour. In the third quarter of 2023, one in five paid $16 to $17 an hour to start and 29% of entry-level jobs paid $17 to $18 an hour. Another 29% of the jobs that Express Employment Professionals filled started at $18 to $19 an hour, which compares to just 1% in 2018.

Overall, 93% of the jobs Express Employment Professional filled in 2023 paid $16 or more an hour to start and 6% paid less, which is a complete reversal from just five years earlier.

A key driver to the higher entry-level wages has been what Robb calls an environment that

was “almost like a manic hiring mode” as employers rebounded from of the worst of the pandemic and sought to catch up on pent-up demand, Robb said. He doubts the pay increases of the last few years will continue at the same elevated rate as the labor market returns to pre-pandemic levels.

The “supply and demand dynamics are in play, so it’s kind of just easing off the needs for those increases,” Robb said.

“Companies were just trying to get back (and) there was unprecedented demand for products,” he said. “It was just very hyper-competitive, and they were willing to do whatever they needed to do to get the talent in the door, so wages were going up very fast. As things have kind of leveled off, we’ve seen a lot of companies stabilize that.

Yes, they might still be hiring, but it’s probably for maintaining their workforce as opposed to growing it massively.”

Even so, one of the issues that employers still face is that job candidates today have higher expectations for entry-level wages, Robb said.

“The mindset has totally shifted in the workforce. There’s just a lot more awareness on wages, especially with all of the advertising

from companies and hiring rates and the wages of the last couple of years,” he said.

The Express Employment Professionals report is based on placing about 10,000 people in light industrial, warehousing, skilled trades and office positions at more than 500 companies in a 13-county region of West Michigan.

Even with an easing in the unprecedented tightness in the labor market, employers should continue to regularly review compensation levels to remain competitive, according to Express Employment Professionals.

“As we look towards 2024, we are encouraging companies to be mindful of their current wages and monitor overall inflation and wage trends on a quarterly basis to ensure they remain competitive. In a talent market defined by significantly more demand than supply, it is especially detrimental for a company to fall behind the market in their wages,” Robb and Petrini wrote in their report for 2024.

“More now than ever, employers need to focus on becoming an employer of choice so they can attract and retain the talent they need for the future to be sustainable. Wages are a very important factor, but just one piece of the overall puzzle.”

Wheeler Development Group officials say strong demand in a recently completed nearby townhome project spurred action on the Meadowood Townhomes project. | PROGRESSIVE AE

20 | CRAIN’S GRAND RAPIDS BUSINESS | January 22, 2024

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COREWELL From Page 1

property deals and Corewell Health’s overall “master plan” for an office campus as well as housing, parking and greenspace will drive up nearby property values and create an uptick in retail activity.

“Anywhere that starts to get developed, the property values will increase,” said Mary Anne Wisinski-Rosely, partner and executive vice president at NAI Wisinski of West Michigan. “We saw it on Bridge Street too, but I think that’s also just a product of the city growing. They have to grow out and there just is not a lot for sale, so things are going up in value.”

However, some business owners in the neighborhood fear the development may push up commercial lease rates and drive them out of the neighborhood.

That includes Edwin Collazo, the president and CEO of City Built Brewing Co., which is located on the first floor of River Flats at 820 Monroe, two blocks north of Corewell Health’s new campus.

“We have looked around (the neighborhood) to see if there is a place where we can own instead of rent, but every place where there is a potential for us, they’re seeing Corewell come through and pay exorbitant amounts for land, so they’re holding out,” Collazo said.

Master plan Michigan’s largest in-state health care system has been amassing parcels for its $110 million office park project and surrounding development plan. The office park, known as Corewell Health Place, is under construction and set to be fully occupied in the summer of 2024, with some employees already working in the renovated Brass Works Building.

Corewell Health Place will include an eight-story office tower connected to the renovated Brass Works Building and two parking structures. As well, the health system intends to “remove blighted, unusable and condemnable buildings on the project site,” Corewell

STADIUM From Page 3

The overall parking demand for an event held at the soccer stadium is estimated to be around 2,400 spaces, and the development team is expecting that need to be met by the 16,042 surface lot and parking deck spaces located within a 15-minute walk of the potential project site.

“One of the reasons Grand Action focused on the downtown area is because of that existing infrastructure,” said Bill Culhane, principal at Progressive AE Inc., which serves as the project designer. “That’s part of the opportunity here — we’re expecting people to come downtown early, maybe have dinner, drink, walk around and do some shopping.”

Grand Action 2.0 Executive Director Kara Wood said they also accounted for the potential of sev-

blocks north of the health system’s new campus.

In particular, Corewell Health’s new offices will consolidate about 1,200 office workers who are currently at 26 leased spaces at the location, which Secchia aims to draw in with The Silva once it opens, which is targeted for later this year.

However, not all hospitality business owners share that optimistic outlook.

Collazo said while he appreciates the Corewell Health Place in Monroe North calls for an office tower, parking decks and surface parking, green n e i g h b o r h o o d ’s space and housing. This plan was previously proposed to the Grand Rapids Planning Commission, but the growth, City Built’s company has said it will work with stakeholders to address concerns around surface parking. future at the River | COURTESY OF COREWELL HEALTH Flats at 820 Monroe Health spokesperson Gillian Con- Rapids submarket, according to building is uncertain after its rad told Crain’s Grand Rapids Busi- the latest data from NAI Wisinski lease expires at the end of 2024.

“It’s exciting to be part of a growness in a statement. of West Michigan.

Corewell Health’s purchase of Wisinski-Rosely said she does ing neighborhood, and my hope is 706 and 725 Bond Ave. NW for not expect to see Corewell Health’s that people come to our space and $11.05 million on Dec. 26, 2019, project having a major effect on we become their new happy hour marked the beginning of the health driving up commercial rent in the spot, but there is no guarantee of care system’s property acquisitions area. However, leasing rates for that,” Collazo said. “Whether more in the area. Corewell Health ac- commercial space that Corewell people come or not, my rent is the quired the properties from manu- Health may potentially build as rent, and we are not in a position to facturer Gill Industries Inc. part of its new development will be help control things by being able to From the Gill transaction to the higher to offset new construction invest in the neighborhood — that ship has sailed.” recent purchase of Rocky’s, Core- costs, she said. well Health has closed on 11 propWisinski-Rosely also predicts erty sales (some including multiple that Corewell Health’s project will Local engagement parcels) over the past four years, help to fuel more growth in the totaling nearly $57.3 million in Monroe North neighborhood, Corewell Health has engaged combined transaction values, ac- which sits just north of I-96 but is with local leaders, business owners cording to a review of property re- separate from fast-growing areas of and neighbors about the next cords. In most cases, Corewell downtown and Bridge Street on the phases of construction, and “will Health paid significantly more than west side. continue to listen to the communithe previous purchase transaction “We want the downtown area to ty as plans are developed,” Conrad price for the properties. stay vibrant with all the work that’s said. gone into it and (Corewell Health) “We see this downtown area as investing near the downtown is a vital to our growth, vital to connectRipple effects? good thing, too, and will certainly ing Corewell Health with the comThe 155,000-square-foot Brass help any retail establishments, bars munity and vital to connecting Works Building came with the and restaurants in the area,” Wis- people working in health care,” Conrad said. “The location creates largest price tag for Corewell inski-Rosely added.

Mark Secchia, who is renovating a work environment conducive to Health at more than $24.7 million.

The building is being renovated the former Riverfront Fitness Cen- opportunities in education, innofor office workers as part of Core- ter at 975 Ottawa Ave. into a bocce vation, and health improvement well Health Place. Corewell Health ball entertainment center called collaboration in addition to paid $159 per square foot for the The Silva, said the Corewell Health strengthening the economic vitalibuilding. The average yearly lease office project was a “huge impetus” ty of our city. The increase in peorate for office space is $18.38 per in deciding where to develop his ple coming into this campus will square foot in the northeast Grand project. Secchia’s project is a few benefit the downtown business

district and provide new opportunities for businesses to establish themselves in this area.”

Besides the 157,000-square-foot, eight-story office tower and two parking structures for Corewell Health Place, the health care system also has a North Monroe Campus Master Plan, which calls for the development of housing structures for medical residents and fellows as well as a market-rate housing project. Corewell Health also has proposed to install surface parking lots and greenspace in the place of several aging buildings in the area.

Future phases of development could also include retail and additional office space.

However, after pushback from the community, the Grand Rapids Planning Commission tabled Corewell Health’s plans to demolish five vacant structures in the area to make way for surface parking lots.

Corewell Health has since pulled back its request to the city and plans to re-engage as specific properties need demolition, Corewell Spokesperson Ellen Bristol recently told Crain’s Grand Rapids Business.

“We are engaging with local leaders and neighbors before proposing future phases,” Bristol said.

Meanwhile, for former Monroe North business owners who sold their land to Corewell, the deals have created fuel for expansion.

While Corewell Health’s acquisitions have been mostly vacant buildings, exceptions include the former Rocky’s and Eastern Kille Distillery properties. On Dec. 13, Corewell closed on the former Rocky’s building at 633 Ottawa Ave. NW for $1.6 million — more than 12 times what Frank Lehnen paid for the property when he bought it in 2001, according to property records.

Eastern Kille Distillery owners also got a massive return on their property when they sold it to the health care system for $3.75 million in 2021 — more than 10 times the amount of the distillery’s initial property investment of $370,000.

The property sale allowed Eastern Kille to build a new distillery, restaurant and outdoor cocktail garden on 16 acres in Plainfield Township near Rockford, which opened at the end of 2023.

a professional soccer team would be attached to the project in the future, Wood said. However, Grand Action is focused on the project development and is not part of efforts to land a soccer team for the venue, Wood added.

“I think the community sees this as an opportunity to be a huge unifier and also an opportunity for more outdoor sporting events and

bringing more visitors to the region,” Wood said. “This is much different than what we see with the other venues. It rounds out the portfolio of the (Grand Rapids-Kent County Convention/Arena Authority) nicely from music to sports and everything in between.

I think it’s a great opportunity to enhance the city and continue the momentum we have going.”

eral events happening at major downtown venues on the same night, and said the current parking infrastructure would meet the expected needs.

One local resident during the meeting questioned whether the neighborhood would be better served if housing was built rather than a soccer stadium, in light of the extremely tight housing market in the city.

Culhane and Wood said there is roughly enough space on surrounding DASH lots for the development of 550 housing units, but that would be outside of the 8.2acre soccer stadium site and the project scope.

“This project will serve as a catalyst for housing and additional development,” Wood said. “It’s not ‘this or,’ but ‘this and.’”

The next steps for the project will involve Progressive AE continuing to formulate the project design, putting together cost esti-

mates and public-private funding for the development, land configuration and more public engagement, Wood said.

The goal is to submit a request for a special land use for the project to city planning staff by the end of February to be considered at a future planning commission meeting, Culhane said.

A team store and restaurant are also planned on the stadium site, and the proposed restaurant and bar would likely be open on non-game days, Culhane said. There is also space on the project site to expand the seating of the stadium to make it up to an 11,000-capacity venue.

The development team looked at soccer stadiums in Columbus and Cincinnati, Ohio, as well as Louisville, Ky., for comparisons on how the venues operated and were funded.

At this point, Grand Action has a “high confidence level” of the project coming to fruition and that

January 22, 2024 | CRAIN’S GRAND RAPIDS BUSINESS | 21

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THE CONVERSATION

CEO returns home to metro Grand Rapids to lead new Southridge Behavioral Hospital

CrainsGrandRapids.com President and CEO KC Crain Group publisher Jim Kirk, (312) 397-5503 or jkirk@crain.com Executive editor Mickey Ciokajlo, mickey.ciokajlo@crain.com Editor Joe Boomgaard, joe.boomgaard@crain.com Managing editor Andy Balaskovitz, andy.balaskovitz@crain.com Special projects editor Tim Gortsema, tim.gortsema@crain.com Director of audience and engagement Elizabeth Couch, elizabeth.couch@crain.com Audience engagement editor Matthew Pollock, matthew.pollock@crain.com Creative director Thomas J. Linden, tlinden@crain.com Associate crative director Karen Freese Zane Digital design editor Jason McGregor Art directors Kayla Byler, Carolyn McClain, Joanna Metzger Director of Visual Media Stephanie Swearngin Notables coordinator Ashley Maahs

Construction on a new psychiatric hospital in southwest Kent County proceeds on schedule toward a 2025 opening that will add new capacity in West Michigan to treat people with a mental illness. Developed through a joint venture between Trinity Health Michigan and Pennsylvania-based Universal Health Services Inc., Southridge Behavioral Hospital will have 96 adult inpatient beds, including 24 beds for geriatric patients, and offer outpatient care. One of the nation’s largest hospital operators, Universal Health Services also owns Forest View Hospital in Grand Rapids and five facilities overall in Michigan. Universal Health Services recently named Scott Miles as CEO and managing director for Southridge Behavioral Hospital. Miles is a veteran health care executive with 24 years of experience who most recently served as CEO of Cedar Creek Hospital, an inpatient psychiatric facility in St. Johns. A Grand Valley State University graduate who earned a bachelor’s degree in psychology, Miles spoke with Crain’s Grand Rapids Business about the project, located near Trinity Health’s Southwest outpatient medical campus at 64th Street and Byron Center Avenue. | By Mark Sanchez

REPORTERS Kate Carlson, real estate, kate.carlson@crain.com Jack Grieve, audience engagement, jack.grieve@crain.com Abby Poirier, restaurants, retail and agribusiness, abigail.poirier@crain.com Mark Sanchez, health care and finance, mark.sanchez@crain.com Kayleigh Van Wyk, manufacturing, technology and law, kayleigh.vanwyk@crain.com Rachel Watson, residential real estate, insurance and tourism, rachel.watson@crain.com Danielle Nelson, research and data, danielle.nelson@crain.com

What was the allure for you to take on the role of CEO at Southridge?

The opportunity to work in partnership. The ability to come back to my home community and work in coordination with Trinity and UHS, it’s very exciting to me. The positive impact we’re going to have on the community, the ability to showcase a team of purpose-driven care heroes, the ability to further develop positive relationships within this community — every part of it is exciting.

How’s construction on Southridge coming along?

Things are going quite smoothly.

We’re on schedule and things are going really well right now. We’re planning to open in the second or third quarter of 2025. The steel supports are up, and we did a beam-topping ceremony in early November.

How do you see Southridge fitting into the health care market in Grand Rapids?

This is going to give us the ability to partner with Trinity Health and be able to focus on meeting the current unmet needs. Not only will the teams be able to work together to meet the needs of those struggling with mental health, but they will be able to work to provide access to the services they need, when they need it.

There are so many folks really in need of treatment for high-quality mental health services for things such as depression, anxiety, bipolar, substance use and they’re just unable to get the services at the time they need them. Our patients are the core of their own treatment, so our programming will be tailored to the individual

Michigan events director Samantha Flowers, samantha.flowers@crain.com Events Planner Tressa Brondyke, tressa.brondyke@crain.com People on the Move manager Debora Stein, dstein@crain.com Classified sales Suzanne Janik, sjanik@crain.com Sales assistant Rachel Smith

CEO Scott Miles signs a steel beam during a beam-topping ceremony in November marking a milestone in the construction of Southridge Behavioral Hospital.

needs. Psychiatric counseling services are accompanied by programs like art therapy, music therapy, pet therapy and outdoor activities, things you’re just not used to hearing and thinking about when you consider an inpatient level of care. It’s really going to help our community see a whole new level of treatment.

What will the new hospital offer in terms of amenities that reflects how mental

COURTESY

We’ve seen a number of projects move forward in the last couple of years to address a lack of access for mental health care that became so apparent in the pandemic. Are mental health care providers beginning to catch up on the need and demand?

We’re trying to do our part to help us get caught up, but the demand is clearly exceeding the number of services at this time.

ADVERTISING Senior vice president of sales Susan Jacobs, susan.jacobs@crain.com Advertising & event sales director Jill May, jill.may@crain.com Account executives Shelly Keel, shelly.keel@crain.com Jennifer Maksimowski, jennifer.maksimowski@crain.com

safety at the forefront and creating a well-lit, comfortable atmosphere with inclusive therapies focused on what you and I want in treatment and what we deserve.

This will become UHS’s second facility in Grand Rapids. How do you see Southridge working with other care providers in the market?

The efforts will be very, very collaborative, and we’ll have

It’s hard for me to describe how rewarding this work is. I’ve been a mental health advocate my entire life and I’ve had the privilege to make that my career.

— Scott Miles, CEO and managing director for Southridge Behavioral Hospital health care is changing and evolving?

One of the biggest pieces from a treatment perspective is the ability to have the outdoor space and the ability to feel less institutionalized while still being able to focus on comfort and safety.

It’s incredible the amount of work that goes into just the design of the colors, the furniture, the layout while always having patient

services ranging from adolescent all the way to geriatric now in the market, which has not been the case previously. We will collaborate very closely to make sure we are meeting community needs. It really will … better position us to be able to do that.

There are other phenomenal services in the county, and we want to be a collaborative partner.

UHS formed the joint venture

with Trinity for this project.

Are you open to other partnerships?

Absolutely. We will collaborate with mental health partners from all over the community as far as our referral sources and our next levels of care. One of the key components to having a successful discharge from an inpatient or outpatient level of care is that long-term follow up within our community. We have some really good providers within our community and will be collaborating very closely with them.

Why did you choose mental health care as a career path?

It goes back to having the privilege to serve those in need. Everyone has been impacted by mental health, whether it’s themselves or a loved one, and I actually have the ability to help meet their needs and treat them. It’s hard for me to describe how rewarding this work is. I’ve been a mental health advocate my entire life and I’ve had the privilege to make that my career. It’s just phenomenal work.

This is a treatable illness and there are so many people who just don’t understand, and I want to make sure that we’re there for them and that we can deliver in West Michigan.

CRAIN’S CONTENT STUDIO Senior director of Crain’s Content Studio Kristin Bull, kbull@crain.com Crain’s Content Studio manager Clare Pfeiffer Content marketing specialist Allie Jacobs PRODUCTION Vice president, product Kevin Skaggs Product manager Tim Simpson Prepress/production director Simone Pryce CUSTOMER SERVICE (833) 830-7446 toll free (845) 267-3031 local line (for any foreign calls) customerservice@crainsgrandrapids.com

Crain’s Grand Rapids Business is published by Crain Communications Inc. Chairman Keith E. Crain Vice chairman Mary Kay Crain President and CEO KC Crain Senior executive VP Chris Crain Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Volume 41, Number 2 Crain’s Grand Rapids Business (ISSN 2836-7723) is published biweekly, with an extra issue in May, October and December,

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22 | CRAIN’S GRAND RAPIDS BUSINESS | January 22, 2024

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INNOVATION IN

Health Care Explore the evolving landscape of health care in West Michigan with Crain’s Grand Rapids Business and a panel of experts. Discover how various industries contribute to enhancing health care, from cutting-edge medical devices to innovative processes.

CONGRATULATIONS ON YOUR NEW SPACE, ANIMAL EMERGENCY HOSPITAL!