Crain's Grand Rapids Business, March 18, 2024

M&A DEALS AND DEALMAKERS AWARDS

Multifamily housing starts plummet locally

West Michigan data shows alarming 43% drop

year over year

By Rachel Watson

Multifamily housing starts plummeted in West Michigan last year at a rate far worse than national declines, a trend local experts attribute largely to higher borrowing costs.

Data provided to Crain’s Grand Rapids Business by Grand Rapids-based NAI Wisinski Great Lakes showed only 2,925 units of new multifamily housing under construction in West Michigan during the second half of 2023, a 43% drop from the 5,212 units during the same period a year earlier.

NAI’s reports — which are assembled using data from CoStar Group Inc., local public meeting

minutes and media reports — consider multifamily housing starts as developments of ve or more units in the Grand Rapids, Kalamazoo, Battle Creek, Lansing and Lakeshore markets. NAI denes the Lakeshore territory as the Lake Michigan shoreline from Benton Harbor to Muskegon. e local decline in housing

See

on Page 44

Historic hardware store changes hands

Kutsche’s Hardware supplies most of the major contractors in West Michigan

By Kate Carlson

Chip Brander sold the 162-yearold Kutsche’s Hardware store last month, but he’s not sure he’ll ever fully adapt to leaving something he’s been involved with since he was 12. e hardware store at 307 Leonard St. NW has roots dating back to the Civil War era and has supplied most of the major West Michigan contractors and con-

struction companies for decades.

It’s the kind of shop where regular customers often stay to catch up with Brander in his o ce, where a black-and-white photo of horses and buggies outside the original downtown storefront hangs on the wall.

As Brander nears the age of 60 and other commitments take up his time, he chose to sell the hardware store and its property to East Grand Rapids resident Max Johnson. e $810,000 property sale between Brander and Johnson closed on Feb. 7, according to property records.

Michael Greengard at Wyoming-based Praxis Business

on Page 44

MANUFACTURING

Component supplier tabs Holland for North American HQ

Construction last month on The Current in Grand Rapids’ Creston neighborhood.

Roaster moves away from coffee shops to focus on retail

distribution network

| By Abby Poirier

“Operating coffee shop outposts is just not a primary initiative to support Ferris’ vision and growth trajectory moving forward.”

Mark VanTongeren, CEO Ferris Coffee & Nut Co.

Ferris Coffee & Nut Co. is closing its Holland coffee shop and stepping back from operations at two in-store cafes as the family-owned business turns its attention to retail distribution.

CEO Mark VanTongeren confirmed Ferris Coffee plans to close its Holland cafe at 57 E. 8th St. on March 23 after a decade in business. The space has served as a coffee shop for the past 30 years, previously operating as JP’s Coffee.

shops to boosting retail sales in 2024.

The decision comes as the business pivots from operating coffee

“We are growing pretty significantly and with that growth, we’ve had to say ‘no’ to certain areas of our business that have been historical to us or have helped us get there,” said VanTongeren. “Operating coffee shop outposts is just not a primary initiative to support Ferris’ vision and growth trajectory moving forward.”

VanTongeren said the company “wrestled internally” with the decision not to renew its lease at the

Holland location.

“It was a difficult decision, but it was made with confidence,” he told Crain’s Grand Rapids Business. “It’s been a privilege to be part of the Holland community in this capacity for the last 10 years.”

VanTongeren, the second-generation owner who was appointed to lead the company a year ago, said the closure is part of Ferris Coffee’s plan to grow its packaged products business.

“It’s been a really nice location for Ferris, it’s been a profitable location,” he said. “It’s been a great

By Mark Sanchez

Corewell Health plans to transform a sprawling former General Motors manufacturing site into an $80 million service center that will support operations statewide.

The health system acquired the northern 40 acres of the vacant 75-acre site at 300 36th St. in Wyoming for $6.6 million in December, according to property records. The project is located on the south side of 36th Street at Buchanan Avenue and just east of U.S. 131.

The 295,515-square-foot service center would house supply chain offices, a courier fleet, document and mail services, and 36,000 square feet of shelled space for future use. Corewell Health will build a non-motorized trail along Buchanan Avenue and provide an easement to the city. WOOD-TV8 first reported the project on Feb. 23.

“The proposed industrial development will increase the economic strength of Wyoming’s economy with new construction jobs for the estimated $80 million development as well as new employment in the facility once constructed,” City of Wyoming planning staff wrote in a memo to planning commissioners that recommended site plan approval.

The property, known as Site 36, has been vacant since 2009 after GM ceased production at the plant, which dated back to 1936.

See COREWELL on Page 45 See COFFEE on Page 44

State labor force participation rises ‘sharply’

Gains help Michigan reach ‘neutral’ point in economic cycle

By Mark Sanchez

Michigan should continue to add jobs over the next two years and avoid an economic downturn.

That’s that latest assessment on the state’s economy in an updated outlook from the University of Michigan.

“We remain cautiously optimistic about Michigan’s economic trajectory over the next two years, judging that an ongoing decline in interest rates coupled with a growing national economy should help

Michigan to navigate through the wobbles in the auto industry,” economists from the UM Research Seminar for Quantitative Economics wrote in an updated state outlook they issued this month.

“We believe that Michigan is nearing a roughly neutral point in the economic cycle,” they wrote. “We expect economic growth to slow down from the pace we have seen recently, but we project that the state will avoid a downturn over the next two years.”

UM economists project that the

state will add 37,900 payroll jobs this year as “weak growth at the end of 2023 holds down calendar year growth in 2024,” and then add another 57,500 jobs in 2025.

The projected employment growth would increase jobs in the state to 2.2% above the pre-pandemic level by the end of 2025. Still, the “relatively upbeat forecast” leaves Michigan about 3.4% below the state’s payroll employment peak in the second quarter of 2000.

Ferris Coffee’s Holland location, which is set to close later this month. | cOUrTESY PhOTO

Ferris coffee & Nut co. plans to strengthen its

VanTongeren

113-year-old west side home earns rare historic designation

By Rachel Watson

Frank Patis still can’t believe the house he grew up admiring from the sidewalk every day is now his to love and preserve in perpetuity.

Along with his wife, Melissa Patis, Frank bought the Irving Andrew and Olive Crane Kendall Dean House, better known as May ower Place, for $395,000 in 2018 from previous owners Brenda Pawl and the late Dr. Lawrence Pawl.

e Michigan State Historic Preservation O ce announced Feb. 7 that the four-bedroom home built on Grand Rapids’ west side in 1911 was one of 19 properties successfully listed on the National Register of Historic Places last year.

e designation came on July 20, after the Patises spent about a year working on the application.

Frank Patis, a nurse at Edison Christian Health Center just a few blocks from the house, said he’s been fascinated by May ower Place since his childhood in the Westside Connection neighborhood where it sits. He used to walk past it every day on his way to school, and said it’s still “hard to believe” that he owns it now.

“I (toured) the house when I was 16 in high school, and I thought, ‘Boy, this would be nice to live here.’ And then like 50 years later, here we are,” he said.

State Historic Preservation Ocer Ryan Schumaker said the home earned its spot on the Register for its unicorn status among homes built during the period.

“ e bulk of the justi cation for the nomination was based on the unique blend of the Classical Revival style and Arts and Crafts-style Foursquare,” he said. “ at was part of the consideration and part of the narrative for it being elevated to the National Register.”

e home is only the sixth single-family dwelling in Grand Rapids that’s not in a historic district to be added to the National Register.

e others are the Mathias J. Alten House and Studio listed in 2009; the President Gerald R. Ford Jr. Boyhood Home in 1995; the Augustus Paddock House that houses Mangiamo in 1985; and the Eliphalet H. Turner House and Abram W. Pike House in 1970.

An ‘unusual combination’

e home was nicknamed Mayower Place because original owner Olive Dean’s ancestors sailed to America on the Mayower in 1620. Proud of her heritage, she had architect Frank Payne Allen include a single ceramic tile in the home’s living room replace depicting the ship. e tile and red brick Craftsman

surround has survived at least a half-dozen ownership changes since 1911.

e Patises hired historians Valerie van Heest and William Lafferty, of Holland-based La erty van Heest & Associates, to gather information on the house and apply for the historic designation.

As they wrote in their application, the house presents one face to the world and another to those who step inside.

e exterior is in keeping with the Classical Revival style, “with a centered portico supported by paired Corinthian columns, symmetrical fenestration and (a) broken pediment front door surround,” they wrote.

But the interior is “ nished in simple woodwork, with panel doors and built-in cabinetry” aligning with the tenets of the Arts and Crafts movement that ourished in the U.S. and Europe between 1880 and 1920.

“ e house, in its unusual combination of exterior and interior design approaches, outwardly re ects the reverence the Deans held for their colonial ancestors while inwardly re ects a dominant form of interior design of the period,” van Veest and La erty wrote.

e e ect is a place that awes passersby but is cozy and practical for its inhabitants.

“ is may not be surprising considering who the Deans were, an upper middle-class couple who may have considered such an interior appropriate as private and entertaining space for their station in life, especially so in Grand Rapids,” which was home to so many Arts and Crafts-style furniture designers and manufacturers, they said in the National Register application.

The people behind the home

Olive and Irving Dean married in 1883, according to van Heest and La erty. He worked as an accountant for the Grand Rapids and Indiana Railroad until opening his own accounting rm in 1908. Like so many others in Grand Rapids, Olive Dean came from a family of furniture makers. She also was an active member of the Daughters of the American Revolution.

Olive inherited half of her brother’s estate in 1910, enabling them to hire Allen to design May ower Place. Allen was primarily a commercial architect, though he did publish a popular catalog of house plans in the 1890s, and he later designed the Felt Mansion in Laketown Township near Saugatuck, which was listed on the National Register in 1996.

e Deans never had children, and Irving died in 1927. According

to former homeowner Brenda Pawl, when Olive died in 1929, she left the home not to a relative, but to a neighbor.

“When Mrs. Dean took ill, her neighbor, Mrs. (Leonard J.) Ritzema took care of her. And it was my understanding that the house was deeded to her family because of that,” Pawl said.

Leonard Ritzema was then owner of the former Ritzema Department Store. ough further details are murky, the house appears to have changed hands a couple more times until the late Dr. Lawrence Pawl, former medical director of Hospice Grand Rapids (later absorbed by Hospice of Michigan), bought it in 1993.

He married Brenda Pawl at the house in January 1996, and they happily spent the next 22 years there.

Pawl said she felt an instant connection to the place. “ at property is so sacred, it’s so special,” she said, noting that the gated driveway opens onto 2.5 acres that feel “magical” and private, despite being located along busy Leonard Street. at’s partly because the Deans, who were globetrotters, brought home nonnative trees and plants from all over the world to create a lush, sheltered oasis surrounding the house.

During her years at May ower Place, Pawl cared for the gardens and installed a seven-circuit agstone labyrinth in the yard that she walked as part of her mindfulness practice. She also kept beehives onsite.

As her husband’s heart condition worsened, and he could no longer

climb stairs, they were forced to sell.

Enter Frank and Melissa Patis. ey were about to buy another home, but when the longtime west side residents heard May ower Place was on the market, they pivoted to buy Frank’s dream home.

Dr. Pawl, who went by Larry, was a history lover until his death in 2020, and he wanted to make sure May ower Place would go to someone who would promise to preserve the home as he and Brenda had.

“We wrote a letter when we were trying to buy the house about why we liked the house, and he picked our letter because he knew that we would care about the property as he did,” Frank Patis said.

‘Special’ characteristics of the home

e Patises and Brenda Pawl were grateful the Deans left behind a photo album in the house that documents their travels and sheds light on who they were. Previous owners also passed along the two framed black-and-white portraits of Irving and Olive that hang in the front stairway, and Allen’s original blueprints for the home.

Many of the original features remain, like the woodwork, hardwood oors, doors, panels, built-in cabinets, replace, and stainedglass windows.

“What makes it special is the design, the architecture outside, with the Greek Revival pillars and the stucco (sheathed exterior), and if you go inside the home, there’s a lot of Arts and Crafts woodwork,” Frank Patis said.

His favorite room is the entryway, which features the main staircase with an oak “swirl” newel and original railed banister that continues up to a landing and a second set of stairs and curves around a second- oor hallway that overlooks the lower oor.

Both the Patises and Pawl love that the main staircase is one of two.

“ e back stairs area was fun when kids and the grandkids would come over — they would run all the way up the front steps and then they’d run down through the back stairway, where there’s a dumbwaiter,” Pawl said.

Melissa Patis, who’s a graphic designer for Meijer Inc., said her favorite part of the home is the dining room, which has a built-in, nearly oor-to-ceiling canted china cabinet and a small butler’s pantry that connects the dining room to the kitchen.

“I keep my arts and crafts supplies there,” she said. “And then we also have a couple of stained glass windows that are pretty: upstairs, one in the bathroom, and then one that’s in the front of the house.”

Future possibilities

Schumaker, at the State Historic Preservation O ce, said getting a home listed on the National Register is an “honori c designation” that does not come with any requirements for preservation of speci c elements, unlike for homes that are located in historic districts like Grand Rapids’ Heritage Hill, Cherry Hill, Fairmount Square, Wealthy eatre and Heartside.

Built in 1911 for Irving and Olive Dean, the house locally known as May ower Place was recently listed on the National Register of Historic Places. | COURTESY OF FRANK AND MELISSA PATIS

LT Precision tabs Holland for North American HQ

By Abby Poirier

South Korean manufacturer LT Precision Co. Ltd. plans to invest $43.2 million to establish its North American headquarters in Holland and build new manufacturing operations.

With the investment, the manufacturer specializing in producing battery cooling plates for U.S. electric vehicle makers expects to create 70 new jobs, according to a statement from Gov. Gretchen Whitmer’s office.

The company’s LT Precision Michigan subsidiary will receive a $700,000 performance-based Business Development Program grant from the Michigan Economic Development Corp., according to a statement.

The company purchased the 10acre site at 1776 Airport Court a year ago for more than $9.1 million, according to property records. The property currently includes 136,000 square feet of industrial facilities.

Established in South Korea in 1993, LT Precision produces machinery and components for both electric and internal combustion engine vehicles.

“This investment will build on our strength as the destination for growing companies in the battery and future mobility sectors,” Whitmer said in a statement.

With the move into North America, LT Precision is stepping into manufacturing and sales in the

U.S. for the first time. The Holland location will serve as the company’s hub for manufacturing and corporate offices in the U.S.

According to its website, the company is a supplier to LG Chem.

In addition to a Michigan Business Development grant, the city of Holland has offered a property tax abatement in support of the manufacturing project.

“The new facility is a great example of the economic spin-off created from existing manufacturers making business-to-business transactions,” Mark Meyers, Holland’s director of community and neighborhood services, said in a statement. “The capital investment, and more importantly job creation, is significant.”

As it enters the new market, LT Precision is seeking contracts with U.S. battery manufacturers to produce cooling plates for electric ve-

hicle batteries.

According to a statement, the company chose Michigan over potential locations in Indiana and Ohio because of the state’s proximity to its existing customer base.

LT Precision’s announcement comes amid a surge in electric vehicle manufacturing projects in Holland in recent months.

In December, metro-Detroit-based ATC Drivetrain announced it would invest $7.9 million to build a new electric vehicle-focused facility in Holland. The new, 170,000-square-foot expansion would add up to 163 jobs in Holland over the next five years as the company consolidated operations to the area. The move is supported by a $2 million Michigan Business Development Program performance-based grant.

As well, South Korea-based LG Energy Solution’s $1.7 billion ex-

pansion is currently underway in Holland. The project, first announced in 2022, adds roughly 1.7 million square feet to its existing manufacturing campus in Holland off East 48th Street, a move that will create approximately 1,000 new jobs.

In August, Roger Traboulay, project manager at LG Energy Solution Michigan, told local developers that the company was “seriously considering” making the site LG’s North American headquarters.

Soon after, the company announced that it was investing an additional $3 billion in the project

to supply Toyota Motor North America Inc. with lithium-ion battery modules for electric vehicles. LG said it will establish new production lines for battery cells and modules dedicated to Toyota, starting production at the Holland plant in 2025.

“The region’s advanced energy storage cluster continues to grow and thrive,” Jennifer Owens, president of Lakeshore Advantage Corp., said in a statement. “Having LT Precision join our ecosystem will not only create good jobs and investment, but also enhance our cluster’s innovation, productivity, and competitiveness.”

Investment returns boost Corewell Health earnings

By Mark Sanchez

A large return on investments boosted Corewell Health’s 2023 bottom line to nearly $1 billion.

The nonprofit health system recorded $992.8 million in total net income last year, an annual result that came mostly from $822 million in investment income, according to a 2023 audited financial statement posted online.

Outside of investments, Corewell Health recorded an improved $190.7 million in net operating income, an amount that included $18.5 million in state and federal pandemic-relief funding. The operating income came on $15.15 billion in total operating revenue.

The operating result equated to a 1.3% operating margin last year, a slight improvement over the 1.1% operating margin in 2022. The 2023 margin percentage came from the $157.8 million in net operating income that Corewell Health generated on $13.8 billion in total operating revenues across all business units, as well as $106 million in state and federal assistance.

The 2023 results point to improved financial performance for

Corewell Health coming out of the pandemic. Higher costs for labor and supplies led to slim or negative operating margins for many hospitals and health systems. As 2023 went on, operating margins began to stabilize and improve nationally.

“I’m happy that we were able to achieve a 1.3% operating margin in an environment where many other organizations did not end the year positively. This measure is slightly above where we ended in 2022. I’m also very pleased with our investment returns, essentially making up for losses in 2022” that totaled $815 million, Corewell

ability and value will be critical to success in 2024 and beyond.”

In 2023, the care delivery side of Corewell Health generated $8.27

“Corewell Health is proud of its results for 2023 but recognizes that continued focus on operational excellence, affordability and value will be critical to success in 2024 and beyond.”

Matt Cox, Corewell Health CFO

Health CFO Matt Cox wrote in an email to Crain’s Grand Rapids Business. “Corewell Health is proud of its results for 2023 but recognizes that continued focus on operational excellence, afford-

billion in patient revenue. Premium revenue from insurance company Priority Health generated $6.48 billion. Another $398.9 million came from other income that put the health system’s total oper-

ating revenue at $15.15 billion last year, a 9.7% increase over 2022.

Care delivery generated $88.1 million in operating income and Priority Health had operating income of $17.9 million. Another $66.2 million in operating income came from Corewell Health’s corporate shared services unit that supports administrative functions.

Cox attributes the improved operating results and revenue growth in 2023 to higher patient volumes and membership growth at the 1.3-million-member Priority Health. The improved performance came despite higher cost pressures for labor, supplies, equipment and medications that “continue to grow at rates higher than our revenues” and persist in

2024, Cox said. Higher utilization rates at Priority Health also drove medical claims higher.

“We have a plan to improve again in 2024. The headwinds are continuing, with higher prices from suppliers and drug manufacturers and continued wage pressure,” he said. “We are focused on investing in our amazing team members, nurses and physicians, and our facilities to provide access to care and our technology to ensure we offer convenient access to health and information. We are also investing in our community to be even more proactive and helpful in enabling people to be healthy.”

Corewell Health invests earnings back into the business, mainly for what Cox called “facility and technology enhancements” that include more neighborhood outpatient physician practices, inhome care and digital health connectivity.

Crain’s Grand Rapids Business reported in February how the largest in-state health system in Michigan has been investing to buildout a wider outpatient care footprint in the Grand Rapids area. The health system also is pursuing the development of an $80 million service center at the site of a former General Motors manufacturing plant in Wyoming.

Corewell Health’s Butterworth campus in Grand Rapids includes Helen DeVos Children’s Hospital, at left. | cOUrTESY PhOTO

LT Precision Co. Ltd. specializes in producing battery cooling plates for U.S. electric vehicle makers.

Construction progress continues on LG Energy Solution Michigan’s $1.7 billion expansion in Holland. | KaYLEIGh

State funding prepares blighted properties for new uses

By Rachel Watson

County land banks across West and Southwest Michigan plan to use millions of dollars in recent state funding to prepare blighted properties for redevelopment, including former schools that could be converted into housing.

e Michigan Department of Labor and Economic Opportunity (LEO) last month awarded more than $30 million in grants from the State Land Bank Authority to 13 counties and the city of Detroit to rehabilitate blighted properties. Nearly half of the funds are supporting housing-related projects.

is was the fourth and nal round of grants in the state- and federally-funded Blight Elimination Program, which LEO designed to help “disproportionately impacted communities” prepare vacant properties for redevelopment.

Land banks in Muskegon, Manistee, Calhoun and Van Buren counties were among the latest grant recipients.

“Given the need in (our) county and statewide, we want to make sure that we’re addressing (residential properties), especially given the age of our housing in Muskegon,” said Tim Burgess, Muskegon County Land Bank Authority coordinator.

e program has so far injected more than $100 million into projects across the state, according to LEO data.

e rst two rounds committed state budget funding to the e ort between fall 2022 and summer 2023. Rounds three and four,

awarded in September 2023 then in February, were funded with American Rescue Plan Act dollars that must be committed by the end of 2024 and spent by 2026.

Eligible activities for the funding include demolition or stabilization of publicly or privately owned structures, as well as environmental remediation or rehabilitation.

ough the grant program guidelines do not require the funds be spent on housing-related projects, according to the state, about $14 million is being used for that purpose in round four.

Susan Corbin, director of LEO and chair of the State Land Bank board of directors, said in a statement that the funding represents “the culmination of a historic contribution to land banking and blight elimination that will make a real di erence” in revitalizing communities.

Muskegon County efforts

e Muskegon County Land Bank Authority holds about 327 properties countywide that it typically acquired through foreclosure, and many of the properties are blighted, Burgess said.

e land bank was awarded about $1.83 million across two grants in round four of the Blight Elimination Program, in addition to $200,000 from round one and $2.5 million from round three.

Burgess said the funds from round one were dedicated mostly to demolition and stabilization for a couple of land bank properties in the county, while round three will

be spent “almost exclusively” on rehabilitation of residential properties, primarily in the cities of Muskegon and Muskegon Heights, to get those land bank-owned parcels back onto the market.

e rehab process will include lead and asbestos remediation as well as steps to improve the energy e ciency of the homes, he said.

“We don’t want to put lipstick on a pig,” he said. “We want to make sure these homes are generationally safe.”

For round four, the Muskegon County Land Bank is serving as the conduit for funds that will go toward two projects not led by the land bank.

e rst is $1.4 million toward the rehabilitation of the 94-yearold Froebel School at 417 Jackson Ave. in Muskegon into 46 low-income apartments by Samaritas, a project the nonpro t developer proposed last summer. e Mus-

the former Kennedy School, located at 610 E. Parkdale Ave. in Manistee Township, which closed in 2011. East Lansing-based RT Group III LLC plans about 280 market-rate apartments at the old school, Nelson said.

“ at’s a super exciting project,” she said. “ ey would have done the project, but it would have impacted those rent costs in the long run. Being able to fund something like this, and take that cost right o the top, just helps keep that rent down and helps with more a ordable housing in our community.”

kegon City Commission approved the sale of the school, which has been vacant for 20 years, to Samaritas for $1,000 last October, pending receipt of Low-Income Housing Tax Credits that have not yet been awarded.

“Froebel is a neat project because it’s got so many cool old architectural features to it, it’s an old Spanish-mission style school, and we’re hoping that can be preserved as best as it can,” Burgess said.

e second grant from round four is $440,000 that will go toward demolishing a 60,000-square-foot former factory and warehouse at 1367 W. Sherman Blvd. that’s owned by the city of Roosevelt Park. e industrial facility sits on 7 acres at Sherman and Glenside boulevards. Burgess said that’s a large chunk of unused land for the 1-square-mile municipality.

e property went up for sale last year, and the city issued a request for proposals to develop it, but was stymied by the cost of demolishing the building. Burgess said now that the cost of taking down the building is covered, it puts all options on the table, whether for housing, commercial or mixed-use.

Up the coast

e Manistee County Land Bank Authority has now received a little more than $3 million in blight program funding, including about $1.85 million in the most recent round.

e county land bank holds relatively few properties but is able to pass the funding on to private property owners for their blight elimination projects, said county treasurer and land bank authority board chair Rachel Nelson.

e latest funding round will support two projects in Manistee County.

Property owner Josh Compeau will demolish an old storage building at 518 First St. in Manistee’s central business district to build housing. Kevin Schae er, founder of Clover Real Estate Investments LLC, will stabilize a long-vacant commercial building he owns at 141 Washington St., north of the Manistee River. Pending receipt of state tax incentives, Schae er plans to convert 141 Washington into a mixed-use project with 15 apartments, according to media reports last fall.

Meanwhile, a previous funding round will pay for demolition of

Round two grants also will support demolition of the former Disabled American Veterans building at 305 First St. in Manistee.

Southwest Michigan

e land banks in Van Buren County, which borders Kalamazoo County to the west, and Calhoun County, which abuts it to the east, also received grant funding through the Blight Elimination Program.

For Calhoun County, where Ford Motor Co. is planning an electric vehicle battery plant in Marshall that’s expected to add 1,700 jobs, local o cials say the funding will provide crucial predevelopment support for several projects that could add housing.

Calhoun County received three separate grants totaling nearly $3 million in round four, which comes on top of $2.7 million awarded in previous funding rounds.

Krista Trout-Edwards, executive director of the Calhoun County Land Bank Authority, said that the grants will fund six rehabilitation projects, primarily single-family homes and one duplex, as well as three stabilization projects for mixed-use properties in Battle Creek and Albion. e remaining dollars will be used for demolition and preparing properties for future development in Albion, Battle Creek and the village of Tekonsha.

ose three municipalities are all within a 20-minute commute of the planned Marshall battery plant.

Trout-Edwards added that all of the projects, which could total a couple dozen housing units between single-family, duplex and mixed-use multifamily projects, will be targeted to residents making 80% to 120% of the area median income for Calhoun County. at was $61,040 to $91,560 for a four-person household in 2023, according to the U.S. Department of Housing and Urban Development.

e largest number of units could be built at the former Austin School in Albion, which has been vacant since 1979 and will be stabilized with a blight grant. Trout-Edwards said the building could potentially contain at least 15 residential units.

e Calhoun County Land Bank owns about 700 properties, “pretty much all” of which are blighted, Trout-Edwards said. at number is nearly half what it was in recent years, as the county has gradually sold o the land to developers, and fewer properties are entering the land bank because of fewer foreclosures.

The Muskegon County Land Bank received $1.4 million to rehabilitate the 94-year-old former Froebel School in Muskegon that Samaritas plans to convert into housing.

MUSKEGON COUNTY LAND BANK AUTHORITY

Wolverine cutting 150 jobs with Kentucky plant closure

By Kayleigh Van Wyk

Wolverine World Wide Inc. is permanently laying off 150 workers as it closes its Kentucky distribution center this spring, the latest move in a months-long turnaround plan to boost the company’s profitability.

Wolverine had completed the sale of the Kentucky warehouse on Dec. 28, 2023, company executives disclosed during a company update.

Hufnagel

The Rockford-based marketer and licenser of footwear and apparel disclosed the layoffs at its warehouse at 6001 Cane Run Road in Louisville through a recent Worker Adjustment and Retraining Notification (WARN) Act filing with the state of Kentucky.

According to the notice, the en-

The property sale generated $23 million in cash during the fourth quarter of 2023, part of a total of $250 million in cash the company generated during the full fiscal year through a series of transactions.

The company at the time said it would continue operations for Saucony and Sperry at the Kentucky distribution center under a lease agreement. Weeks later, Wolverine sold the Sperry brand to Authentic Brands Group Inc. for roughly $130 million.

“Wolverine World Wide is a much different company now than it was just six months ago.”

Chris Hufnagel, Wolverine World Wide CEO

tire operation will close permanently with employee separations expected to start around May 3. A company spokesperson could not be reached for comment.

Wolverine currently operates other U.S. distribution centers in Howard City, Mich., and Beaumont, Calif.

The news of the Kentucky closure came less than a week after Wolverine reported its fourth-quarter and fullyear earnings for 2023.

Company executives in a call with analysts highlighted efforts made over the past year as part of a company “turnaround,” which has included a series of divestitures, layoffs, office consoli-

dations and leadership changes in 2023.

“Wolverine World Wide is a much different company now than it was just six months ago,” CEO Chris Hufnagel said during the call. “As we begin 2024, our portfolio is more focused than it has been in over a decade. … Our business is poised to be much more profitable.”

Executives are aiming for an anticipated 44.5% adjusted gross margin in 2024, which would be a record-high for the company.

“We’re in the late innings of the

stabilization phase of the company’s turnaround,” CFO Mike Stornant said during the call, noting $140 million in anticipated profit improvement in 2024.

Wolverine’s total 2023 revenue dipped to $2.24 billion, a 16.5% drop from $2.68 billion a year earlier. Following the series of divestitures, the company is projecting $1.7 billion to $1.75 billion in revenue for 2024, a 13.4% decline.

Wolverine’s ongoing transformation plan has involved other recent layoffs. In November, Wolverine announced that a “global

workforce restructuring” was underway, though it was unclear how many employees or which areas of the business were affected.

Other recent actions aimed at turning around the company include the sale of Keds to Designer Brands Inc. in February 2023; the sale of the U.S. Wolverine Leathers business to New Balance in August 2023; and the exit from a joint venture for Merrell and Saucony in China along with the Asiabased leathers business sale in December 2023.

Wolverine World Wide announced plans last year to consolidate all of its U.S. operations in Rockford. cOUrTESY PhOTO

GVSU program combines online, in-person adult education

By Kayleigh Van Wyk

A new Grand Valley State University initiative aims to make post-secondary education more accessible for adults in Michigan.

The university’s new Omni learning model is designed to enhance flexibility for adult learners by combining online learning with in-person instruction available at regional GVSU campuses or locations in Holland, Traverse City, Jackson, Battle Creek and Detroit.

The idea is to boost the career potential for the 2.5 million Michigan adults who don’t have a post-secondary degree or credential, according to GVSU officials. Enrollment is scheduled to begin this spring.

GVSU President Philomena Mantella told Crain’s Grand Rapids Business that the idea behind the program surfaced around the time she joined GVSU in 2019. The university has been working to put the pieces in place over the last few years.

“Understanding our program assets, understanding our structures, getting through the pandemic — all of that got us to a place of launching GVSU Omni, which in fact takes our good work that’s done right now today with adult learners and expands and extends that to thousands more,” Mantella said.

Kara Van Dam, who joined the university’s leadership team in 2021 and previously served as GVSU’s vice provost for graduate and lifetime learning, will lead the new Omni initiative.

Van Dam has more than two decades of experience in adult post-secondary education from

the University of Maryland Global Campus and Kaplan University (now Purdue Global).

“We know that post-secondary education is the surest path out of poverty … and we know that 71 out of our 83 counties (in Michigan) don’t have a four-year public institution,” Van Dam said. “Part of what we’re trying to do is close that gap and bring the education to those learners across the state.”

The Omni model allows learners to choose how they pursue their education with options for fully online, hybrid or in-person from various regional campuses or partner locations across the state.

Van Dam said GVSU is intentionally seeking partners and community leaders in each region

dent and CEO of the W.K. Kellogg Foundation, said in a statement. “Opportunities like these are crucial to move our communities toward becoming more equitable places of opportunity, and also help parents better support their children so they can thrive.”

Going forward, GVSU will explore ways to expand the regional network across Michigan “and maybe beyond,” Van Dam said. The university also is looking for additional investors as well as more state support to help move toward more competency-based education based on adult learners’ capabilities.

GVSU already has started recruiting for noncredit programs with Omni and will expand to more degree programs this fall.

“When we look at our work of helping our community members get to the careers that are most successful for them, training and education is one of the key factors in helping them be successful.”

Angie Barksdale, COO at West Michigan Works!

to help understand the unique demographics and labor market needs and tailor Omni offerings accordingly.

One such regional partner is the W.K. Kellogg Foundation, which is supporting the Omni initiative at GVSU’s Battle Creek campus.

“The needs of Michigan’s workforce demand bold solutions,” La June Montgomery Tabron, presi-

Van Dam noted that Omni is not meant to compete with the university’s more traditional residential model but is intentional about removing barriers of access for students who aren’t completing a degree directly after high school.

“This is really going to serve students who haven’t been able to take advantage of a Grand Valley education because of some of their other life circumstances that have nothing to do with their capability to learn,” she said.

Widespread need

The need for flexible adult education pathways is widespread, including in West Michigan.

Regional workforce development agency West Michigan Works! recently released its 2024 Hot Jobs report outlining in-demand careers in Kent, Ottawa, Allegan, Muskegon, Montcalm, Ionia and Barry counties.

Angie Barksdale, COO at West Michigan Works!, noted that most of the 100-plus occupations outlined in the report require some form of post-secondary education, often a credential or certificate but sometimes a bachelor’s degree or higher.

“When we look at our work of helping our community members get to the careers that are most successful for them, training and education is one of the key factors in helping them be successful,” Barksdale said.

With adult learners who aren’t completing a degree immediately after high school, Barksdale noted that common barriers tend to involve work-life balance with juggling school and a full-time job in order to pay for rent or mortgages, as well as managing child care and family life.

For Barksdale, programs like Omni are often most successful when intentional flexibility is offered.

“Not every individual is adept at

doing things fully online — some need that in-person (learning),” she said. “I think the most successful programs are offering options for individuals based on their learning needs and the situation they’re in.”

Both Mantella and Barksdale pointed to Gov. Gretchen Whitmer’s Sixty by 30 goal, which was announced in 2019, of increasing the percentage of Michigan adults with postsecondary degrees or certificates to 60% by 2030.

Key elements of that initiative include closing the skills gap as more jobs and sectors demand increased training and providing greater access to the education for that training.

“We have big aspirations. We really want to see (Omni) serve the full stay in a way that meaningfully moves us forward in our Sixty by 30 goals,” Mantella said.

For Barksdale, programs like Omni are important not only for the adult learners but also for communities.

“Any opportunity to innovate and provide opportunities for individuals and a non-traditional way is important, and we as a community need to continue to look into those things to provide those opportunities,” Barksdale said.

Davenport to launch bilingual program for Latino students

By Mark Sanchez

An online degree program that Davenport University will launch in the fall aims to raise the talent pool of people who are bilingual and help more Latino students earn a college education.

The Casa Latina program will offer a dozen undergraduate and graduate degrees online that are taught in English one week and in Spanish the next week.

Latinos represent the fastest-growing demographic in the U.S. “but the least represented in higher education, and you know who’s at fault? Higher education.

Because we haven’t responded,” Davenport President Richard Pappas said.

“It is us changing for their needs,” Pappas said. “Often, universities say, ‘Well, come and adapt to our culture, to what we do.’ And what we said is, ‘What is the culture that would be most successful for you?’ That’s what we’ve been changing.”

Through Casa Latina, Davenport

University wants to erase a gap in college attainment rates between Hispanics and Latinos and their white counterparts, Pappas said. He cites data that shows 37% of white/non-Hispanic adults aged 25 and older hold an undergraduate degree or higher. That compares to 18% of Hispanics and Latinos.

In creating the program, Davenport University found that research shows that Latinos generally face three main barriers to a college education: finances, a feeling “that their English was not good enough,” and that “higher ed was not for them,” said Executive Director Carlos Sanchez.

“They didn’t see themselves in higher ed,” Sanchez said. “Out of that, we set out to develop Casa Latina.”

Casa Latina will offer scholarships of $9,200 for full-time undergraduate students and $5,000 for graduate students. Part-time students can receive pro-rated scholarships.

Davenport University also will offer all student-support services bilingually, Sanchez said. “So, the students can actually choose the way they want to be served,” he said. “Rather than us inviting Latinos to come to Davenport University and adapt to the way we teach, we are adapting to the way the Latino community speaks.”

The university has so far secured $2.7 million in contributions to

support the program financially.

That includes contributions from the Community Foundation for Southeast Michigan, the M.E. Davenport Foundation, Daniel and Pamella DeVos Foundation, Frey Foundation, Steelcase Foundation, and Steve and Tana Wessell.

Davenport University prepares to launch Casa Latina as the nation’s Latino population grows rapidly. The U.S. Census Bureau in 2021 reported that the nation had a

Hispanic or Latino population of 62.1 million people in 2020, a 23% increase from 2010.

“As we think of the future of talent, as we think of a regional economy, as we think of getting the next generation of Latino business owners and Latino entrepreneurs prepared, this program that Davenport University has put together is going to be a gamechanger, not just to this region but to our state and, hopefully, we’ll show what can be done at the national level,” said Guillermo Cisneros, president and CEO of the West Michigan Hispanic Chamber of Commerce. “As we continue to see our economic growth, we need to make sure that we continue to invest in organizations and schools and institutions like Davenport University that are setting that standard and are setting the foundation for the future in this region.”

Davenport University has about 5,000 students enrolled online and at campuses near Grand Rapids, Kalamazoo, Lansing and Detroit.

Davenport University’s Lettinga Campus. | COURTESY PhOTO

GVSU campus. | COURTESY PhOTO

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10 school closings create redevelopment opportunities

By Kate Carlson

Ten Grand Rapids Public Schools buildings are expected to close in the next five years, presenting potential housing redevelopment opportunities on nearly 132 acres across the city.

The Grand Rapids Public Schools Board of Education voted in late 2023 to shutter the 10 schools over the next five years.

The first two schools, East Leonard Elementary and Stocking Elementary, are set to come offline at the end of the current 2023-2024 school year.

Closing nearly a quarter of the district’s schools is part of consolidation, restructuring and improvements under the Reimagine GRPS plan, which is supported by a $305 million school bond that voters passed in November 2023.

The school district is holding community meetings for feedback on the closures and to let families affected by the closures know what schools their children will attend in the future.

District officials also are in the early stages of envisioning how these properties could be repurposed. GRPS currently operates 67 buildings, which includes 47 schools, that total roughly 4 mil-

them, Hendrix said.

“It’s a bit of a tight rope we’re walking here,” he said.

‘Everything is on the table’

The next phase will involve gathering input from neighbors of East Leonard Elementary and Stocking Elementary schools on what they want the properties to look like, said Luke Stier, project manager for the Reimagine GRPS plan.

“Right now we’ve been focused on taking care of the scholars,” Stier said. “That’s the focus, but as we move into the spring we’ll be engaging the neighborhood more on the properties and what they want to see there.”

While the targeted feedback sessions on the properties haven’t started, neighbors are already discussing what they want to see happen.

Gregg Hampshire, executive director of the Creston Neighborhood Association on the city’s north side, said while it’s sad to see some of the schools close, the consolidation paves the way for more efficient uses of GRPS property.

“Most of the feedback (in the Creston Neighborhood) is about the sadness of the closure of Palmer (Elementary),” Hampshire said. “It’s one of our (English as a Second Language) schools that works really closely with our refugee population.

“We’ve certainly heard from people who know about the housing crisis in our city and know if there is a way to make more affordable housing in these buildings, that could be a huge addition to our community.”

Luke Stier, project manager for the Reimagine GRPS plan

lion square feet of facility space.

Part of the decision-making behind closing schools — and which locations should be shuttered — was based on enrollment declines as well as the age and condition of buildings, said Leon Hendrix, executive director of communications and external affairs for GRPS.

“There is a lot of interest in the property,” Hendrix said. “GRPS is the second-largest landowner in the city, only second to the city itself. It’s been the position of (district) leadership and the school board to really want to take time and make decisions with a longterm lens and make sure we’re making decisions in the best interest of our community and the GRPS district.”

However, district leaders also feel a “sense of urgency” to determine the future of the properties based on the cost of maintaining

Grand Rapids to stabilize the housing market. However, GRPS enrollment is declining for a variety of reasons, Hendrix said. The proliferation of charter schools and declining birth rates are also among contributing factors, he said.

As for the closing schools, district leadership has stated a preference for maintaining ownership of the properties in case of future expansion needs, though redevelopment of the properties is an option as well.

“I think everything is on the table,” Hendrix said.

Redevelopment potential

The 132 acres of school properties present as many redevelopment opportunities as they do challenges, several Grand Rapids developers and multifamily investment experts told Crain’s Grand Rapids Business. Despite the hurdles, the development community will certainly be interested in the properties’ potential based on the low inventory of developable land in the city.

Palmer is also a very popular school because of its walkability, so that is a loss.”

Recurring comments so far have included desires to convert some of the closed schools into affordable housing, and retaining some of the playgrounds and greenspace for continued community use, Stier said.

“We’ve certainly heard from people who know about the housing crisis in our city and know if there is a way to make more affordable housing in these buildings, that could be a huge addition to our community,” Stier said.

In fact, Grand Rapids’ lack of affordable housing options has driven some families out of the city and into the suburbs, Hendrix said.

“Finding an affordable place to live in Grand Rapids for young families has been an issue for some time,” Hendrix said. “That has driven the boom of the suburbs, and people who may have traditionally chosen to live in the city are living outside of the city. That’s drawing scholars away.”

A Kent County Housing Needs assessment shows 34,699 more housing units will be needed in the county by 2027, and 14,106 units will be needed in the city of

Housing developments are especially hard to pencil out right now, unless they are Class A projects rented out at a high price point, according to multifamily housing experts at NAI Wisinski of West Michigan. Even if it isn’t affordable housing that goes on the school properties, communities might be accepting of the projects if the alternative is demolishing the buildings.

“The real struggle with most of those buildings is the interior block wall,” said Scott Nurski, senior director of multifamily investment for NAI Wisinski of West Michigan. “You run into structural issues, and the cost and time to remove them. There is a certain point where it’s no longer cost effective to try to use the shell.”

Still, former school properties are attractive because of their location, Nurski said.

“It’s hard to get good infill locations, and some of these schools do have a good amount of acreage,” Nurski said. “There is an efficiency of gaining a site with bulk on the land side when you’re trying to do infill neighborhood redevelopment.”

Leaders at Dwelling Place and ICCF Community Homes both expressed interest in redeveloping the properties. Both nonprofit housing developers have taken on school-to-housing conversions before and are uniquely qualified to take on these types of developments, said Ryan VerWys, CEO of ICCF Community Homes.

“There is nothing wrong with for-profit developers that worry about the bottom line,” VerWys said. “But the reason we say ‘yes’ sometimes when some other developers might say ‘no’ is because there is more here than just the bottom line. Going the extra mile

with community buildings like old schools, sometimes it’s the right thing to do and that is not cost-effective.”

With projects like redeveloping school buildings, many neighbors feel a sense of ownership of the building, VerWys added.

“Change, even good change that we know we need like more housing, can be scary,” VerWys said. “We really need our community to be open to a future for these buildings that still serves the community. It just serves it differently.”

Other challenges with redeveloping historic school buildings include the need for abatements and extra measures to preserve historic elements. As well, extra-wide hallways are harder to keep warm or cool depending on the season, VerWys said.

In general, schools are well-adapted for housing conversions, said Dwelling Place CEO Jeremy DeRoo, who echoed VerWys on the importance of involving the community in projects.

“Schools have been major parts of social infrastructure as well as physical assets in neighborhoods, so it’s important to recognize the park space and open space they provide and potential for neighbors to get to know each other many times in the buildings,” DeRoo said. “The city has a high need for housing developments across the economic spectrum and limited opportunities for redeveloping large-scale housing projects. This really is a unique opportunity for the school district to achieve social impact through long-term assets.”

Aberdeen Academy sits on nearly 9 acres and is set to close in 2027, though a proposal calls for building a new school on the site. | KATE CARLSON

Stocking Elementary on Grand Rapids’ west side is set to close later this year. KATE CARLSON

East Leonard Elementary sits on 7.3 acres and is set to close this year. | KATE CARLSON

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Court limits ownership disclosure law — for now

By Mark Sanchez

A federal judge’s ruling against a law that requires businesses to report their ownership to the government has limited application for now.

The March 1 ruling by Judge Liles Burke of the U.S. District Court of the Northern District of Alabama that the Corporate Transparency Act was unconstitutional applies only to the roughly 65,000 members of the National Small Business Association that brought the case challenging the law.

That means businesses that are not members of the trade association should proceed as they already would have and file forms disclosing their ownerships to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, or FinCEN. The U.S. Small Business Administration reports nearly 33.2 million small businesses in the country.

“How does this (ruling) impact your business? In short, not much. The court issued a permanent injunction barring enforcement of the CTA only for the parties named in the lawsuit,” Honigman LLP attorneys wrote in a legal briefing to clients. “The injunction does not prohibit the federal government from enforcing the law against other parties, including the ongoing collection of beneficial ownership information from entities that are subject to reporting requirements under the CTA.”

Judge Burke gave the federal government 60 days to appeal his

ruling, which remains in effect unless an appellate court issues a stay.

Seth Ashby, a partner at Varnum LLP in Grand Rapids who leads the law firm’s task force on the Corporate Transparency Act, expects an appeal and for the case ultimately go get decided by the U.S. Supreme Court.

Until then, “everyone should probably take a deep breath because there’s a long road ahead,” said Ashby, who previously said the Corporate Transparency Act ushered in a “sea change” by requiring most businesses to disclose their ownership.

“And we’re waiting for Treasury or the Department of Justice to, hopefully, come out with some sort of guidance as to their view of this decision and its strategy going forward,” Ashby said. “We

wouldn’t advise companies that are bumping up against their deadline not to file based on this ruling because it only applies to a limited set of businesses.”

For now, and unless they are a member of the National Small Business Association, businesses that were required to file disclosure documents with FinCEN “should proceed and still file,” Ashby said. “The CTA still applies to you.”

The bipartisan Corporate Transparency Act that Congress enacted in 2021 and took effect Jan. 1 targets illegal activities such as using shell companies for money laundering, terrorist financing and tax fraud. The law requires legal business entities registered with a state to report their beneficial owners to FinCEN.

The law defines beneficial ownership as anyone who has an ownership interest of 25% or more in a business, a majority of voting ownership, or someone who exerts “substantial control” over the entity, such as executives, senior officers and board directors — even if they do not hold an ownership stake in the company.

FinCEN, in a notice posted online March 4, said it was not enforcing the law against the plaintiffs who brought the case and the National Small Business Association members, and “will comply with the court’s order for as long as it remains in effect.”

“Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time,” the agency said.

In a 53-page ruling issued March 1 that declared the law as exceeding the Constitution’s limits on the ability of Congress to regulate commerce, Judge Burke cited the late Supreme Court Justice Antonin Scalia, who once remarked that “federal judges should have a rubber stamp that says, ‘Stupid But Constitutional.’”

“The Constitution, in other words, does not allow judges to strike down a law merely because it is burdensome, foolish, or offensive. Yet the inverse is also true — the wisdom of a policy is no guarantee of its constitutionality. Indeed, even in the pursuit of sensible and praiseworthy ends, Congress sometimes enacts smart laws that violate the Con-

stitution. This case, which concerns the constitutionality of the Corporate Transparency Act, illustrates that principle,” Judge Burke wrote in his ruling. “The Corporate Transparency Act is unconstitutional because it cannot be justified as an exercise of Congress’ enumerated powers.”

Under the law, a company created or registered to do business prior to Jan. 1, 2024, has until Dec. 31 to file an initial beneficial ownership information report with FinCEN through an online portal.

A company created or registered on or after Jan. 1, 2024, and before Jan. 1, 2025, has 90 days to file from the date when it receives notice from the state that its registration is effective. Companies formed or registered on or after Jan. 1, 2025, will have 30 days to file an initial report to FinCEN.

The 65,000-member National Small Business Association, which brought the case on behalf of a small business owner in Huntsville, Ala., praised the ruling as a “victory for law-abiding small-business owners across the U.S. who would have been forced to disclose their sensitive personal information to a government database.”

“The CTA has from the very beginning been poor policy that unfairly targets America’s small businesses,” association President and CEO Todd McCraken said in a statement. “This ruling justifies the concerns of millions of American businesses about how the CTA is not only a bureaucratic overreach, but a Constitutional infringement.”

Pigeon Hill helps revive classic Muskegon beer brand

By Abby Poirier

A long-dormant lakeshore beer brand is coming back to life thanks to a new production agreement with Muskegon’s Pigeon Hill Brewing Co.

The yet-to-open Muskegon Brewing Co. will occupy space at the $250 million mixed-use Adelaide Pointe project that broke ground last spring on 32 acres fronting Muskegon Lake.

Ibex Hospitality Group, founded by Adelaide Pointe developer Dr. Emily Leestma, is spearheading the revival of Muskegon Brewing Co., which previously closed in 1957 after 80 years in business.

Grand Rapids Business. “It was such an integral part (of the community). It was a big source of commerce here and it was also a stopover for people and really brought a lot of hospitality to Muskegon.”

While no one owned the rights to the Muskegon Brewing name, Leestma contacted the grandsons of the company founders before launching her project. She said they “gave their blessing” and expressed excitement for her plans to bring the brewery back to life after more than 60 years.

The company announced it has inked a deal with Pigeon Hill to contract brew beers for the Muskegon Brewing restaurant and bar, which Leestma expects to open sometime in June. The site is adjacent to the former Muskegon Brewing facility and will celebrate the brand’s history, she said.

“We thought it’d be very cool to pay homage to the site and to the history of Muskegon and bring back the Muskegon Brewing Company name,” Leestma told Crain’s

Although Ibex Hospitality wanted to revive the brewery name, the company realized early on that it wanted to partner with another producer to brew the beer, which led to conversations with the owners of Pigeon Hill.

“They’re really the best in town,” Leestma said.

Michael Brower, co-owner of Pigeon Hill and a self-proclaimed “history nut,” said he has been intrigued by the legacy of Muskegon Brewing Co., having collected many historic items from the brewery’s heyday. At one time,

Brower even planned to open a business under the brand, going so far as to register the name.

When Leestma approached him about the project, Brower realized it “presented a real opportunity for the revival of the name,” and agreed that Pigeon Hill would take on the role of brewer for the gastropub.

Pigeon Hill will produce a range of classic and modern styles, including a lager, blonde ale, west coast IPA, hazy IPA, saison, fruit beer and wheat beer, all of which will be packaged under the Muskegon Brewing Co. brand.

While Brower owns an old brewing log from the original

Muskegon Brewing Co., he has no plans to resurrect any of the recipes from the old brewery since ingredient types and processes have changed significantly since the company was originally brewing.

“The main guiding principle won’t be ‘historic accuracy’ because just as the recipes brewed by the historic breweries in Muskegon changed to match people’s taste preferences, we have to focus on making good beer that people will be excited to drink,” he said. “Our focus will be brewing up beers that are approachable and drinkable.”

When the restaurant and bar

opens, Muskegon Brewing Co. will seat 250 people and offer a view of Muskegon Lake. The focal point of the restaurant will be its 42-seat curved bar that extends between the 5,500-square-foot restaurant and the 2,700-square-foot patio.

Leestma, who also owns local-favorite Bear Lake Tavern in North Muskegon, is developing a gastropub-style menu that she hopes will “elevate the local dining scene,” bringing in new food vendors and dishes while remaining approachable. She said the food will be “to-go friendly” to cater to boaters during the summer months.

Adelaide Pointe also includes a 55-unit condo building, retail and event space, a 125-room hotel, public fishing pier and marina. The development aims to contribute to waterfront commerce in Muskegon, a focal point for Leestma.

“Muskegon has some of the most beautiful waterfront in the entire state with three lakes that are all interconnected,” she said. “If you’re a boater, there’s tons of lakes to boat around, but there’s no place in Muskegon to really stop. Boaters like to have destinations, so I saw an opportunity there.”

Plans for Muskegon Brewing Co. call for a 42-seat bar that extends between the 5,500-square-foot restaurant and the 2,700-square-foot patio.

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Gotion submits site plan for $2.4B battery plant

By Kayleigh Van Wyk

Gotion Inc.’s plan for a $2.4 billion battery manufacturing project near Big Rapids has taken another step forward.

The company formally submitted a site plan to Mecosta County planners for the project that includes plans for four large buildings, reduced estimates for water withdrawals and attempts to limit onsite traffic congestion. The proposed plan also includes 60 protected acres for wildlife habitat preservation.

The sprawling project would be built in two phases and calls for four 800,000-square-foot buildings, parking lots, an electric substation, a nitrogen and equipment storage area, and stormwater ponds, per a site plan drawing. The proposal also indicates that discussions are ongoing with DTE Energy and Consumers Energy for utility services.

Paul Bullock, Mecosta County’s administrator and controller, said the site plan is expected to go before the planning commission during a special meeting on May 1.

Bullock told Crain’s Grand Rapids that the project will be “handled like any other application” with review by building and zoning department staff before it’s forwarded to the planning commission for review.

“It’ll be normal course of business — it’s just the scope that’s unusual,” Bullock said.

Annette Coles, Mecosta County’s building and zoning director, confirmed the site plan was received. She said the application “is looking very promising” in terms of the necessary information provided by Gotion.

The planning commission’s decision will likely take place at the May 1 meeting, she said.

Among recent changes to the proposal is a reduction in the anticipated amount of water usage expected at the factory, which had been estimated at 700,000 gallons per day. The new amount now will be “significantly decreased,” according to a news release.

“We’re building a state-of-theart facility in Mecosta County that will nestle into the existing landscape and protect the environment for generations to come,” Chuck Thelen, Gotion’s vice president for North American operations, said in a statement.

Thelen was not immediately available for an interview.

Gotion also aims to limit traffic congestion near the plant by creating an onsite truck and trailer staging area to accommodate at least 50% of anticipated daily traffic.

Other key elements of the site plan include a “dark sky design” to limit light from the factory and plans to recycle raw materials and by-product from manufacturing the cathode and anode materials for electric vehicle and energy storage battery cells.

The site plan application comes after Gotion last month began cutting trees on the 120-acre plot in Green Township where the battery plant would be built.

Thelen also told Crain’s last month that the company was preparing “very comprehensive permit requests for the project involving construction as well as environmental reviews.

He said local permits are still needed from Mecosta County and the county drain commissioner related to construction on the buildings. Additionally, air and water quality permits will be needed from state and federal regulators, including the Michigan Department of Environment, Great Lakes, and Energy (EGLE) and the U.S. Environmental Protection Agency.

The project’s potential environmental effects have been a lingering concern among local opponents, in addition to criticism about Gotion’s parent company’s ties to the Chinese Communist party.

In 2023, a local opposition group threatened to sue the company over concerns involving the plant’s potential effect on endangered species as well as groundwater, given the project’s proximity to the Muskegon River.

While Mecosta County’s consideration of the plans will involve opportunity for public comment, Coles noted that the plant is “an allowable use by right” based on the property’s industrial zoning. Any opposition to the project presented to the board must pertain to the

New Holland plans spirits tasting room in Grand Haven

By Abby Poirier

New Holland Brewing Co. is further expanding along the lakeshore with plans for a new spirits tasting room in downtown Grand Haven.

zoning ordinance or any local, federal or state laws.

“It has to be something valid for an individual to advise the board that (Gotion is) not meeting those requirements,” Coles said. “Otherwise it is a use by right and they will be able to build their plant.”

Thelen previously said Gotion had been working with EGLE for about 16 months and completed site surveys. A report on the environmental condition of the site will be submitted along with the permit requests, he said.

“Gotion’s environmental and safety record is unmatched, and our mission to protect and preserve the environment is woven into every aspect of the design process,” Thelen said in the statement. “As a lifelong conservationist myself, this is not only a key company requirement but a personal requirement.”

Gotion also is seeking a soil erosion and sedimentation control permit through the Mecosta County drain commission.

Meanwhile, the company recently acquired office space in downtown Big Rapids at a former JCPenney department store, where executives hope to have 55 employees working by the end of this year.

Thelen said he also hopes construction on the factory will break ground this year.

“Based on the result of the permit process, as soon as that is done, we will break ground,” Thelen said last month. “I’m hoping, optimistically, that will be the end of summer, but it could be early fall.”

The new 1,300-square-foot bar will be located in the lobby of the former Grand Theatre that was built in 1928 and now includes apartments. The project would join other New Holland lakeshore locations in Saugatuck and South Haven, as well as its flagship bar in downtown Holland.

The historic former theater located at 24 S. Washington Ave. was an enticing location for New Holland CEO and founder Brett VanderKamp.

“The community holds (the Grand Theatre) dear, and we’re just thrilled to be able to continue the legacy that that place has for being a place for community and gathering,” VanderKamp said.

The Grand Haven spirits tasting room will seat roughly 40 guests and will employ 10 people. In addition to a range of cocktails and tasting flights, the location also will offer small charcuterie plates. Only the company’s line of spirits will be available at the location.

The space also will include a retail area with bottled spirits and New Holland merchandise, and additional plans call for an outdoor seating area in warmer months.

New Holland will make some additions to the street-facing space beneath the marquee, including a walk-up window to offer grab-and-go beverages as part of Grand Haven’s social district.

However, VanderKamp plans “minimal modifications” to help preserve the historic nature of the property.

“The physical bar space has al-

ready been carved out there, and so there were a lot of things that we wanted to be really careful to preserve,” he said.

The building plans were “a little bit different than our other tasting room locations where we could kind of create a space from scratch,” VanderKamp said, adding that “it’s just really cool (to have) built-in features already that have been working for years.”

In addition to preserving the decades-old bar, the brewery also plans to resurrect an old aquarium behind the bar.

“Our plan is to maintain as much of the character and charm of the space while still introducing the New Holland Brewing Company’s brand to the community,” Dave White, New Holland’s vice president of development and facilities, said in a statement.

The new location follows the opening of the New Holland Spirits’ South Haven tasting room in 2022. The company also added a full taproom in Battle Creek a year ago.

VanderKamp said the Grand Haven location is part of New Holland’s strategy to build out tasting rooms on the Michigan lakeshore, where communities with a solid tourism base and an engaged downtown draw in customers.

“We’re just getting better at building (taprooms) out and kind of have the framework now. We know how to do everything from the decor to the feel,” he said, adding that he anticipates building more tasting rooms in the coming years.

The Grand Haven project will be built-out by New Holland’s internal team, with architecture by Holland-based J. Andrew Baer. VanderKamp anticipates the tasting room will be open by Memorial Day.

The lobby of the former Grand Theatre at 24 S. Washington Ave. in Grand Haven will become the next spirits tasting room location for Holland-based New Holland Brewing Co. | MARK SANChEZ, CRAIN’S GRAND RAPIDS BUSINESS

Gotion Inc. continues to move forward with plans for a large battery manufacturing operation in Mecosta County near Big Rapids. BRYAN ESLER

Crews from M&M Lawn Care & Snowplowing LLC work to clear pine trees for the future site of Gotion’s battery plant in Green Township. | JOE BOOMGAARD

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Shelter aims to move unhoused out of downtown

By Rachel Watson

A real estate investment and property management firm is partnering with a local nonprofit on an “innovative” idea to move chronically unhoused individuals off the streets of downtown Grand Rapids and into a new temporary shelter on the city’s east side.

An entity tied to Grand Rapids-based Eenhoorn LLC bought the vacant Van Andel Pavilion at the former Fulton Manor campus, located at 1450 E. Fulton St. in the city’s Eastown neighborhood, from an affiliate of Hope Network on Feb. 16 for just under $1 million, according to Eenhoorn CEO Paulus Heule.

Eenhoorn then donated the property and the funds to renovate the building to the Grand Rapids-based nonprofit Community Rebuilders.

When completed, the rehabilitated building will house the Nexus Initiative, a housing and social service facility run by Community Rebuilders that will be able to house 42 individuals at a time who are emerging from homelessness, Heule said. The project also has received an undisclosed amount of

funding support from the DeVos family for ongoing operating costs.

The renovations are scheduled to begin this month and take six months to complete, with plans to populate the building by late fall. The project received administrative approval from the city late last year.

Heule said the partners’ “innovative” idea is meant to help reduce the number of chronically unhoused people in downtown.

“In downtown Grand Rapids, there are a lot of homeless people, but really only (about) 100 chronically,” he said. “So if we are able to house 40 of them, hopefully that will have a somewhat material impact on the problem, at least for the time being.”

Eenhoorn’s plan for the building includes 42 fully furnished “micro apartments” to house one person each.

Each apartment will include a kitchenette, bathroom, and living and sleeping quarters, situated around two central courtyards. The design of the building is expected to minimize disturbance to the community and to be more energy efficient and sustainable.

Grand Rapids-based TRU Build-

ing is the contractor for the renovations, and Keith Carey Design, also of Grand Rapids, is handling exterior design.

The housing will be provided rent-free to residents, although those with an income may be asked to contribute a nominal sum if they plan to stay long term.

Eenhoorn and Community Rebuilders said they are working collectively to secure funding for the annual operating budget for the facility from local foundations and government agencies. So far, they have a commitment of an undisclosed sum from the DeVos Family Foundation through its Facing Home Initiative, as well as funding from an anonymous corporation.

A DeVos family spokesperson could not immediately be reached for comment.

Ryan Kilpatrick, a contractor for the DeVos Family Foundation through his consulting firm Flywheel Community Development, told Crain’s Grand Rapids Business in January that the foundation was working on a partnership with Community Rebuilders to address homelessness through the DeVoses’ Facing Home Initiative that involved rehousing of chronically

homeless individuals.

“In exploring this issue with some of the (Grand Rapids Coalition to End Homelessness) service providers, what we found was, as of last spring, there were 113 individuals who were categorized as chronically homeless, and from the Family Foundation perspective, that felt like a number that we could make a serious dent in, if not eliminate in a very short period of time with targeted investments,” he said at the time.

Vera Beech, executive director of Community Rebuilders, said the goal will be for each individual to exit the facility with stable housing.

“We will work with individuals to create a housing plan for their

long-term housing stability and have a really individualized approach,” she said.

During tenants’ stays, Community Rebuilders will provide a range of services, from access to health care, employment services, transportation and food security, depending on each person’s needs, Beech said.

Hope Network bought the former Fulton Manor property from Holland Home in September 2021 for $4.1 million and is currently building 118 low-income apartments there in a project called Eastpointe Commons. Holland Home, a nonprofit providing endof-life care and housing, had owned the property since 1912.

The former Van Andel Pavilion at the Fulton Manor property will be converted into a temporary shelter and social services center. | ANDY BALASKOVITZ

Perrigo eyes launch of OTC birth control pill soon

By Mark Sanchez

Perrigo Co. plc expects to introduce the first oral contraceptive available in the U.S. without a physician’s prescription by mid-March, even as it prepares to reduce its workforce by 6% under a restructuring initiative.

The company has “activation plans” in place to promote and drive consumer awareness of Opill at retail stores and for online sales when it goes to market, said President and CEO Patrick Lockwood-Taylor.

“We expect Opill to be available to consumers in-store and online within a few weeks,” Lockwood-Taylor said during a Feb. 27 conference call to discuss Perrigo’s latest quarterly results. “You’ll find it in every store, and you’ll find it everywhere online.”

The U.S. Food and Drug Administration last July approved Opill’s conversion for over-the-counter sale. When introduced in early 2024, Opill will become the first birth control pill available in the U.S without a prescription.

In preparing for one of the largest product launches in the company’s history, the maker of over-thecounter medications envisions Opill becoming a core product in its women’s health division.

“We view Opill as a key pillar to

our growing women’s health care business. Perrigo intends to be a global leader in women’s health, and believe we have the core portfolio and personnel to implement this strategy,” Lockwood-Taylor said. “This is by far the most revolutionary and holistic product launch in the history of Perrigo and will be a benchmark for future branded launches.”

Perrigo (NYSE: PRGO), which is domiciled in Dublin, Ireland, and operated from Grand Rapids, expects consumers switching from a prescription birth control to account for half of Opill’s initial sales.

“In terms of revenue ramp, obviously, we’ll have initial pipeline, then we get into consumer offtake,” Lockwood-Taylor said. “You will see quite an initial surge and then probably a dampening … of that offtake curve into quarters three and four just because we picked up the full switch volume earlier on.”

Perrigo expects Opill to contribute to gross margins soon, although in “the first year, there will be a dilutive effect because we’re really investing in the brand and are going to see significant investments, mainly at the retailer and online in the second quarter,” Lockwood-Taylor said. “We would expect a minimum accretion at the bottom line in Q1, but an improve-

ment in gross profit margin.”

Perrigo generated $1.15 billion in revenue for the fourth quarter of 2023, which was flat when compared to the same period a year earlier. The company recorded a $32.3 million quarterly net loss, or 24 cents per diluted share.

Full-year sales totaled $4.65 billion, a 4.5% increase from 2022. Perrigo recorded a $12.7 million net loss for the year, or 9 cents per diluted share.

Perrigo projects flat sales for 2024.

In announcing quarterly results, Perrigo said it was embarking on a three-year initiative called Project Energize to improve long-term business performance. Project En-

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ergize should generate $140 million to $170 million in annualized pre-tax cost savings, $40 million to $60 million of which the company intends to reinvest.

Company officials did not say where the 6% workforce reduction would occur or the types of jobs to be eliminated.

Project Energize “will make us more efficient and agile, while providing a bridge to 2025 for the business to be augmented and strengthened for the full year and beyond,” Executive Vice President and CFO Eduardo Bezerra said.

The efficiencies that Project Energize generates “will enable us to drive global capabilities, including brand building and consumer-led

innovation, unify our platforms and technologies and support global business service models,” Lockwood-Taylor said.

About 60% of the operating efficiencies that Perrigo (NYSE: PRGO) targets will come from “non-headcount-related actions as we streamline and focus the organization,” Lockwood-Taylor said. “These efficiencies will be driven by several initiatives, including optimizing global advertising and promotional spend,” eliminating planned investments that are not aligned with a corporate strategy, and savings in procurement.

The other 40% will come from “centralizing” and “streamlining” Perrigo’s core consumer self-care business units in the Americas and globally. That will include a net 6% reduction in Perrigo’s workforce, “thereby generating meaningful operating savings.”

“This reduction includes the elimination of current and open roles as well as the creation of new roles as we invest in brand building and innovation capabilities,” Lockwood-Taylor said. “While the decision to reduce the number of roles at Perrigo was not an easy one, it will enable organizational dexterity across our segments by enhancing decision-making and simplifying commercial operations.”

Perrigo’s Opill will be the first birth control pill available in the U.S without a prescription.

Truck parts remanufacturer plans 130 new jobs locally

By Kayleigh Van Wyk

A Grand Rapids-area drivetrain components remanufacturer has expanded into a newly renovated building and plans to add 130 jobs to accommodate growing demand for electric vehicle components.

Weller Truck Parts’ new space at 1250 60th St. in Wyoming marks the fifth building in West Michigan for the company, which is part of the Indiana-based Jasper Holdings Inc. group of employee-owned companies.

The company recently acquired and renovated the existing 131,000-square-foot building, which is now equipped with more than 118,000 square feet of remanufacturing space. The remaining square footage includes office space for the company’s research and development teams. An affiliate of Weller Truck Parts acquired the 60th Street property for $13 million in November 2023, according to property records.

The new building will enable Weller Truck Parts to accommodate growth in the heavy-duty truck parts aftermarket and also boosts the company’s capabilities in the electric vehicle space, com-

pany executives say.

“The product is ever-changing and becoming more automated, and the future of EVs and the electronics associated with them is a large part of the growth of our company,” said Terry Stranz, president and COO of Weller Truck Parts.

factures and distributes drivetrain components for heavy duty vehicles. The company’s corporate headquarters located at 1500 Gezon Parkway SW in Wyoming spans 20 acres and houses a large majority of the company’s manufacturing operations.

The new facility will be used for the production of automated manual transmissions, electronic axles and other electronic and mechatronic components for heavy duty trucks.

Indeed, the electric vehicle transition could further boost the U.S. auto remanufacturing market, which is forecasted to grow by 8.7% annually by 2030 when it reaches a value of $118.2 billion, up from $60.8 billion in 2022, according to Coherent Market Insights.

“The product is ever-changing and becoming more automated, and the future of EVs and the electronics associated with them is a large part of the growth of our company.”

Terry Stranz, president and COO of Weller Truck Parts

Stranz said the company was looking to expand to support growth, and the building on 60th Street near its headquarters became available as a lease option with a possibility of lease-to-own. The company purchased the building once the ownership option was available.

Established in Muskegon in 1928, Weller Truck Parts remanu-

“We’re really not looking to lease — we’re looking to employ people and manufacture product here for many years, so we really need to own our own manufactur-

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ing facilities because we have to invest a lot of equipment and technology into those buildings,” Stranz said.

The company expects the expansion will create 130 new jobs over the next three to five years. Weller Truck Parts currently employs 1,200 total employees with about 700 in the greater Grand Rapids area.

Stranz said the auto industry’s ongoing shift to electrification will prompt not only new manufacturing positions but also roles with engineering and electronic remanufacturing.

“As we expand into newer products, both on the electronic side and non-electronic products in the EVs that are coming, we know that’s going to take an expansion of people,” Stranz said.

FDA fast-track drug approvals are costing Americans

America represents 4% of the world’s population, yet we consume 60% of all prescription drug sales made on Earth. We use prescription drugs more frequently than anyone in the world, yet pay nearly three times more for them than other industrialized countries.

There are now almost 20,000 Food & Drug Administration (FDA) approved prescription drugs on the market in America — more than in any country worldwide. According to a United States Health & Human Services report issued this month, over half of the new drugs in the world are launched first in the U.S. before being launched in other countries.

DOMINICK PALLONE Executive Director Michigan Association of Health Plans

The U.S. has become the “pin cushion” for worldwide pharmaceutical experiments because the FDA has recently laid out its welcome mat for new and emerging drugs by creating a “fast-track” accelerated FDA approval process. This “wild, wild west” expedited approval process does not have the same rigorous guidelines that ensure the drug provides clinical benefits, thus creating uncertainty about long-term efficacy. Instead, the FDA grants conditional approvals based on interim data and requires additional studies to confirm clinical benefits later. As a result, to date, the FDA has withdrawn approval for roughly 20% of therapies specific to cancer treatment, which have been subsequently proven to have no clinical benefit.

Drug manufacturers launch new drugs in America because they have greater latitude to set prices here and use those prices to set external referencing points elsewhere.

Furthermore, the fast-track FDA approval process does not undergo a cost-effective analysis for new drugs. That means the government doesn’t set the price nor analyze whether the drug is worth the price paid. As such, insurers must diligently monitor a drug’s clinical outcomes, value, and costs to our healthcare system.

In recent months, gene modification procedures and GLP1 prescription drugs have grabbed national headlines for their potential advancements in treating rare cancer diseases and weight loss. Make no mistake, the promise of these advancements is both life-altering and lifesaving. These medical advancements hold a lot of promise when used appropriately. However, sufficient clinical long-term studies are crucial to minimize reversals that cost money and hurt consumer health.

The FDA approved the first gene modification procedure (CAR-T) in 2017 to treat acute lymphoblastic leukemia. Before this, gene modification procedures were only used in experimental clinical trials. The number of applications for new gene modification procedures has flooded the FDA in recent years, as more than 2,000 new gene modifications are already being developed for potential FDA “fast-track” applications. According to The Institute for Clinical and Economic Review, cell and gene modification procedures cost between $1 million and $2 million per treatment.

Glucogon-like peptide 1(GLP-1) drugs traditionally used to treat diabetes have been shown to decrease appetite, making their use for weight loss popular. The FDA has approved just two drugs for on-label use for treating weight loss, but there is little doubt that the FDA’s doors will be busted down with countless new weight loss drug applications from drug makers. These GLP-1 drugs are priced at $1,000 per month and can continue into perpetuity. These drugs are not a cure for weight loss but rather a supplement used alongside diet and exercise to promote long-term weight loss. Manufacturers

Weller Truck Parts, which has been employee-owned for about 10 years, aims to keep growing in the Grand Rapids area, Stranz added.

“The West Michigan area has continued to supply us with the good people we need to grow and keep expanding, so it’s been a really great community for us to be able to do that,” Stranz said.

In addition to the Wyoming expansion, Weller Truck Parts also recently opened a new distribution center in San Antonio, Texas, and is scheduled to open new distribution centers in Albuquerque, N.M., and Oklahoma City, Okla., this year.

The company has 39 distribution locations throughout the U.S. that are supplied by its West Michigan manufacturing operations.

of these drugs have attested that people regain two-thirds of the prior weight loss on average after discontinuing the use of these drugs.

Some insurers are attempting to address the high cost of gene modification procedures and GLP-1 drugs through re-insurance programs or via optional riders to policies to be responsive to customer requests. However, these programs often increase premiums for all customers. At a time when affordability is nearing a crisis state, we must join hands to drive towards solutions that drive the highest outcomes, quality, and affordability.

Health insurance providers have a duty to seek out and eliminate waste to keep costs down for those that they insure. With the FDA’s fast-tracked approval process, insurance providers are forced to impose even greater clinical efficacy standards. It is essential that we preserve the ability for health insurance providers to evaluate efficacy and find a delicate balance between access to lifesaving medical advances and paying for therapies that don’t work. Everyone in health care delivery, from the FDA to the consumer, must be more focused on outcomes, quality and cost benefits.

Weller Truck Parts’ new manufacturing space south of Grand Rapids. | COURTESY PhOTO

MENTAL HEALTH AND POLICING

911 and mental distress: Can more be done to avert tragedy?

Law enforcement and community health organizations are rethinking how to improve outcomes

Just over 15 months ago, the Detroit Police Department launched its rst standalone mental health unit. e new special responder program was a response to public outcry for better policing of those experiencing mental health episodes in the wake of the killing of George Floyd.

For better or worse, police departments are often the rst service provider to interact with a person in severe mental distress.

And it’s largely been a violent failure.

People experiencing a mental health episode are 16 times more

“The best solution for a person in mental distress is getting that person in the proper environment. We don’t want them to automatically be part of the criminal justice system.”

Oakland County Sheriff Mike Bouchard

likely to be killed by police. Nationally, more than 1,400 of the roughly 7,200 police killings between 2017 and 2023 involved a person in a mental health crisis, according to data from e Washington Post’s police killings tracker.

Bluntly, public policy has

failed the growing number of Americans and Michiganders under mental distress.

But there’s movement in the system. While the entire mental health care sector is full of broken links, the rst line responders around Michigan are working to stop the killings, and keep people

out of jail and out of unequipped emergency rooms as the health care industry plays catch-up to the rolling, and growing, mental health crisis in America.

However, a perfect solution for solving policing and mental health isn’t apparent, and departments across the state are

By | Dustin Walsh

trying di erent methods with differing levels of success.

An expanding crisis

Of the 1.24 million emergency response calls made in Michigan last year, nearly 13% of them involved a person experiencing a mental illness or episode. at’s more than 433 calls per day.

For DPD, more than 16,000 calls last year involved someone in mental distress — or more than 43 calls per day.

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Oakland County Sheriff Mike Bouchard says policing in his county has been evolving to meet the needs of residents. A co-responding unit has diverted people from arrest to mental health services. | NIC ANTAYA

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That unit has grown to 22 officers, three sergeants, a lieutenant and six behavioral health specialists.

Its officers dress differently than regular DPD — khaki pants, polo shirts and jackets. The Mental Co-Response Unit police cars have green lights instead of the blaze red and blue. The officers are outfitted with nonlethal weapons, such as pepper ball launchers, a BolaWrap that shoots ropes around a person’s legs to subdue them, and rubber rounds.

“The goal is always to divert people away from the jail and courts,” said Lt. James Domine, head of the DPD unit. “We’re all trained in de-escalation, and we have the advantage of being able to spend time with people, making sure we can help them in the best way possible.”

The reason is evident: Jails and prisons are not the best place for those suffering from mental illness to receive treatment. Yet one in every five people in jail or prison suffers from a mental illness. And inpatient hospital treatment isn’t always an option.

“The best solution for a person in mental distress is getting that person in the proper environment,” said Oakland County Sheriff Mike Bouchard. “We don’t want them to automatically be part of the criminal justice system.”

Oakland County launched its own co-responder unit in July last year. Since then, the single unit has responded to calls involving about 900 people, Bouchard said. Of that total, 277 were transferred to a crisis center, such as Common Ground in Pontiac. Only 27 people in those encounters were arrested.

“I view us responding to the needs of the community and of the street,” Bouchard said. “We’re evolving because the world is evolving. The needs of these people are not being met appropriately by the state or federal governments to provide a full continuum of services.”

Nowhere good to go

Besides jail, responding officers in these specialized units are working to keep those in mental distress away from overburdened emergency departments as well.  An officer transporting a distressed person to the emergency department in Baraga County in the remote regions of Michigan’s Upper Peninsula likely means an officer is off the streets.

“When we’ve determined a person is in crisis, we would generally take them to the hospital,” said Baraga County Sheriff Joe Brogan. “That was usually done by force. But if we’ve brought a violent person to the hospital, they are our responsibility. We have to keep an officer on scene to make sure they don’t hurt themselves or anyone else at the hospital. We might end up sitting an officer with them for hours or days or weeks. They are a patient, but now we have to be

Stowe said. “They are only a viable candidate if they remain in our emergency room. In the past three months alone, we’ve had individuals waiting 20-plus days in the ER while we are seeking an inpatient bed for them.”

And if that bed is downstate, it could be a nine- or 10-hour drive each way to transfer them. Baraga County can’t afford to send an ambulance or sheriff’s deputy downstate in what would amount to an overnight trip, so it has to hire a third-party service to transport the patients, Stowe said, on the hospital’s dime. The transport services aren’t always billable to insurance or Medicaid, Stowe said.

So far in 2024, the hospital, which operates in a county with fewer than 8,300 residents, has had to send five patients downstate after an excruciating wait.

“It’s just wrong,” Stowe said. “I don’t know the definitive answer, but there needs to be a different way to do this. We’re not an inpatient facility. We need better solutions.”

To prevent patients from waiting in the system’s emergency department, it’s footing the bill, along with a grant from the Michigan Health Endowment Fund, to provide a novel mental health response for all five police departments in the county.

Officers and sheriff’s deputies are outfitted with iPads that connect to a third-party service, Sioux Falls, S.D.-based telemedicine provider Avel eCare.

The service — which connects officers remotely to mental health professionals from Avel’s nationwide system to provide a mental health evaluation on the spot — is an attempt to keep mentally distressed people out of the local jail and out of Baraga County Memorial’s emergency department.

there, too, and we only have five deputies on the force. If they are at the hospital, they are not on the street.”

And things don’t get easier for those in Baraga County, or in hundreds of other rural communities in the state, from there.

If a patient at Baraga County Memorial Hospital, a small critical access hospital in L’Anse Township, is deemed to need inpatient psychiatric care, that person must be moved downstate to a hospital that offers those services.

But to do so, practitioners at

“If we’ve brought a violent person to the hospital, they are our responsibility. We have to keep an officer on scene to make sure they don’t hurt themselves or anyone else. We might end up sitting an officer ... for hours or days or weeks.”

Baraga County Sheriff Joe Brogan

Baraga County Memorial must keep that patient in the emergency department until a bed is found, said Rob Stowe, CEO of the hospital.

“If we admit them to our hospital, they are removed from the waitlist for a psychiatric bed,”

The system has been used six times since November, Brogan said. Four out of the six people needing mental health assistance were able to stay home, receiving mental health follow-up services from community health professionals. Only twice did the person get referred to the hospital’s ED.

“In the past, we were weeding through who needed to go to the hospital and who doesn’t,” Brogan said. “That’s not a law enforcement issue, that is medical. So having someone else make that determination is better. They can talk to a community mental health official or a counselor. Right now, this is the most efficient mouse trap. We can meet that need without involving our guys beyond the initial call.”

Who will do the work?

While law enforcement involvement isn’t the perfect solution, it’s better than relying on the “old days” with haphazard institutionalization, said Dr. Vasilis Pozios, chief medical officer for the Oakland Community Health Network, which provides coresponder programs to Oakland County police departments.

Hospital in L’Anse Township, transferring patients who need

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“We’re not returning to the days of the asylums,” Pozios said. “We need to work together with law enforcement and treat people where they live. We have to make sure people are not at the mercy of the criminal justice system.”

Of the 3,000 referrals to the network’s co-responder program — which sends mental health professionals to calls alongside officers — half of these were able to remain at home and receive follow-up treatments instead of being jailed or hospitalized.

“Jail is the most restrictive outcome,” Pozios said. “But being in a hospital setting on a locked psychiatric floor is restrictive, too. If we can intervene, we have better success for that individual.”

But there remains a critical bottleneck in the overall plan to place mental health professionals alongside police officers to tackle the state’s mental health epidemic.

Michigan is among the top five states with a shortage of mental health professionals. Just 36% of mental health needs are being met, according to Blue Cross Blue Shield of Michigan.

The state has roughly 31,000 licensed social workers, but must add an additional 41,000 through 2032, according to research by the Michigan Health Council.

Social workers and psychologists are master’s degree-level jobs and often co-responder programs, largely funded by grants at this time, can’t afford to recruit these professionals, said Dana Lasenby, CEO of the Oakland Community Health Network.

bulletproof vest and work with police in potentially dangerous situations. We need people who care and have the heart to do this work and they deserve to be paid a meaningful wage.”

Daicia Price, a clinical associate professor of social work at the University of Michigan, said these community programs simply can’t compete with private practice.

“We were providing training to co-responders, and they went out in the field and found out it wasn’t suitable,” Price said. “They can go into private practice or the private sector and make $30,000 more with half the responsibilities. How do we train behavioral health individuals to be in these settings and make sure they deliver that public service and compensated the way they should when they can sit in an office with people with milder disorders and make more money?”

Leonard Swanson, crisis policy manager at the Center for Behavioral Health and Justice at Wayne State University, believes the academic level for a co-responder needs to be adjusted to meet the excessive demand.

“We’re never going to have enough master’s level clinicians to respond to 911 calls,” Swanson said. “We need to completely re-

“We’re never going to have enough master’s level clinicians to respond to 911 calls. We need to completely rethink the certification system.”

Leonard Swanson, crisis policy manager at the Center for Behavioral Health and Justice at Wayne State University

“The bulk of our funding goes to providing direct services, but we also have to build in sustainability,” Lasenby said. “How do we find the money to keep these programs going and be able to recruit and retain talent in the mental health arena? We have to pay these people appropriately. We want to hire more coresponders, but it takes a special person to do that job … to wear a

think the certification system. There are EMTs and paramedics who are not doctors, yet are more than capable of responding to emergency medical situations. We need something like that in the mental health field. We need someone who cares; they don’t need to diagnose in the moment, and it doesn’t require six years of schooling to do that. We need a new style of responder to fill the need.”

4 ways policing can change to deal with mental health crises

By Dustin Walsh

Michigan, like the nation, is in the midst of a mental health crisis.

More than 1.75 million in Michigan suffer from a mental health illness. But there’s no clear-cut way to treat those suffering. More than 38% of those with an illness are not receiving care.

The front lines aren’t filled with scrubs and soothing voices, but with guns and badges. Historically, when police dealt with someone experiencing a mental health episode, it was more likely to lead to arrests and, sometimes, to violence and police shootings.

While it’s not ideal for police to respond to calls involving mentally ill Michiganders, training is occurring. The police are partnering with community mental health providers and other nonprofits to address the troubling issue.

Today, there are dozens of initiatives across the state marrying law enforcement with mental health care professionals, all with the goal of keeping distressed citizens out of the jail system and, if possible, out of the emergency room.

These are novel programs and the departments and their partners are in only the nascent stages of the undertaking, but the programs are already having an impact. Some examples:

Crisis intervention

The Detroit Police Department launched last year its standalone mental health unit to address the more than 16,000 calls it gets annually involving mental distress.

The officers in the unit dress differently than traditional cops and their cars have green lights opposed to blue and red. It's up to 22 officers and six behavioral health clinicians, along with

command staff. They carry nonlethal weapons and their goal is de-escalation.

Right now, the teams work only typical day shifts, but the department is looking to expand hours of operation.

Co-responder programs

Oakland County launched a co-responder unit in July and has aided about 900 people, resulting in only 27 arrests but hundreds of transfers to critical crisis centers.

The Oakland Community Health Network has trained more than 1,150 federal and local law enforcement officers in its crisis intervention methods.

In Washtenaw County, Sheriff Jerry Clayton advocates a continuum of care, wellness and coresponse, with five types of deployment scenarios that depend on the specific situation:

Police-only response: A low-risk situation that requires only officers at a scene.

Clinician-only response: A situation in which an individual is having a personal crisis. A 24hour, seven days a week team, without a police presence, can respond to get the individual assistance from family or friends, or community resources.

Coordinated response: When a responding officer determines a situation may escalate or mental health issues are contributing to the emergency, a behavioral health professional may be called in to help deputies.

Co-response unit: The county pairs a deputy with a clinician to work together every day. They create a plan of action for higher risk situations and, when deployed, they work together to determine who takes the lead to de-escalate an incident.

Unarmed community response: In situations that primarily involve someone with housing,

food or transportation issues, or nuisance issues such as trespassing, noise and juvenile complaints, dispatchers can send a community worker instead of law enforcement.

Virtual assistance

Baraga County in the Upper Peninsula launched a virtual crisis program late last year in which its officers carry iPads connected 24/7 to mental health crisis counselors across the U.S. to aid in de-escalation and start that individual on a path to treatment.

Baraga County Memorial Hospital is small and serves a rural population. Any individual who requires extensive care or monitoring by a deputy or officer removes personnel from daily activities, straining law enforcement services. The virtual program, through a South Dakota telemedicine provider, puts individuals in contact with counselors elsewhere in the country whenever intervention is needed.

Certification changes

Wayne State University is pushing to create a mental health responder certification program intended to increase the number of people with appropriate training who would be available to assist officers.

There are not enough mental health professionals to handle the police responses. A certified individual, not a master’s level provider, could go a long way toward reaching a solution.

Trauma-informed intervention, suicide risk assessment and harm reduction methods don't need someone with an advanced degree. Proper training and a bachelor's degree-level education could increase the pool of professionals interested in such work and make those workers more affordable for law enforcement agencies.

A puzzle piece art project that hangs in the Oakland Community Health Network administrative office was facilitated by the OCHN’s Begin Ending Stigma Today (BEST) workgroup, which aims to create a stigma-free culture across Oakland County.

Members of the Detroit Police Department’s Crisis Intervention Team wear uniforms that don’t look anything like police officers’ clothing and they drive vehicles with green lights, not red and blue like patrol cars. DETROIT POLICE DEPARTMENT

Building a better tomorrow includes women in operations.

Tomorrow is on.

“I’ve broken through many barriers and proven that safety knows no gender in this industry. Enbridge is a company that celebrates different perspectives and empowers women to thrive. They value diversity and inclusion and I’m grateful to be a part of a company that champions women in operations.” Kate H., Operations Manager, Great Lakes Region.

enbridge.com/IWD

Crisis responders help keep people safer

Mental illness is not a crime. Yet, it’s often treated as such in public discourse and when policies are made informing police practices for behavioral health crisis response.

Sarah Wurzburg is deputy division director of behavioral health for the Council of State Governments Justice Center.

We’ve seen this play out too many times: a person is facing a mental health crisis, and instead of receiving a response from someone who specializes in crisis de-escalation, they encounter an officer with a firearm. While the response is well-meaning, it can also be triggering and lead to disastrous situations.

Fortunately, another option is emerging across the country, supported by people from all walks of life, including law enforcement leaders who note that their departments are ill-equipped to address behavioral health crises. Community responder programs, staffed by professionals trained in

de-escalation, trauma-informed care and harm-reduction strategies, offer an expansion to traditional first responder efforts based on the principles of collaboration, engagement and trust. These responders have extensive knowledge of their communities, and they work to bridge the gap between public health and public safety systems while helping to rebuild trust in emergency service access.

While these programs have recently grown in popularity, particularly following the murder of George Floyd in 2020, they have their roots in community-driven emergency response efforts decades prior. Many of their practices were first established in communities such as Pittsburgh, where the Freedom House Ambulance Service — led by Black community members — pioneered emergency and community response in the 1960s, and

Eugene, Oregon, where the CAHOOTS (Crisis Assistance Helping Out On The Streets) program was established in 1989.

Across Michigan, community leaders have been actively working to establish community responder efforts focused on community violence intervention and improving crisis response. In alignment with these efforts, the Michigan Collaborative to End Mass Incarceration, along with its partners (the Detroit Justice Center, Friends of Restorative Justice, the Michigan Roundtable for Diversity and Inclusion, and Emergent Justice), recently hosted the MI Learning Community: Building Connections to Transform Public Safety and Prevent Incarceration, which included a focus on alternative crisis responses. At the local level, in places like Muskegon County, a team of health care specialists is now deployed to emergency calls for people experiencing a behavioral health crisis.

At the Council of State Governments Justice Center, we are work-

ing to assist communities as they enact and grow their own programs, tailoring them to their unique needs. To facilitate this growth, we established the Expanding First Response National Commission last year to identify emerging practices and key strategies for jurisdictions looking to enact their own community responder programs. This commission has brought together advocates, community leaders, law enforcement representatives, emergency responders, behavioral health professionals and people with lived experience to develop guidelines focused on connecting the components of emergency response who are often siloed from each other and the communities in which they

serve.

With support from the Joyce Foundation, we have now extended our support to include the Great Lakes Community Responder Program Learning Community, available to jurisdictions in Michigan and other states in the Great Lakes region looking to establish or expand community responder efforts.

We have already seen how communities across Michigan are leading the way for community responder programs nationwide. Now, it’s time to ensure these efforts are scaled up so they can meaningfully improve outcomes for people in need and increase trust in our communities and with each other.

There are better ways to respond to mental health crises

Reports of people with mental illnesses being killed by police during a mental health crisis are tragically common. Although more likely to be victims of crime than perpetrators, people with mental illness are more likely to have force used against them during encounters with the police.

Further, while officers rarely get extensive training on mental illness, in many communities they are the only reliable, 24/7 service available to respond to mental health emergencies.

At the Center for Behavioral Health and Justice at the Wayne State University School of Social Work, we have had the opportunity to learn from key stakeholders in crisis response. When we talk to people who have experienced mental health crises, they tell us that police involvement can be traumatic and stigmatizing. Law enforcement officers tell us that mental health providers are better prepared to respond.

A chief describes law enforcement’s crisis response role as roofers showing up to fix a plumbing problem.

Mental health clinicians express concern about safety, particularly when the mobile crisis “team” is one clinician. Further, their clinical training may not have prepared them to feel confi-

dent managing safety. As a result, they may limit response to secure locations (emergency departments, schools or police stations), or request that police respond with them.

Fortunately, there is broad support for reducing the role of law enforcement in crisis response. Unfortunately, the mental health system has a workforce problem.

We simply don’t have enough clinicians to respond to all the crisis calls that police are handling. People with master’s degrees and clinical licenses may not be prepared or want to work the odd hours or varied contexts of a mobile crisis team. Further, the skills of a licensed clinician may not be the primary skills needed for crisis response. Licensed clinicians can diagnose mental illnesses and provide therapy, but those skills may not be needed to support someone in crisis.

Accurate diagnosis is unlikely during a crisis, and it is not the time to address underlying psy-

chological problems. Try to remember the last time you felt overwhelmed; is that when you wanted to talk about your big life questions? Probably not. A lot of people just want the space to be heard and supported. Sometimes that’s as simple as offering a bottle of water and asking the person what has happened to them, what they need, and listening to what they say. Then, we can talk about what to do next. Master’s level clinicians can do this, but their advanced skills might be better reserved for supervision and consultation.

Clinician training and the mental health treatment system were built for 50 minutes and a fern: We are used to working through problems with therapy in a comfortable office. Crisis work is a different ballgame. Crisis workers need to be able to remain calm under pressure, be comfortable in uncomfortable situations, de-escalate tension and maintain safety, but most of all: listen with compassion.

People in crisis don’t often need an army of police or clinicians; they need someone who will listen and provide support. That doesn’t require a master's or even a bachelor’s degree. Certainly, crisis responders need to be able to assess safety — whether someone is at risk of harming themselves or others. We can

train them to conduct simple screenings (something police officers do regularly) and we can have licensed clinicians on call for more complex cases. This allows us to use our limited resource of licensed clinicians for more specialized situations: We don’t need clinicians on every crisis call, just as we don’t need brain surgeons on every emergency department visit.

In partnership with the Michigan Department of Health and Human Services, Wayne State University’s School of Social Work is preparing a new kind of crisis workforce.

First, we are developing a credentialing program to prepare bachelor’s level social workers and counselors for crisis work: The skill-based curriculum includes trauma-informed intervention, suicide risk assessment, harm reduction, safety and more.

We are also planning an advanced credential to prepare master’s level social workers and counselors for their advanced roles. The Substance Abuse and Mental Health Services Administration recommends that mobile crisis teams include certified peer specialists, who are people with lived experience of mental health or substance use conditions that are trained in peer support. MDHHS is developing training for certified peer specialists interested in crisis work.

We are also exploring a role for non-degreed professionals trained in crisis response skills, sort of like emergency medical technicians for mental health crises. Combined, these efforts will help us grow the workforce so that mobile crisis response is available 24/7, and law enforcement is only involved when a crime has occurred or when significant safety concerns are present.

Muskegon Police Lt. Casey Bringedahl, mental health Officer Andy McKee and mental health clinician Michelle Pouch. | MUSKEGON POLICE DEPARTMENT

Leonard Swanson, Amy Watson and Meghan Taft are involved in crisis policy management at the Wayne State University School of Social Work’s Center for Behavioral Health and Justice.

Funding is key to continue progress on mental health COMMENTARY | MENTAL HEALTH AND POLICING

While unveiling his ambitious plan for a new community-based, behavioral health care system to Congress, President John F. Kennedy shared these words:

“Most of the major diseases of the body are beginning to give ground in man’s increasing struggle to find their cause and cure. But the public understanding, treatment and prevention of mental disabilities have not made comparable progress since the earliest days of modern history.”

Vasilis K. Pozios is the chief medical officer of the Oakland Community Health Network.

When this speech was delivered, nearly one million Americans with mental illnesses and intellectual and developmental disabilities lived in institutions, often in deplorable conditions rife with abuse.

Families were separated. People suffered. Congress responded to this tragedy by passing Kennedy’s Community Mental Health Act of 1963, forever changing the trajectory of services and supports for persons diagnosed with a mental illness.

Oakland was among the first counties in Michigan to establish a Community Mental Health agency.

Despite recent Substance Abuse and Mental Health Services Administration statistics showing nearly half of jail inmates and more than a third of state and federal prisoners having a mental illness, it is a misconception that people with mental illnesses are inherently violent. Indeed, only 3% to 5% of violent acts are attributed to individuals living with a serious mental illness. Moreover, people with serious mental illnesses are over 10 times more likely to be victims of a violent crime.

For more than a decade, Oakland Community Health Network has met this public health challenge with innovative solutions guided by the Sequential Intercept Model. The SIM details the “intercepts” where individuals with mental health and substance use disorders intersect with the justice system and provides opportunities for intervention.

OCHN’s Justice Initiatives team is composed of highly qualified mental health professionals strategically placed in the community at each intercept to provide guidance, resources and supports that address the needs of people prior to, during and after an encounter with the justice system. Staff are embedded with local law enforcement agencies, jail, probate, district and circuit courts, probation and parole to divert people away from the justice system and, if appropriate, into treatment.

In 2021, OCHN launched its Community Co-responder or CoRe initiative, a program in which behavioral health clinicians co-

respond with local law enforcement to calls requiring mental health/ substance use support. CoRe helps decriminalize mental illness, while assisting people in navigating the behavioral health system. The program increases access to behavioral health care and officer safety, and reduces the use of jails, involuntary hospitalizations and time spent by law enforcement on behavioral health-related calls.

The program has been a remarkable success.

From August 2021 through De-

cember 2023, OCHN’s CoRe program received 2,935 referrals from law enforcement. Voluntary transports to emergency departments were provided to 671 people, and 1,464 individuals were de-escalated and remained in the community with appropriate resources. Only 75 arrests occurred when CoRe was engaged.

OCHN has also provided Crisis Intervention Team training to more than 1,150 federal and local law enforcement officers. CIT is an internationally recognized community

program that establishes a strategic partnership between law enforcement and mental health designed to promote positive outcomes during crisis situations that require police assistance.

Justice initiatives, including CoRe, CIT and OCHN’s new Community Behavioral Threat Assessment and Management Program depend upon local, state and federal grants, as well as general funds. Unfortunately, these dollars are term limited. The need for longterm, sustainable funding that is

Seamless All-In-One Solutions

backed by elected officials is critical to strengthening the communitybased public mental health system.

The community mental health system was never intended to be stagnant: the plan was always for it to evolve with the needs of the people it serves. I call on our federal, state and local elected officials to recognize the immediate need to adequately fund and ensure the sustainability of justice initiatives integral to fulfilling Kennedy’s vision of a robust community-based behavioral health system for all.

M&A DEALS AND DEALMAKERS AWARDS

Varnum’s Wooldridge thrives on complexity, collaboration in nearly four-decade M&A practice

By Mark Sanchez

In a legal career that spans nearly four decades, corporate law attorney Michael Wooldridge has worked on deals for some of West Michigan’s most iconic companies.

His clients range from UFPI Inc. (formerly Universal Forest Products) and MillerKnoll Inc. (formerly Herman Miller), to Sparta-based Old Orchard Brands, and now Acrisure LLC, which for more than a decade has been the most prolific acquirer of insurance agencies and brokerages in the nation and keeps Wooldridge the “most busy these days.”

In the banking industry, he worked on the former FMB Corp.’s merger into Huntington Bank more than 27 years ago, and he’s long represented Grand Rapids-based Independent Bank Corp. through a series of acquisitions, divestitures and capital raises.

Wooldridge also worked on initial public offerings in the 1980s and 1990s for Zeeland-based Gentex Corp., UFPI, X-Rite Corp. in Grand Rapids, and others.

A partner on Grand Rapids-based Varnum LLP’s corporate

HALL OF FAME

Michael Wooldridge

w Title: Partner, Varnum LLP

w Education: B.a. from alma college, J.D. from cornell University Law School

w Community involvement: YMca of Greater Grand rapids, board member and secretary; Blythefield country club, past president, 2006-2017

practice team, Wooldridge said the allure of the legal sector stems from working through the intricacies and nuances of each deal.

“The complexity, that’s part of the fun, I think,” said Wooldridge, 64, who started with the law firm in 1985 and focuses much of his work on M&A and securities work.

“It’s a little like putting together the puzzle. It was sort of fun,” he said. “The fun part also in doing M&A work is more the collaboration in terms of putting together (deals). You have two parties, like in any transaction, where the buyers want to pay the best price and the seller wants the highest price, but that obviously comes to a

BEST IN THE BUSINESS

The M&A Deals and Dealmakers Awards is back for its 11th year in West Michigan, and its first time under the Crain’s Grand Rapids Business banner.

At Crain’s, we’re building on that solid foundation to highlight the sophistication and caliber of the deals that get done every year in West Michigan, as well as celebrate the work of the region’s dealmaking professionals.

Each iteration of these awards has shared a common theme in demonstrating that West Michigan punches well above its weight class when it comes to creativity and grit required to close complex deals. This year is no exception.

While M&A activity was down overall last year from recent record highs, the winners we’re celebrating here prove that good deals and exceptional leadership can happen in any market. It’s a testament to the strong business environment here in West Michigan that should set us up for even more success in the future.

Joe Boomgaard, Editor

DEALS OF THE YEAR

Banking/Finance

cascade Partners expands in industrial market, adds restructuring practice

Economic Development

The right Place helps secure first Transformational Brownfield Plan for West Michigan

Health Care

UM health deal for Sparrow health builds on prior relationships

Life Sciences

Marketlab broadens product portfolio with New York deal

Manufacturing

PE firm boosts auto supplier Burco’s growth through acquisition

Real Estate

Investor deploys ‘creative financing’ to close region’s top multifamily deal

Retail

Shared values are driving force behind action Water Sports deal

Sports and Entertainment connections help DP Fox land Grand rapids rise volleyball team

Technology

Tech firm DornerWorks preserves culture in ESOP transition

Transportation

Fourth-gen family owners of Star Truck rentals prioritize employees in sale to Penske

compromise and, I think, fairness. If the deal’s not fair, it usually doesn’t get done. If it’s a fair deal, you can get through just about anything.”

In recognition of his career, Crain’s Grand Rapids Business named Wooldridge to the West Michigan Dealmaker Hall of Fame as part of the 2024 M&A Deals and Dealmakers of the Year Awards.

‘Valuable contributor’

In his nomination, clients past and present praised Wooldridge for his professionalism and thoroughness.

“Mike’s expertise, business acumen, and trustworthy counsel is greatly valued by our leadership team,” said Brad Kessel, president and CEO at Independent Bank, which has worked with Wooldridge for more than 30 years.

At Herman Miller, Wooldridge worked as legal counsel on corporate issues, securities and deals.

“To fully understand how to manage deal risk, you have to have commercial insight. Mike has the experience and spends the time to understand the

Professional Services

Waséyabek builds out ‘well-rounded, connected’ portfolio in BLDI deal

DEALMAKERS

Adviser

Dickinson Wright’s Guest appreciates collaborative approach to dealmaking

Executive

Waséyabek executive helps solidify growth strategy with 2 deals

Investor

Palm helps charter Growth capital deploy ‘solutions’ funding

JUDGES

Young Dealmaker

harper’s collaborative mindset, attention to detail add value to WNJ’s dealmaking

Hall of Fame

Varnum’s Wooldridge thrives on complexity, collaboration in nearly four-decade M&a practice

anne Marie carson, co-chair of corporate and Mergers and acquisitions practice group, Miller Johnson

Jenny Dakoske, director, charter capital Partners

Brandon Finnie, managing director, Vision ESOP Valuation

Krista Flynn, Midwest regional executive, PNc Bank

Peter roth, corporate law and M&a attorney, Varnum

Michael Wooldridge calls the complexity of M&A deals “part of the fun.” | SETh ThOMPSON

Boomgaard

BlueWater deal allows Cascade Partners to expand in industrial market, add restructuring practice

By Abby Poirier

An acquisition involving two investment banking firms gave executives at both companies a chance to experience firsthand what their clients go through as part of the dealmaking process.

They also used the deal as an opportunity to bend some of their own rules.

Likening it to a situation in which a strong tax accountant does his own taxes, executives at Southfield-based Cascade Partners LLC and Grand Rapids-based BlueWater Partners LLC negotiated their own deal.

Rajesh Kothari, founder and managing director at Cascade Partners, said he relied on his attorney, Bruce Haffey at Troybased Giarmarco Mullins & Horton PC, to keep him grounded throughout the deal.

“I told Bruce, ‘If I’m being crazy, tell me. If I’m being too over the top, tell me.’ Because I need that

BANKING / FINANCE

Cascade Partners LLC

w Business description: Middlemarket investment banking and restructuring firm based in Southfield with offices in Grand Rapids and Cleveland

w Top executive: Rajesh Kothari, founder and managing director

w Total Michigan employees: 24

w Advisers: For BlueWater Partners, Dickinson Wright PLLC (legal); for Cascade Partners, Giarmarco Mullins & horton PC (legal

the winner in the banking and finance category in the 2024 M&A Deals of the Year Awards from Crain’s Grand Rapids Business. As part of the deal, BlueWater founder Ronald Miller and his son, Matt Miller, joined Cascade Partners as managing directors.

“Collectively, we are entrepreneurs and owners and operators of businesses prior to becoming investment bankers and term consultants. We’ve been there, done that. We’ve walked in our clients’ shoes.”

third party objectiveness. This is me and my business — I’m passionate about it. (Ron and Matt Miller) are passionate about theirs. So I said, ‘Just tell me if we’re being unreasonable.’”

Cascade’s acquisition of BlueWater Partners was recognized as

From Page 27

business drivers before advising on the right legal structures and provisions,” said Brian Walker, Herman Miller’s CEO from 2004 to 2018.

Wooldridge first worked with Acrisure when in 2008 the company bought The Campbell Group, an insurance agency in Caledonia that he represented. Wooldridge was later asked to represent Acrisure, which went on to pursue an aggressive acquisition strategy to become one of the largest insurance brokerages and fintechs globally. Between 2018 and 2023, Acrisure closed on more than 570 acquisitions, according to Chicago-based Optis Partners LLC that tracks M&A activity in the industry.

Wooldridge estimates he’s worked on more than 800 agency deals for Acrisure. He also has worked on several major financings for the company, including a $3.45 billion capital raise in 2021 and a $725 million Series B-2 Preferred Equity raise in 2022.

very similar,” Miller said. “In many ways, our experience and what makes us unique is very similar.

“Collectively, we are entrepreneurs and owners and operators of businesses prior to becoming investment bankers and term consultants. We’ve been there, done that. We’ve walked in our clients’ shoes.”

The deal led to the combination of two middle market investment banking firms that played in different sectors of the market. Whereas Cascade skewed more toward health care and business services, the deal for BlueWater added more depth in industrial, manufacturing and distribution companies. Cascade also added a restructuring practice with the acquisition, and bolstered its presence in the West Michigan market.

“They (Cascade) liked our industrial experience,” Miller said. “That’s a big part of the middle market, whether you’re looking at the Midwest or more broadly. We bring that to the table (and) the restructuring practice — that’s new to Cascade Partners. It’s been a really nice counterbalance to our business.”

All BlueWater employees were retained by Cascade Partners.

In discussing why BlueWater opted to move forward in the sale to Cascade, Matt Miller described the importance of the shared culture between the two companies.

“Our approach to business is

Co-founder, Chairman and CEO Greg Williams said Wooldridge’s “adept handling of shareholder and investor relations has been pivotal in fostering trust and securing vital partnerships with key constituents.”

“Mike Wooldridge’s impact on our company’s trajectory is undeniable, marking him a valuable contributor to both our past and present,” Williams said.

Getting out of the comfort zone

Wooldridge started at Varnum a year after earning his law degree from Cornell University Law School in 1984. He previously earned an undergraduate degree at Alma College in 1981.

After graduating from Cornell, Wooldridge served a summer clerkship for Exxon in Houston, Texas He received an offer from a large law firm in Houston, but decided to return home to his native Grand Rapids, where he found an opportunity at Varnum.

Wooldridge got his first chance

Locally, the restructuring practice landed Cascade the role as the court-appointed receiver for Grand Rapids-based Proos Manufacturing Inc. and advised on the company’s sale to Chicago-based Westbourne Capital Partners, which operates other manufacturing businesses in West Michigan.

As Cascade solidifies its presence in the West Michigan market, Kothari said community engagement is key to the firm’s long-term plan.

to work on a bank transaction as an associate at Varnum. His office was next door to the late Donald Johnson, then the firm’s managing partner, who assigned him to work on a bank deal.

“I was very lucky that I had worked with him and got tons of experience,” Wooldridge said. “He forced me out of my comfort zone and I think I worked on some deals when I was a second- and third-year associate that I probably shouldn’t have. I was able to do better and move along faster because I did get out of my comfort zone.”

That assignment led Wooldridge to do more acquisition work for banks and get into securities compliance and registrations.

In doing the legal work for a deal, Wooldridge begins with an approach that “every deal is different” and first strives to understand exactly what’s driving the buyer or seller, and the dynamics of their business.

“You have to really understand the business before you can work on the M&A side,” he said. “You take the time to understand how

“We’re not interlopers,” said Kothari, a former board member at Priority Health. “We’re real believers in the community in West Michigan.”

After buying BlueWater Partners and solidifying the firm’s position in the Grand Rapids market, Cascade Partners may look to expand elsewhere in the years ahead as it makes sense. The company also maintains an office in Cleveland, Ohio.

“We continue to look at growing

they’re making products or services and how those are developed and marketed, understanding their customers and clients.

“You have to understand what makes things work so you can focus on what’s important.”

When structuring a transaction, a good deal is when “both sides do well,” Wooldridge said.

Changing industry

In nearly 40 years of legal work, Wooldridge has seen numerous changes. The biggest has been how in today’s digitally driven world you can work out a deal via Zoom or Teams, rather than “eyeball to eyeball and face to face.” The COVID-19 pandemic has accelerated the use of virtual conference calls in M&A, he said.

While modern communications technology is more convenient than traveling to work out a deal, Wooldridge does miss the “closing dinners” to celebrate completing a transaction, events that are more of an exception today than the rule.

The digital age also allows for a

across the Midwest,” he said.

For BlueWater Partners, the deal came about as the firm began exploring options in 2018 as part of a long-term succession plan that involved considerations for how to provide more opportunities for employees and add services for clients, Miller said.

It also allowed his father to take some chips off the table.

“We really accomplished everything we set out to accomplish,” Miller said of the deal.

far faster and “much easier” exchange of documents between parties.

That’s quite different from years ago, such as when facing deadlines for preparing legal documents to exchange or filing registration statements with the U.S. Securities and Exchange Commission.

“There was a lot of onus and pressure of getting things done before FedEx left because that’s how you exchanged documents,” he said. “Now, you can work all night and send documents back and forth and you don’t have that time limit any more.”

Today’s era also has brought out many more potential buyers.

While owners years ago generally looked to a buyer within their own industry, the rise of private equity and family offices has given sellers more options to consider.

“You just have a lot more compared to when I started. The buyers were other companies in your industry, not the financial buyers that are out there,” he said. “There’s just a lot of private equity money out there willing to buy a company.”

Rajesh Kothari, founder and managing director. | COURTESY

Everyday dedication meets everyday appreciation

Renee

President, Bank of

Factory Yards secures area’s first Transformational Brownfield Plan

By Kate Carlson

The monumental $103 million Transformational Brownfield Plan approved last year for a sprawling 15.5-acre mixed-use development on Grand Rapids’ southwest side started as a heavy lift back in 2017.

Heritage Development Partners, led by Ben Smith, Scott Magaluk and Dennis Griffin, is behind the project, which was the first in Grand Rapids to receive transformational brownfield incentives and only the fourth development in the state approved for the powerful funding tool.

The Right Place Inc. was among the organizations that played an instrumental role in helping the developers apply for the incentives. The economic development organization first started talking to the project’s development team in 2017 when the partners started buying up properties to put together the project site, said Tim Mroz, the senior vice president of community development for The Right Place.

The regional economic development organization then helped Heritage Development Partners make connections and coordinate with the right people to pull off the transformational brownfield program application.

If not for the transformational brownfield program incentives,

ECONOMIC DEVELOPMENT

Project: Factory Yards

w Description: 15.5-acre mixed-use development to convert a former industrial facility into housing, commercial space, offices, storage, parking and public space. The project received state approval for a $103 million Transformational Brownfield Plan in 2023 with help from partners including The Right Place Inc.

w Total cost: $147 million

w Top executives: Ben Smith, Scott Magaluk and Dennis Griffin, partners at Birmingham-based heritage Development Partners

Mroz said he believes the site would have been vacant for at least another 10 years, noting that the tool accelerated plans for the development.

While the transformational brownfield program (TBP) comes with a hefty application process,

the team knew the tool was perfectly matched for the Factory Yards development, Mroz added.

“Myself and the development partners at Factory Yards, we believed at the beginning that a project like this is the definition of why the TBP exists,” Mroz said. “You’re looking at a neighborhood that has been disinvested in for nearly half a century and looking to redevelop a building that has been vacant for almost as long. They’re looking to bring in an influx of more than $100 million into a neighborhood that arguably has never seen that level of investment in its history. That’s why the TBP exists.

“We were confident going into this that if there was ever a project in Grand Rapids that was primed for approval, it was this one.”

The project at 655 Godfrey Ave. SW is expected to give a boost to the Roosevelt Park and Black Hills neighborhoods. The $147 million development calls for redeveloping former industrial property into 467 apartment units, 31,000 square feet of ground floor commercial space, a 22,000-square-foot food hall and 30,000 square feet of commercial offices.

The plans also include nearly 30,000 square feet of fitness and recreational facilities, along with a 50,000-square-foot self-storage facility and half-acre courtyard with 825 parking spaces.

University of Michigan Health picks up Sparrow Health

By Mark Sanchez

Acquiring Sparrow Health last spring extended University of Michigan Health’s reach further across the state.

The deal aligns with a strategy that the Ann Arbor-based University of Michigan Health began executing six years earlier to become a statewide health system. Sparrow Health represented “one really important step forward in our vision,” said Keith Dickey, chief strategy officer at UM Health.

“We do have a long-term vision of building out a statewide system of care that has a broad reach across many geographies,” Dickey said.

UM Health’s deal for Lansing-based Sparrow Health was selected as the winner in the health care category of the 2024 M&A Deals of the Year Awards from Crain’s Grand Rapids Business.

The transaction was rooted in a prior affiliation between UM Health and Sparrow Health.

In 2019, UM Health signed an affiliation agreement with Sparrow Health for pediatric medical services. UM Health later made a minority investment in the Sparrow Health-owned Physicians Health Plan.

As Sparrow Health felt financial pressures that deepened in the pandemic and incurred operating losses that included $171.5 million in 2022, executives in Lansing decided to pursue a merger. They started with UM Health, said Margaret Dimond, who in September was named regional president for UM Health over the Grand Rapids area and Sparrow Health.

The collaboration and PHP investment “became the foundation and the basis for these broader conversations,” Dickey said.

The two organizations announced the deal in December 2022 and it took effect April 1, 2023.

Sparrow Health has 115 mid-Michigan care locations that include E.W. Sparrow Hospital in Lansing; community hospitals in Carson City, Charlotte, Ionia and St. Johns; Sparrow Specialty Hospital; and nearly 500 primary care providers and specialists.

The merger came with an $800 million capital commitment to Sparrow Health over five to seven years.

Since closing the deal, Sparrow Health has saved millions by becoming part of UM Health’s supply chain and has benefitted clinically from the extension of medical specialties from Ann Arbor and Grand Rapids, Dimond

HEALTH CARE

University of Michigan Health

w Business description: One of the largest health systems in Michigan, the Ann Arbor-based University of Michigan health is part of Michigan Medicine, which consists of the health system and the university’s medical school.

w Annual revenue: About $8.1 billion in 2023 for the entire health system. $1.4 billion for Sparrow health

w Top executive: Margaret Dimond, regional system president

w Total Michigan employees: About 47,000

w Advisers: McDermott Will & Emery LLP (legal)

said. Becoming part of UM Health also has helped Sparrow Health to recruit nurses and other clinical staff, she said.

“(For) doctors, nurses, PTs (physical therapists), we are seeing a surge of applicants that we wouldn’t have had,” Dimond said.

UM Health also helped to plug a gap in Lansing for surgeons who perform microvascular procedures, said Scott Flanders, chief clinical strategy officer.

In integrating Sparrow Health, UM Health has worked to connect with Lansing and Grand Rapids to share best practice and resources, as well as to refer patients for specialty care offered in each market, particularly people who live between them in communities such as Ionia.

UM Health plans to deploy specialists in Grand Rapids to Ionia and other markets where Sparrow operates.

“If we can do that, it raises all boats in terms of improving health in those smaller communities,” Dimond said.

UM Health previously acquired the former Metro Health, now UM Health-West, in December 2016. Three months ago, UM also signed a strategic alliance with Holland Hospital.

Margaret Dimond, regional systems president

Marketlab broadens product portfolio with New York deal

By Abby Poirier

When Caledonia-based Marketlab Inc. went searching for ways to expand its product portfolio and offer distributors more options, it found an attractive opportunity in a family-owned health care products manufacturer.

Brooklyn, N.Y.-based Medi-Tech International, founded by George Fortunato in the early 1970s, specialized in wound care, labor-and-delivery, and patient safety products. After building the business from the ground up and operating it for decades, Fortuna-

LIFE SCIENCES

Marketlab Inc.

w Business description: caledoniabased specialty health care products manufacturer and distributor

w Top executive: Tom hill, cEO

w Total Michigan employees: 150

w Advisers: Varnum LLP (legal)

“What we’re looking for is to be an aggregator of those low-to-medium value products, and Medi-Tech nailed that for us,” said Marketlab CFO Fred Vander Mo-

“In M&A deals, you can put whatever you want in the legal documents, but there’s a trust level and relationships matter. That allowed them to work through a few of the sticking points.”

to was looking for a new owner to take over.

Medi-Tech’s complementary portfolio of low-to-medium value products and similar vision ticked the right boxes for Marketlab, which acquired the business from Fortunato in August 2023.

len, who noted that the deal also came at an opportune time for the New York company.

“They had reached the point in their evolution where they weren’t developing products anymore,” he said. “(When) you get to a size where you’re not developing and

you’re not marketing in a way that Marketlab (can), what we bring is a comprehensive marketing approach, as well as a national, geographic specific sales team that can actually bring these things into hospitals.”

Marketlab’s transaction for Medi-Tech was named the winner in the life sciences/medical device category of the 2024 M&A Deals of the Year Awards from Crain’s Grand Rapids Business.

Medi-Tech’s products also boosted Marketlab’s presence in the health care consumables market, creating more customer touchpoints.

“A healthy portion of our business today is in capital or high-dollar items that people or customers buy once every few years,” Vander Molen said. “Those are great to have, but we need more consumables in our portfolio, and that’s what the Medi-Tech line does for us.”

He added that the addition also has helped Marketlab hone its relationship with distributors, and opened up new channels for the manufacturer to offer its products.

Varnum LLP partners Christopher George and Peter Roth ad-

vised Marketlab on the deal.

While working with a family-owned seller brought some unique considerations, Vander Molen’s ability to engage the seller on a personal level was helpful in ironing out the deal, Roth said.

“Fred developed a relationship with the sellers, and when there were sticking points, there were times where instead of having the lawyers hammer things out, he was able to get on the phone with

somebody who had a trust factor with him,” Roth said. “In M&A deals, you can put whatever you want in the legal documents, but there’s a trust level and relationships matter. That allowed them to work through a few of the sticking points.”

For the relatively new Marketlab leadership team — Vander Molen joined in 2020 as corporate controller, while CEO Tom Hill came aboard in 2021 — the acquisition also served as a way to unify the company for a common goal.

“What this really gave us was an opportunity to sink our teeth into something as a company,” Vander Molen said. “One of the things that we’ve seen coming out of this is this really helped establish our team environment, not just the executive team, but all the way down to the directors and managers and frontline folks.”

As the company remains open for additional deal opportunities, it’s finding that the playbook established in the transaction for Medi-Tech may come in handy in the future.

“We’re finding that a lot of the opportunities here are in founder-led businesses,” Vander Molen said.

CONGRATULATIONS!

Tom Hill, CEO

PE rm boosts automotive supplier Burco’s growth through acquisition

By Kayleigh Van Wyk

Burco Inc.’s acquisition by a lower middle-market private equity rm last year has already helped the company grow its revenue and expand into new business segments.

e Walker-based manufacturer of automotive mirror replacements sold to Pennsylvania-based Argosy Private Equity in spring 2023. Terms of the deal were not disclosed.

Mike Mervenne, the former CEO of Burco, said the company’s annual sales had been around $7 million when the deal closed last year.

Since Argosy acquired the business, the company has grown about 30% with revenue of more than $9 million in 2023, according to Mervenne, who retired with the sale.

“When I left in April 2023, the company was trending up, and they ended up in a really nice spot,” Mervenne said. “ e company has been pro table.”

e Burco acquisition was named the winner in the manufacturing category of the 2024 M&A Deals of the Year Awards from Crain’s Grand Rapids Business.

Mervenne decided to seek out a buyer for the company in March 2022 and began working with Charter Capital Partners, an investment banking rm based in Grand Rapids. In addition to the right

MANUFACTURING

Burco Inc.

w Business description: Walkerbased manufacturer and supplier of mirror glass and related products to automotive and consumer markets

w Annual sales: about $9 million in 2023

w Top executive(s): Bill Castleberry, president; Mike Mervenne, former CEO (retired)

w Total Michigan employees: around 25

w Deal advisers: Charter Capital Partners, Stone River Capital Partners, McShane & Bowie, Doeren Mayhew, Innovia Wealth

price, he sought a buyer that would keep the management team intact and maintain a hands-o approach to the company’s operations.

“I found that with Argosy,” he said.

e acquisition went smoothly overall, according to Mervenne,

who went through the M&A process for the rst time with this deal after 42 years in business.

He credited Charter Capital as a valuable partner in the process and noted the importance of selecting the right advisers on M&A deals.

“I can de nitely justify the value (Charter) brought to the table,” Mervenne said. “I think what Charter is able to do is make both parties comfortable with each other.”

Since the acquisition, Burco’s strategy has focused on diversifying and introducing new product lines, leveraging a strong e-commerce platform and expanding in key target markets.

In August 2023, the company announced its expansion into the heavy-duty vehicles market by launching a new mirror glass replacement product line for Freightliner trucks.

“Replacement mirror glass for many heavy-duty vehicles isn’t easily available, and owners often unnecessarily replace their entire mirror assemblies when they need to replace only the mirror glass,” Burco President Bill Castleberry said in a statement at the time.

“ at’s why we decided to take our 45 years of experience manufacturing premium quality, easy-to-install replacement mirror glass for cars and light-duty trucks, as it meets the needs of the heavy-duty segment.”

Waséyabek builds out ‘well-rounded, connected’ portfolio

By Kate Carlson

Waséyabek Development Co. LLC’s acquisition of a Grand Rapids environmental rm at the end of 2023 helped round out the tribally owned rm’s portfolio.

at’s according to Deidra Mitchell, president and CEO of the Grand Rapids-based Waséyabek Development Co., the non-gaming economic development entity of the Nottawaseppi Huron Band of the Potawatomi.

Waséyabek closed on the acquisition in September 2023 after the deal had been in the works for a year. e transaction was named the winner in the professional services category of the 2024 M&A Deals of the Year Awards from Crain’s Grand Rapids Business.

BLDI’s integration into Waséyabek’s portfolio has been going well since the deal closed, Mitchell said. All of the rm’s sta of about 25 people stayed on with the exception of the former majority owner, who wanted an exit.

“ ey really integrated well into the culture,” Mitchell said. “We have a shared services division so things like (human resources), legal and accounting, where they want to plug into those things, we have the corporate capability to help them and that’s going well.”

BLDI President Leslie DeBoer also has started working with the leaders of other companies in Waséyabek’s portfolio.

“It’s important to me that all our company leaders have a relationship,” Mitchell said. “ ey have a built-in group to reach out to if they need (help).”

Because of the partnership, BLDI and Waséyabek plan to focus on growing federal contracting work in the environmental remediation sector. Already, Waséyabek has o ered BLDI’s services on an existing Department of Energy contract.

“Environmental services are just an extension of some of the beliefs of our tribe and protecting Mother Earth, so that made it a re-

PROFESSIONAL SERVICES

Waséyabek Development Co. LLC

w Business description: The tribally owned holding company includes real estate and industrial divisions, the Waséyabek Federal Group, federal subsidiaries and joint ventures, and eight real estate properties. The company is the non-gaming economic development arm of the Nottawaseppi Huron Band of Potawatomi.

w Top executive: Deidra Mitchell, president and CEO

w Annual revenue: $94.3 million in 2023

w Michigan employees: 339

w Advisers on the deal: BDO USA LLP ( nancial) and Dickinson Wright PLLC (legal)

ally special acquisition for us to be able to address some of those issues,” Mitchell said. “Not only does it t into our broader strategy of co-aligned companies and the fact that it was Michigan-based made it attractive, but also that it supports this fundamental belief of our tribe that we’re to be good stewards of the environment.”

Waséyabek’s portfolio closed out 2023 with $94.3 million in revenue. Waséyabek has been acquiring a slew of companies in recent years, deploying a buyand-hold strategy with rms that align with the tribe’s investment strategy.

In December last year, Waséyabek closed on a deal for a majority stake in Maryland-based VES LLC, a middle-market rm based at the U.S. Army’s Aberdeen Proving Ground that contracts with the U.S. Department of Defense for software and technical solutions. Under Waséyabek’s ownership, the company plans to target more federal set-asides designed to help minority-owned rms secure federal contracts and make them more competitive when bidding.

BLDI’s staff of engineers, geologists, scientists and business professionals is focused on providing high-quality, cost-effective environmental services throughout the Midwest. COURTESY

‘Creative financing’ closes region’s top multifamily deal

By Rachel Watson

Amid a costly debt financing environment, a metro Detroit real estate investor used a three-tiered capital structure to fund West Michigan’s most expensive multifamily transaction of 2023.

The GSH Group in Clawson last year acquired The Grove Luxury Apartments, at 3590 E. Beltline Ave. NE in Grand Rapids Township,

“Based on market demographics, Grand Rapids is one of the … healthiest markets in the state as it relates to average median income, schools (and) population trends.”

from Terra Haute, Ind.-based Thompson Thrift Residential for $94.8 million.

At $296,250 per unit, the sale of the then 1-year-old, 320-unit luxury development was the costliest

apartment deal in West Michigan last year by price per door, according to data from NAI Wisinski Great Lakes in Grand Rapids, which tracks the multifamily market. Gideon Pfeffer, CEO and managing partner of The GSH Group, said two aspects of the deal that made it unusual for his firm: It was the first brand-new multifamily community to join The GSH Group’s portfolio, and it required a different financing structure than the company usually uses.

“Up until this point, we’ve been very focused on existing vintage workforce housing communities,” he said, adding this deal was also unusual because of the luxury price point. The firm has a portfolio of about 6,000 units across 22 communities, and this was the first that required no renovations.

“We also structured (the deal) differently because of where the market was in early 2023,” he said. “The capital markets had shifted, the 10-year Treasury, which is what our mortgages are tied to, had gone way up … and lenders were pulling back.”

In response, the firm devised a

REAL ESTATE

The GSH Group

w Business description: real estate investment firm based in clawson, Mich. that manages about 6,000 units of multifamily housing across 22 communities

w Projected gross annual revenue for 2024: $102.6 million

w Portfolio value: More than $1 billion

w Top executive: Gideon Pfeffer, cEO and managing partner

w Total Michigan employees: 25, between GSh and its affiliated companies

w Advisers on the deal: Momentum realty and Berkadia real Estate advisors (brokerages), Nathan Upfal Pc (legal), Berkadia commercial Mortgage (financing)

“creative financing structure” where it took out a 99-year ground lease on the property and did a three-tiered combination of ground lease, mortgage and equity to fund the deal instead of the usual split of debt and equity, Pfeffer said.

A ground lease is an arrange-

ment in which the land underneath the structure is sold to an investor and leased back by the tenant, which owns the buildings and the improvements made to them but not the land.

“We were able to get a ground lease at terms that were actually below the current mortgage interest rates at the time, and so that was a creative way to increase our leverage point a bit, as well as lower our interest rate, which maximized return to our investors,” Pfeffer said.

The Grove was the firm’s second multifamily deal in Kent County.

The first was Foote Hills, a 182-unit apartment complex in Kentwood that The GSH Group acquired in 2020 for $24.3 million and sold on Jan. 24 to Southfield-based SG Companies for $32 million after making capital improvements.

“Based on market demographics, Grand Rapids is one of the … healthiest markets in the state as it relates to average median income, schools (and) population trends,” Pfeffer said. “From a residential investment perspective, we really like Grand Rapids.”

Pfeffer said the firm’s expectation for The Grove’s revenue performance has proven true. One year after acquiring the development, it is 95% percent occupied, up from the “high-80s” occupancy percentage it had a year ago, he said.

“It’s been a strong performer, as we expected, out of the gate,” he said.

Josh Purvis, managing partner for Thompson Thrift, told Crain’s last year that it’s typical for his firm to sell a multifamily development like The Grove within a short timeframe.

“We’re excited — we think we developed a Class A-plus community up there in Grand Rapids, one that was received well by the market, and we’re just excited to add it to our track record,” he said.

Mike

Gideon Pfeffer, CEO and managing partner

Jerry Brouwer wasn’t looking to sell Action Water Sports when a representative from Doug and Maria DeVos’ family office approached him in late 2021, but he soon realized it could be the right fit at the right time.

After years of frequenting the Hudsonville-based boat dealership, the DeVos couple closed on an undisclosed majority investment in Action Water Sports through their Continuum Ventures family office in March 2023.

Brouwer remains a minority owner in the dealership, which also has locations in Fenton, Traverse City and Polk City, Fla., as well as the Action Wake Park west of its headquarters.

He told Crain’s last year that the DeVoses’ interest came at the right time. Gregg Rising, his partner in the Fenton operating company and related location, was ready to retire from the business, and Phil Miklo at the Polk City location also was nearing retirement age. Although Brouwer had always been a good saver, the cost of extending buyouts

would create debt and reduce cash.

“We brought in (Continuum as) another equity partner for longterm growth and long-term prosperity,” he said, noting that the DeVoses shared some of his key

values, including local ownership and excellent customer service.

Pankaj Rajadhyaksha, mergers and acquisitions adviser at Calder Capital, represented Action Water Sports in the deal, which was named the winner in the retail category of the 2024 M&A Deals of the Year Awards from Crain’s Grand Rapids Business.

Rajadhyaksha said he encouraged Brouwer to seek out other offers, but buyers of dealerships of this size are typically limited to two or three publicly traded companies. For Brouwer, the thought of transitioning the business to a large corporation was unappealing. He also had considered an ESOP, bult ultimately ruled out that option.

“At the end of the day, (Brouwer) said, ‘If we can put a deal together with (Continuum), then we’ll do it, and if it’s fair, we’ll go ahead. Otherwise, we’ll continue to operate the business,’” Rajadhyaksha said.

With those marching orders, deal discussions started in earnest in late 2021.

The deal was complex for a number of reasons, Rajadhyaksha said.

It involved multiple entities, including five real estate LLCs and five operating companies, each with its unique ownership structures and challenges. The deal also involved eight different property appraisals and valuations complicated by ongoing construction. Ensuring fair valuations while keeping everyone up to speed without overcomplicating the transaction proved to be a delicate balancing act.

“People have different expectations and timelines. … On the one hand, you want to keep everyone informed, but you also don’t want to have too many cooks in the kitchen,” Rajadhyaksha said. “That was something that we had to balance, keeping all the shareholders abreast of what was going on.”

Rajadhyaksha said the buyers were “great to work with.”

“There’s always some back and forth and some emotions and this and that, but they were very collaborative,” he said. “(In) some deals, the negotiations can get a little contentious. That wasn’t so much the case here.”

Continuum Ventures CEO Mike Cazer told Crain’s last year that he and the DeVoses hope to eventually add new Action locations.

“We’re really enthusiastic about the amount of growth potential,” he said.

Jathan Koetje, marketing director for Action, recently told Crain’s the first year post-acquisition has been about evaluating “what we’re currently doing and how we can do that better.”

Former football league connection helps DP Fox Ventures land Grand Rapids Rise professional volleyball team

By Kate Carlson

What started as a casual conversation two years ago between the DeVos family and officials from the former Arena Football League led to them landing the Grand Rapids Rise women’s professional volleyball team to play at Van Andel Arena.

After a handful of matches into the inaugural season, Cole DeVos,

success in not only Grand Rapids but in the other cities as well,” said DeVos, the son of Dan DeVos, who serves as chairman and CEO of DP Fox Ventures, the family office that also co-owns the Grand Rapids Griffins.

The deal to lure the Grand Rapids Rise to the city was named the winner in the sports and entertainment category of the 2024 M&A Deals of the Year Awards from Crain’s Grand Rapids Business.

“We may be a little bit smaller in size, but we know Grand Rapids shows up when it comes to sports, and they have not let us down.”

the director of strategic investments at DP Fox Ventures LLC, said he “couldn’t be happier” to be the first market to join the Pro Volleyball Federation.

“It’s proven so far to be a huge

The DeVoses and Scott Gorsline, executive vice president of operations and family investments for DP Fox, were approached about the Pro Volleyball Federation by co-founders Stephen Evans and Dave Whinham, who had backgrounds in the Arena Football League.

DP Fox formerly owned the AFL’s Grand Rapids Rampage.

“We had a prior relationship with Dave and Steven, and we knew the family,” Cole DeVos said. “I was very intrigued from the moment

SPORTS / ENTERTAINMENT

DP Fox Ventures LLC

w Business description: DP Fox Ventures LLc is a holding company founded in 1993 and owned by Dan and Pamella DeVos. The family office’s portfolio includes companies across the transportation, sports, entertainment, fashion, retail, resort management and real estate sectors.

w Annual sales: Did not disclose

w Top executive: Dan DeVos

w Total Michigan employees: 2,025

w Advisers: handled in-house Cole DeVos the director of strategic investments at DP Fox Ventures LLC.

we had this first conversation and they wanted us to get on board. Immediately, we got to work on our research about what volleyball in Grand Rapids could look like and it evolved very quickly.”

DeVos said it made sense for DP Fox Ventures to pursue the sport because of the rise in popularity volleyball has experienced across

the country and in West Michigan, which features a number of youth teams.

Grand Rapids was the first market announced for the Pro Volleyball Federation. While Grand Rapids’ population is smaller than the six other cities in the league, DeVos said the owners are not worried about attracting a

fan base for the city’s first major league women’s sports team.

“We really see us as a sports town,” he said. “We may be a little bit smaller in size, but we know Grand Rapids shows up when it comes to sports, and they have not let us down.”

Former Michigan State University and Western Michigan University volleyball coach Cathy George serves as the head coach for the team, whose 14 players include a member of Team USA Beach Volleyball, players who have played professionally in Europe and college volleyball standouts.

About 8,000 fans came out to the Grand Rapids Rise’s home opener on Jan. 25 at Van Andel Arena, which the owners considered a success. The crowd at Rise games also is made up of more women and girls, which you don’t always see at Griffins hockey games, DeVos added.

“The ultimate goal always for us when it comes to sports franchises is bringing people together for sport,” DeVos said. “We really do this for the city of Grand Rapids.”

Tech firm DornerWorks preserves culture with transition to ESOP

By Kayleigh Van Wyk

DornerWorks Ltd. transitioned to an employee-owned company last year, a move aimed at preserving the culture of the company.

The Grand Rapids-based electronic engineering and technology firm closed a transaction in June in which the company was sold to an employee stock ownership plan, or ESOP.

For David Dorner, who founded DornerWorks more than 20 years ago in his basement and was looking to transition the company, the idea of selling to employees seemed like a better fit than finding a strategic buyer or selling to a private equity firm.

“What I loved about the ESOP (model) and employee ownership is that it really maintains the culture,” Dorner said. “It keeps our culture the same and also allows us to have our own destiny.”

The deal was named the winner in the technology category of the 2024 M&A Deals of the Year Awards from Crain’s Grand Rapids Business.

TECHNOLOGY

DornerWorks Ltd.

w Business description: Grand Rapids-based firm that develops embedded electronics and software engineering solutions for clients.

w Annual sales: $20 million

w Top executive: David Dorner, chairman

w Total Michigan employees: about 100

w Deal advisers: Warner Norcross + Judd LLP, Ventura Trust, Vision ESOP Valuation LLC

DornerWorks develops embedded electronics and software engineering solutions for clients in the aerospace, automotive, medical device and other industries.

The firm employs about 100 people, and Dorner said the company celebrated with a cookout, champagne and T-shirts for the team once the deal closed.

Now that the ESOP model is in place, Dorner still sees it as a

“great opportunity” to reward employees, although the slow timing of the buyout is one consideration when transitioning to employee ownership.

“It takes a while for you to build into that and for them to earn that employee ownership over time as the company grows, but it’s a great opportunity for them to retire with a nest egg of equity in the company,” Dorner said.

Dorner is still involved in the business through his role as chairman, having passed the title and role of president to Shawn Isenhoff in 2021.

“One of the interesting things about the ESOP is — and people don’t really understand this at first — but the ESOP deals with company ownership, but it doesn’t deal with company management,” Dorner said. “When you sell, everybody becomes an owner, but that doesn’t mean that everybody’s in charge of the company. The management structure remains the same as to what we had in place before.”

Dorner said DornerWorks witnessed a softening in the broader

tech sector in 2023, which affected the company in the third and fourth quarters coming off a record year of growth in 2022.

Looking ahead, Dorner has a “glass half full” outlook and said he anticipates business will pick up in the third quarter and lead to more growth.

VanderLugt, Mulder,

Inc.

Mercantile Bank of Michigan

Michigan State Housing Development Authority

OVD Insurance

Plante Moran

PNC Bank

Summit Point Roofing

Triangle Associates, Inc.

Having the ESOP means the entire team will continue to learn and grow together, he said, and it’s also meaningful for Dorner to still be a part of the team.

“I think it’s just a wonderful thing for all the employees, so I couldn’t be happier with exiting this way,” Dorner said.

BENEFACTOR SPONSORS

Marsha and Larry Veenstra

Zeeland

Abra

Afton DeVos Consulting

Ajacs

Beall

Bethany

Marc and

Birch

Drew

Brewery Vivant

David Dorner, chairman | COURTESY

Star Truck Rentals owners prioritize employees in sale

By Abby Poirier

When the Bylengas decided to sell Star Truck Rentals Inc. after it had been in their family for four generations, they wanted to find a buyer who would offer a fair price, but perhaps equally as important, also agree to look after their employees.

Based on the strength of the company, then-President Tom Bylenga initially recommended to his family members in February 2022 that they consider selling Star Truck and monetizing their investments. The company, which had been in the Bylenga family since 1916, hired investment banking firm KPMG to identify a buyer.

The push to sell had several drivers, according to Bylenga.

“One of them was that we were doing as well as we had ever done, and I felt it was an appropriate time to monetize that,” he said. Bylenga also saw increasing risk in the business as electric vehicles moved into the truck leasing space.

While the company received several offers, the family ultimately chose Reading, Pa.-based

Penske Truck Leasing Co. LP for “a multitude” of reasons, Bylenga said.

Penske offered a fair price for the business and agreed to buy all the real estate Star Truck owned, spanning 18 locations in total. The company also committed to hiring all of Star Truck’s employees, a non-negotiable for Bylenga, who wanted to ensure his employees were cared for after the deal.

in 1919. The name Star Truck Rentals was incorporated in 1946.

At the time of the Penske acquisition, Star Truck operated from 18 locations across Michigan and Indiana, with sites in Grand Rapids, Comstock Park, Holland, Muskegon and Kalamazoo. The business offered full-service leasing, commercial truck rental, contract maintenance, used truck sales and more to food and beverage, manufacturing and consumer goods and services industries.

In the deal, Bylenga turned to Warner Norcross + Judd LLP, who he described as “a partner of ours going back 100 years.”

“They followed through and took care of my wider Star family,” Bylenga said.

Star Truck Rentals was originally founded in the 1860s as Star Baggage Co. and hauled freight via horse-drawn carts. The Bylenga family purchased the business in 1916 and changed the name to Star Transfer Line, purchasing its first two trucks shortly thereafter

The acquisition added 1,900 trucks to Penske’s fleet.

In the deal, Bylenga turned to Warner Norcross + Judd LLP, who he described as “a partner of ours going back 100 years.”

Attorneys Mike Jones and Jeffrey Battershall led a legal team of 10 attorneys who worked with Star Truck on the deal. Plante Moran handled financial and tax work, while KPMG Financial Services served as the investment banker.

Battershall noted Star Truck’s family ownership added complexity to the deal.

“There were a lot of moving

TRANSPORTATION

Star Truck Rentals Inc.

w Top executive: Tom Bylenga, former president

w Business description: Fourthgeneration truck rental and leasing company with locations in Michigan and Indiana

w Annual sales: $80-plus million at the time of the sale

Total Michigan employees: 275

w Deal advisers: KPMG corporate Finance LLc (financial), Warner Norcross + Judd LLP (legal), Plante Moran PLLc (accounting)

parts,” Battershall said. “There were multiple family members who had direct and indirect interests in the company, so their in-

terests needed to be aligned. There was estate planning for a number of the family members (and) there was a lot of tax planning that was coordinated with Plante Moran.”

Battershall added that other points of contact, like KPMG’s previous experience working with Penske, helped the transaction proceed smoothly.

Bylenga was proud that upon Penske’s inspection of his vehicles, they were “quite surprised” to find them in great condition.

“To my knowledge, we had no adjustments for brake jobs, tires or paint, anything that needed to be addressed in connection with the valuation. That was quite remarkable,” he said, adding that it “frankly proved how good we were at what we did for a living.”

In the months following the sale, most of the former Star Truck employees continue to work for Penske, while a few of them have since retired like Bylenga.

“There are a number of us who are reaching that age anyway, so that was just another factor (in the sale.) We were getting old together,” he said.

RABIH

Dickinson Wright’s Gregory Guest appreciates collaboration

By Rachel Watson

For Gregory Guest, a corporate attorney at Dickinson Wright PLLC’s Grand Rapids office, 2023 was a year of increased collaboration and camaraderie.

In 2023, Guest worked on 10 deal closings and provided some oversight on two additional deals for the firm’s corporate team.

Among the deals Guest worked on last year, he advised former Chairman and CEO Rich Postma in his sale of data center service provider US Signal to Igneo Infrastructure Partners, SignComp’s sale to Kalamazoo-based Sleeping Giant Capital, and Waséyabek Development Co. LLC’s deals for environmental engineering firm BLDI and software company VES.

Looking back, Guest said this past year reinforced more collaborative opportunities in completing a deal, which he enjoys about transactional law.

“I found that this past year in particular, whether it was some of the larger firms from out of town that we had an opportunity to work with or some of the local

ADVISER

Gregory Guest

w Title: Member, Dickinson Wright PLLC

w Business description: headquartered in Detroit, Dickinson Wright is a full-service law firm with 40 practice areas and various offices across North America, including in Grand Rapids

w Education: B.A., Lewis University; J.D., University of Illinois Chicago, The John Marshall Law School

firms, there was just a great deal of camaraderie,” Guest said. “That really helped reinforce the point that you can make a deal that’s collaborative and one in which both sides walk away feeling like their objectives were met.”

Guest was named the winner in the adviser category of the 2024 Dealmaker of the Year Awards from Crain’s Grand Rapids Business.

While Guest said he experienced a typical pick-up in activity toward the end of the year, 2023

overall was not as active as previous years, which he’s heard his colleagues across the legal industry say as well.

“Last year, we kept busy, but there were definitely periods of time within the year where things were a bit slower,” Guest said.

Guest’s practice primarily focuses on private, middle-market mergers and acquisitions, restructuring and distressed transactions, supply chain management and general corporate and commercial law. His experience spans both financial and strategic transactions in industries and sectors such as manufacturing, industrial, distribution, transportation and logistics, services, hospitality and technology.

Looking ahead, Guest said the firm expects to manage an increase in deal flow in 2024.

“There’s definitely some optimism coming out of (2023) that things are going to pick up as folks get comfortable with where interest rates are and where they will be and start feeling more comfortable about spending a lot of the cash that has been held here as we

DESIGNING A BOLD NEW FUTURE Progressive AE is now Progressive Companies

From modest beginnings of four original engineering partners in 1962, to over 270 employees across the nation today, Progressive AE embraces the need for change.

While design remains core to our business, the range of services has grown to include Universal Design consulting, change management, sustainability leadership, controlled environments, program management, and capital planning.

The shift to Progressive Companies offers greater flexibility as the firm continues to diversify beyond architecture and engineering.

wait to see what the market’s going to look like,” he said.

Guest also believes a key focus for 2024 will be navigating the Corporate Transparency Act, which took effect Jan. 1.

The federal law requires legal business entities registered with a state to report their beneficial ownership to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

“We’re expecting to be busy putting into place the proper legal

procedures and protocols that can help our clients comply with the act efficiently while not impeding on the deal process,” Guest said.

“I think it’s going to be a good opportunity for those in the space that are innovative to try to come up with a good process to optimize the deal timeline that doesn’t get impeded by the extra assessment and filings and corporate review that comes with compliance with the Corporate Transparency Act,” he said.

Gregory Guest, attorney with Dickinson Wright. | COURTESY

Waséyabek COO Rabih Jamal helps solidify growth

By Andy Balaskovitz

After closing two deals and deploying $22 million in capital in 2023, Waséyabek Development Co. LLC is gearing up for a year of integration in 2024 before the outlook shifts back into adding two or three more companies to its defense and manufacturing space.

Rabih Jamal will have a front row seat to all of it.

As chief operating officer of Waséyabek, the non-gaming economic development arm of the Nottawaseppi Huron Band of the Potawatomi, Jamal oversees the due diligence and dealmaking process, followed by a company’s integration into Waséyabek’s portfolio.

Jamal’s instrumental role in Waséyabek’s acquisitions of environmental engineering firm BLDI LLC in September followed by Maryland-based software firm VES LLC in late November garnered him honors as the winner in the executive category of the 2024 Dealmaker of the Year Awards from Crain’s Grand Rapids Business.

The two deals had been in the works for some time, ahead of a relatively difficult year “to find new deals” in 2023 compared to the re-

EXECUTIVE

Rabih Jamal

w Title: chief operating officer, Waséyabek Development co. LLc

w Business description: Triballyowned, non-gaming economic development arm of the Nottawaseppi huron Band of the Potawatomi

w Education: B.S., University of Michigan; MBa, Grand Valley State University

cent past, Jamal said.

In particular, the deal for VES helped Waséyabek “really propel” its federal defense contracting portfolio, he said. With a focus on information technology and software, VES is based at the U.S. Army’s Aberdeen Proving Ground and contracts with the U.S. Department of Defense for software and technical solutions.

Waséyabek two years ago identified a “very specific set of criteria” when searching for companies that could bolster its Federal Group of companies.

“We thought if we could get a company that has 80% of these criteria or more in the defense space,

it could make a tremendous impact on our growth trajectory. When we found VES, it was almost a 95%plus match,” Jamal said. “We couldn’t believe the fortune of finding the perfect company.”

While deals may have been slightly tougher to source in 2023, Jamal said Waséyabek’s approach to due diligence was unaffected by any shifts in the market. In fact, Jamal noted that the only change was Waséyabek’s growing experience.

“It’s not that (the due diligence process) changed necessarily, we’re just doing it better,” he said. “Our team is just better. That’s probably the biggest difference.”

Jamal started his career out of college about 20 years ago “like a lot of people out there,” envisioning one career path but finding another. After graduating from the University of Michigan, Jamal worked as an engineer for auto supplier Keiper before spending seven years as managing partner at financial consultancy DWH.

In early 2019, he landed with Waséyabek after meeting with President and CEO Deidra Mitchell, at a time when the organization had no portfolio, just three employees and was crafting a growth plan.

In each of those career turns, Ja-

mal said he can point to mentors who helped to guide his next move.

“The common thread among all the different changes in my career is generally there was one individual who took an interest in me and demonstrated a vision and a character that made me want to learn from them and follow them into a new space,” he said.

As for his approach to dealmaking, Jamal describes a “win-winwin style.”

“I prefer to look at dealmaking as

an opportunity for all of the stakeholders to walk away feeling like they got a fair and right deal,” he said, noting the inherent competition among parties with a high potential for conflict.

“The fact of the matter, at least in our case, is when we’re doing deals, we want to continue on with these folks as partners well beyond the transaction,” he said. “It’s imperative before, at the time of, and post transaction that the relationship between the parties involved … is prioritized so there’s a healthy working relationship.”

Looking ahead, Jamal said integrations among portfolio companies will be a key priority in early 2024 before considering additional deals.

“2024 will be an integration and absorption year, making sure we’re blocking and tackling. All of our systems and processes and people are doing well and we’re integrating these companies well so the foundation is on solid ground,” Jamal said. “Later in 2024 and going into 2025 and beyond, we’re looking to add two to three more portfolio companies in the $50 million to $100 million revenue range in the defense and manufacturing space.”

CONGRATULATIONS, MICHAEL WOOLDRIDGE WEST MICHIGAN

DEALMAKERS HALL OF FAME

Representing many of our community’s best known private and publicly traded companies in their most significant matters for more than 35 years.

Rabih Jamal, Waséyabek Development Co. | cOUrTESY

Charter Growth Capital’s Mike Palm deploys ‘solutions’ funding to growing lower middle market businesses

By Mark Sanchez

Charter Growth Capital, a Grand Rapids-based mezzanine debt-and-equity investment fund, closed on five deals in 2023 while seeking investors to back a new $100 million fund.

Mike Palm led the team behind each deal, managed an existing $41 million fund, and oversaw fundraising for the second fund. He’s a partner and the managing

“We’re building an organization that will invest well outside of our region and help all of the businesses grow.”

director at Charter Growth Capital, a sister firm to investment banking and M&A firm Charter Capital Partners.

After completing 12 investments since 2019 out of the first mezzanine fund that’s now fully

invested, Charter Growth Capital has even bigger plans with the $100 million second fund that is “getting close” to its fundraising goal.

“We’re building an organization that will invest well outside of our region and help all of the businesses grow,” Palm said. “We have plans, hopefully, for more. Last year was a good year, and our goal is to have bigger and better years.”

Palm was named the winner in the investor category of the 2024 Dealmakers of the Year Awards from Crain’s Grand Rapids Business.

He joined Charter Capital Partners in February 2018 after returning to his native Grand Rapids from Chicago, where he worked for a private equity firm and a family office.

Colleagues describe

Palm as “integral to both Charter Growth Capital’s success and the success of its portfolio companies.

Mike is a shining example of an investor who can successfully identify opportunities, overcome challenges, close deals, and help

GoldSponsor ofthe

INVESTOR

Mike Palm

w Title: Partner and managing director, Charter Growth Capital

w Business description: Mezzanine debt and equity fund

w Education: B.A., Indiana University Bloomington; MBA, University of Chicago Booth School of Business

portfolio companies grow and prosper.”

Charter Growth Capital targets the lower middle market that’s below where mezzanine funds typically invest. The firm sources deals largely through professional peer networks and referrals from larger funds. The mezzanine fund considers deals that involve $2 million to $8 million in debt and equity that provide growth capital and recapitalize a business, or what Palm describes as “solution capital” for growing businesses.

Deals often involve investing alongside founders and bank debt as part of the financing.

Charter Growth Capital presently holds 11 positions in portfolio companies through its first fund. New investments the fund made in 2023 included Cleveland, Ohio-based Malley’s Candies; Florida-based First Coast Mulch, a commercial mulch-spreading business; and Mitten Fluidpower, a hydraulic and pneumatic com-

pany based in upstate New York. The firm also completed two addon investments for Mitten Fluidpower and another portfolio company, Superior Investigative Services LLC, based in Milford, near Detroit.

In putting together deals, Charter Growth Capital aims to fully understand the rationale behind why an owner needs capital and is willing to sell a stake in the business to investors, and to align financial incentives for management and leaders of the deal.

“If there’s economic incentives for growth and where we’re going and how we’re going to get there, and there’s a plan, then people can all row in the right direction,” Palm said. “We’ve definitely walked away from things before when we’ve seen that incentives are skewed or not aligned as they could be. You want management teams, and you want people involved in the company, to be able to share in the upside down the road.”

Palm serves on the boards of seven of the first fund’s active equity investments.

Mike Palm, managing director of Charter Growth Capital COURTESY

Harper’s collaborative mindset, attention to detail add value

By Rachel Watson

Sarah Harper takes initiative in every aspect of dealmaking, a trait she leveraged last year as she worked on or led 50 mergers and acquisitions for Grand Rapids-based Warner Norcross + Judd LLP.

A member of the firm’s corporate and economic incentives practice groups, Harper assists public and private companies on mergers and acquisitions, among other services.

From agricultural products and funeral homes to automotive suppliers and investment advisers, she’s worked on hundreds of deals since joining the firm in 2018, including 50 transactions in 2023 valued at approximately $820 million.

Harper, 30, was named winner of the Young Dealmaker of the Year in the 2024 M&A Deals and Dealmakers of the Year Awards from Crain’s Grand Rapids Business.

She describes herself as a proactive learner. Because she works on deals in so many different industries, she said it’s important to learn everything you can about a client.

“If you don’t, there’s a lot of

YOUNG DEALMAKER

Sarah Harper, 30

w Title: associate, Warner Norcross + Judd LLP

w Education: B.B.a. from Ferris State University, J.D. from University of Michigan Law School

w Community involvement: Emerging leaders council of D.a Blodgett- St John’s

things that could get missed that could turn out to be detrimental to your client. If you don’t know what the risks and benefits are of a certain industry, it becomes really easy to skip over those things when you’re negotiating the transaction,” she said.

Harper describes herself as a master of checklists to “quarterback” a deal and move it forward.

“There are sometimes dozens of documents that different parties have to execute at different times in a transaction,” she said. “Making sure that you’re managing that

workflow … and really aligning the different tasks that need to be done … and getting everyone on the same page and working in the same direction is really important.”

Matthew Johnson, a partner at Warner Norcross + Judd who chairs the corporate practice group, said Harper nails the project management aspect of M&A transactions.

“Sarah understands it’s not our job to direct the deal — it’s our job to help make sure the deal gets done the way the client wants it to get done,” he said. “She’s very pragmatic, detail-oriented and good at leading a team. She’s a great project manager.”

Harper realized she wanted to be a lawyer during high school. She obtained her Associate of Legal Studies and Bachelor of Business Administration degrees from Ferris State University between 2011 and 2014 before earning a J.D. in corporate and securities law from the University of Michigan in 2017.

Unlike litigation, which she called a “zero sum game” with a “winner and a loser,” she likes that mergers and acquisitions law is cooperative.

Preserving the Past, Building the Future

Adaptive Reuse and Renovation in Education

By Rockford Construction

As caretakers of our communities’ educational infrastructure, K-12 school districts and higher education institutions face a dual challenge: meeting the evolving needs of students and faculty while also stewarding precious resources in a responsible way. In this delicate balance, the ability to extend the life of school or university buildings through adaptive reuse and renovation has emerged as a vital strategy for facilities management. At Rockford, a leading construction management company specializing in adaptive reuse renovation projects, we understand the transformative power of preserving the past while building for the future.

Maximizing Resources,

Minimizing Costs:

Adaptive reuse and renovation offer a cost-effective alternative to new construction, allowing educational institutions to maximize their resources and minimize capital expenditures. By leveraging existing infrastructure and identifying under-utilized spaces, schools and universities can allocate funds towards educational programming,

faculty development and student services, enriching the overall learning experience. Rockford’s expertise in value engineering and project management ensures that renovation projects are completed on time and within budget, providing clients with tangible returns on their investment.

Sustainable Solutions for Long-Term Viability:

In an era of heightened environmental awareness, sustainability is no longer an option — it’s a necessity and the right thing to do. By repurposing existing structures rather than beginning new construction projects, educational institutions can significantly reduce their carbon footprint and minimize waste. Rockford employs innovative construction techniques and materials to optimize energy efficiency, improve indoor air quality and enhance occupant comfort, ensuring that renovated buildings remain viable and sustainable for generations to come.

Flexibility to Meet Changing Needs:

The educational landscape is

“Early on, what struck me about M&A is it’s such a collaborative experience, (with the) buyer and seller working toward the same goal,” she said.

One standout deal Harper advised on last year was Guelph, Ontario-based Linamar Corp.’s acquisition of assets from Mobex Fourth and 1 LLC, a tier 1 automotive supplier. Valued at $64 million, the transaction closed in November

2023 after eight months of negotiations.

She called working on the deal with her team and attorneys at Toronto-based Aird & Berlis LLP a “great experience.” Given that it was a cross-border transaction, the deal involved extra layers of due diligence and coordination.

Harper said her best advice to other young dealmakers is to be assertive in seeking opportunities.

constantly evolving, driven by advancements in technology, pedagogy and student demographics. Adaptive reuse and renovation afford schools and universities the flexibility to adapt to these changes without sacrificing the integrity of their physical spaces. From reconfigurable classrooms and collaborative learning environments to stateof-the-art laboratories and maker spaces, Rockford collaborates closely with clients to understand and create spaces that are responsive to evolving educational trends and pedagogical approaches.

Preserving Heritage, Fostering Identity:

Educational buildings often serve as anchors within their communities, imbued with rich history and cultural significance. Through adaptive reuse and renovation, these structures can be revitalized to honor their heritage while meeting modern educational standards. Whether it’s restoring historic facades, repurposing classrooms, or retrofitting infrastructure, Rockford is committed to preserving the architectural integrity of

educational buildings, fostering a sense of pride and identity among students, faculty and alumni.

Community Engagement and Collaboration:

Renovation projects present unique opportunities for community engagement and collaboration, fostering partnerships between educational institutions, local stakeholders and preservation organizations. Through open forums, public charrettes and stakeholder workshops, Rockford facilitates meaningful dialogue and consensus-building, ensuring that renovation projects reflect the collective aspirations and values of the community. By actively involving stakeholders in the design and decision-making process, Rockford fosters a sense

of ownership and stewardship that extends beyond the completion of the project.

Overall, the importance of adaptive reuse and renovation in extending the life of school or university buildings cannot be overstated. By preserving heritage, embracing sustainability, maximizing resources, fostering flexibility and promoting community engagement, Rockford empowers educational institutions to create inspiring and enduring learning environments that stand the test of time. Together, we can honor the past, embrace the present and build a brighter future for generations to come.

The addition and renovations at Oakland University consolidated student services under one roof, greatly improving the student experience.

Sarah Harper, Warner Norcross + Judd cOUrTESY

Newsmaker events demonstrate business impact

“Are you going to write a positive story?”

I can’t tell you how many times I heard that comment, or a version of it, when I was a reporter. Often it was said by someone who didn’t really understand the news business or was making it in half-jest as a clumsy way to probe on what the angle of my story might be.

My response was always that I don’t set out to write positive, or negative, stories when covering the news. The news was the news, of course, and I would let others decide how to interpret it.

City council approved a tax hike? Taxpayers may not love the hit to their wallets, but may appreciate smoother streets or better fire services.

The state offers grants to manufacturers? Likely good news for those companies and the people they hire, but perhaps frowned upon by those who wish for government to play a more limited role in the private sector.

News is often much more nuanced or detail-driven than to be simply categorized as “positive” or “negative.”

All of this said, I can’t help but having had an overwhelmingly positive feeling after handing out Crain’s Newsmaker awards recently in Grand Rapids. And I expect a

COMMENTARY

similar vibe at our upcoming event in Detroit.

The reality is there are a lot of people working hard to make our communities better places. No, not everything is roses. But if you pause for a moment, as we do at these Newsmaker events, and take stock of what’s happened over the past year, it’s hard not to see the collective impact.

Whether it’s Tim Streit and Grand Ven-

tures raising $50 million to invest in fintech startups, or Philomena Mantella and Grand Valley State University planning new downtown developments, or Guillermo Cisneros and the West Michigan Hispanic Chamber of Commerce plotting a major expansion, each of those are important individual stories. But when they, and many others like them, are in one room together hearing about each other’s efforts and having con-

versations with fellow leaders, the feeling of the forward momentum is inescapable.

At the Grand Rapids event, Crain Communications CEO KC Crain interviewed Carol Van Andel, co-chair of Grand Action 2.0, in front of the audience of 300 people. Grand Action is simultaneously developing a 12,000-capacity amphitheater and an 8,500-seat soccer stadium in downtown Grand Rapids.

In Detroit, we will hold our annual Newsmakers event on March 21, where Henry Ford Health CEO Bob Riney will be our keynote and sit in the hotseat across from KC.

Henry Ford Health is planning a new $2.5 billion hospital tower and, along with the Detroit Pistons and Michigan State University, other nearby developments that would transform that section of Detroit’s New Center neighborhood. We will hear from the contractor building Detroit’s newest skyscraper, the visionary who helped transform the riverfront, and small-business restauranteurs who keep getting nominated for prestigious James Beard Awards.

Individually, these are all remarkable stories in their own right. But to hear them collectively, and to see these leaders together, will demonstrate the impact the business community has when it comes to pushing the city, and state, forward.

So whether each of these stories is viewed as positive, negative, or some variation in between is up to each person’s interpretation. But this brings to mind a phrase I do embrace as a writer: Show me, don’t tell me. In the case of Crain’s Newsmakers, you are welcome to come see for yourself.

Michigan doesn’t need rent control for mobile homes

Lawmakers in Michigan are considering bills that would impose rent control on mobile home operators. Five bills before the Senate create many new regulations, including restrictions on owners of manufactured housing communities. Instead of determining their rental rates independently, they would have to submit any rent increases above the inflation rate to a state board for approval.

Controlling prices is the wrong way to get affordable housing.

is subject to state rules about safe construction, inspections and practices like the requirement to have a surety bond.

Supporters of rent control want to make it easier for low-income families to afford rent. The best way to achieve that goal is through competitive markets. Markets, not state rules, are what allow people get better products at lower prices.

There is already a lot of market intervention that substitutes political priorities for the priorities of customers.

Manufactured housing parks already have to receive a license from the state and are subject to state regulation. All housing

The legislation would add another layer on top of existing regulation. Senate bills 486 through 490 give a state board power to control every aspect of a manufactured housing community, including its construction, layout and business practices. It also prohibits construction workers from building or repairing mobile home parks without first meeting state qualifications and training. This would be regardless of whether they already are licensed to perform this work.

All of these requirements are in addition to the requirement that rent increases above inflation be pre-approved. There are also bills in the House that would create other and different regulations of manufactured housing communities.

It’s understandable that people want to make sure that trailer park owners treat their customers well. The better approach,

however, is competition. When the customer is king, people profit by finding ways to give customers what they want better and cheaper. The prices of computer software, toys, clothing and cellphone services are all lower than they were in 2000 — not because of government price limits but through competition. Bad landlords create profit opportunities for better landlords.

Competition coordinates the resources of society to get people what they want efficiently and effectively. It is not from the benevolence of the butcher that we expect our dinner, as the old lesson from economics demonstrates. Nor is it from state regulation. Making it harder or less lucrative to compete with bad landlords makes it more difficult for people to get better options. It also limits the competitive pressure that can force bad landlords to be better to the people who rent from them.

review of the literature concluded, “Rent controls appear to be quite effective in terms of slowing the growth of rents paid for dwellings subject to control. However, this policy also leads to a wide range of adverse effects affecting the whole society.” These include decreased mobility, lower wages, and fewer options for the people looking for low-income housing.

Supporters of rent control want to make it easier for low-income families to afford rent.

Rent controls will hurt even the people who would pay lower rent. Owners are less likely to offer improvements to units and have more incentive to let them wear out.

This is seen in reviews of the economic effects of rent control policies like the one Michigan’s Senate is considering. A 2024

The people renting in manufactured housing communities may not feel like kings. But there are people trying to make an honest buck by giving them good deals. The bills in the Michigan Senate would make it harder to build new market-rate housing for low-income families. That’s not what lawmakers ought to want to do.

James M. Hohman is the director of fiscal policy at the Mackinac Center for Public Policy.

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

SET h T h OMPSON

Snack food maker marks anniversary with expansion

By Kayleigh Van Wyk

A European snack food company is expanding its North American headquarters south of Grand Rapids just one year after the facility’s official opening.

SnackCraft LLC, a subsidiary of Greece-based Unismack S.A., is investing $29.9 million to add 186,000 square feet to its manufacturing operation at 4444 52nd St. SE in Kentwood.

The project, with state backing from a $400,000 Michigan Business Development Program performance-based grant, calls for the creation of 37 new jobs.

“The expansion demonstrates our commitment to the area and enables the future growth potential for both existing and new customer opportunities, as well as securing SnackCraft’s long term food manufacturing platform,” SnackCraft CEO Joseph Riley said in a statement.

SnackCraft was established in Kentwood in 2022 as Unismack’s first North American manufacturing operation and new U.S. headquarters.

SnackCraft manufactures glu-

ten-free and allergen-controlled baked and salty snack foods. The company’s products include baked crackers, tortilla chips, pellet snacks, and baked extruded snacks with ingredients such as lentil flour, chickpea flour, vegetable flours, whole-grain corn, various seeds and other natural ingredients.

SnackCraft unveiled its new headquarters with a grand opening ceremony in January 2023 and has since experienced “rapidly increasing demand” for its products, according to a news release.

The addition to the building will bring SnackCraft’s operational footprint to 311,000 total square feet of manufacturing, warehousing and distribution space.

The company chose to expand in West Michigan over a competing site out of state, according to state and local economic development officials.

“I connected with SnackCraft in early 2022 when they were in the process of establishing their first North American operations here in Kentwood,” Brent Case, vice president of business attraction at The Right Place Inc., said

in a statement. “Being part of their journey, from the initial stages to witnessing their exponential growth in our region since the opening, and now helping with their expansion just over a year later, has been an incredible opportunity. I’m excited to see what’s in store for them moving forward.”

Unismack in September 2022 first announced its plans to invest

nearly $42 million over five years and create 185 jobs with its subsidiary’s new operation in Kentwood. The 52nd Street site was a former Kerry Foods facility, which the company renovated along with the installation of new equipment and machinery.

SnackCraft officials said at the time that they planned to upgrade the facility to current food manufacturing standards and add man-

ufacturing lines, new utilities, employee facilities and machinery.

Unismack had selected the Kentwood site over a competing location in Chicago and received $1 million in support from the Michigan Strategic Fund.

Meanwhile, SnackCraft’s expansion plan was announced along with two additional projects in West Michigan.

Profielnorm USA LLC, a subsidiary of Dutch mezzanine flooring company Profielnorm B.V., is investing $7.5 million to construct its first U.S. manufacturing facility in Plainwell after establishing a Kalamazoo office in 2023.

The expansion, which will create 32 new jobs, will allow Profielnorm to onshore production of mezzanines destined for U.S. customers.

As well, Uniform Color Company is expanding in Holland with plans to invest $12 million in a 25,000-square-foot expansion at its headquarters.

The company produces custom color and additive masterbatch solids for the thermoplastics industry, and plans to add 13 new jobs with the project.

Investor buys Kentwood apartment complex for $32M

By Rachel Watson

A 50-year-old apartment community just outside Grand Rapids has changed hands from one metro Detroit investor to another.

Southfield-based SG Real Estate acquired Foote Hills, a 182-unit apartment and townhome community in Kentwood, on Jan. 31 from Clawson-based The GSH Group for $32 million, or $175,824 per door.

Craig Kallemeyn and Craig Black of Colliers West Michigan represented both the buyer and the seller in the deal, which involved SG assuming a Fannie Mae mortgage with a 3.57% interest rate from GSH Group that’s good for another 15 years, Black said.

The 23-building, Class B development sits on just over 19 acres at 4630 Common Way SE, just northwest of 28th Street and Patterson Avenue SE.

Its amenities include two standalone garage structures; a clubhouse with a built-in kitchen, fireplace, community social room, gym and yoga center; a pool with locker rooms; an outdoor grill and picnic area; a dog park; and a playground.

Selam Sanders, president of SG Real Estate, said this is her firm’s first multifamily deal in West Michigan. Its other holdings are on the east side of the state.

“I absolutely love the asset,” she said. “It’s beautiful.”

Sanders said SG has been deploying dollars from its real estate fund for about two-and-a-half years.

“We’ve been looking all over Michigan and in the Midwest, and (we’re) really loving the Grand

Rapids market,” she said. “We are very pleased with what we find (there), everything from the potential resident base to the employer base to, obviously, it’s a beautiful city, and it’s growing during COVID.”

Sanders said Housing Next’s 2023 housing needs assessment helped SG understand the market demand for housing, which sealed its decision to invest in the area. The study found Kent County will need more than 13,000 new rental units between 2022 and 2027, with more than 7,500 of those units needed for people making 80% or less of the area median income.

She said the data affirmed SG’s decision to preserve half of the units “at all times” for people making 80% or less of AMI.

“There’s not a lot of investment and development in multifamily in Michigan, in general, compared to other parts of the country, so people are getting priced out more and more,” she said. “We find it financially beneficial for our investors to maintain a level of affordability to keep people who are

working, whether at a grocery store or a plant … (in) affordable housing that they can live in for several years until they’re ready to make the next move.”

Rents at Foote Hills currently range from about $1,300 to $2,200 per month for units ranging from one to three beds, according to Apartments.com. The development is currently 91% leased, Sanders said.

According to a report released earlier this month by RentCafe, Grand Rapids is the fifth most competitive market in the U.S. for renters in 50-unit or more developments at the start of 2024, based on factors like vacancy duration, occupancy rates, rental application competition, lease renewal rates and apartment completions.

Grand Rapids’ average apartment occupancy rate currently stands at 95.1%, and its lease renewal rate is 76.6%, according to the report. Apartments that come up for rent stay on the market for 39 days on average, while new units account for only 0.27% of all

units on the market, according to the study.

Kevin O’Reilly, director of multifamily investment for NAI Wisinski Great Lakes in Grand Rapids, told Crain’s Grand Rapids Business last fall that limited inventory and strong rent growth rates of about 5.1% are the main drivers that make Grand Rapids an attractive market for multifamily investors. He said last week that’s still the case.

“Not a lot changed between October and now,” he said.

The GSH Group bought Foote Hills, which was built in 1973, for $24.3 million in April 2020, according to city property tax records. The firm then invested in upgrades to the apartments and clubhouse that were completed last year in August.

GSH Group CEO Gideon Pfeffer could not immediately be reached for comment on the deal, but told Crain’s Grand Rapids Business earlier this month that “vintage workforce housing” is his firm’s specialty. GSH typically does rehabilitation and/or adaptive reuse

through a related construction affiliate, Multifamily Commercial Construction LLC.

“Our projects, most of the products we buy, we’re doing some value-add to,” he said.

Colliers West Michigan’s Black estimated the property is about 70% upgraded, which leaves some room for SG Real Estate to add more value.

“You don’t want to do all of (the upgrades). You want to leave something for the next (owner)” so they can grow the property’s value for their investors, Black said.

Sanders said the firm is pretty happy with how the interiors currently look but will continue cosmetic upgrades.

“We’ve got some money set aside to do some exterior building work, and we’re going to be sprucing up and doing asphalt, things like that,” she said.

She added some of the units have the potential to become fourbed units, a project SG is considering to help house families with three or four children.

Foote Hills Apartments in Kentwood sold for $32 million. | cOUrTESY OF SG rEaL ESTaTE

SnackCraft is adding to its manufacturing operation in Kentwood. cOUrTESY OF ThE rIGhT PLacE INc

HARDWARE

From Page 1

Brokers introduced Johnson to Brander and assisted with the deal. “I am getting older and was thinking about what the next chapter is going to be,” Brander said during a recent interview at the store. He also said he wanted to leave the business on his own terms with time to step away from his responsibilities.

“When you own a small business, it’s not a 9-to-5 job,” he said. “Even on vacations, you’re checking in. It’s just time to try to slow down a little bit, but I still have a lot of things going on.”

Johnson, the new owner and operator of Kutsche’s, plans to keep on all of its employees as well as the company name. Brander is assisting Johnson through the transition.

“There is a ton to learn, and you don’t learn it all in a month or two months. It takes a long time to know all the moving parts,” Brand-

MULTIFAMILY

From Page 1

starts far exceeds the national average. A Feb. 27 report from the National Association of Home Builders showed multifamily starts totaled 472,000 units in 2023, down 14% compared to the previous year. NAHB predicts multifamily starts will fall 20% in 2024 to a total of 379,000 units.

“Tight lending conditions and the high cost of development loans continue to hinder additional multifamily housing production,” Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis, said at a recent press conference on the organization’s report.

Kevin O’Reilly, director of multifamily investment sales for NAI Great Lakes, attended the 2024 National Multifamily Housing Council annual meeting Jan. 30 in San Diego and heard from presenters that higher interest rates on debt financing is one of the leading factors depressing housing starts in most markets across the U.S.

Because “soft costs,” like architecture and engineering firm fees and the cost of performing wetland surveys, are “at least 30% more expensive than 18 months ago,” and building materials costs are still growing, O’Reilly said it’s no wonder developers are reporting reduced viability for multifamily projects.

“It’s a perfect storm in many re-

er said. “Guys who come in here know us, and we have personal relationships with them and they can call and ask us for things. It’s just a different niche, which is a huge strong point we have compared to the big boxes.”

Kutsche’s carries a selection of tools and accessories, and offers in-house services like screen and window repair, custom pipe fittings, glass cutting, ratchet kit rebuilding, power tool repair, key cutting, and pipe, chain and threaded rod cutting.

The company’s long history is evident when walking through the store, where handwritten receipts from the 1800s, covered in cursive script, are tucked away in Brander’s office. One wall is lined with wooden cabinets from the same era that are clad in hand-carved trim and contain an array of screws, nails and other hardware.

Chris Beckering, executive vice president of Grand Rapids-based Pioneer Construction, first visited Kutsche’s about 40 years ago as a

spects for a slowdown … and the primary reason is the cost of financing,” O’Reilly said.

Much like the NAHB, O’Reilly said he expects to see an even slower year for new multifamily starts in West Michigan in 2024, since many of the projects he’s aware of that broke ground last year locked in their interest rates in 2022, before the Federal Reserve completed a series of 11 rate hikes to slow inflation.

“I think in the backside of this year, maybe Q3, Q4, we’re going to see enough rate cuts to justify development again,” O’Reilly said, though he added it can be tricky to predict the Fed’s monetary policy when so many economic factors drive the decision-making.

Apartment developers across West Michigan have repeatedly cited financing and construction costs as the biggest barriers slowing their projects.

Third Coast Development Partner Dave Levitt told Crain’s Grand Rapids in January that both factors are stalling plans for a 39-unit “attainable” housing project at a former union hall at 916 Benjamin Ave. NE.

Similarly, Honor Construction CEO and Victory Development Group partner Brad Laackman said in December that Victory’s plan to break ground this summer on the planned 250-unit Victory on Celebration project was delayed as the developers continued to run into challenges assembling the financing pro forma.

Mike Coyne, CEO of Grand Rap-

child with his dad and remains a steady customer.

“It’s been a great community resource and wonderful vendor for us for as long as I can remember,” Beckering said. “We have a lot of work in and around downtown Grand Rapids, and it’s a convenient location with a good product and knowledgeable staff.”

Kutsche’s long history as a staple in the Grand Rapids community, and the fact that it’s one of the few hardware stores without corporate ownership, appealed to Johnson.

“We’re going to keep it a privately owned hardware store. We’ve looked at lots of small businesses in town and love Kutsche’s,” Johnson said, adding that the company’s history “is pretty awesome.”

Johnson previously worked as a contractor and in the restaurant industry, and purchased Walker-based S&C Plastic Coating in 2020. He lives in East Grand Rapids with his wife and four young children, whom he plans to bring to work and help him stock the

shelves, he said.

So far, Johnson said running Kutsche’s is more enjoyable than he expected, which includes assisting the customer base of mostly contractors.

“The work and type of service that this place offers and helping people get jobs done has been very rewarding,” he said. “The customers are great, super loyal and hardworking.”

‘This has been our lives’

Kutsche’s Hardware opened in 1862 in the heart of downtown Grand Rapids as Kutsche & Verdier Hardware. William P. Kutsche later bought out his partner and established Kutsche’s Hardware and Industrial Supply Co. at 328 Monroe Ave. NW, approximately where Grand Rapids City Hall now stands. The store operated for 101 years on all four floors of the 20-foot-wide building.

Kutsche was then offered a buyout during the city’s phase of urban renewal in the 1960s when older

ids-based Cella Building Company, said his firm went through “a lot of different generations of the capital stack” for the 58-unit Wealthy & Sheldon Lofts project that broke ground last fall at 415 Sheldon Ave.

SE in Grand Rapids. The firm secured a mix of state and local incentives to help defray costs, but it also looked to “nontraditional players” like private equity, Coyne said.

“For the most part, a lot of those (players) were people who were asking just too much, be it in equity or in a preferred return or those types of things,” he said. “What we eventually did, though, is we increased our equity with some outside investors with a preferred return that was much more acceptable to us, which brought down the amount of financing we would need to a much more reasonable level.”

COFFEE

From Page 3

outpost for us as a brand and as a roaster, but it is a necessary ending to support the continued growth of our organization.”

VanTongeren said the business is looking to beef up packaged products and retail sales in 2024, noting that Ferris is “set to roast more coffee this year than we ever have annually in our 100-year history.”

This year, Ferris will roast approximately 2 million pounds of coffee, VanTongeren said.

In addition to its Grand Rapids cafe and headquarters at 839 Seward Ave. NW, Ferris formerly operated five offsite coffee shops, located in Lansing, Holland and Grand Rapids.

The Holland closure follows two Grand Rapids Ferris cafes, located at 227 Winter Ave. NW and 40 Pearl Ave. NW, that closed in spring 2021.

Meanwhile, Ferris Coffee cafes

that are located in two small Meijer Inc.-owned grocery stores — Bridge Street Market in Grand Rapids and Capital City Market in Lansing — are closed as they restructure operations. VanTongeren said Meijer will take over operations at both in-store locations while they remain under the Ferris brand, noting that Ferris is in the process of “working closely with Meijer on what that looks like.”

In 2024, Ferris plans to invest at its Grand Rapids headquarters at

structures were being torn down to make way for government buildings downtown. He sold the business in 1963 to Harold Brander, the owner of a paint and wallpaper store next door. The business moved in 1965 to a newly constructed building at 307 Leonard St. NW, where the hardware store still operates today.

Chip Brander grew up spending the summers between school at Kutsche’s. He worked at the store with his late grandfather, Harold Brander, and eventually took over operations. Harold worked at the store until he was 99, and died in 2014 at 101 years of age.

For Chip Brander, Kutsche’s was more than a business, and his patrons were more than customers.

“This has been our lives,” Chip Brander said. “It’s been the only thing I know. A lot of our regular customers, they’re customers but they’re also friends. I’ll see them sometimes outside of work, and a lot of these guys I’ve known for 2030 years.”

numbers and find a way to make everything work and still stay within very reasonable lending parameters.”

While regional and national banks have pulled back on lending or tightened their standards, some community banks remain eager to do business with multifamily developers.

Mercantile Bank is one such example. Mike Bishop, senior vice president and commercial banking group manager, said Mercantile’s commercial lending for multifamily construction increased from $110 million in 2022 to $320 million in 2023, an increase of $210 million, or 190% year over year.

Ryan Talbot, owner of Birmingham-based Talbot Development LLC, is the developer behind the 72-unit apartment project The Current that broke ground last fall at 220 Quimby St. NE in Grand Rapids’ Creston neighborhood.

Talbot secured a $2.65 million Michigan Community Revitalization Program loan, $367,680 in brownfield tax increment financing incentives from the state and a 15-year Neighborhood Enterprise Zone tax abatement for the project from the city, all of which brought the debt service coverage ratio down to an acceptable level for Lake Michigan Credit Union to issue a construction loan, he said.

“I have to give the lender a lot of credit,” Talbot said. “Lake Michigan Credit Union was very partnership-oriented. They were willing to work with me and dig into the

Seward Avenue and grow its distribution network.

“We’re going to be building out that coffee shop and retail experience to be more of a destination for Grand Rapids,” VanTongeren said. “We’re in the vision-building process for what that looks like, but we do want to invest in creating a space here in Grand Rapids that is second to none.”

Going forward, Ferris is “pushing pretty significantly” as it plans to grow its distribution in the Midwest

As well, the bank created a new subsidiary, Mercantile Community Partners, last June to finance affordable housing projects.

“If you talk to developers in West Michigan, you will hear there’s less competition for construction lending,” Bishop said. “That is a sentiment that I find true. Some of the larger players have certainly reduced their appetite for new construction lending … so you’re left with community banks, generally speaking, trying to fill that gap.”

He said besides tighter federal regulations in the wake of a few bank failures, like Silicon Valley Bank in March 2023, one reason larger regional and national banks have had to pull back on multifamily lending is that their commercial loan portfolios are distressed because of troubled office real estate assets.

and throughout the U.S., VanTongeren said.

As Ferris leaves its Holland location behind, the business is finding new opportunities for its nine employees.

“Our team in Holland has been phenomenal,” VanTongeren said. “We’re working with them on what the future might look like for them, whether that’s continued opportunities with Ferris, or working with them on perhaps onboarding with the new tenant (at 57 E. 8th St.).”

Cella Building Company broke ground last fall on the 58-unit Wealthy & Sheldon Lofts project at 415 Sheldon Ave. SE in Grand Rapids. COURTESY OF MIKE COYNE

Architectural products maker Tubelite closing facility

By Kayleigh Van Wyk

Aluminum architectural products manufacturer Tubelite Inc. plans to cease its production operations in Walker as its Minnesota-based parent company launches a series of cost-saving measures.

Officials with Tubelite’s parent company, Bloomington, Minn.based Apogee Enterprises Inc. (Nasdaq: APOG), recently announced plans to transfer operations from Tubelite’s headquarters at 3056 Walker Ridge Drive NW in Walker to other Apogee-owned facilities in Missouri and Wisconsin in the coming months. Apogee purchased 100% of Tubelite’s stock in 2007 for around $44 million.

The recent decision to close the Walker production plant is part of “Project Fortify,” a series of strategic moves announced in late January that company leaders say will streamline operations and reduce costs to drive growth.

Project Fortify anticipates 250 job cuts, or about 5% of positions, companywide, including 106 layoffs in Walker.

“Our company’s been on kind of a strategic journey for about three years where we’ve been focused on improving the execution and productivity of the business and focusing on the parts of the market where we have the most differenti-

COREWELL

From Page 3

Corewell Health bought the former GM site from Oak Brook, Ill.-based Franklin Partners, which had acquired the site in 2022 from the City of Wyoming’s Brownfield Redevelopment Authority for $5.25 million. The city took ownership of the property in 2011 and demolished the production facility.

Franklin Partners co-founder and partner Don Shoemaker de-

LABOR

From Page 3

“Michigan’s economy has made painful strides toward becoming more diversified and less cyclical over the past two decades,” economists wrote in the outlook. “Even though much work remains to restore Michigan’s economy to a position of national leadership, the state’s recent resilience in the face of a challenging environment has been encouraging to see.”

Economists noted in their updated outlook that Michigan’s unemployment rate “crept up” to 4.3% in the last two months of 2023 from a post-pandemic low of 3.6% in June and July. The increase reflected a “sharply rising” labor force participation rate of 62.2% as of December, up from 59.8% in January 2023.

The increase in the labor force participation brought Michigan to within 0.3 percentage points of the

ation and that gives us the best growth and profitability potential,” Jeff Huebschen, Apogee’s vice president of investor relations and communications, told Crain’s Grand Rapids.

The recently announced plans to end production in Walker “are really the next steps in executing that strategy,” Huebschen added.

Production work will transfer out of Walker over the coming months as projects are completed.

Founded in Reed City in 1945, Tubelite manufactures aluminum storefront, curtain wall and entrance systems for commercial and institutional buildings. The company has been acquired multiple times throughout its history prior to the Apogee acquisition, according to the company’s website.

Tubelite’s assembly, warehousing and distribution operations relocated to Walker in 2003 before the corporate office also moved to Walker in 2006, per the website.

Tubelite completed a 33,000-square-foot expansion in Walker in 2016, which followed a 43,000-square-foot expansion in 2012.

Apogee plans to maintain an office in Walker for employees in non-production roles, such as customer service and other administrative functions, though the team is still evaluating whether the em-

ferred comment to Corewell Health.

Sarah Vanderwood, Corewell Health’s vice president of operations, told city planning commissioners at the Feb. 20 meeting that the consolidated service center “is a strategic project that we’ve been working on for a really long time.”

“This consolidated service center, when it’s all finished as a stateof-the-art consolidated service center, will support the entire state of Michigan for Corewell Health,” Vanderwood said.

Corewell Health will employ

national rate.

“Strangely, the increase in the state’s unemployment rate was mostly encouraging news from our perspective,” they wrote. “The state’s labor force participation rate has been rising since the beginning of the year, defying the downward pressure from Michigan’s aging populace.”

Despite the “pleasant surprise” with the labor force increase, an aging workforce and “demographic trends indicate a less promising outlook for the future.” The state’s 65 and older population will soon account for 20% of the workforce, or 2.5 percentage points higher than prior to the pandemic.

“We expect the aging of the population to hinder the state’s labor force growth, which we expect to tick up to 62.3 percent by the first quarter of 2025 before flatlining for the remainder of the forecast,” UM economists wrote.

Contributing to the state’s economic fortunes for 2024 is an auto

ployees will remain at the current location, Huebschen said.

Apogee as of February 2023 employed around 4,900 total people across its brands, a workforce reduction from a peak of 7,200 in February 2020, the Minneapolis Star Tribune recently reported. Apogee’s brands include Alumicor, EFCO, Harmon, Linetec, Tru Vue, Tubelite, Viracon and Wausau.

Tubelite also maintains an aluminum extrusion plant in Reed City, where Huebschen said operations will continue. Tubelite also has facilities in Dallas, Texas, and Warwick, R.I.

A key part of Project Fortify involves consolidating manufacturing from all of Apogee’s brands within the architectural framing systems business segment, Huebschen said.

Net sales for the company’s architectural framing systems segment dropped 15.4% year over year, from $165 million to $139.6 million, in the third quarter of fiscal year 2024, according to a recent earnings report.

“What we’re trying to do is leverage our manufacturing capabilities that support all those brands so that the manufacturing isn’t specific to a brand — that we can kind of shift our manufacturing to support whichever brand needs it,” he said.

about 240 people at the center across three shifts, including weekends, according to Nicole Hofert, the city’s director of community and economic development.

Wyoming’s master plan adopted in 2021 envisioned the site and the surrounding neighborhood for mixed-use redevelopment, including office, commercial and industrial uses, Hofert said.

“This plan is keeping true with what the intention was,” she said.

The Wyoming Planning Commission voted unanimously Feb.

industry that’s expected to pick up from a “sluggish” January when the annualized production rate declined to 15 million units after reaching 16.1 million in December.

UM economists expect automakers to produce light vehicles at an annualized rate of 16.2 million units in the second half of this year, and 16.4 million units in 2025, boosted by declining interest rates.

“Despite stubbornly high vehicle financing rates, dealers remain focused on stocking higher-priced vehicles, exacerbating poor affordability and limited inventory levels,” economists wrote.

Nationally, UM projects U.S. real GDP to grow 2.5% this year and 1.9% in 2025, according to a Feb. 16 quarterly outlook. Core inflation should further ease to 2.8% this year and 2.4% next year, allowing the Federal Reserve “to follow through on its plans to begin cutting short-term interest rates this year,” according to the U.S. outlook.

“So, there’s not going to be a dedicated Tubelite manufacturing.”

Apogee expects the changes with Project Fortify, which was announced in late January, to be completed by the third quarter of the 2025 fiscal year.

The company anticipates about $12 million to $14 million in annualized cost savings from the strategic moves, with 60% of the savings realized in fiscal year 2025 and the rest in fiscal year 2026. The company anticipates cutting 250 total jobs through these actions.

“The actions we are announcing … progress our enterprise strategy and help position the company to build on what we’ve achieved over

20 to approve a site plan for the development and recommended City Commission approval.

“We are very, very excited to have you guys here, and we’re looking forward to working with you not only today, but in the future,” Wyoming Planning Commission Chairperson David Micele said after site plan approval. “You made our day. You really made our day.”

The project is the latest major investment for Corewell Health.

As Crain’s Grand Rapids Business reported last month, the larg-

the past two years,” Ty R. Silberhorn, CEO of Apogee, said in a statement at the time of the announcement. “Project Fortify will further improve our cost structure, enhance organizational efficiency, and enable our team to focus on higher growth, higher margin opportunities.”

Apogee in December reported improved profitability as net sales dropped 7.6% in the third quarter of fiscal year 2024, to $339.7 million from $367.8 million during the same period in 2023.

In an updated outlook for fiscal year 2024, the company now expects net sales to decline by about 3% compared to fiscal year 2023.

est in-state health system in Michigan has been investing to build-out a broader outpatient care base in the Grand Rapids area, most recently proposing a $15.2 million facility for endoscopy procedures in Caledonia Township at 4910 60th St. SE.

Corewell Health also has invested $57 million to acquire more than a dozen properties in Grand Rapids’ Monroe North neighborhood, where the health system is developing a $110 million office campus known as Corewell Health Place.

Lambert Global, LLC seeks a Senior Analyst in Grand Rapids, MI.

Requirements: U.S. Bachelor’s degree in Public Relations and Corporate Communication, or closely related; twenty four (24) months experience as Public Relations Specialist, Investor Relations Journalist, Financial Journalist, or Financial Reporter; and travel to various locations throughout the U.S. approximately 15% of the time. Telecommuting from any location within the U.S. is an option for this position. Multiple openings.

Email resume to human.resources@lambert.com.

Tubelite is in the process of ceasing production operations at its Walker plant. | KaYLEIGh VaN WYK

Miller Canfield attorney is a former brewer who speaks his clients’ language

When Christopher Gartman graduated from Cooley Law School in 2011 as firms nationally were still contracting from the Great Recession, he hung up his own shingle thinking it was his best option and turned to craft beer to help him figure out the rest. The self-proclaimed “homebrew dork” started Gartman Law LLC in Milwaukee, Wis., in 2011 and was doing whatever it took to try to gin up business. That included putting ads for legal services on Craigslist and walking around the student union at the University of Wisconsin-Milwaukee, where he earned his undergraduate degree, to hand out business cards while wearing a shirt emblazoned with his phone number, email address and the slogan, “I’m not your parents’ attorney.” “But I wanted some kind of predictable income, so with the homebrewer pass, I just started knocking on doors around Milwaukee at all the breweries,” Gartman said. The search ultimately led him to becoming a weekend tour guide for Milwaukee Brewing Co., a side hustle he maintained for several years while trying to grow his solo law practice. “I got paid cash tips and I got to take beer home. It was a good budget helper overall,” Gartman said. “I was gaining experience, meeting people, learning more about how a brewery actually runs.” When his wife was offered an accounting position in London in 2015, Gartman dove into a full-time production position at Milwaukee Brewing with the goal of being able to hit the ground running to find a brewing position when he landed across the pond. A few years later, the couple found themselves back stateside, and Gartman faced a key decision whether to stay in brewing or go back to law. Gartman, now a principal at Miller, Canfield, Paddock and Stone PLC, spoke with Crain’s Grand Rapids Business about his atypical path into the international law firm and how his brewing experience helps him work with clients as they navigate a highly regulated industry. | By

What role did you have at Milwaukee Brewing before you and your wife went abroad?

I was doing packaging and cellar work with a vision of when I get to London, I want to be able to tell people I’m an actual professional brewer. They trained me for three months (during) the summer before we left. Then I showed up in the U.K. and got a job at Fuller’s, the guys that make London Pride. I worked in essentially their gift shop within the brewery.

As part of the relocation for my wife’s job, I was what’s known as a trailing spouse, and they gave me a budget to do things — to acclimate to society, essentially. I had some free cash and used it on tuition for a brewing diploma program with the Institute of Brewing and Distilling to further expose myself to the industry. Did that program help when it came time to look for a brewery job?

On the first day of class, I sat next to the guy that founded the Five Points Brewing Company, and two months later I was working odd shifts. A couple of weeks after that, I was a full-time brewer there. I did that for the next two and a half years while we lived there.

How did you end up in Grand Rapids?

We always knew our time was coming to an end in 2018 and that we’d have to probably move back to the U.S. Going back to Milwaukee wasn’t really a good option for my wife’s career, and my career was still all over the place. (My wife’s company) said, ‘It’s between Chicago and Grand Rapids. What do you want to do?’

I’d been to school in Lansing and knew a little bit about Grand Rapids. We knew we could afford a house here with a yard, and that was important to us. With three months’ warning before we

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had to move, we settled on Grand Rapids. I just started contacting everybody, every brewery — through email blasts, phone calls, Facebook messages. It was my initial objective to just hang a shingle again, but be niche beer regulatory advising.

What kind of reaction did you get?

I got a lot of non-responses. … But then Mitch Ermatinger at Speciation finally came out with a bunch of details. He was like, ‘If you want a brewing job, just go to Founders; they actually pay. And I’m good on the legal side, but there’s this guy named Joe Infante (at Miller Canfield) who’s really busy. You should call him. He probably needs help.’ I managed to reach Joe, and by that time, he’d already heard of me. The second day after we landed, I was in the office interviewing for a lateral associate position since Joe just

happened to be hiring at the time. How does your past experience in the brewing industry shape your approach to clients?

We are small family business lawyers that happen to be in this highly regulated environment. Some clients are completely new to the industry and never worked in a brewery. They drink beer, and they know what’s good, but they’re new to doing it on a regulated level so they ask, ‘What do I need?’ I’ve gone through brainstorming sessions of, ‘Here’s what you need to get started from an equipment standpoint. Here’s good, better, best, cheap, pricier, expensive options for these things.’ A salesperson’s not going to give them that practical experience — they’re going to do whatever makes them money — but I can have that discussion with them.

We have to be very cost-sensitive, too. It’s no secret that craft beverage is a pretty low-margin business. They don’t have tons of resources to devote to lots of legal attention. Part of what sets our practice apart from others is that if someone calls with a trade practice question, they get an answer right away. It’s a 5- or 10-minute phone call, where others may have to do some research or make a few phone calls to figure it out. Eight times out of 10, I have it off the cuff. ‘Here’s how it went bad, here’s how it can go well, and understand the enforcement priorities of the various states and federal regulators.’ We can advise on that risk. Crain’s reported how you successfully helped the owner of a Grand Rapids laundromat navigate the regulatory process after the state initially denied him a liquor license. How often are you helping people wade through the bureaucracy to find a way to make their business dreams a reality?

We’re really handy with weird problems. We can do the run-ofthe-mill licensing work. That’s not necessarily rocket science, it’s just effort and details. When the weird stuff comes into play, like the laundromat or Class Cs wanting to flip to manufacturing so that they can take advantage of the wholesale market, … the Liquor Control Commission is actually giving my name out saying, ‘You’ve got a weird one. Call Gartman. He’ll figure it out for you.’

You’ve got to take a very non-black-and-white thing and shoehorn it into state code and administrative rules with an agency that loves black and white. They don’t function in the gray area. That’s the fun challenge. Sometimes you get it right the first try. Sometimes with the laundromat, you go a few rounds, but it was important to the client. We made it work.

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JOE BOOMGAARD