Crain's Grand Rapids Business, May 13, 2024

Richard

and Helen

DeVos Foundation

sunsets after 54 years, $1.1B in giving

By Mark Sanchez

In the late 1960s, as Amway Corp. grew and prospered, the late co-founder Richard DeVos and his wife, Helen, decided to better organize how they shared their growing wealth.

ey created and funded a private, charitable foundation to nancially support causes, organizations and projects that they believed in, both in Grand Rapids and around the nation.

Now, after providing $1.1 billion in contributions to more

than 1,000 organizations over more than a half-century, the Richard and Helen DeVos Foundation is sunsetting, marking an end to an era of deep philanthropy in Grand Rapids that’s rooted in their faith.

“My mother, before they had

Tommy’s Boats lands in

Decision turns over ‘immediate possession

By Rachel Watson

Tommy’s Boats has been placed under court-appointed receivership as the dealer’s legal and nancial battles mount.

Kent County Circuit Judge T.J. Ackerman appointed omas Beane, president of Wilmington, Del.-based Beane Associates, as the receiver over the Grand Rapids-based company on April 22.

Beane accepted the appointment on April 23.

e action gives Beane authority to take “immediate possession and full control” of the dealer’s assets and income with the ultimate goal of paying o receivership fees, bank debts and court fees, according to court lings.

e receiver was appointed in response to an April 1 motion by Bu alo-N.Y.-based M&T Bank,

whose commercial loan portfolio includes a nancing program for marine dealers.

M&T Bank declined an interview, citing a policy not to comment on pending litigation.

e bank alleges that Tommy’s Boats has defaulted on nearly $118 million in debt principal and interest stemming from oor

Kent County puts hotel tax increase on primary ballot

Voters to decide in August on potential funding for projects

By Kate Carlson

Kent County voters will determine in the Aug. 6 primary whether the county’s lodging tax can be increased to potentially fund projects including the Acrisure Amphitheater, a soccer stadium and an aquarium under consideration.

e Kent County Board of Commissioners voted 15-3 on May 2 to put the proposed lodging tax hike on the ballot. If approved by voters, the board of commissioners would then consider amending the lodging ordinance and raising the tax beyond 5%, up to 8%, which would go into e ect Jan. 1, 2025. Under new legislation signed by Gov. Gretchen Whitmer on April 2, Kent County is one of eight counties that can raise its lodging tax up to 8%.

Commissioners Tom Antor, Katie DeBoer and Matt Kallman voted against the proposal.

“Here before us is another incredible opportunity for our community to invest once again in public assets,” Grand Rapids Mayor Rosalynn Bliss told com-

missioners before the vote during public comment at the meeting. “We’re the place people want to be, but we can’t just assume that’s going to continue. We have to continue to have a vision. We have to continue to invest in order to make sure that’s a reality.”

Bliss was joined in support of the hotel tax increase by leaders from Experience Grand Rapids, e Right Place Inc., Canopy by Hilton by Downtown Grand Rapids, West Michigan Sports Commission, AHC Hospitality, ASM Global, Grand Action 2.0 and the Grand Rapids Area Chamber of Commerce.

“I can’t wait to see this go into

Richard and Helen DeVos at the beam signing for the Helen DeVos Children’s Hospital. | COURTESY OF RDV CORP.

Renderings for the proposed Acrisure Amphitheater in downtown Grand Rapids. | COURTESY OF PROGRESSIVE COMPANIES

Tommy’s Boats has a showroom at 247 Morrissey Drive NE in Comstock Park, between West River Drive and U.S. 131. | JOE BOOMGAARD

Studio Park Tower opens apartment leasing, condo sales

Project leader J.D. Loeks is one of the first to sign up for condo on 21st floor | Rachel Watson

Celebration Cinema heir J.D.

Loeks is so excited about the city views and amenities that Studio Park Tower will offer that he’s leaving East Grand Rapids to live on the downtown tower’s 21st floor.

Rockford Construction crews continue to work on the new 16-story, 212,000-square-foot residential tower rising above the six-story Studio Park(ing) garage at 144 Oakes St. SW in downtown Grand Rapids. However, the broker and leasing agent for the condos and apartments are now taking reservations for all 200 housing units.

Loeks, CEO of the family-owned,

Grand Rapids-based movie theater chain Studio C and a partner with the Studio Park project leader Olsen Loeks Development, said he cannot wait for tenants to start moving into the tower this coming September. That’s when construction on the first units is expected to wrap.

For now, all 16 floors are an active construction site, with some of the lower floors drywalled and painted and the upper floors in framing stage.

“The amenities that we have in this building are going to knock the socks off of anything else that’s

Reclassifying cannabis could prompt cash infusion

Dispensaries would benefit from access to banking opportunities

By Dustin Walsh

The U.S. Drug Enforcement Agency is expected to reclassify marijuana, shifting the legal federal framework around the drug for the first time in more than 50 years.

The DEA’s proposal, which still must be reviewed by the White House Office of Management and Budget, would recognize the medical uses of cannabis and acknowledge it has less potential for abuse than some of the nation’s most dangerous drugs, according to reporting by the Associated Press. Moving marijuana from a Schedule I drug to a Schedule III drug doesn’t make it federally legal, but it would be a significant change for cannabis businesses and their employees. It would mean instant cash flow with access to banking opportunities, as well as loan opportunities which could lead to much faster expansion of the industry in Michigan and other states where marijuana is legal.

It would also open the door to

Hispanic Center buys former church location for expansion

Organization’s offices are located just north of the site in Roosevelt Park

By Kate Carlson

The Hispanic Center of Western Michigan plans millions of dollars of renovations at a recently acquired vacant church as part of the nonprofit’s plan to grow its programming for the Latino community.

The Hispanic Center acquired the 1.2-acre property at 735 Ritzema Court SW in Grand Rapids’ Roosevelt Park neighborhood on April 8 from the Great Lakes District of the Wesleyan, a collection of churches in the Midwest. The $450,000 property sale came in

less than the $550,000 listing price.

The Hispanic Center’s main offices are located just north of the property at 1204 Cesar E. Chavez Ave. SW. The organization’s staff of 34 people are currently spread out at its headquarters, the Covenant House in Grand Rapids for preschool programs, and in office space at 401 Hall St. SW.

Hispanic Center leaders say the former church property offers a natural place to grow.

“Over the past three years, we’ve been growing our programming and we were looking for the right location to make sure our commu-

nity feels comfortable and is welcoming,” said Evelyn Esparza-Gonzalez, president of the Hispanic Center of Western Michigan. “What better place than the Roosevelt Park neighborhood, which has the largest Latino community in Grand Rapids?”

After a multimillion-dollar renovation of the former church to meet the Hispanic Center’s needs, the organization plans to move programming to the new site while still maintaining operations at the main Cesar E. Chavez location,

Crews continue to build out the residential units at Studio Park Tower in downtown Grand Rapids. | RaCHEL WaTSON

The Hispanic Center of Western Michigan has acquired this former church in the Roosevelt Park neighborhood to expand the nonprofit’s programming. | KaTE CaRLSON

Leasing has started for the apartments while sales have begun for the condo units at Studio Park Tower in Grand Rapids. | RaCHEL WaTSON

The U.S. Drug Enforcement Agency is expected to reclassify marijuana, shifting the legal federal framework around the drug for the first time in more than 50 years. | NIC aNTaya

Loeks

Office design key as firms adapt to new work habits

By Kayleigh Van Wyk

While new workplace priorities have had a profound effect on office design and furniture in recent years since the pandemic, the social contract between employers and employees had already started to shift long before that.

That’s according to Ann Harten, chief human resources officer and vice president of global human resources at Holland-based Haworth Inc., who shared insights on the current hybrid work ecosystem during a recent Michigan West Coast Chamber of Commerce event.

Harten noted that the COVID-19 pandemic is what the Harvard Business Review refers to as the greatest change to work since the Industrial Revolution, but a broader societal shift toward self-centric habits began to prompt changes even before 2019.

“This has been going on for a long time — it didn’t just start,” Harten said during the event. “We’ve slowly moved toward isolation.”

Harten pointed to changes in consumption of news and entertainment over the last several decades. Whereas families once gathered around the radio to listen to broadcasts together, personal mobile devices now enable self-centric listening experiences, she said.

As the COVID-19 pandemic hit, work-from-home became the norm, and employees began to rethink traditional workplace habits as the pandemic passed.

“We had to change our habits, and this is directly related to how people feel about work,” Harten said.

These shifting habits have led to changes in workspace designs. In the legal profession, hybrid work has pushed law firms to adopt flexi-

work in a place within the office where they feel best.

Other changes such as using outdoor patio space or moving private offices away from outer walls to improve access to daylight and views can make a difference for employees, she added.

“We had to change our habits, and this is directly related to how people feel about work.”

Ann Harten, chief human resources officer and vice president of global human resources at Holland-based Haworth Inc.

ble and modern office design choices, signaling new priorities in a traditionally demanding industry. Harten said Haworth has noticed more companies doing away with assigned workspaces and offering more flexible seating arrangements so employees can

A key driver of the changing social contracts is that employees are seeking autonomy, a value that first emerged in a Haworth research survey dating back to 2012. The difference is that instead of desiring it, they now are demanding it.

“It’s shifted from being an employer-driven boundary to an employee-defined permeable boundary,” Harten said. “They want a lot more choice. They want a lot more flexibility. … It’s something that

people will often say in an interview. In an interview five years ago, this was not a question (of), ‘Do you have a hybrid program? Do I have to be in every day?’”

While Harten views some of the changes as healthy overall, she noted how it can be difficult for leaders to navigate new workplace habits and foster an engaging workplace culture.

That’s why it’s critical to “design spaces that matter,” she said.

“Your space is something that you control, you influence, and you can design in a way that helps your team be more effective,” Harten said. “This is not just a human resources conversation. It is what is driving your business to ever-growing heights of success.”

In February, the family-owned Haworth reported it generated $2.57 billion in sales last year, a 3% increase over 2022. Last year’s revenues also marked 16% growth since 2019, before the pandemic.

Despite overall pressure on the industry, President and CEO Franco Bianchi told Crain’s Grand Rapids Business in February that the growth was driven by employers adapting to “huge” workplace changes and new office styles to accommodate those shifts.

“Every time a client gives us a chance to help (companies) think how they should be organized, we have a major opportunity to win and to grow,” Bianchi told Crain’s Grand Rapids Business.

As a privately owned company, Haworth publicly reports annual sales but does not disclose earnings.

Other West Michigan furniture makers have seen return-to-office

mandates and workplace redesigns improve their results in recent years.

Grand Rapids-based Steelcase Inc. (NYSE: SCS) reported its best year of earnings since the onset of the pandemic with $3.2 billion in revenue for the 2024 fiscal year that ended Feb. 23, 2024. Executives pointed to investments in workplace redesigns from large corporate customers as a key factor for order growth.

“Customers tell us they need our help to create spaces that will attract new talent and engage and retain employees and help teams and individuals perform,” CEO Sara Armbruster said during an earnings call with analysts. “They know their spaces must do more and they must be designed to support a range of needs, such as providing places to focus, collaborate, build social connections and foster well-being.”

Likewise, while Zeeland-based MillerKnoll’s (Nasdaq: MLKN) most recent financial results reflected ongoing industry challenges like high interest rates and inflation, executives previously referred to return-to-work policies as an “inflection point” for the company since the pandemic.

“We’ve seen companies begin to take the leap back into physical space and announce return-to-office policies,” MillerKnoll CEO Andi Owen said during an earnings call last fall. “Office leasing in the U.S. began to rebound in the second quarter of 2023, and we’re seeing this amongst our clients as companies continue to announce return to office policies.”

Restaurateur, chef partner for lakeshore brunch concept

By Abby Poirier

Business partners with deep ties to West Michigan’s restaurant scene are launching a new brunch restaurant called Happystance near Saugatuck.

Located at 8 W. Center St. in Douglas, Happystance will seat 60 people indoors and 40 more on an outdoor patio. The creation of co-owners Katie Herbert and chef Patrick Conrade will offer hearty, traditional breakfast fare with vegan options, relying on West Michigan farms to provide fresh produce.

The new, 3,000-square-foot restaurant is located in space formerly occupied by Bistro 44, an American and Mexican restaurant that closed in January 2022, a year after opening. The space was also formerly home to several other restaurants over the years, including Chaps and Center Street Bistro.

The partners expected to open Happystance earlier this month.

Herbert and Conrade initially started exploring the idea of a joint restaurant venture two years ago, with Herbert taking on the hospitality side of the business and Conrade leading the kitchen. Now, they’re bringing that idea

to life with Happystance, where they intend to create a positive workplace for employees, while adding a much-needed breakfast food option to the restaurant scene in downtown Douglas.

Herbert said the name, Happystance, is a reflection of their desire to stand out in the restaurant industry.

“We just thought, ‘How are we going to be different?’ Well, we’re going to be happy. So this (restaurant) was our happy coincidence,” she said. “We’ve both worked in this industry for a long time, and it can be hard on your body and really wear on you as a lifer.

“It was important that we made this a really happy place for not just us, but for employees to feel valued and to feel taken care of, which isn’t something historically restaurants are known for.”

Herbert, who grew up along the lakeshore, spent 10 years working at New Holland Brewery, where she learned the craft of restaurant management. She went on to open The Southerner in Saugatuck as co-owner alongside chef Matt Millar.

As a fan of Conrade’s concepts, she jumped at the chance to open a restaurant with him.

“I’ve been following Patrick’s career for a long time and I am so excited to put his food on a pedestal,” she said.

Conrade has been involved in several prominent West Michigan restaurants, including most recently as general manager of food production at Martha’s Vineyard in Grand Rapids. He also formerly served as executive chef at farmto-table restaurant The Sovengard and The Old Goat, both in Grand

Rapids.

In the kitchen, Conrade is sticking with what he knows best: farm-fresh produce and bright, herby flavors that change with the seasons. He said he’s guided by “thinking about how I would want to eat (a dish) and making sure that everything that I want happens in that context.”

So far, his plans for the Happystance menu include standard breakfast classics like pancakes, french toast, bacon, sausage and ham, while including some vegetable focused plates that showcase West Michigan produce.

“Every dish is different, but they’re also unique in their own right,” he said.

Conrade will draw on his relationships with farmers he’s worked with throughout his career to supply the restaurant with fresh fruits and vegetables. He plans to source from Crisp Country Acres in Holland, Visser Farms, Kessler Family Farm and Green Wagon Farm, among others.

Since November, the pair have been working to remodel the building in Douglas, which had fallen into disrepair over the years.

“Nobody’s ever changed the interior or exterior,” Herbert said.

“Some people had just given up on this building and wouldn’t even try the new restaurant (if) it doesn’t look different. We need to make sure everybody knows ownership has turned over and the new owners care about the building, just as much as they do their food and their service.”

With that goal, Herbert and Conrade are completely remodeling the building, which they’re leasing from Holland-based AMK Rentals and Property Management, which also is serving as general contractor for the project. Property records show that AMK purchased the property for $600,000 in February 2023.

The restaurateurs plan to change the layout of the restaurant and add new seating and a breakfast counter, while opening up the courtyard behind the building for the first time in years.

The restaurant will employ around 40 people and will be open from 8 a.m. to 3 p.m. daily.

“I am really excited to lead a team again in an industry that I’m really passionate about,” Herbert said. “I think there’s like three breakfast joints in all of town, and it’s all the same breakfast. I think people are very excited.”

Happystance will focus on using farm-fresh produce and bright, herby flavors that change with the seasons. COURTESy PHOTO

Ann Harten, chief human resources officer and vice president of global human resources at Haworth Inc., shares insights on the current hybrid work ecosystem during a recent Michigan West Coast Chamber of Commerce event. | COURTESy OF WEST COAST CHAMBER OF COMMERCE

Heart of West Michigan United Way absorbs neighboring agency

By Rachel Watson

Last year, when United Way of Ottawa and Allegan Counties’ president and CEO Brian Gaggin left the nonprofit, its board and staff began exploring a merger with the organization’s much larger sister chapter in Kent County.

As of April 30, Heart of West Michigan United Way and United Way of Ottawa and Allegan Counties received approval from the state attorney general’s office to combine into one nonprofit that will serve Kent, Ottawa and Allegan counties. The merger is expected to be finalized this summer.

The green light from the state follows the merger approval from both entities’ boards late last year after merger conversations first began in March 2023.

United Way is an international network of more than 1,800 local nonprofit fundraising affiliates. Each local nonprofit chapter channels funds toward partner agencies and programs.

Becki Postma, who served as interim CEO of United Way of Ottawa and Allegan Counties for the past six months, has transitioned back to her previous role as chief administrative officer for Heart of West Michigan United Way.

Michelle Van Dyke, president and CEO of the Kent County nonprofit, will continue as president and CEO of the combined entity, which will be called Heart of West Michigan United Way.

“Our realization (was) that we both have a mission and a vision centered around creating communities where everyone can thrive, so we have the same end goal in mind,” Van Dyke told Crain’s Grand Rapids Business. “So why not combine forces to be able to do this in a much more efficient and effective manner?”

All assets from United Way of Ottawa and Allegan Counties will be transferred over to the new merged entity led by Van Dyke.

Van Dyke said the nonprofits’ existing teams — three employees in Ottawa and Allegan counties and 65 in Kent County — will be retained, along with the physical offices in downtown Grand

Meijer Inc. donates $3M to pediatric hospital project

By Mark Sanchez

A $3 million gift from Meijer Inc. boosts Mary Free Bed Rehabilitation Hospital’s capital campaign to build a new pediatric hospital.

Rapids, Holland and Allegan.

Heart of West Michigan United Way also will continue operating the 2-1-1 hotline that connects callers to food, shelter, utility assistance, disaster recovery, child care and transportation. And it also will continue running the Volunteer Income Tax Assistance Program.

Van Dyke said funds raised in all three counties will continue to be allocated for those counties, or as designated by the donors.

“The question that we’re hearing the most is ‘What’s going to happen with my money?’” Van Dyke said. “When somebody gives their money, they want to make sure that it’s going to the area, the community where they live and work. And so I just want to make it really clear in every way possible that the dollars raised through local businesses, individual contributors, foundations in each county, will continue to be allocated to that specific county, or as directed with donors.”

She added that existing contributors to the smaller nonprofit also need not fear that their donations will be “sucked into Kent County,” as some people have phrased it to her.

“That’s just not going to happen,” she said. “We have systems set up and in place to be able to monitor and track the dollars from each county, and they will go back to those counties.”

Two board members from the former Ottawa and Allegan nonprofit, Lyndsie Post, representing Ottawa County, and Jennifer Garcia, representing Allegan County, have joined the newly merged board.

A plan for incorporating other Ottawa and Allegan board members into the new merged governance team, including to serve on board committees, is still being determined, Van Dyke said.

The Kent County organization has been better able to weather changing individual giving habits by having a more diversified base of philanthropic, corporate and individual donors, along with a robust grant pipeline, she said. About 60% of its revenue currently comes from workplace campaigns.

The contribution from the Walker-based supercenter retailer announced April 29 brought the capital campaign to $50 million for the $70 million Joan Secchia Children’s Rehabilitation Hospital. The facility will rise on the south side of Wealthy Street, across from Mary Free Bed’s existing hospital in Grand Rapids. The project is a joint venture between Mary Free Bed and Corewell Health’s Helen DeVos Children’s Hospital.

Construction is expected to start later this year on the three-story facility. When open in 2026, the facility will become the first rehabilitation hospital in Michigan dedicated to treating pediatric patients with traumatic illness and injury.

“As a family-owned company, we are humbled to give to organizations that provide hope and healing to so many families,” Meijer President and CEO Rick Keyes said in a statement. “We’re thrilled to be able to help Mary Free Bed and Helen DeVos Children’s Hospital create the first children’s rehabilitation hospital in Michigan and provide support

to families in times of need.”

Mary Free Bed in February previously secured a $5 million gift from the DeVos Family Foundation as part of a $50 million contribution to support pediatric care in Grand Rapids, including at Helen DeVos Children’s Hospital and for a pediatric care center at Pine Rest Christian Mental Health Services.

The Secchia family last fall also gave what was described at the time as a “generous gift” to the pediatric hospital, which Mary Free Bed named after Joan Secchia. The new pediatric rehab hospital also has received public support through $13 million in state funding and $5 million in federal funding.

“We’re incredibly grateful to Meijer for their generous support

of our mission to restore hope and freedom to children and families,” said Kent Riddle, CEO of Mary Free Bed Rehabilitation. “This donation will uplift families, empower communities, and make a lasting impact for thousands of children for generations to come.”

The design of the new pediatric facility is the subject of a lawsuit that Mary Free Bed’s former architect on the project, SmithGroup Inc., filed against the hospital, claiming violations of federal copyright protections. Mary Free Bed and its present design firm, Grand Rapids-based Pure Architects, deny the claim and have sought to have the case dismissed, arguing that the issue belongs in arbitration, not litigation.

Heart of West Michigan United Way’s downtown Grand Rapids headquarters.

Investors hopeful for better second half of 2024

By Mark Sanchez

Private equity investors say they’ve begun to see activity pick up this spring, despite not seeing a decline in interest rates from elevated levels that has held back deals the last two years.

Jeff Helminski, the founder and managing partner at Auxo Investment Partners, noticed a marked pickup in activity about mid-March for the Grand Rapids-based private equity firm. Helminski reports improved activity in both volume and quality, or “deals that are a good fit for us.”

a better rate environment and improved valuations.

“The world has largely coalesced around the belief that interest rates aren’t coming down in any material way any time soon, so from a liquidity and cost standpoint we have what we have to play with for a while. This is the environment that we have to live in,” Helminski said. “I expect the second half of this year is going to be much stronger than it was in both the first half and last year.”

“And it has continued ever since,” Helminski said. Helminski believes that greater

“I expect the second half of this year is going to be much stronger than it was in both the first half and last year.”

Helminski, the founder and managing partner at Auxo Investment Partners

certainty in the U.S. economy’s direction and a general acceptance that interest rates, even if they do start to come down, won’t decline significantly in 2024 have started bringing more sellers into the market who have been waiting for

Others in the private equity and M&A field offer similar perspectives.

At Grand Rapids-based Blackford Capital, “we have cautious optimism,” Managing Director Jeff Johnson said.

Blackford Capital is looking at “a number of new platform investments and some add-on investments for our existing platforms,”

Johnson said.

“In general, I think the sentiments, at least among a lot of the investment bankers that we’re working with, is that the second half of the year should be much stronger and more enthusiastic than the first half of the year,” he said. “They’re feeling as though there’s going to be a more robust pipeline in the back half of the year because sellers have been through a couple of tough years, and they don’t expect a tremendous sea change. They feel like this is probably the right time.”

Still, there remains “some over-

hangs in the marketplace and deals are taking longer to get closed for a whole host of reasons,” Johnson said. A sector that’s held up well among investors has been manufacturing, while the consumer sector “has been very lukewarm at best,” he said.

er, “we have observed positive activity that leads us to believe deal volume and valuation multiples will improve as we progress through 2024,” LV2 said.

partner at investment bank Woodward Park Partners in Bloomfield Hills.

“There’s enormous interest in kind of old economy, industrial, manufacturing businesses,” Johnson said. “That’s where people want to take a look at deals. There’s a lot of investor interest.”

After hitting a peak in 2021, with 9,760 reported deals worth $1.2 trillion, private equity investing experienced two down years in 2022 and 2023, according to PitchBook. Deals in the U.S. last year totaled $706.3 billion across 8,115 transactions.

PitchBook recently reported

“In general, I think the sentiments, at least among a lot of the investment bankers that we’re working with, is that the second half of the year should be much stronger and more enthusiastic than the first half of the year.”

Jeff Johnson, managing director at Blackford Capital

LV2 Equity Partners LLC noted in an April newsletter that “market dynamics in 2023 appear to have spilled over into 2024,” with lingering economic uncertainty, high material costs and interest rates, lower consumer confidence, and geopolitical concerns. Those factors slowed M&A activity in 2023.

Higher debt costs caused “buyers to be more prudent in what they will pay for a business,” LV2 reported.

In the last few months, howev-

2,105 U.S. private equity deals in the first quarter of 2024 for $145.4 billion.

Deal activity nationally in the first three months of 2024 “continued to move mostly sideways with estimated deal count slightly elevated relative to the past four quarters and deal value moderately lower,” according to PitchBook’s first quarter analysis on U.S. private equity.

Investors entered 2024 hopeful for sustained interest rate cuts this year after a series of increases beginning in 2022 to fight high inflation. Amid stubborn inflation, the Federal Reserve Open Market Committee on May 1 opted again to hold the benchmark federal fund rates steady.

Economists at PNC Bank expect the Fed still may make two quarter-point rates cuts this year, followed by three more in 2025, although “inflationary pressure coming from goods producers appear set to put that outlook to the test,” they wrote in a recent economic briefing.

“It really comes down to supply and demand, and private equity isn’t going to do a deal just to do a deal,” said McGowan, who also expects improved deal flow in the second half with more strategic buyers in the market and the continued higher use of earnouts and seller financing.

“I think you’re going to see private equity be more active in 2024,” he said. “You’re going to see more people start to just come to terms with where the market’s at and start transacting.”

However, outliers to market trends have been deals in the lower middle market, which “has really continued pretty much unaffected, particularly this year,” said M&A attorney Tracy Larsen at Honigman LLP in Grand Rapids and leader of the firm’s Transactions and Counseling Practice Group.

Activity involving investors making bolt-on acquisitions for existing platform companies in their portfolio has also held up, Larsen said.

“We’re very busy in kind of the lower middle market PE, add-on space,” he said. “We’ve also seen an in increase in private equity funds positioning themselves for their next platform (or) private equity funds looking to sell platforms.”

Add-on acquisitions since interest rates began rising two years ago “have emerged as a pivotal mechanism or sustaining the momentum of the PE sector amid the challenges of tightened credit conditions and market volatility,” PitchBook noted in its report on first quarter activity. “These strategic transactions enable PE sponsors to persistently deploy capital by focusing on smaller, more manageable deals, thereby navigating through a period where the lending environment constrains the execution of larger platform buyouts.”

The start of a lower rate environment could create a psychological boost to the market and “just create a lot of enthusiasm and people will feel a whole lot better about starting to invest again,” Johnson said.

“If the rate environment starts to go the other direction and people kind of feel like we’ve bottomed out on this and the momentum is starting to shift, then that’s going to be, I think, a catalyst to start seeing deployment number go up.”

While any downward movement in interest rates is welcome, Helminski at Auxo Investment Partners said a full point decrease is needed “before you get something truly meaningful in terms of the financial impact,” he said.

The market conditions in 2023 and pullback by some sellers particularly affected the quality of transactions, said Greg McGowan, managing director and founding

Larsen believes the lower middle market “will continue to transact largely because people are perhaps a little bit more flexible on their terms.”

“We’re very busy in kind of the lower middle market PE, add-on space.”

Tracy Larsen,

partner,

Honigman LLP

The estimated $1 trillion in capital the private equity funds on the U.S. have available to invest, or “dry power,” will also begin to drive activity, he said.

“There’s certainly a ton of dry horsepower in the private equity industry,” Larsen said. “And you know the old saying: ‘It’s not a question of whether they’re going to invest, it’s when they’re going to invest.’”

Jeff

Helminski

Johnson

Larsen

Up North hotel prices could see summer stabilization

By Rachel Watson

Tourism leaders say the end of pent-up demand for travel post-pandemic, combined with more hotel rooms coming online, could help travelers avoid lodging price spikes heading into peak travel season.

Visitors bureau leaders in multiple Northern Michigan tourism hotspots all say they are expecting a stabilization of hotel rates coming out of the pandemic, which brought on swift price increases when demand soared.

“I would say we’re probably at a level (with rates) that will remain consistent for a while,” said Jim Powell, executive director of the Petoskey Area Visitors Bureau. “I don’t see a big jump this summer. I don’t see it falling off. I think they’re in that fine-tuning stage because we had so much rapid growth there (during the pandemic). I think every property is looking at their numbers individually and saying ‘OK, maybe we went a little too high here. Maybe we’re a touch too low here.’”

Trevor Tkach, president and CEO of Traverse City Tourism, also said he’s not expecting big increases in rates this year, though it can be hard to say when consumers ultimately drive rate changes.

“You don’t always know the tip-

ping point until you hit it,” he said. “The reality is, I don’t think we’ve grown our rates any faster than anyone else. We were already a premium price destination, and so we’ve maintained that. ... But the consumer, they hold all the cards. If the confidence shifts at any point during the summer, and that could happen, we’ll see what the response (in hotel rates) might be.”

During the Pure Michigan Governor’s Conference on Tourism last month in Kalamazoo, one theme was the anticipated leveling off of local and regional travel spending after pent-up demand peaked post-pandemic, and inflation began hitting pocketbooks.

“I think the headline for the impending summer season in Michigan is that the ridiculously named ‘revenge travel’ period is dead,” said Justin Winslow, president and CEO of the Michigan Restaurant & Lodging Association. “In its wake, we find something more akin to what we saw before the pandemic, which was modest, if uneven growth.”

Kelly Wolgamott, interim vice president for the state tourism office Travel Michigan within the Michigan Economic Development Corp., echoed that observation.

“There’s a lot of disruptors out there when we talk about consumer trends,” she said. “There’s inflationary pressures, so there’s only so

many dollars people have to travel, and what we called the ‘revenge traveler’ following the pandemic started to subside last year.”

When inflationary pressures squeeze local and regional travel budgets, Michigan sees a dip in visitation, Wolgamott said, which, based on the law of supply and demand, can mean lower room rates. While that’s good for visitors, it’s not good for hotels, which have higher expenses now thanks to the rising cost of goods and labor.

“That (poses) a challenge for us, in how we can make that considerable

outreach, not only within the U.S., but also internationally,” Wolgamott said, especially with fewer Pure Michigan advertising dollars in the proposed 2024-25 state budget than tourism officials hoped for this year.

“International tourists are extremely important for the state,” Wolgamott added. “They stay longer, they spend more money, and we’re the perfect product compared to New York, L.A. and Florida, which are very, very high as far as pricing, and Michigan is the best value price opportunity for those international travelers. So we’re

working hard with our partners to get the international traveler here.”

Tkach, of Traverse City Tourism, said the bureau’s coverage area of Benzie, Grand Traverse and Leelanau counties experienced hotel room rate growth of about 3% last year. Rates currently vary from about $150 to $200 per night on average, depending on the day of the week, the season and the property. For this year, he said no significant rate growth is expected, partly because of the continued growth of inventory.

About 500 rooms are being added to the Grand Traverse region’s inventory of about 4,000 rooms, between two hotels that came online part way through last year and several being built this year. That includes a Tru by Hilton that opened last March in Garfield Township, the independent Alexandria Inn that opened in East Bay Township in June and the new Avid Hotel that opened a couple of weeks ago, also in East Bay Township. Other hotels under construction include a Residence Inn & Suites and a Home2Suites by Hilton in East Bay and a new Fairfield by Marriott in Garfield Township, all of which Tkach expects will open within a year. That’s in addition to the area’s 2,000 short-term rentals that have

See HOTELS on Page 8

Park Place Hotel in Traverse City. | COURTESy OF TRaVERSE CITy TOURISM

Preservation of historic hotels is businessman’s new focus

By Rachel Watson

Metro Detroit businessman Jon Cotton’s main goal in shifting his career from health care to hospitality is to acquire and restore properties that are “not replicable” — and he’s not stopping with deals in Northern Michigan.

Following a string of Up North hotel and restaurant acquisitions over the past four years, Cotton in December closed Grosse Pointe Farms-based Medicare Advantage plan ApexHealth, which he founded and led, to fully focus on building his new hospitality business, The Cotton Collection LLC.

So far, he has acquired five hotels and several onsite and standalone restaurants in Northern Michigan as part of three separate transactions, hiring Troy-based Hotel Investment Services Inc. (HIS) to manage the portfolio.

“It’s a very fun and exciting industry to be in,” Cotton said. “The health insurance industry, I wouldn’t exactly call that a sexy and fun industry to be in, but this is very enjoyable. It’s fun to go and stay at the hotels or sit in the corner of the restaurants and watch families interacting and enjoying themselves. It’s very gratifying.”

Although Cotton described Northern Michigan as “the jewel of the Midwest” and a great place to invest, he’s also eyeing a future southward expansion.

“We would very much like to diversify outside of the state of Michigan, especially down South, because Michigan is a very seasonal summer operation, and we’d love to … move employees up and down depending on the seasons,” he said. Behind the shift

Cotton is one of three sons of David and Shery Cotton, who founded Meridian Health Plan Inc., once the state’s largest Medicaid HMO, in the late 1990s and sold the company in 2018 for $2.5 billion.

Jon Cotton, who lives in Grosse Pointe and previously served as president and COO at Meridian Health, developed a love of Up

North lodging when he began staying at the Hotel Iroquois during the Mackinac Policy Conference.

“Every year as part of our business group, we’d take a core group of execs … (and it) was just our favorite place to be,” Cotton said.

He bought Hotel Iroquois, which was built in 1900, in the summer of 2020 from the McIntire family, who had owned and operated it since 1954. The purchase included the onsite Carriage House Restaurant.

Cotton wasn’t ready to stop at one hotel acquisition.

In October 2020, he registered The Cotton Collection as a holding company for future hospitality investments and began scouting other opportunities.

He and his wife, Lauren Cotton, purchased Stafford’s Hospitality Inc. from founder Stafford Smith and his five equity partners in November 2023. The portfolio includes three hotels and four restaurants in Petoskey, Charlevoix, Harbor Springs and Alanson, which sits along US-31 between Little Traverse Bay and Burt Lake.

In March of this year, the Cottons then acquired the 204-year-old Harbour View Inn and onsite restaurant Bill’s Grill on Mackinac Island from the Pulte family.

A focus on ‘mom and pops’

The through-line for The Cotton Collection’s acquisitions strategy is to identify generationally owned, resort-style properties and carry on those legacies, Cotton said.

Cotton, who spent his entire career working in family businesses, said although those transactions

havior is unpredictable,” so only time will tell if the bureau’s prediction for another strong peak travel season comes true.

been added in the past 10 to 15 years, he said, noting that there tend to be rooms at every price point.

Tkach said it remains to be seen whether the demand will match supply, or whether potential oversupply could drive down rates. He tends to think that won’t be a problem until winter arrives.

“There’s a lot of variables that affect rates,” he said. “... For us, we’ve built up a recognizable brand over the years, and so I think Traverse City has allowed itself an opportunity to dictate a different type of rate structure and maybe hold on to that structure a little bit longer than others will be able to, and the proof was in the outcomes. We continue to see a lot of visitation.”

But he also said “consumer be-

The Petoskey Area Visitors Bureau covers part of northern Charlevoix County, Petoskey, Harbor Springs, the Boyne Valley area, and Alanson, which sits along US31 between Little Traverse Bay and Burt Lake.

The visitors bureau has 28 member hotel operators with about 2,500 rooms. Another 44 rooms are coming online this spring, as the new Otis Harbor Springs Hotel is now accepting reservations.

Powell said his area’s average daily rates for 2021-2023 were about $188 for that three-year period. Hotels saw “incredible” rate growth of 8% to 16% in 2021 and 2022 based on higher demand. He expects a more “normal” growth rate of about 2% to 4% in 2023 and 2024.

He said it’s important to keep in

can sometimes take a bit more patience, they’re worth the wait.

When he approached the McIntire family about buying Hotel Iroquois, the family matriarch, the late Margaret McIntire, was in her 90s and not quite ready to sell. The family entertained conversations around selling but ultimately delayed the transaction for a couple of years.

“Two years later, they came back in the middle of COVID … and said, ‘You know what, grandma is ready,’” Cotton said. McIntire lived to see the sale close in 2020, then passed away in 2022.

A similar timeline took place with the Stafford’s owners, who initially approached Cotton in 2022 to gauge what a deal could look like but didn’t sell the business to him until 2024.

Cotton said it’s important to him to keep as much continuity among the staff as possible. He retained Margaret McIntire’s “super star” grandson, Sam Barnwell, as general manager of Hotel Iroquois. A year ago, Barnwell was promoted to chief development officer at HIS.

At all of the restaurant and hotel properties, Cotton also strives to keep longtime non-family staff in place.

“We really like (a mom-and-pop business) because with the employee base … your employees are really an extension of your family at that point,” Cotton said. “They’re not just ‘butts in seats.’”

Cotton also said he would like to avoid steep increases in hotel room rates to keep prices in line with what regulars have come to expect.

“We don’t want to alienate people

mind that the average rate spans a wide spectrum of prices, from $600 to $800 per peak season night at a high-end property like the Inn at Bay Harbor, to $469 for a room at the Perry Hotel, to $79 for a basic Super 8 in Petoskey.

As to whether room rates are “too high,” Powell said it’s a question being discussed across the state.

“Northern Michigan prices have gone up,” he said. “That’s very clear in the last few years, that we may have priced some people out of that entry-level product, and they may have chosen to go to a different location that might provide a more affordable rate. But likewise, we (in Petoskey) get a benefit from the trickle-down from some other places whose rates may have gone up even higher than ours,” such as Mackinac Island, he added.

Steph Castelein, events and content manager for the Mackinac Island Tourism Bureau, acknowl-

who have been coming there a long time and price them out of something that they’ve been enjoying for years and generations,” he said.

Preserving and restoring

Cotton said another theme of his investment strategy is acquiring historic, one-of-a-kind properties that need preservation.

“Our strategy is we really want to look at boutique only, preferably historic buildings that hopefully are so unique that they’re grandfathered in, they wouldn’t be able to be built a certain way (and) they’re on property or land that’s probably not replicable,” he said.

After acquiring Hotel Iroquois, Cotton invested an undisclosed sum into interior and exterior improvements, including combining some bedrooms into suites, redoing the landscaping, building a new dock at the Carriage House Restaurant and increasing outdoor seating with new patios.

Also on Mackinac Island, the Cottons are planning a three-year, multimillion-dollar renovation of the Harbour View Inn that’s in the design phase now and is expected to kick off after the 2024 peak season ends.

For the Stafford’s properties, which Cotton says are “really well run,” he’s targeting retaining staff but optimizing other expenses with the new economies of scale that The Cotton Collection’s management team, HIS, can provide.

But he’s also going to take the next couple of years to assess the properties for any necessary renovations, as they also are historic

edged prices were higher last year on average across Mackinac Island’s 1,600 rooms.

Though the 2023 visitation numbers aren’t in yet, her gut feeling is that consumer spending from day trippers was softer last year, and there likely were fewer visitors than the 1.2 million people who came in 2022. But the bureau still exceeded its revenue goals, largely because rates were up.

Castelein said she expects rates will hold fairly steady for the 2024 peak season. A May 7 search of the Mackinac Island hotel rooms still available for mid-July showed options ranging from $289 at the Murray Hotel on Main Street to $597 up the hill at the Grand Hotel.

“I think we’ve kind of hit our max for a few years right now, so I can see rates staying similar,” Castelein said.

One indicator of that, she said, is that another 30 rooms are coming

structures. The Bay View Inn, for instance, was built in 1886, while the Perry Hotel dates to 1899.

“We want to understand all of the operations, the buildings … (and) it’s going to take time to really say, ‘What do we want to do with each one of these?’” he said. “We have not started the exact process yet.”

Jim Powell, executive director of the Petoskey Area Visitors Bureau, said he looks forward to seeing how the Cottons’ plan for the Stafford’s properties plays out, as the properties are some of Emmet and Charlevoix counties’ most-loved destinations.

“We do know that (the Cottons) intend to maintain the historic nature of those properties,” he said. “When you look at their other purchases like the Hotel Iroquois on Mackinac Island, there’s been a lot of positive (anticipation) that they’re going to do the right thing with these historic properties up here. Certainly, as always, we’re excited to hear about what capital improvements are coming. The hospitality industry is an ever-evolving piece and the last thing you want to do is not keep your properties current. We’re excited to see what vision they have going forward that’ll help elevate those properties.”

Cotton said he’s always been a preservationist at heart.

“I love historic architecture, and I love to design and to build and improve,” he said. “And I think that’s what we’ve done (with Hotel Iroquois) and what we’re going to do with our other properties. It’s really taking these gems … to the next level.”

back online this year, thanks to the completion of the two-year-long renovation of the Inn at Stonecliffe adding supply to the market. The luxury property’s July prices range from about $492 for a queen room up to $3,000 for a night in one of the summer cottages.

Powell, from Petoskey, said just from anecdotal conversations, he thinks there’s more competition for consumers’ budgets, including for travelers who might be considering “long haul” international destinations. That makes the growing practice of dynamic pricing essential, rather than a set-it-and-forgetit approach to peak-season rate setting.

“At the end of last summer … consumers were really returning some of their pre-pandemic behaviors,” he said, before laughing: “If one more person (talks) about their trip to Spain, or somewhere international, I swear ...”

Bay View Inn. | STAFFORD’S HOSPITALITy

Jon and Lauren Cotton

Harbour View Inn. | COURTESy HIS

SMALL BUSINESS

Insurance coverages for your small business

Know your options and feel con dent at your next renewal

ANDREW SCHIPPERS

Senior Producer

Lighthouse Andrew.Schippers@aleragroup.com 616-820-7216

Andrew develops customized insurance strategies for West Michigan small businesses. With over 18 years of experience, his clients value his personalized and educational approach.

As a small business owner, you juggle countless responsibilities to keep your enterprise thriving with your bottom line always top-of-mind; and your insurance program is an important investment in your business’ nancial

security as you face the unexpected. Yet with insurance costs constantly on the rise, you might be questioning what coverages are truly necessary?

As a small business insurance agent with nearly two decades of local experience, I’ve walked with clients through a multitude of claims and feel a few optional coverages rise to the top as the best “bang for your buck.”

In this brief Q&A, we’ll look at three of these coverages that may be vital to protecting your business operations and why business owners should think twice before opting to forgo them.

What is Directors and Of cers (D&O) insurance?

D&O insurance protects directors and o cers from personal liability arising from decisions made while managing the company. It covers legal fees, settlements, and judgments that may result from alleged wrongful acts.

Why is D&O insurance important for a small business?

Despite the common misconception, small businesses face virtually the

same risk to legal challenges as large businesses. Even those without a formal board of directors face exposure to potential lawsuits that can arise from business operations. D&O insurance ensures your leadership team’s personal assets are protected so they can make strategic decisions without constant fear of personal liability. is coverage can also attract and retain top talent, as executives feel more secure in their roles in an increasingly litigious environment.

What is Cyber Liability insurance?

Cyber Liability insurance safeguards businesses against cyber threats and data breaches. It covers costs related to data recovery, legal expenses, customer noti cation, and even extortion demands from cybercriminals.

Why is Cyber Liability insurance important for a small business?

Small businesses are increasingly targeted by cyberattacks due to their perceived vulnerability. According

to Accenture’s Cost of Cybercrime Study, 43% of cyber-attacks are aimed at small businesses, yet only 14% are prepared to defend themselves. As cyber criminals continue to grow more sophisticated their attacks can be catastrophic, leading to signi cant nancial losses and reputational damage. Paired with proper protections and securities, Cyber Liability insurance provides a safety net, helping you recover swi ly and maintain the trust of your customers.

What is Employment Practices Liability Insurance (EPLI)?

EPLI protects businesses against claims related to employment practices, such as wrongful termination, discrimination, harassment, or retaliation. It covers legal defense costs, settlements, and judgments.

Why is EPLI important for a small business?

Employment-related claims can arise unexpectedly, even in well-managed businesses. Many small businesses work

alongside and employ family members, friends, and close acquaintances. is ‘closeness’ can create a false sense of security for the business owner believing there won’t be an incidence such as harassment, discrimination, or wrongful termination. Unfortunately, even good intentioned business owners fall victim to lawsuits, whether or not they are legitimate claims. If it’s an employee, customer, or vendor, the risk is present. EPLI shields your company and its nances from the fallout of employment disputes, ensuring you can focus on growth without the looming threat of costly legal battles.

ese three insurance coverages are only a few of the many available to strategically invest in protecting the future of your business. e small business team at Lighthouse, an Alera Group Company specializes in building nancially feasible and holistic insurance programs unique to each business. Start a conversation today!

As your business grows and changes, so do your insurance needs.

At Lighthouse, we’re proud to partner with our clients to develop strategies that serve your needs today while keeping your long-term business goals and objectives in mind.

Find out more about a risk management approach that can keep you well-protected for years to come at lighthousegroup.com.

SMALL BUSINESS

A strategic approach to growing in laboratory furniture

Symbiote’s path to organizational renewal and sustainable growth

BARRETT RANDOLPH

but stagnant history, embarked on a journey to revitalize its operations and foster a culture of growth and engagement among its team members. Over the past two years, significant changes have been implemented, paving the way for a brighter future.

Recognizing the need for a strategic overhaul, Symbiote’s leadership embarked on a mission to position the company for sustained growth. Despite its longstanding presence in the market, the company had plateaued, prompting the exploration of new avenues for expansion.

Barrett Randolph is a secondgeneration leader in manufacturing innovative workspaces for Laboratories, Aerospace, National Defense, Higher Education, and technical markets.

In the ever-evolving landscape of business, strategic thinking and adaptability are paramount for continued success and growth. Symbiote, Inc., a firm with a stable

Central to this transformation was the aspiration to cultivate a culture of employee engagement and selfaccountability, recognizing the pivotal role of motivated and empowered employees in driving organizational success. Developing new core capabilities around steel fabrication created a more intimate relationship between the engineering, design, and production areas of the business.

A new management team has catalyzed a series of transformative initiatives aimed at propelling the company forward. Embracing lean

concepts and principles of continuous improvement, the management team embarked on a journey of organizational renewal, charting a path toward enhanced efficiency and competitiveness. Despite the inherent challenges, including the need for tough decision-making, the company’s commitment to growth remains unwavering.

One of the cornerstones of Symbiote’s transformation has been the systemic development of work instructions, standard operating procedures (SOPs), and the optimization of its enterprise resource planning (ERP) system. By streamlining workflows and enhancing operational efficiency, these measures have enabled the company to unlock latent potential and capitalize on growth opportunities. Moreover, the implementation of these systems has instilled a sense of trust and accountability across the organization, laying the groundwork for sustainable growth.

However, organizational transformation goes beyond

procedural enhancements; it necessitates a fundamental shift in culture and mindset. At Symbiote, the cultivation of a more inclusive and empowered workplace culture has been a top priority, granting team members a voice in decision-making processes and empowering a sense of ownership and commitment among its workforce. This inclusivity has not only boosted morale but has also unleashed creativity and innovation, driving the company’s competitive edge.

Central to Symbiote’s cultural transformation has been the adoption of the Entrepreneurial Operating System (EOS) workplace system, providing a comprehensive framework for organizational alignment and accountability. EOS has served as a catalyst for bringing teams together and driving collective action toward shared goals. Through active communication and a renewed focus on accountability, Symbiote has fostered a culture of transparency and collaboration, enabling the team to work cohesively towards a common vision. The results of these strategic initiatives are evident in our recent

performance metrics. With a renewed focus on efficiency and innovation, the company has experienced tangible growth and success, surpassing previous benchmarks and setting new standards for excellence. However, it is just the beginning of Symbiote’s journey toward sustainable growth, as the company remains committed to continuous improvement and adaptation in an ever-changing marketplace.

The strategic positioning of Symbiote for continued growth represents a testament to the power of proactive decision-making and a commitment to organizational excellence. By embracing change, fostering a culture of engagement, and leveraging tools such as lean principles and the EOS workplace system, Symbiote is unlocking its full potential and has laid the foundation for a prosperous future. None of which could have been possible without the hard work and efforts of each and every team member at Symbiote.

‘Land baron’ approach leaves lasting mark on downtown

By Kate Carlson

Former Grand Valley State University President Arend “Don” Lubbers recalls when the late Richard DeVos told him to “just let him know” if he ever needed any money to purchase property in downtown Grand Rapids for the school.

Lubbers, who served as GVSU’s president from 1969 through 2001, is among multiple local higher education and economic development leaders who say the Amway co-founder and his wife, Helen, built a lasting legacy for downtown by donating to transformative projects.

As the Richard and Helen DeVos Foundation sunsets after more than 50 years of giving, the couple’s philanthropy established a model for public-private development that is still evident today.

“They acted out of a very strong religious conviction, but this religious conviction did not limit them to just (donating) to religious causes. Their commitment extended to community projects,” Lubbers told Crain’s Grand Rapids Business. Lubbers, 92, worked lock-step with Richard and Helen DeVos in their various roles at the university. The DeVoses both served as members of the Grand Valley University Foundation in the early 2000s, and Richard DeVos served on the Board of Control from 1975-1982.

“It started with a president asking a wealthy person to become a donor, but for Rich and me, it became the kind of relationship where whenever I wanted to take on an initiative, he would be in the planning stage already rather than the giving stage,” Lubbers said. “He would be sitting at the table right away.”

The DeVoses were among a group of wealthy philanthropists who helped GVSU establish the now 45-acre Robert C. Pew campus downtown in the late 1980s. The philanthropic couple were always willing to contribute financially as well as on the planning side of the university’s various capital projects, especially when it came to its presence in downtown Grand Rapids, Lubbers said.

“There have been a few significant people in West Michigan who helped me succeed, and Rich and Helen DeVos were exceedingly important in my career,” Lubbers said. “They made a difference for me. They helped me achieve my objectives — I don’t think I could have achieved as much as I had, wanted to and did without them.”

Land barons

The DeVoses also were successful in convening other power brokers of the time to combine their wealth to make projects happen, even gathering as a “Land Barons Club” to strategize and align their plans.

“When we needed downtown property, I remember Rich chaired a meeting and invited about 20 people to come to the meeting and those people all contributed maybe between half a million and $1 million to buy land downtown where we built the (Pew) campus,”

Lubbers said.

The group met at the ritzy Lumber Baron Bar in the Amway Grand Plaza hotel downtown, which is partly how the club got its name, Lubbers said.

The Lumber Baron Bar was originally located in the space now occupied by Woodrows DuckPin Bowling. The original furnishings from the bar were donated to GVSU when the bar closed in 1997, and are now on display in The University Club Room located in the Richard M. DeVos Center at GVSU’s downtown campus. A smaller recreation of the Lumber Baron Bar was constructed in 2004, taking over the space of the Knife and Fork Restaurant in the Amway Grand Plaza.

The group made pewter cups emblazoned with the name of each member of the exclusive Land Barons Club, and at one point displayed the pseudo mug club on a shelf at GVSU’s downtown campus, Lubbers said.

“That kind of land baron approach really had the touch of a Rich DeVos, his individual stamp on it,” Lubbers said. “The university brings people together like that for planning and fundraising, but that was his particular brand.”

For all of its economic development benefits for the city’s downtown and GVSU, the downtown Pew campus also contributed to displacing residents in the surrounding neighborhood. The campus development displaced more than 700 homeownership units between 2007 and 2021 in the surrounding Westside Connection neighborhood, according to a recent report by the Fair Housing Center of West Michigan.

Residents on the city’s west side today have been the most vocal in voicing concerns about the soccer stadium Grand Action 2.0 is developing at the edge of their neighborhood, which many say could cause

ty,” Slavitt said in an interview. “I think it’s a really important and really dynamic topic that has a lot of resonance across the philanthropic ecosystem, now probably more than in other moments in time.”

‘Lasting legacy’ downtown

Richard and Helen DeVos’ contributions to the creation of GVSU’s downtown campus helped seed an ever-expanding development, where half of the university’s students and all of the professional colleges exist today, said Philomena Mantella, who has served as its president since January 2019.

“This has been a lasting legacy,” Mantella said. “It’s also where we continue to explore great growth moving forward into the future because the vibrance and interplay between the city and university is so exciting and energetic, because the city itself has become a great college town. The professional schools are linked to the businesses, industries and nonprofits around downtown.”

As well, the DeVoses have left an imprint on GVSU that has carried into the next generation. Dan De-

As the Richard and Helen DeVos Foundation sunsets after more than 50 years of giving, the couple’s philanthropy established a model for public-private development that is still evident today.

similar gentrification and eliminate parking for the west side community.

It’s common for philanthropic families to leave “complicated” legacies, said Lesley Slavitt, executive director of the Dorothy A. Johnson Center for Philanthropy at GVSU.

The second and third generations of the DeVos families have incorporated housing into their funding priorities, including support for the Facing Home Initiative and Housing Stability Alliance that led to the formation of Housing Kent, as well as the Boston Square Together development on the city’s southeast side.

“There’s a large topic of conversation, particularly right now, in terms of how wealth is made and what are the responsibilities, or what are the legacies, that second and third generations are confronted with in terms of how they think about obligations to the communi-

Vos and his wife, Pamella, both serve as vice-chairs of the Grand Valley University Foundation.

“Their legacy is going to last,” Dan DeVos said of his parents’ philanthropy. He also serves as the CEO of Grand Rapids-based DP Fox Ventures LLC, the family office that includes the nearly $2 billion (revenues) Fox Motors car dealerships; is co-founder and partner of CWD Real Estate Investment, a major downtown property owner; and is on the ownership and leadership teams at the Grand Rapids Griffins, Grand Rapids Rise, and Orlando Magic.

“The opportunities continue on for the university in different ways,” DeVos added, referring to GVSU’s expansion plans for the downtown campus.

The university’s master plan proposes to double the number of student housing units downtown in the coming years, develop a $140

million tech hub and convert a parking lot to green space to generate more public interaction downtown, as Crain’s Grand Rapids Business previously reported.

Meanwhile, the outsized role that Richard and Helen DeVos played in the development of the Pew campus and much of downtown Grand Rapids has carried on to the next generation.

The couple’s eldest son, Dick DeVos, in 1992 helped found the Grand Vision Committee, which later became Grand Action. The private development group — which he cochaired along with the late David Frey and the late John Canepa — led the creation of Van Andel Arena, DeVos Place, the Michigan State University College of Human Medicine’s Secchia Center, Civic Theatre and Downtown Market.

After taking a hiatus in early 2018, the organization reconvened in 2020 as Grand Action 2.0, chaired by Dick DeVos, Carol Van Andel and Tom Welch, the West Michigan regional president at Fifth Third Bank. Grand Action 2.0 is in the process of simultaneously developing Acrisure Amphitheater and a downtown soccer stadium, representing hundreds of millions of dollars in new investments in the city.

Shifting philanthropic landscape

Dick DeVos said he was “inspired by his parents’ philanthropic leadership in the city,” although the dealmaking landscape has shifted since the days of the Land Barons Club.

“At that time there were about four, five or six couples that all knew each other that could just make things happen,” Dick DeVos said.

Projects could move more quickly, say after a few phone calls or meetings over drinks, compared to a broad-based approach today that pulls in more interested parties, residents and local officials, he said.

“We’re certainly seeing that as we look at the amphitheater project and the soccer stadium project,” Dick DeVos said. “We have to use some different processes and it needs to be a bit broader, because there’s not the same resources in any one pile.”

Grand Action 2.0 Executive Director Kara Wood shared a similar sentiment about the shifting nature

of Grand Rapids’ philanthropic landscape.

“What’s interesting is that, as these generations transition, the participation is much broader and even so far to say that hopefully (Richard and Helen) have led by example and encouraged the community to give so that it’s more community members contributing alongside philanthropists, allowing those projects to continue,” Wood said.

Despite that shift, the DeVoses have set the example that “the development of profitability comes with the responsibility to give back,” Mantella said.

“I think there is a new entrance to philanthropy,” Mantella said. “One could say it was very concentrated and now perhaps it’s more dispersed, but the legacy they offer is there. (Giving) can sometimes come and go with a single family, but with the DeVoses it became a unification of community members to build the well-being and energy of the city.”

Welch, who also serves on the boards of The Right Place Inc. and Grand Rapids Symphony, is a native of Toledo, but said he was inspired by the DeVoses and other power broker families to get more involved in the community upon moving to the area about 10 years ago.

“That is the multiplier effect that Helen and Rich had, is they were able to take who they are and what they stand for, bring it to the community and also instill it in the second and third generations that are continuing the great work that you see with Grand Action 2.0. But that is a really unique gift to be able to do that,” Welch said.

What Welch noticed a decade ago when he moved to Grand Rapids was that leaders did not send representatives for them to meetings. They got involved and showed up, he said.

“I felt like it was incumbent upon me as a leader in the community to earn my stripes,” Welch said. “I saw Grand Action as a perfect way to do that, get involved, get my hands dirty, roll up my sleeves and get some work done. In my mind, I was merely following in the footsteps left by great leaders that had already done the work.”

Crain’s Grand Rapids Business reporters Rachel Watson and Mark Sanchez contributed reporting to this story.

Grand Valley State University’s Pew campus in downtown Grand Rapids. | COURTESy OF RDV CORP.

DeVos donations helped build health care powerhouse

By Mark Sanchez

Dr. Jim Fahner was a young pediatric oncologist at Butterworth Hospital 35 years ago when he was called to then-CEO Bill Gonzalez’s office one day.

Gonzalez told him that a member of the hospital’s board of directors and his wife had questions about pediatric care. Fahner had been on the job for only a few months in the summer of 1989 after Butterworth recruited him to Grand Rapids to start the pediatric oncology program.

and executive director for philanthropy at the hospital.

Jumpstarting the vision

The DeVoses’ gifts began to transform the vision for a local children’s hospital into reality and “that the work was real, and that the future was real,” he said.

The donation was the beginning of a push to develop the “big blue building” that today towers over Michigan Street as the home of Helen DeVos Children’s Hospital, along with other facilities that comprise the Butterworth campus that were built in the past two decades.

The support allowed for the development of a freestanding children’s hospital years sooner than what otherwise would have occurred, Fahner said.

Fahner recalls how Gonzalez “threw open the doors of the boardroom and at the end of the table were Rich and Helen DeVos,” Fahner said. “Of course, I was starstruck and overwhelmed. I had certainly heard of these icons of the community, and I had not met them in person.

“I was extremely nervous, and they started a conversation that made me feel like I had known them my whole life. They asked about what had brought me to Grand Rapids, how my practice was going, whether my family liked living in West Michigan.”

In their conversation, Fahner recalls Rich DeVos asking: “What is it that you want most to accomplish here?”

Fahner cited the unmet need for children’s care in outlining why he thought “West Michigan deserves a full-service, comprehensive children’s hospital.”

“And (Rich) said something to the effect, ‘Well, then that’s exactly what we’ll help you do.’”

From that conversation, the DeVoses went on to contribute millions to Butterworth Hospital and later Spectrum Health and Corewell Health to support pediatric and other care, cementing their significant role in building a health care powerhouse in Grand Rapids and the city’s Medical Mile.

A few months after meeting Fahner, their giving started with a $5 million donation to start a women and children’s health unit at Butterworth Hospital.

“It was a wonderfully strategic gift,” said Fahner, who today serves as division chief emeritus for the children’s cancer program

“We would be able to have a true children’s hospital here in West Michigan,” he said. “Something that may have been four or five or six years down the road became a more immediate reality for us. That really became the beacon of a lot of recruitment, a lot of program expansion, new services coming online that had not been here in West Michigan before.”

The 234-bed Helen DeVos Children’s Hospital in 2023 recorded more than 328,000 patient encounters and offers specialized pediatric and adolescent care. It’s an expertise that previously was unavailable in Grand Rapids and required people to travel outside of the market to access.

“They jumpstarted the vision,” Corewell Health President and CEO Tina Freese Decker said. “It’s impacting people today, and it’s going to impact people for generations to come.”

The DeVoses’ four children later gave $50 million toward development of the Helen DeVos Children’s Hospital that opened in 2011. More recently in February, the DeVos Family Foundation gave $40 million to support hospital programs, $20 million of which was the final donation made by the Richard and Helen DeVos Foundation, which sunset on May 1, 2024, after giving more than $1.1 billion over its history.

“Helen DeVos Children’s Hos-

Donations from Rich and Helen DeVos allowed for the development of a freestanding children’s hospital years sooner than what otherwise would have occurred.

| COURTESy OF RDV CORP.

pital is truly a special gift to our community, and we are honored to continue to be active supporters. I love that our family has been able to carry on many traditions with the hospital while also creating new partnerships and areas of support, including those announced to the community a few months ago,” Cheri DeVos Ehmann said. “Seeing my children and even some of the fourth generation of DeVos family members carrying on traditions, such as visiting and bringing gifts to the children during Christmas time, has been heartwarming.

“I’m also thankful to many of those in our family who continue to serve in board and committee leadership roles at the organization that help to advance it even further.”

Leading the hospital merger

The DeVos family’s philanthropy for the health system extended well beyond supporting the children’s hospital. Richard DeVos was instrumental in bringing together executives at Butterworth and Blodgett hospitals, which were fierce rivals and in the 1990s engaged in a medical arms race of sorts.

The two hospitals ultimately merged in 1997 to create Spectrum Health, which later went on to develop new facilities and medical services to become a regional destination for specialized care, including heart and lung transplants that also were previously unavailable in Grand Rapids.

The merger forever altered the health care market in Grand Rapids.

“The merger of Butterworth and Blodgett meant we didn’t have three or four equally sized hospitals that all kind of did the same thing. We suddenly had a more regional, more significant, large (health system) with more doctors, more specialties offered in this community. And it changed everything,” said Steve Heacock, a former Kent County commissioner who served as senior vice president of public affairs and research at Spectrum Health.

The origins for Corewell Health’s heart and lung transplants trace back to the 1990s when Richard DeVos was in his 60s and needed a heart transplant. He was unable to fund a transplant surgeon in the U.S. who would take him as a patient. His doctors connected with Sir Magdi Yacoub, a cardiovascular surgeon in London, England, who agreed to take his case.

DeVos had his transplant five months later in 1997 at Harefield Hospital in London.

Back home, he supported the formation of the heart and lung transplant program at Spectrum Health. As with the children’s hospital, the idea was to provide a highly specialized medical service in Grand Rapids, alleviating the need for patients to leave the market for care.

“I just think he felt that any community as good as Grand Rapids should have world-class facilities in health care,” Dan DeVos said of his father. “He just felt there was a need and an opportunity for Grand Rapids to do something special, so he just kept down that path.”

The DeVos foundation continued to support the transplant program for years afterward. In 2022, the most recent data available, the Richard and Helen DeVos Foundation gave $750,000 to the Spectrum Health Foundation for what was named as the Richard DeVos Heart and Lung Transplant program.

DeVos also helped to recruit transplant surgeons and clinicians to Grand Rapids, including Dr. Asghar Khaghani, who performed the first heart transplant at Spectrum Health in November 2010.

Spectrum Health, which became Corewell Health following the 2022 merger with Beaumont Health in Southeast Michigan, was one of the top recipients of funding from the Richard and Helen DeVos Founda-

tion. Between 2012 and 2022, the foundation gave $26 million to the Spectrum Health Foundation, according to annual financial disclosure forms.

Richard DeVos also served for years on the health system’s board.

Heacock credits the DeVos foundation’s support with accelerating access to specialized medical care in Grand Rapids.

“I don’t have any doubt in my mind that this health care system in our region is multiples better than it would be without Rich and Helen DeVos and the DeVos family,” Heacock said.

Looking back, Fahner believes that because of the philanthropy, “we have always been able to punch way above our weight class in this organization.”

“Our ability to start innovative programs and services and to at-

Empowering Businesses Through M&A Support

The groundbreaking for the Helen DeVos Children’s Hospital. COURTESy OF RDV CORP.

As DeVos family passes torch, what’s next for nonprofits?

By Rachel Watson

When the owners of The Coffee Girls, LLC were ready to finance their first Biggby Coffee franchise, they turned to Lake Michigan Credit Union. LMCU’s SBA lending team brews the perfect blend of competitive rates, quality service, and expert guidance to ensure a smooth lending process. Call Tom Nestor at (248) 841-2838 or email Thomas.Nestor@LMCU.org to see how we can help your business grow.

Observers and longtime beneficiaries of the Richard and Helen DeVos Foundation say the entity’s dissolution comes amid a challenging climate for philanthropy that is keeping nonprofits on their toes.

The children of Richard and Helen DeVos — Dick, Dan, Cheri and Doug — announced May 1 that they are sunsetting their late parents’ foundation, which gave more than $1.1 billion to 1,044 nonprofits since its formation in 1969.

Some of the foundation’s key funding priorities included arts and entertainment, health care, education, faith-based causes and economic development.

In an interview with Crain’s Grand Rapids Business, Dick DeVos said that while some wealthy families take the approach of setting up a single foundation through which all giving decisions are made in perpetuity, his parents had other ideas.

In their estate planning, they asked their children to sunset the foundation within five to 10 years of their deaths. Helen DeVos died in 2017, while Richard DeVos passed away in 2018.

“My parents always had a view that they wanted us, in the same way that they followed their passions and their hearts with their giving … to follow our own passions and do the things in the community that touched our hearts, where we felt there was a need,” Dick DeVos said.

Lesley Slavitt, executive director of the Dorothy A. Johnson Center for Philanthropy at Grand Valley State University, said while it’s not uncommon for first-generation philanthropists to sunset their foundations, it is a “passing of the torch” that has implications for the nonprofits that came to rely on the elder DeVoses’ giving.

“Whatever legacy commitments or legacy work that Richard and Helen were committed to, those things have come to their conclusion,” she said.

The sunset comes at a crucial moment for philanthropy, when

the election year may shift some charitable giving from nonprofit causes to political campaigns, Slavitt said. Also, the community foundations in Grand Rapids, Battle Creek, Kalamazoo and Holland/Zeeland all changed leadership within the past year, which also could affect foundation giving priorities in the years ahead.

In addition to those broader trends, the sector also is grappling with conversations around artificial intelligence and pressing needs like housing and diversity, equity and inclusion work, Slavitt said.

“Some things are deeply rooted locally, such as leadership transitions, and the increased investment and focus on housing, and some things are national and cyclical, like the elections,” she said. “All of those things come into play in what the community has to process and deal with. … But certainly, it’s really important to acknowledge the changing of the guard and the ongoing philanthropic commitment, and where the (DeVos) family takes that.”

Decades of legacy

Richard and Helen DeVos were longtime supporters of arts organizations including St. Cecilia Music Center, Frederik Meijer Gardens & Sculpture Park, the Grand Rapids Art Museum, Grand Rapids Civic Theatre, Grandville Avenue Arts & Humanities, Opera Grand Rapids and others.

The Grand Rapids Symphony was one of their longest-running beneficiaries. The Richard and Helen DeVos Foundation gave to the organization for 52 straight years. That included a $20 million lump sum donation to a 2012 capital campaign to build a permanent symphony endowment that was then matched by $20 million from other donors. The couple’s foundation also gave annual grants to the symphony totaling about $12 million between 2012 and 2022, the years for which tax filings are publicly available.

The Grand Rapids Symphony is the longest-running recipient of the Richard and Helen DeVos Foundation’s philanthropy. | NATALIE LOPEZ PHOTOGRAPHy

Current Grand Rapids Symphony President and CEO Keith Elder, who stepped into the role last July after leading the Tulsa Symphony Orchestra, said one of the unusual aspects about Richard and Helen DeVos’ approach to arts giving is that “so often it’s either one or the other” — endowing organizations and programs or building facilities. But the DeVoses did both.

“It seems like they got the balance here just perfect,” he said.

While Elder said the organization is grateful for the support and hopes the family will continue it generationally, he said he hasn’t had detailed conversations with Richard and Helen DeVos’ children about what form that might take.

And the younger DeVoses aren’t making specific promises.

“If you look at the numbers, we’ve supported the symphony much more modestly,” Dick DeVos said of his immediate family’s giving to the organization about $272,000 since 2002. “It has not been a passion area of ours.”

Dan DeVos and his wife, Pamella Roland DeVos, have given about $5.73 million to the symphony since 2001, along with a gift of an undisclosed amount in February to endow the music director chair. Dan DeVos said even so, they don’t know if they can fill the shoes of their parents.

“We’ll contribute significantly to it on an ongoing basis,” Dan DeVos said. “Whether that’s going to match what my parents were able

to do or not, I don’t think we can, but we would certainly want to do our fair share.”

From 2012 to 2022, the Richard and Helen DeVos Foundation gave about $312,000 to St. Cecilia Music Center, according to the publicly available tax filings. Amounts during that period ranged from $60,000 in 2018 to $20,000 in 2022. In 2012, the foundation’s grants to St. Cecilia represented more than 11% of the total contributions the organization received that year. But by 2022, that share was down to about 1.2%, as more of its contributions came from other sources.

Cathy Holbrook, executive and artistic director of St. Cecilia, was not available for an interview but said in a statement that the late DeVoses were an “important and significant” source of funding for the venue and its programming for decades.

“The fact that we could rely on loyal support from the (Richard and Helen) DeVos Foundation allowed us to expand our programming both in our concert Present-

ing Series and our School of Music,” she said in the statement. “Expanding programming, in turn, helped us expand our audience base, which also means the ability to expand our donor base.”

Local arts organizations represented just part of the Richard and Helen DeVos Foundation’s annual giving. Heart of West Michigan United Way is an example of a health and human services organization that was a beneficiary to the tune of about $850,000 between 2012 and 2021, according to the publicly available tax filings.

Michelle Van Dyke, the chapter’s president, said although the DeVoses’ foundation ceased making grants to Heart of West Michigan United Way three years ago, their legacy of giving lives on in their children. All four of them continue to give to the local United Way organization, according to their 2022 tax filings.

“My sense is that the torch was really passed many, many years ago,” she said. “The second generation remains very committed to not

only Heart of West Michigan United Way, but other nonprofits all throughout this community. And so I think Rich and Helen did a wonderful job of leaving this legacy through their children.”

A challenging year ahead?

Michael Montgomery is principal and founder of the metro Detroit-based fundraising and economic development services firm Montgomery Consulting and a lecturer on fundraising and grant writing at the University of Michigan-Dearborn.

He said the dissolution of the DeVos parents’ foundation comes during what he expects to be a challenging year for fundraising.

A June 2023 report from Giving USA — the most recent available — found giving fell 10.5% in 2022 after two years of record-breaking giving inspired by the pandemic.

The best leading indicator for 2024, Montgomery said, is the fourth quarter 2023 report from the Association of Fundraising Professionals’ Fundraising Effectiveness Project, which showed a near-universal decline in dollars raised, donor counts and retention at the end of last year when compared to 2022.

“What we’re probably looking at is giving this year that is flat relative to last year, which would mean down in real dollars, once you adjust for inflation,” Montgomery said.

A survey Montgomery conducts

yearly as a barometer of Michigan’s fundraising climate also found that more organizations than ever failed to meet their fundraising goals last year, and fewer organizations than in all previous 12 years of the survey were able to raise more funds last year than the prior year.

“The response I got back (from CEOs and chief development officers) about what they’re thinking about for 2024 was the lowest level of optimism of the 12 surveys I’ve done,” he said.

United Way’s Van Dyke said while her organization is for the most part hitting fundraising targets, she has definitely noticed the shift in giving habits.

“Just in general, from a fundraising standpoint, it is really difficult right now for nonprofits,” she said. “The cost of their programming, of their supplies, of everything that they do is growing, and it’s a strain right now for nonprofits to raise the money that they need to be able to continue being as effective as they’ve been in the past. … Donors are being more cautious in terms of their giving levels because things are costing them more, too.”

The Grand Rapids Symphony’s Elder said one of the bars nonprofits now have to meet if they’re going to continue to sustain their contributions is the ability to prove the positive effects they are having in the community.

Crain’s reporters Kate Carlson and Mark Sanchez contributed to this report.

Banking

Lesley Slavitt, Johnson Center Keith Elder, Grand Rapids Symphony

Michelle Van Dyke, United Way

Michael Montgomery, Montgomery Consulting

too much extra money to give around easily, they had a plan and she would take cash and put it in an envelope for giving, consistent with the Christian tradition of tithing,” said Dick DeVos, Richard and Helen DeVos’ eldest son who recalls how the couple’s giving started well before they formed the foundation.

“My father would tell the story. They would take and put cash in the envelope before they figured out the rest of what they were going to do because giving and sharing was always important to them, even from the earliest days of their marriage,” DeVos recalled in an interview with Crain’s Grand Rapids Business.

“The foundation became sort of a formalization or an extension of that very personal decision that giving was something that they were going to do. As they were blessed with resources to give more, the founda-

tion became a good way to do it and how to do it well, and how to do these things thoughtfully was all part of the equation,” he said. “They gave away over a billion dollars, and (it) was very much important to them to give to organizations that were impactful, the organizations that made a difference, and that were doing things they cared deeply about.”

The Richard and Helen DeVos Foundation ceased operations as of May 1, 2024, more than five decades after a modest beginning in 1970, when it gave gifts to 33 organizations that collectively totaled $79,400.

In their hometown alone, the DeVoses’ foundation provided financial support to more than 300 local organizations over its lifespan. The top recipients locally over the years were the Corewell Health Foundation (formerly Spectrum Health Foundation), the Grand Rapids Symphony, Grand Rapids Christian Schools, and the Grand

Spending down

Valley University Foundation, each of which received millions in gifts.

Through those gifts, the foundation contributed to the creation of the Medical Mile in Grand Rapids, Corewell Health’s children’s hospital, and to Grand Valley State University’s downtown campus, all of which continue to grow and evolve today.

Driven by their faith, the DeVoses’ philanthropy extended into areas they felt would benefit their hometown and spur others to give as well.

“It all sprang from their faith and that’s the basis for it all, but they never limited it to faith,” Dick DeVos said. “They went to areas where they felt a passion, where they felt connection, things that moved their spirit, moved their heart to give, to trusting that others would resonate with other areas of the community.”

Designed to sunset

Unlike many foundations, Richard and Helen DeVos never intended theirs to continue in perpetuity after they died. Richard DeVos, who co-founded Amway (short for American Way) in 1959 with his good friend, the late Jay Van Andel, died Sept. 6, 2018, at the age of 92. Helen DeVos passed nearly a year earlier, on Oct. 10, 2017, at the age of 90.

Their wishes were for the foundation to sunset in the years after their passing. The intent was to give the next generation the freedom to chart their own courses in philanthropy and support the organizations and causes that they believed in.

Although their passions were “pretty aligned,” they didn’t want their children to feel obligated to give to the same causes, Doug DeVos, their youngest son and the co-chairman of Amway, told Crain’s Grand Rapids Business.

“an enormously empowering idea.”

“Rather than sitting around for 25 years, giving away your parents’ money wondering what they would have done, and having siblings argue about ‘mom would have done this’ and ‘dad would have wanted that,’ they said, ‘No, you find your heart and lean in and do it,’” he said.

Lesley Slavitt, executive director of the Dorothy A. Johnson Center for Philanthropy at Grand Valley State University, said the “passing of the guard” that the sunsetting of the Richard and Helen DeVos Foundation represents could be coming at a good time, as the community’s needs have changed since their era.

$1.1B

Total amount gifts awarded from 1970 to May 1, 2024

“They had broad, civic well-being interests in program areas that reflect the well-being and health and vitality of a community overall, and those seem to align with a lot of the same interests that family members currently have,” she said. “(But) while a number of institutions are deeply rooted in the longevity of a community, things also change in the community. The programs change, some of the needs may change and some of the organizations may change. … That’s something that has to be actively, richly understood in relationships that have to be continued to be built.”

$79,400

Total amount of gifts awarded in 1970 $380M

Total amount of gifts awarded over 10-year period from 2013-2022 $20M

Final gift awarded, which created a permanent endowment for the Helen DeVos Children’s Hospital’s Child and Family Life Program

1,044

Total number of organizations supported 183

“It was something that mom and dad always talked about,” Doug DeVos said. “They had things that they wanted to do, but … at the end of the day, they wanted it to stop so that the opportunity would be available for others to move forward. They didn’t want to have everybody, if you will, trapped in their legacy. They had their own purpose and sense of why they were doing what they were doing, and they wanted others to have that same joy.”

Most gifts awarded in one year (2012) 53

The number of consecutive years of support

Dick DeVos calls that approach

For example, the pandemic happened after Rich and Helen DeVos died and it revealed deep social and health disparities that needed to be addressed, according to Slavitt.

“Needs change and grow in ways that it’s important to have the active agility that allows philanthropy to be the best partner it can to the well-being of the community,” she said.

To that end, each of the DeVoses’ four children — Dick, Dan, Cheri and Doug — have created their own foundations that support organizations and causes, as have some of their grandchildren.

“I think it’s safe to say that they were such an extraordinary example, not just to those of us in the family, but encouraged many, many others in the community to be generous givers and to think about the importance of these things,” Dick DeVos said.

Education and the arts

Incorporated with the state on Sept. 12, 1969, the Richard and Helen DeVos Foundation backed organizations involved in education, health care, arts and culture, and faith and ministry. The first gifts the foundation awarded in 1970 included LaGrave Avenue Christian Reformed Church,

Grand Rapids Christian Schools, Junior Achievement, World Renew, Coral Ridge Presbyterian Church in Fort Lauderdale, Fla., and Gospel Communications International in Muskegon.

The last gift from the foundation was a $20 million contribution to a $50 million gift the DeVos family gave earlier this year to Corewell Health’s Helen DeVos Children’s Hospital, and for pediatric care centers in planning stages at Pine Rest Christian Mental Health Services and Mary Free Bed Rehabilitation Hospital.

The foundation’s longest beneficiary has been the Grand Rapids Symphony Society, which received

Dick DeVos recalls how support for the Grand Rapids Symphony came from his mother’s love of classical music. As a child, he remembers listening at night in his bedroom as she played the piano.

“My bedroom was in the basement in our family house and I would hear her playing the piano upstairs alone just for the joy of it, not knowing that probably we could hear all of her bad notes and all of her mistakes right downstairs,” he joked.

His mother’s love for music and her desire to support children matched with his father’s interest in building up health care services in Grand Rapids. Those interests served as the basis for supporting the Grand Rapids Symphony, St. Cecilia Music Society, the predecessor to Corewell Health and the Helen DeVos Children’s Hospital, which was named after the family matriarch.

“I think it’s safe to say that they were such an extraordinary example, not just to those of us in the family, but encouraged many, many others in the community to be generous givers and to think about the importance of these things.”

Dick DeVos, son of Richard and Helen DeVos

funding each year for 52 years. That includes a $1.1 million gift from the foundation in 2022, according to the most recent available financial disclosure form that nonprofit organizations are required to file annually with the IRS.

“She loved music and so this support for the symphony in music, the commitment to family and passion about children combined with my dad’s view that a great community needed to have great health care that would be available to people to allow them to stay in the community,” Dick DeVos said.

Helen DeVos was active on the Grand Rapids Symphony Board,

where she served as secretary from 1974 to 1982. The Richard and Helen DeVos Foundation in 2012 donated $20 million to the symphony’s $40 million Legacy of Excellence Campaign, which the DeVoses led to create a permanent endowment for the organization.

The Grand Rapids Symphony was the largest grant recipient in 2022, according to the most recent financial disclosure filing to the IRS.

Outside of health care, education and the arts, the Richard and Helen DeVos Foundation actively contributed to various social causes that aligned with their conservative values. That includes the Grand Rapids-based Pregnancy Resource Center, which in recent years received annual contributions of $50,000, and the Right to Life of Michigan Educational Fund, which

received a $100,000 donation in 2018 and smaller amounts in subsequent years. In 2013, the foundation also gave $250,000 to Focus on the Family, an evangelical Christian organization that has lobbied against LGBTQ rights, and $50,000 to the Alliance Defending Freedom, a Christian legal advocacy group opposing abortion and same-sex marriage rights.

Outside of their foundation, Richard and Helen DeVos also individually contributed millions of dollars to GOP political candidates and organizations. A 2016 analysis by OpenSecrets, a nonpartisan campaign finance watchdog, found that Richard DeVos contributed $3.7 million to candidates and organizing groups from 1990 to 2016, while Helen DeVos gave just shy of $3 million during the same period.

‘From a good place’

Despite criticisms over the years about the level of influence the DeVos family has had within West Michigan and via their outsized philanthropic giving, Dick DeVos is adamant that through it all, his parents were coming at the situation “from a good place.”

“I can tell you my parents … after conversations with others and listening to other people, (focused on) what was going make our community, West Michigan, a better place for all of us,” he said. “Folks may agree or disagree with what (they) did. I hope they would see that behind it all was the intention to make our community better.”

Mike Jandernoa, a longtime business leader in Grand Rapids and the former CEO at Perrigo Co., credits the “grand vision” of both the DeVos and Van Andel families and the public-private sector partnerships that they promoted with forever changing the region into a destination.

“They not only thought about it, they invented it,” said Jandernoa, who recalls sitting with Richard DeVos years ago, talking about the vision for Grand Rapids. “They implemented it and it has transformed our city and we’re now not just Grand Rapids, we’re one of the top cities in the country in terms of transformation.”

Crain’s reporters Kate Carlson and Rachel Watson contributed to this report.

The couple at the unveiling of Hope College’s Richard and Helen DeVos Fieldhouse. | COURTESy OF RDV CORP.

A special report for deal makers focused on middle-market growth

PRESIDENT’S LETTER

ACG Western Michigan committed to advancing collective progress

By Kelly Plawinski

As I re ect on my time in West Michigan over the past six years, it’s clear that many of my deepest relationships and now friendships began at one of the many ACG Western Michigan gatherings. In talking with others, I believe the same is true of many West Michigan professionals. The relationships formed at these events are the backbone of our professional community and the catalysts for signi cant business transactions.

West Michigan boasts a thriving business environment. The members of ACGWM are at the heart of this vibrant scene, bringing unmatched expertise, energy, innovation and deep-rooted relationships.

ACG Western Michigan provides an array of networking opportunities through its annual agship events, including the ACG Cup and the Outstanding Growth Awards, as well as its more frequent events such as Signature Programming, curated small-group

networking and robust NextGen Programming.

Having joined ACGWM weeks before the pandemic, my rst task was helping our signature programming committee navigate those uncharted waters. Thankfully, that’s behind us! I’m honored to now serve as the president of our Western Michigan chapter. Despite the inevitable ebbs and ows of the business climate, ACGWM remains a welcoming platform for nurturing connections and uncovering opportunities. It’s a privilege to contribute to an organization that fosters such active engagement and growth.

In September 2025, Grand Rapids will have the distinct honor of hosting the Annual Great Lakes Capital Connection, a premier event focused on the world of deals. This conference travels among seven ACG Great Lakes Region

cities, bringing together key players in private equity, debt capital and the middle market. This is a golden opportunity to network and exchange insights with more than 1,200 attendees, including 400-plus leading owners, buyers and sellers of middle-market businesses and 800-plus intermediaries and service providers from a national perspective. Mark your calendars for this monumental event. You won’t want to miss it!

If you have yet to attend an ACGWM event, I welcome you to do so. I assure you that you will be greeted with handshakes and introductions. If I’ve learned one thing about WM since moving here, it’s that the people here care deeply about helping others. We hope to see you soon!

As the chief operating of cer at Adamy Valuation, Kelly Plawinski brings a wealth of experience and leadership to ACGWM. Feel free to reach out to her at 616-284-3708 or kplawinski@adamyvaluation.com.

ACG is a global organization focused on driving middle-market growth. Its 15,000-plus members include professionals from private equity rms, corporations and lenders that invest in middle-market companies, as well as experts from law, accounting, investment banking and other rms that provide advisory services. For more information, visitacg.org/wmich

PLAWINSKI

The pursuit of growth: Which path is right for your business?

By Brandon Derusha and Ben Soodsma

How has your business grown in recent years? What are your plans for future growth? These are questions any business owner is likely to hear from prospective investors and lenders.

In general, companies have two options when looking to grow. A business can take the organic approach, utilizing internal resources (capital, personnel, processes) to execute a growth plan. Alternatively, the inorganic approach calls for one company acquiring another. The key is determining which one is right for your business.

Acquiring another business

One business acquiring another can result in a powerful combination when the two companies have overlapping strategic initiatives, complementary services or product lines, and the ability to achieve greater economies of scale. In addition to synergies, acquiring another business can provide immediate access to a new segment or market, positioning your business to realize growth and pro ts from day one. While many companies rely on mergers and acquisitions (M&A) to fuel their growth strategies, the territory comes with a host of considerations:

• Does your team have prior M&A experience, or would you need external advisers to help navigate the process?

• How will you source potential targets? What criteria will you use to narrow the search?

• What is the current state of M&A markets within

your industry? Are potential targets available at reasonable valuation multiples?

• Is the target a cultural t with your organization? Will you be able to retain key individuals?

Building it yourself

Like building a new home versus buying an existing one, using in-house resources to develop a new service or product line often gives business owners more control of scope, timeline and costs. While building out a new line of business is typically less costly than acquiring one, speed to market is a drawback. Factors to evaluate before pursuing a signi cant organic investment include:

• Do you currently have unful lled demand within your customer base?

• Will the expansion require additional labor resources? Or will you be able to manage with your existing infrastructure?

• Is your supplier base equipped to support your growth?

• How will this investment strengthen your company’s overall value proposition?

Analytical considerations

Once you’ve evaluated potential growth options, it’s prudent to evaluate the return delivered by the intended strategy and to consider the returns of any competing options. Required inputs for this analysis may include:

• The purchase price for an acquisition or the production costs associated with organic growth.

• Capital structure. Performing a dry powder analysis can help show a company’s potential funding sources, including the ability to obtain bank nancing.

• Financial projections. Based on your best assumptions, determine whether the strategy exceeds your rm’s weighted average cost of capital to ensure it is an accretive use of capital.

With a strong business case, analytical approach and proper resource allocation, your business can be on a path to achieving sustainable growth.

Brandon Derusha, director, and Ben Soodsma, director, BMO Commercial Bank are based in the Grand Rapids of ce located at 37 Ottawa Ave. NW, Suite 650. Contact Brandon at 616-901-1571 or brandon.derusha@bmo.com. Contact Ben at 616-446-6962 or benjamin1.soodsma@bmo.com. For more information, visit commercial.bmo.com.

DERUSHA

SOODSMA

Business growth, sale or transition – you have options

By Matthew Miller and Rajesh

Myriad options and strategic considerations mark the journey of growing, selling or transitioning a business. Each avenue offers business owners and shareholders unique opportunities to chart their course toward success, from acquisitions and mergers to divestitures, nancing and private equity partnerships. Following are a few of the diverse pathways to navigate business evolution dynamics.

Catalyzing growth and expansion

Acquisitions and mergers are powerful strategies for businesses seeking to accelerate growth and expand their market footprint. Strategic acquisitions allow companies to secure new technologies, customers, geographies, talent and scale, enhancing competitive advantage and fueling growth. By combining complementary strengths and resources, entities can unlock value, streamline operations and create a more vital, resilient organization.

Whether pursuing acquisitions or mergers, the foundation must be built on a well-thought-out strategy, thorough due diligence, integration planning and a realistic market-based assessment of deal value, return and synergy. All are essential to ensure success and maximize the investment return.

Streamlining operations

In certain instances, businesses may divest non-core assets or business units to streamline operations, realize value and sharpen their strategic focus. Strategic carve-outs enable companies to reallocate resources, reduce debt, enhance pro tability

and concentrate on core competencies and growth opportunities.

Divestiture strategies can take various forms, including selling subsidiaries, spin-offs or asset sales. By divesting underperforming or nonstrategic assets, businesses can optimize capital structure, improve nancial performance and drive shareholder value.

Fueling growth and innovation

Access to capital is crucial for businesses at every stage of their lifecycle, whether seeking acquisition funding, internal expansion initiatives, research and development investments or navigating challenging economic conditions. Today’s nancial markets offer more nancing options than ever. From traditional bank loans and lines of credit to private credit lenders, mezzanine lenders and private equity (majority/ minority) investors, driving a managed process tailored to an organization’s needs can yield broader solutions than many realize.

Equity nancing can provide businesses with nancial resources, strategic guidance, industry expertise and network access. These partnerships can catalyze growth, accelerate market penetration and present new opportunities for innovation and expansion.

Partnering for strategic growth and value creation

Private equity plays an increasingly signi cant role in the corporate landscape, providing capital, expertise, and strategic guidance to businesses across industries and stages of development. This is driving consolidation and competition across industries. Through equity investments, leveraged buyouts and growth capital infusions, PE partners collaborate with management teams to drive operational improvements, execute strategic growth and create value.

PE partnerships offer businesses access to additional resources, industry insights and operational expertise, enabling them to pursue growth opportunities, optimize performance and achieve their full potential. They also help organizations increase risk pro le to support bolder actions while increasing discipline in quickly addressing underperformance. The result is often more

successful growth and expansion and increased investment in the business. PE transactions also help address other goals, including ownership transitions, succession planning and liquidity (partial or complete) events for business owners.

Embracing opportunity and choice

The journey of growing, selling or transitioning a business characterizes a wealth of options and opportunities. Whether through acquisitions, mergers, divestitures, nancing or private equity partnerships, business owners can chart their course, pursue strategic objectives and unlock value.

As you navigate the complexities of business evolution, evaluate options carefully, align decisions with long-term goals and leverage the expertise of trusted advisers and partners. By embracing opportunity and choice, business owners can navigate corporate transformation with con dence, resilience and a strategic mindset—ultimately realizing their vision of success and sustainability.

Matthew Miller, Cascade Partners managing director, has 30-plus years of expertise in nance, M&A and business development.

Rajesh Kothari, Cascade Partners founder and managing director, has 30 years of expertise as an investor, nancial adviser and entrepreneur.

To get in touch with us, visit media.cascade-partners.com/43SHe37.

Kothari MILLER

KOTHARI

Investment bankers an assetKey tips for sell-side M&A

By Mark Streekstra

Selling your business is a momentous decision, and navigating the complexities of the process can be daunting. It’s tempting for business owners to “go it alone,” but investment bankers can play a critical role in maximizing the value you receive from your business. By leveraging their expertise in M&A, marketing and negotiation, investment bankers streamline the process, help secure the best possible price and ensure a smooth transaction.

1. Providing M&A expertise

Selling a business is a full-time job, and there’s no substitute for experience. Investment bankers live and breathe M&A every day, and that experience is critical throughout the sale process. This includes developing a sales strategy, preparing marketing materials, navigating due diligence and negotiating terms of the deal.

2. Maximizing value

Valuing a business is complex. Investment bankers excel at identifying value drivers, whether they be strong brand recognition, recurring revenue streams or a dominant market position. They strategically position these strengths to help maximize buyer interest and the price they’re willing to pay. Investment bankers can pinpoint potential weaknesses that might suppress valuation and develop strategies to mitigate their impact.

3. Creating competition In any negotiation, buyers naturally aim for the lowest price. So how can a seller be sure they’re getting the best possible deal? Investment bankers leverage their deep industry connections and negotiation

expertise to attract a pool of the best buyers. This creates a competitive environment where buyers are incentivized to put their best foot forward. Sellers then get a clear picture of their business’s true market value and maximize their chances of securing the highest possible price.

4. Limiting transaction burden

Managing the sale of a business can be an extremely time-consuming and onerous process. An investment banker can take on many of these responsibilities, freeing up the owner and management team’s time to focus on running the company. Investment bankers also serve as the primary negotiator in the transaction, which allows seller and buyer to maintain a strong relationship through and after closing the deal.

By partnering with an experienced investment banker, you gain a trusted adviser with the industry knowledge and negotiation skills to achieve your nancial goals. Investment bankers free you to focus on your core business while ensuring a competitive bidding process that helps secure the best offer for your company. The result? A successful transaction that leaves you con dent you’ve made the most of this pivotal moment in your company’s journey.

Mark Streekstra, partner and managing director, is known for his client-centric results in investment banking advisory services. He offers more than 16 years of versatile nancial expertise spanning multiple sectors.

By Justin Pinto

Many business owners are overwhelmed by the prospect of selling their company and are unclear about what it takes to do so successfully. This article navigates the critical steps needed to properly prepare and execute an ef cient process aimed at maximizing value for the business.

1. Selecting the right advisers

The groundwork for a successful sale begins well before engaging potential buyers. Assembling a team of trusted advisers experienced in M&A can make a signi cant difference in achieving goals. Investment bankers, M&A attorneys, accountants and tax advisers, and wealth managers will provide invaluable guidance throughout the process and help ensure the business is properly prepared for a sale.

2. Pre-market preparation

In a well-run M&A process, internal preparation is key. This involves nancial and legal housekeeping, crafting a narrative that showcases your company’s value and growth potential, creating a buyers list, and addressing weaknesses in the business that could negatively impact valuation, much of which can be done with the help of investment bankers. Proactively compiling necessary books and records of the business required for due diligence is also critical to drive a smooth due diligence process.

3. Marketing and buyer discussions

Now it’s time to ignite the bidding war. Working alongside investment bankers, sellers reach out to identi ed buyers, highlighting the company’s value and future growth potential. The goal is to generate excitement amongst a group of buyers, thus creating a competitive dynamic and driving up

the deal price. It also provides the opportunity for sellers to interview buyers to determine cultural and operational t before selecting a nal party.

4. Buyer selection, due diligence and closing The culmination of buyer discussions arrives with a call for nal offers, with investment bankers guiding interested parties in submitting their best proposals, outlining both price and key deal terms. Leveraging the competitive environment that’s been created by the process can also be critical to securing the most favorable offers at this time. Once the nal buyer has been selected, a letter of intent (LOI) formalizes the agreement to proceed with due diligence. Here, buyers meticulously examine the company’s nancial and legal records, while legal teams work concurrently to draft and negotiate the nal sale documents. This two-pronged approach streamlines the process, paving the way for a smooth and ef cient closing.

By understanding these key steps, and the importance of expert guidance, sellers can approach the sell-side M&A process with con dence, maximizing chances of a successful exit from the business.

Justin Pinto, a vice president at Charter Capital Partners, is responsible for managing and executing Charter’s M&A and capital raise engagements, as well as providing consulting services to our clients. For more information, visit chartercapitalpartners.com.

STREEKSTRA

PINTO

Is this the right time to sell? M&A wisdom

If you are a business owner, you probably receive several solicitations a week from strategic or nancial buyers interested in acquiring your business, and you will ask: Is this the right time to sell my business? Instinctively, business owners rst think about the price they would fetch and if that matches their goals. But before getting to a price and embarking on a lengthy, distractive and exhausting M&A process, a business owner should rst revisit their personal goals by answering a set of questions:

• Are you still enjoying what you are doing?

• Did your role and the job requirements change?

• Did your skills evolve and scale with the growth of the company, or have you become a barrier to growth?

• Have you become more conservative when it comes to reinvesting and growing the business?

• If there are two or more partners, are you starting to have divergent goals?

• Is there something else you would rather do? Start another business? Teach? Travel? Retire?

• Are there any signi cant family or health aspects? Then they can turn their attention to the nancial goal. The purchase price for the company will be determined mainly as a combination of three factors:

• Internal metrics: EBIDTA, adjustments, revenue, pro tability, growth rates, recurring revenues, renewal rates, employee certi cations, customer

base and concentration, scalability, quality and depth of the management team and competitive advantage.

By Cristian Anastasiu By Cristian Anastasiu

O• Fit with the buyer: Who will the actual buyer end up being? Each buyer will value different elements of the company differently. What one given buyer might consider a weakness could represent a great synergy for another. Does a given buyer value more size, growth or pro tability? What is the seller bringing to the buyer (new technologies, territory, customers). And most importantly, what is the buyer bringing to the transaction? A buyer’s appetite for a given acquisition will increase with their perceived ability to impact the seller’s business in a very positive way.

• External metrics: The state of the market, the level of consolidation in the industry, etc.

One single change in any of these factors can result in a signi cant change in price. Entrepreneurs can control their personal goals, while outside factors are not controllable, especially since the sale process itself can take nine to 12 months during which a lot can change. The best timing for satisfying and successful transactions is when personal and nancial goals intersect with the outside factors.

Let’s talk about the right time to sell your business. Email ca@excendio.com.

ne of my favorite courses in business school was Business Communications. One of the assignments was to summarize a 60- to 70-page business case, initially in a few sentences and ultimately in a few words. Thus, it is no surprise that throughout my 20-plus years in M&A, I came to appreciate adages that capture so much wisdom in just a few words. Here are my favorites:

• You can set the price if I set the terms. The message here is that an M&A transaction has multiple components, not just the price. There are many parts of a deal that must be considered holistically: cash at closing, earnout, seller note, adjustments to EBITDA, asset versus stock transaction, working capital, escrow, covenants and many other terms that are addressed in a purchase agreement. The approach a seller should use is to negotiate holistically and not piecemeal while prioritizing their goals.

• Would you buy it for $1?

The late Len Fassler, founder of CORE BTS, architect of several successful M&A consolidation plays and a past client, used to ask this very simple question when analyzing a potential acquisition: “Would you buy it for $1?” Re ecting on this question helped him focus on the t, synergies and value creation rather than the price of the company he was considering buying, without getting carried away by the deal structure too early.

• Every good deal has to die three times before it closes. This adage captures the complexity of M&A deals and the ups and downs the parties often navigate

before closing. That is why building trust early on in a deal is so critical. Surviving several “deaths” strengthens the relationship and increases the deal’s likelihood of success. Be exible and focus on your goals. Never say never in deal-making.

An M&A transaction has multiple components, not just the price.

• Bad news rst.

This advice to sellers might contradict the widely accepted “You never get a second chance to make a rst impression.” But in M&A, it is important to make the right impression, set the right expectations and avoid opening the door for a buyer to lower the offer when something negative is being disclosed later in the process — something that the buyer perceives as negative, even if the seller does not.

• Time kills deals.

I have found this to be most true in M&A. Every M&A deal has its own pace, but losing momentum will open the door for mistrust to build, the parties to second-guess the reason for the slowdown, to explore alternatives, lose focus, interest, and disengage.

Cristian Anastasiu is Excendio’s founder and managing partner. Prior to his 20-year M&A career, he was CEO of a company acquired by Infor and held sales and management roles, including in M&A, at Cisco. Learn more about us at excendio.com.

For over 20 years, we have advised business owners and closed deals in Grand Rapids, 28 States and 14 countries worldwide.

We were founders, business owners, CEOs and sold and bought businesses before advising our clients on selling theirs.

For Entrepreneurs – By Entrepreneurs

“Cristian Anastasiu and his team were by our side every step of the journey, with advice, direction, and friendship. Their knowledge of the technology market is exceptional. We made a great decision when we selected who to represent us in the sale of our company.”

JERRY ENGLE Founder, Computer Products & Resources

ANASTASIU

Understanding working capital in M&A transactions

By Jeff Osment

Working capital is a critical, yet frequently misunderstood component of M&A transactions. Far from a simple afterthought, it can have a signi cant impact on the purchase price and successful operation of a target company after closing. By having a rm grasp on working capital and its role in the transaction process, buyers and sellers can reduce the risk of any post-closing disputes or litigation and better position themselves for a successful transaction.

What is working capital?

In its simplest form, working capital is the difference between a company’s current assets and liabilities. In most M&A transactions, the buyer will acquire a target company on a cash-free, debt-free basis. Net working capital, in a cash-free / debt-free transaction, is the result of excluding cash or debt from working capital.

Why it matters and how it ts into an M&A transaction

Net working capital serves as a key indicator of a business’s nancial health, representing its ability to meet its short-term obligations and fund ongoing operations. In most M&A deals, it’s included in the sale as part of the assets or equity being transferred

with what they assumed in their valuation of the target company and suf cient to continue operations after closing. Anything less would require the buyer to inject additional capital into the business, and effectively raise the purchase price.

To ensure a seamless transition and avoid the need for any post-closing capital injections, buyers will typically require a seller to maintain a mutually agreed-upon level of net working capital through closing, often referred to as the net working capital target or “peg.”

After closing, any deviation from the net working capital target is reconciled with a dollar-for-dollar adjustment to the purchase price, commonly referred to as a “true-up.” If net working capital is lower than the target amount, the seller will pay the buyer the difference, and vice versa if net working capital is higher than the target.

Far from a simple afterthought, working capital can have a signi cant impact on the purchase price and successful operation of a target company after closing.

to the buyer at closing. As such, buyers will want to ensure they receive a “normalized” level of net working capital, or a level that is both consistent

Unsurprisingly, the net working capital target is one of the most highly negotiated aspects of M&A transactions. It’s imperative that buyers and sellers have a rm grasp on this concept so they can negotiate and set a target that best re ects the true working capital needs of the business. To determine a target, the parties will conduct a net working capital analysis during the due diligence process. From there, the parties determine what items to include or exclude in calculating net working capital. After agreeing upon a calculation methodology, the parties will typically set a target based on an average of net working capital over a trailing 12-month period.

In nearly all M&A deals, the net working capital

target and true-up mechanism are included in the purchase agreement. Apart from ensuring the target company is left with suf cient operational liquidity, including these items in the purchase agreement protects buyers from any manipulation of net working capital by sellers, and sellers if they inadvertently deliver more working capital than expected. Marking sure net working capital is clearly de ned in the purchase agreement and properly developing a target can help ensure a smooth transaction and reduce the risk of any post-closing

The growth of Michigan is at the core of our M+A practice.

disputes or ligation. Ultimately, buyers and sellers who take the time to understand these concepts can better position themselves for post-closing success.

Jeff Osment is an attorney at law at Miller Johnson counseling on governance, nance and corporate matters for public and privately-held businesses in Michigan. For more information, visit millerjohnson.com.

2024 ACG Western Michigan Board of Directors

Chloe Benzer | Crowe, LLP | Treasurer

Elisa Berger | Charter Capital Partners

Brandon Derusha | BMO

Jacob Dunlop | Rhoades McKee PC

Denise Drost | Connection Management | Executive Director

Jacob Helwick | Adamy Valuation

Heather Hoezee | Crowe, LLP

Doug Holtrop | Mercantile Bank

Dustin Jackson | Miller Johnson

Eric Kamstra | Auxo Investment Partners | Vice President

David Kinsman | Huntington Bank

Trevor Mason | Barnes & Thornburg LLP

Greg McCormick | The BeC Partnership, LLC

Kelly Plawinski | Adamy Valuation | President

Todd Tjoelker | Amazon Web Services

Jeff Weir | BDO

Erika Weiss | Waseyabek Development Company

OSMENT

Setting the stage: the M&A letter of intent

By Rhoades McKee’s M&A Team

In the lifecycle of an M&A deal, the letter of intent — or LOI — takes center stage once a buyer and seller reach an agreement on key deal terms. The LOI typically addresses such key deal terms as deal structure (asset or equity sale), purchase price amount and payment (cash, seller financing, earnout, rollover equity, etc.), non-compete term, real estate (lease or sell), the seller’s post-closing role (consultant, employee, etc.), and timing (60 days to close, 90 days to close, etc.). In setting the key deal terms, the LOI is essentially a road map for the due diligence and drafting needed to close the transaction. Following are some LOI tips we share with clients:

Tips for both parties:

• To avoid an LOI being interpreted as a binding agreement, the LOI should state that it is a nonbinding understanding of the parties’ discussions. It is critical that commercial terms remain nonbinding and that neither party is obligated to enter the transaction. The goal is to capture the terms that have been agreed upon to date and set the stage for the completion of due diligence and drafting.

• Despite its non-binding nature, certain LOI terms should be binding, including:

Exclusivity

Confidentiality

Expenses

The non-binding nature of all other provisions.

• While key deal terms are typically non-binding in the LOI, both parties should be certain they’re happy with them because, unless a good reason exists, renegotiation of terms set in the LOI is generally frowned upon.

Tips for buyers:

• Make sure to include a binding exclusivity period during which the seller is dealing with only you and

not entertaining other offers. This period should be long enough to cover your due diligence efforts and, depending on the size of the business, is typically 60 to 90 days.

• Similarly, buyers should push for a binding due diligence provision that requires seller to give the buyer and its advisers access to legal, financial and operational information needed to complete due diligence.

Tips for sellers:

• To maintain confidentiality, sellers should negotiate for a binding provision requiring the buyer to obtain the seller’s consent before contacting the seller’s employees, customers or vendors, or visiting the seller’s facilities.

• If an LOI includes a purchase price allocation and/or a net working capital target or formula, the seller’s CPA should review to confirm that the allocation, target and/or formula are appropriate.

• For sellers that receive proposed LOIs from multiple buyers, require all LOIs to address the same terms, which allows a seller to compare apples to apples when considering the LOIs.

Having an experienced M&A attorney review the LOI before it is executed can help prevent headaches down the road by confirming that key terms are properly addressed. If you have any questions about LOIs or any component of an M&A deal, Rhoades McKee’s M&A Team is here to help.

SPONSORED CONTENT PARTNERS

ABOUT THIS SECTION

This section was produced by Crain’s Content Studio, the marketing storytelling division of Crain’s Grand Rapids Business, in collaboration with ACG Western Michigan. For questions about this project or to participate in the future, please contact Crain’s Grand Rapids Business Advertising and Events Sales Director Jill May at jill.may@crain.com.

and share an interactive version of this report at CrainsGrandRapids.com

Our mergers and acquisitions team takes a holistic approach to understanding your business and tailoring a strategy to position you for success.

In West Michigan, businesswomen are building a legacy

By Abby Poirier

Women are leading the way in shaping how West Michigan operates, bringing their unique insight and expertise to the roles they fill in the local business community.

That was one of the takeaways from the Crain’s Grand Rapids Business 50 Most Influential Women in West Michigan event on May 1 at the JW Marriott Grand Rapids.

A panel of three Grand Rapids business leaders, moderated by WGVU Media host and producer Shelley Irwin, shared the changes they’ve seen in their years in the West Michigan business community, the challenges they faced along the way and what’s kept them invested in their city.

The panelists included Birgit Klohs, executive chair of the New Community Transformation Fund; Jody Vanderwel, managing partner at Michigan Capital Network; and Michelle Van Dyke, president and CEO of the Heart of West Michigan United Way.

Being a businesswoman in “a

man’s world” isn’t easy, as Vanderwel experienced early in her career working in a private law practice in New Hampshire.

Following the birth of her first child, Vanderwel, who has served as managing partner of Michigan Capital Network since 2020, said she approached leadership at the law firm to discuss working part time and job sharing with another woman, to give her more time with her child.

“They all looked at me like I was speaking Martian,” she said, noting that they ended up allowing her to work three days a week — with a full caseload. “I got the summer off with no pay. Ultimately, it was clear it wasn’t working, so we ended that relationship.”

Following the advice of her father, Vanderwel — who also has served as corporate counsel and vice president of corporate giving at Herman Miller Inc. — took some time away from work and learned to cultivate relationships elsewhere. She did that through social networks and serving on local

boards, building skills and relationships that led to new opportunities.

Staying true to her values is one of the most important pieces of advice Vanderwel said she’s gathered over the course of her career.

“It’s important to understand who you want to become and what matters to you … and then surround yourself with the people who can help you move in that direction,” she said. “It’s amazing what you can learn and what opportunities arrive if you stay open to the opportunities that present themselves.”

Van Dyke spent much of her career in the banking sector, including as regional president of Fifth Third Bank’s Michigan affiliates, before moving to the nonprofit sector as president and CEO of Heart of West Michigan United Way in 2016. She said being willing to take action while being “a little bit scared” has proven to be an asset.

She shared the story of finding herself in a CEO role nearly overnight early in her career, when she

was told she would be taking over the position at a leasing company on short notice.

Van Dyke, who was a manager at a mortgage company at the time, said she “knew nothing about leasing. But what I knew is that this company was in trouble because they were putting in a new system and it wasn’t working well. The employees weren’t in a good place with leadership.”

Van Dyke, who knew how to lead people and build relationships, relied on people around her to repair the business and demonstrate her ability to lead a company.

Klohs, who served as president and CEO of economic development organization The Right Place Inc. from 1987 to 2021, reflected on the changes she’s seen in the Grand Rapids business community over the years. Thinking back to her early days at The Right Place, she said she “never dreamed” she’d see a room full of women business leaders in the community.

“There was a time when I was often the only woman in a meeting,”

she said. “That isn’t the case anymore.”

Klohs also described the growth Grand Rapids has experienced, noting that “what has happened over the past 40 years came with hard work and leadership, it came with philanthropy.”

She also pointed out the prominence of younger women leaders, and the number of Crain’s 50 Most Influential Women who are still early in their careers.

“All of you in the room, as we start to think about getting off the stage, we want you to take over,” Klohs said. “That’s the only way this is going to continue.”

Vanderwel also reflected on West Michigan’s growth, adding that it’s the community’s caring spirit and investment that keeps her inspired.

“In West Michigan, we recognize that we each flourish only when everybody else flourishes,” she said. “We’re not perfect and we have a long way to go, but we care in a way I’ve seldom seen across the rest of the country.”

Commercial Bank expands in market with branch office

By Mark Sanchez

A new branch location that opens this spring will give Commercial Bank a broader presence in the Grand Rapids-area banking market.

The office under construction at 240 Lake Michigan Drive NW in Tallmadge Township, just over the Ottawa-Kent county line from the Standale area of Walker, will become the 10th branch for Commercial Bank, which is based in Ithaca, north of Lansing.

The community bank previously had a loan production office in downtown Grand Rapids that opened in 2016 and closed last November as plans proceeded for the new full-service branch. The downtown loan office established a solid book of business in the market with more than $30 million in commercial loans, “and hopefully a lot more to come after we have a presence there,” said Commercial Bank President and CEO Kevin Collison.

“We’ve built enough traction

there and we have a really good commercial and treasury team that is working the Grand Rapids area, so we decided it was time to build an office and to take that next step,” Collison said. “It’s a nice growth area. We’ve built up quite a customer base and our customers have been asking when we’re going to have a branch there to service our customer base over there.”

The new branch office represents about a $2 million investment for Commercial Bank, Collison said.

The 130-year-old Commercial Bank presently has branches in what Collison calls a “big circle” around the central Lower Peninsula in Ithaca, Alma, St. Louis, Middleton, Okemos, Mason, Hastings and Greenville, plus a lending office in Alma.

Parent corporation Commercial National Financial Corp. acquired the former MainStreet Bank in Hastings in 2010 and Mason State Bank in Mason in 2017.

Commercial National Financial

(Pink Sheets: CEFC) at the end of 2023 had $579.1 million in total assets, $501.6 million in total deposits, and total loans of $417.4 million. The corporation recorded nearly $6.2 million in net income for 2023.

Primarily a small business, consumer and residential lender,

Commercial Bank will consider adding further in West Michigan after opening the new location.

Collison views the lakeshore as a potential market for Commercial Bank to enter with a new branch, perhaps in Grand Haven where a local dentist who’s a friend and once practiced in Ithaca has re-

ferred “quite a few customers” locally to the bank.

A second West Michigan office is probably at least a year or more away, Collison said.

“We have a lot of business in the Grand Haven area, so we might eventually go that direction, too. We have quite a few customers there that we’ve built up over the years,” Collison said. “If this office takes off and goes crazy, we could do it sooner. If this starts off a little slower, it might take two years. I would say maybe within the next two to three years we’d like to do another office in that area.”

Collison describes Commercial Bank as taking a conservative approach to lending. The bank’s “sweet spot” for commercial loans ranges from $500,000 to $4 million, with a regulatory lending limit of $6.5 million.

Jayme Kosal serves as vice president and commercial lender and West Michigan community president for Commercial Bank.

A panel discussion at the Crain’s 50 Most Influential Women in West Michigan event featured (from left): Shelley Irwin, Michelle Van Dyke, Jody Vanderwel and Birgit Klohs. | JUSTIN RAZMUS

MICHIGAN PUBLICLY HELD COMPANIES CRAIN’S LIST

Company; fiscal year end Address Phone; website

1

FORD MOTORCO. (12/31/2023) One American Road, Dearborn48126 313-322-3000; ford.com

2 GENERAL MOTORS CO. (12/31/2023) 300 Renaissance Center, Detroit48265 313-667-1500; gm.com

3

4

DOW INC. (12/31/2023) 2211 H.H. Dow Way, Midland48674 989-636-1000; dow.com

PENSKE AUTOMOTIVE GROUPINC. (12/31/2023) 2555 Telegraph Road, Bloomfield Hills 48302 248-648-2500; penskeautomotive.com

5 LEARCORP. (12/31/2023) 21557 Telegraph Road, Southfield 48033 248-477-1500; lear.com

6 STRYKER (12/31/2023) 1941 Stryker Way, Portage49002 269-385-2600; stryker.com

7 APTIV PLC (12/31/2023) 5725 Delphi Drive, Troy48098 248-813-2000; aptiv.com

8 WHIRLPOOL CORP. (12/31/2023) 2000 North M-63, Benton Harbor 49022 269-923-5000; whirlpoolcorp.com

9 ADIENT (9/30/2023) 49200 Halyard Drive, Plymouth48170 734-254-5000; adient.com

10 BORGWARNER INC. (12/31/2023) 3850 Hamlin Road, Auburn Hills48326 248-754-9200; borgwarner.com

11

DTE ENERGY CO. (12/31/2023) One Energy Plaza, Detroit48226 313-235-5555; dteenergy.com

12 SPARTANNASH CO. (12/30/2023) 850 76th St., SW, Byron Center49315 616-878-2000; spartannash.com

(12/31/2023)

Ally Detroit Center, Floor 10, 500 Woodward Ave., Detroit48226 866-710-4623; ally.com

MASCO CORP. (12/31/2023) 17450 College Parkway, Livonia48152 313-274-7400; masco.com

ENERGY

(12/31/2023) One Energy Plaza, Jackson48201 800-477-5050; cmsenergy.com

(12/31/2023) 2801 East Beltline, NE, Grand Rapids 49525 616-364-6161; ufpi.com

AXLE & MANUFACTURING

(12/31/2023) 1840 Holbrook Ave., Detroit48212 313-758-2000;

(12/31/2023) 999 W. Big Beaver Road, Troy48084 248-362-4444; kellyservices.com

19 PERRIGO CO. PLC (12/31/2023) 515 Eastern Ave., Allegan49010 269-673-8451; perrigo.com

20 DOMINO'S PIZZA INC. (12/31/2023) 30 Frank Lloyd Wright Drive, Ann Arbor 48105 734-930-3030; ir.dominos.com

1. Succeeded Jeffrey Brown as CEO on April 29.

CEO

MICHIGAN PUBLICLY HELD COMPANIES CRAIN’S LIST

Company; fiscal year end

Address Phone; website

21

NEXTEER AUTOMOTIVE GROUP LIMITED (12/ 31/2023)

1272 Doris Road, Auburn Hills48326-2617 248-340-8200; nexteer.com

22

MILLERKNOLL INC. (FORMERLY HERMAN MILLER INC.) (6/3/2023)

855 E. Main Ave., P.O .Box 302, Zeeland 49464; millerknoll.com

23

VISTEON CORP. (12/31/2023) One Village Center Drive, Van Buren48111 734-627-7384; visteon.com

ROCKET COMPANIES INC. (12/31/2023) 1050 Woodward Ave., Detroit48226 313-373-3000; rocketcompanies.com

25 TI FLUID SYSTEMSPLC (12/31/2023) 2020 Taylor Road, Auburn Hills48326 248-296-8000; tifluidsystems.com

26 STEELCASE INC. (2/2023) 901 44th St. SE, Grand Rapids49508 616-247-2710; steelcase.com

27 SUN COMMUNITIES INC. (12/31/2023) 27777 Franklin Road, Suite 200, Southfield48034 248-208-2500; suncommunities.com

28 JACKSON FINANCIAL INC. (12/31/2023) 1 Corporate Way, Lansing48951 517-381-5500; jackson.com

COOPER-STANDARD HOLDINGS INC. (12/31/ 2023) 39550 Orchard Hill Place Drive, Novi48375 248-596-5900; cooperstandard.com

30 WK KELLOGG 2 (12/30/2023) One Kellogg Square, Battle Creek49016 269-961-2000; wkkellogg.com

31

SKYLINE CHAMPIONCORP. (4/3/2023) 755 West Big Beaver Road, Suite 1000, Troy 48084 248-614-8211; ir.skylinechampion.com

LA-Z-BOYINC. (4/2023) One La-Z-Boy Drive, Monroe48162 734-242-1444; la-z-boy.com

CORP. (12/31/2023) 600 North Centennial St., Zeeland49464 616-772-1800; gentex.com

WOLVERINE WORLD WIDEINC. (1/1/2023) 9341 Courtland Drive NE, Rockford49351 616-866-5500; wolverineworldwide.com

ACCEPTANCE CORP. (12/31/2023) 25505 W. 12 Mile Road, Suite 3000, Southfield 48034 248-353-2700; creditacceptance.com

ALTA EQUIPMENT GROUP INC. (12/31/2023) 13211 Merriman Road, Livonia48150 248-449-6700; altaequipment.com

HOLDINGS INC. (12/ 31/2023) 12755 East Nine Mile Road, Warren48089 586-920-0100; universallogistics.com

38 GENTHERM INC. (12/31/2023) 21680 Haggerty Road, Northville48167 248-504-0500; gentherm.com

RobinMilavec president, CTO, CSO and executive board director

HerveBoyer senior vice president, global COO and North America division president

AndreaOwen president, CEO and director

steering, driveline and software solutions

Fluid-handling systems, noise- and vibration-

systems

manufacturer of Kellogg's cereal brands including Frosted Flakes, Froot Loops, Special K, Rice Krispies, Corn Flakes, Kashi and Bear Naked

SOURCES:S&PGlobalMarketIntelligence,(Marketintelligence.spglobal.com)andSECfilings|ThislistofpubliclyheldcompaniesisacompilationofthelargestcompaniesinMichiganthathavestock tradedonapublicexchange.Forcompaniesnotonacalendarfiscalyear,revenueandnetincomefiguresareforthemostrecentlycompletedfiscalyear.52-weekhighsandlowsareforperiodending April29,2024.NA=notavailable. 1. Convertedfromeuros.FromannualreportendinginDec.31,2023. 2. BegantradingasanindependentpubliclytradedcompanyonOct.2,2023aftertheformer Kellogg Co. separated into two distinct businesses. 3. Succeeded Brendan Hoffman as CEO on Aug. 10, 2023.

LaSandra Gaddy President and CEO,

City to lose another economic development official

By Kate Carlson

The city of Grand Rapids will soon be on its third economic development department leader within the past year.

Jono Klooster, the city’s interim economic development director, is stepping down from his role this summer after working in the department for about 14 years.

Klooster has no immediate plans after he leaves the city, and will assist in helping new department leadership transition into the role in his last months before he leaves in June. The city is now working to hire a new assistant director for economic development, which was Klooster’s role before he became interim director.

as well, and most recently has been filling the role since Jeremiah Gracia left the director job in October 2023 for a similar position in Ohio. The city has been working to hire a new economic development director since Gracia’s departure and held interviews with finalists for the role in April.

City staff recently requested to add more positions to the economic development department, which resulted in two new positions. The department now spans nine positions.

“I don’t have set plans for what I’ll be doing next,” Klooster said. “I’m hoping there are things out there for me. I put my mark on things here and I think it’s just time for me to take a step back.”

While every job has its challenges, Klooster said his time at the city overall has been “a rewarding experience and privilege to do the work the economic development has been a part of.”

Klooster has been the interim director of the department in the past

The city’s economic development department handles business retention, expansion and attraction projects in Grand Rapids. The department has recently been working closely with Heritage Development Partners for the Factory Yards development and Grand Action 2.0 as they navigate the Transformational Brownfield Plan application process for the Acrisure Amphitheater and soccer stadium projects.

In his time at the city, Klooster has led the brownfield program and steered the city’s economic pandemic response.

“Jono has been a key leader in economic development for the city and really an expert in his field,” Grand Rapids Deputy City Manag-

er Kate Berens told Crain’s Grand Rapids Business via email. “His expertise and creative problem solving have allowed us to maximize the incentive tools that exist to attract development and business to Grand Rapids, which creates opportunities for new and existing residents alike.”

Klooster sees parallels between the recent business environment and when he began his career at the city as an intern in 2010 as Grand Rapids was coming out of the Great Recession. He was part of the cohort of city staff at the time working to implement government-funded grant and financing programs, similar to COVID-19 recovery programs, he said.

“We try to approach development as a partnership, it’s not a zero-sum game,” Klooster said. “(Projects) start with that partnership and the perspective that no project is perfect.”

Other than at the beginning of his career and a pause at the height of the pandemic, Klooster said Grand Rapids has been experiencing a steady stream of development across the city.

Throughout this time working with developers, some points of personal pride for Klooster include implementing the city’s brownfield program, as well as an inclusion program that requires developers

to create aspirational subcontractor diversity goals as part of the incentive application process.

He said the city’s development success will require ongoing flexibility and adjustments to the current building environment.

“Real estate and development is an ecosystem,” Klooster said. “We play a role, but currently the real challenges are the cost of capital and construction costs. That will get better and worse at different points in time, but the city must remain flexible and adjust how we are participating in that ecosystem.”

Klooster also noted that efforts are underway at the city to provide more opportunities for emerging developers.

“There are real opportunities in Grand Rapids to provide a new set of resources for new and emerging developers,” Klooster said. “That’s something we’re working on and it’s a challenge and is different from what we’ve done before, but I think there are ways the city and brownfield authority and various other boards the city has to provide things like early-stage investment and cover pre-development costs.”

There is no single way to carry out a project because they are all different, Klooster added.

“Something I’ve enjoyed is that every project is a new challenge and opportunity to think creatively and work in collaboration with a developer and the community,” he said.

Klooster

Deal boosts JR Automation’s medical device presence

By Andy Balaskovitz

Hitachi Ltd. has reached an agreement to acquire a German robotics and automation firm that will join and expand the global presence of Holland-based JR Automation Technologies LLC. Executives with Hitachi, which acquired JR Automation in 2019 for $1.42 billion, in late April announced the 71.5 million euro ($76.4 million) all-stock purchase of MA micro automation from MAX Management GmbH. MAX Management is a subsidiary of MAX Automation SE.

The deal will expand JR Automation’s global footprint and also grow the company’s support capabilities in Europe and bolster its presence in the medical technology market, said Dave DeGraaf, who was named CEO of JR Automation in 2023.

“MA micro automation provides engineering, build and support expertise with established capabilities in complex vision applications, high-speed and high-precision automation technologies,” DeGraaf said in a statement. “As we integrate this new dimension, impressive talents and abilities of the MA micro automation team we further enhance our ability to serve our cus-

tomers, creating a more robust and globally balanced offering.”

Additional terms of the deal, which is expected to close in the second half of 2024, were not disclosed.

Founded in 2003 as a carve-out from Siemens, St. Leon-Rot, Germany-based MA micro automation serves high-growth medtech automation markets. The

“MA micro automation provides engineering, build and support expertise with established capabilities in complex vision applications, high-speed and highprecision automation technologies.”

Dave DeGraaf, CEO of JR Automation

company produces, assembles and tests medical and optical components such as contact lenses, in vitro and diabetes diagnostics consumables, and injection molding for medical uses.

The company employs about 200 people and generated the equivalent of $49.7 million in revenues in 2023.

The H.T. Hackney Co. Wyoming, MI

“Following the successful establishment and growth of MA micro automation within the attractive automation market for medical technology products, we are now opening a new chapter,” MA micro automation CEO Joachim Hardt said in a statement.

“Our partnership with Hitachi will not only strengthen our global competitive position, but we will also benefit from joint technological synergies and a global market presence. We look forward to a synergistic partnership with Hitachi and JR Automation.”

JR Automation has more than 20 locations across North America, Europe and Southeast Asia, and serves customers in a variety of industries such as automotive, life sciences, e-mobility and consumer and industrial products.

The company was founded in 1980 by the late Ken Assink and over the past 44 years has grown into an Industry 4.0 powerhouse along the lakeshore.

Kentwood-based manufacturing investment firm Huizenga

Group acquired JR Automation from Assink in 1995, growing the company’s annual revenue from $14 million at the time of the deal to about $180 million when it sold to New York City private equity firm Crestview Partners in 2015. By 2019, JR Automation’s sales had grown to more than $600 million when Crestview sold the company to Japanese conglomerate Hitachi for $1.42 billion.

DeGraaf took over as CEO at JR Automation in 2023 following the retirement of former CEO Craig Ulrich. DeGraaf came to JR Auto-

mation from Holland-based lithium-ion battery maker Volta Power Systems.

DeGraaf told Crain’s Grand Rapids Business last year that his goal was to develop and evolve Hitachi’s vision for the company, which recently has included more data collection and integrating more artificial intelligence.

“The teams at JR are immensely talented, and they come up with some really creative solutions to problems,” DeGraaf said at the time. “There’s a very exciting future for JR.”

MA micro automation’s Centauri-IVD injection molding platform. COURTESy PHOTO

LGBTQ-owned apparel company plans first store

By Abby Poirier

LGBTQ-owned apparel company Transfigure Print Co. is opening its first shop in Grand Rapids’ Creston neighborhood, where owner and founder Bailey Sell hopes to create a welcoming space for all in the emerging neighborhood.

The new brick-and-mortar store, which Sell hopes to open on June 1 for Pride Month, will be Transfigure’s hub for online sales fulfillment and retail sales. The 1,200-square-foot store, located at 2221 Plainfield Ave. NE in Suite 107, will sell custom designs that celebrate transgender identities, alongside items from local and national LGBTQ makers and artists.

While Sell is excited to begin a new chapter for Transfigure, he said it’s not where he expected the business to end up after he founded it in his living room.

“I really didn’t start Transfigure with the intention of having a retail store,” Sell said. “I didn’t know that that would be something in my future. But I think of all of the support and the feedback I’ve got from people over the years, a lot of people (were) saying that they wish they had a space that they could come and shop for this kind of stuff in person.”

Sell founded Transfigure in 2017 while attending Kendall College of Art and Design, making woodblock printed designs as a way to express his trangender journey and identity. He began selling them as shirts on Etsy, and was surprised when sales rolled in because he “didn’t think anybody would really want (them.)”

From there, the business grew and developed its own website, a wider range of products and moved into its first physical space, 1539 N. Taylor Ave., also in the Creston neighborhood, where the screenprinting shop creates custom and wholesale designs.

Transfigure has morphed into a national company, selling in 26 U.S. states and Canada. The company has created custom designs for brands like clothing company Bombas and Ghirardelli Chocolate Co., and has worked with

Planned Parenthood.

Transfigure also raises funds to support other LGBTQ-owned businesses and organizations on a local and national scale. For example, Sell made T-shirts to support the Entertainment Community Fund during the SAG/AFTRA strike from June to November 2023. Locally, the business has raised funds for AYA Youth Collective, the Grand Rapids Trans Foundation, Grand Rapids Area Mutual Aid Network and more.

“A very big part of Transfigure is about giving back to the trans and queer community,” Sell said.

After expanding the operation in his Taylor Avenue space, Sell started looking last year for a new location that would offer enough space for retail and production. A prior deal for a space on Godfrey Avenue fell through at the end of 2023, which set the business back to square one.

With the retail location on Plainfield Avenue, Sell plans to keep the screen printing and production side of the business located in its existing Taylor Avenue space.

Sell also anticipates adding to his team as the business expands, moving from a team of four to six people.

The new Plainfield store will sell Transfigure’s prints and products from other LGBTQ artists in West Michigan and nationally. In addition to clothing, Transfigure will offer decor and home goods and some packaged food items.

The new storefront also will give Sell the freedom to interact with customers in-person for the first time.

“I think a big part of what I’m so much looking forward to is having the opportunity to meet with the people that have been supportive over the years and have that extra personal connection with the community that I’ve been selling stuff in for years,” he said.

The expansion comes amid what could be a slower year for the company, as Sell anticipates weaker wholesale orders following widespread backlash against corporations supporting LGBTQ causes.

COMMENTARY

The humanity behind building codes state is considering

Construction is the toughest, most important, yet underappreciated sector in our economy.

I’ll go further. State and local governments should be doing everything in their power to make sure the industry is healthy and able to meet society’s needs: speed up review processes, simplify permitting, shrink zoning ordinances, take a stand against NIMBYism, invest heavily in labor training programs … the list could go on. But do not sacrifice increased energy efficiency codes to do so.

Right now, the Michigan Department of Licensing and Regulatory Affairs (LARA) is updating our state’s building codes. It is making huge decisions that will impact Michigan for generations.

It sounds auspicious, given that building codes are nothing more than a tool to protect building occupants’ health and wealth. The code’s energy efficiency requirements are a great example why.

In cold climates like Michigan, we spend 90% of our time in buildings. It’s where we create, perform, educate, worship, entertain, eat and sleep.

Society is really a collection of buildings, and yet the people who perform the work rarely get their due and the companies who employ them assume a great deal of financial risk.

COMMENTARY

We need to respect the construction industry for all it gives us, but we cannot sacrifice increased energy efficiency to do so. Ultimately, buildings are not about the builder. They are about the people who occupy them.

And the price tag is steep when looked at in the aggregate. I recently worked for Habitat for Humanity of Kent County, which is distinguished for building high-efficiency homes. Since 2006, over 200 of those homes have been independently inspected for their efficiency and the results put into modeling software.

The software compares the way Habitat Kent builds its homes — which is similar to what LARA is considering adopting for all Michigan builders — versus the way they could have been built had they been built to the code at the time of their construction.

The models estimate that the average annual utility savings for each family served by Habitat Kent’s homes is about $300. In 50 years, the total savings for all the families is $3 million.

There are 14,000 single-family homes expected to be built in Michigan in 2024. If they achieved the same savings, their oc-

cupants would experience over $200 million in savings over 50 years. And that’s just the houses built this year! Ten years’ worth of Michigan homes (it has been almost 10 years since LARA updated its building energy codes) would save those homeowners $2.1 billion over 50 years.

Since houses last much longer than 50 years, the savings go on in perpetuity and will actually grow with the inevitable rise in energy costs. That money saved would stay in our state, cities and neighborhoods. It would go toward families’ health, education and futures. It builds their wealth.

Adopting higher energy efficiency codes is being resisted by the building community not because they are against it but because they know customers would rather put money into fancier cabinets or flooring than buy more insulation. Items that, unlike insulation, will be easily updated many times during the home’s lifespan. Michigan’s trades and contractors will build whatever LARA tells them to build. They will do it with craft and skill, and they will adjust and learn ways to do it more efficiently and economically. That has always been the case. Innovation always flows from necessity.

Hopefully, LARA will remember that the building codes it’s adopting aren’t for builders. They are for the Michiganders who will occupy the buildings, now and for the next 100 years. Hopefully, it won’t give those future families more houses that are a burden to be comfortable in. Hopefully, the department will make its decision in the spirit of this improvised proverb: “We don’t inherit the house we live in from our parents, we borrow it from our children.”

Rerun on film subsidies remains ineffective, expensive

To steal a line from the 1986 movie Poltergeist II: The Other Side, “They’re back!” Lansing politicians are restoring, with slight modifications, a film subsidy program that previously robbed Michigan taxpayers of $500 million. The new proposal authorizes $2 billion over 10 years. This time, proponents say, will be different than the last. Why? Because the film credits, which cover up to 30% of a production’s expenses, are transferable.

But the previous law permitted transferability as an option, too, and the program still failed. Evidence from other states shows that transferability makes little if any difference in performance.

The legislature should stop this proposal at its first opportunity.

Research by state governments, academics and economists around the nation demonstrates that subsidizing Hollywood

is ineffective at helping the economy or state treasury. The state of Michigan alone conducted or bought three such studies of its past film and television production efforts.

Two of Michigan’s own studies found the state’s film program to be a net negative for the Michigan treasury. The report from the non-partisan Senate Fiscal Agency showed the film production incentive lost 89 cents for every dollar spent. A third study did find a positive impact, but that study couldn’t be taken seriously because it ignored 100% of the subsidy costs. The real world costs real money. These programs siphon off scarce resources that might be spent fixing roads and bridges

At least 10 other states, including Louisiana and New York, have done analyses and found their own programs to be net losers. New York’s analysis, released

last January, showed taxpayer losses as high as 85 cents on the dollar.

Sophisticated analyses of film subsidy programs in peer-reviewed journals repeatedly demonstrate little if any positive impact on the economy, employment or wages. One 2019 Georgia-specific study found that if all film jobs in the Peach State could be attributed to its film subsidies, each would have cost taxpayers between $64,000 to $119,000 per year. That’s hardly a cost-effective way to facilitate growth.

Georgia is an important state to consider for two reasons. It operates the most expensive film program in the nation. Subsidy watchdog Good Jobs First reports that the state dedicates about $1 billion per year to the program. If film incentives don’t work at $1 billion a year, what makes Lansing politicians think they would be competitive at smaller amounts?

Georgia’s 30% tax credit like the new one

proposed for Michigan, is transferrable. Nevertheless, Michigan proponents argue that allowing producers to sell, or transfer, tax credits makes their proposal different and better. It makes scant difference in terms of performance. Georgia taxpayers are still losing their shirts, or at least having their shirts transferred to a favored few. All transferability does is mask the route cash takes from taxpayers to producers. And that obscure route brings steep costs. Credit buyers typically demand discounts to acquire them. The transferability argument just allows proponents to redirect legitimate criticism from past film subsidy failures. Lawmakers should not pass this proposed legislation into law. Taxpayers deserve better.

Two of Michigan’s own studies found the state’s film program to be a net negative for the Michigan treasury.

Michael LaFaive is the senior director of fiscal policy at the Mackinac Center for Public Policy, a free-market research and educational institute in Midland.

Grand Rapidian Mark Ogland-Hand is the new grants and foundation relations manager at the Michigan Environmental Council.

Corewell Health names new president for Southwest Michigan

By Mark Sanchez

Corewell Health has named Natalie Baggio as president of operations in Southwest Michigan.

A registered nurse who’s been with the health system since 2017, Baggio starts July 1, the health system announced earlier this month. She succeeds Dr. Loren Hamel, who retires as president at the end of June.

“Natalie has done a tremendous job and has been taking on more and more responsibility over the years. She has demonstrated a commitment to championing innovative ideas that have improved processes and patient care,” said Dr. Darryl Elmouchi, Corewell Health’s chief operating officer. “She cares deeply about the community.”

Baggio previously served in health care leadership roles at Mercy Health South in St. Louis, Mo. She holds a bachelor’s degree

in organizational leadership from Greenville College, a bachelor of science in nursing from Chamberlain College of Nursing, a master of business administration from Webster University, and a doctor of nursing practice from Baylor University.

“I am incredibly grateful for the mentorship and guidance from Loren throughout my leadership career,” Baggio said in a state-

ment. “I look forward to the opportunity to further build upon the strong foundation we have created together for better health here in Southwest Michigan.”

Hamel said in February that he planned to retire this year after a four-decade career in health care. He joined the former Lakeland Health’s medical staff in 1983 and rose to become the St. Joseph-based health system’s leader in 2009.

“Corewell Health has benefitted greatly from Natalie’s innovative and human-centered leadership, and I am so proud of all that she has accomplished. Natalie cares deeply about our patients and our team members,” Hamel said in a statement. “I am confident in her ability to further advance health care throughout Southwest Michigan and build upon our vision for a future where health is simple, affordable, equitable and exceptional.”

Trendway owner details plans for Holland plant closure

By Mark Sanchez

The corporation that owns the former Trendway Corp. in Holland Township will begin winding down operations and laying off employees by the end of this month before permanently eliminating 117 positions.

Employee terminations will occur in six phases, starting May 30 or within two weeks afterward with 17 employees, and continue through October, according to a recent WARN Act notice filed with the state. The notice was also sent to local elected officials.

Itasca, Ill.-based Fellowes Brands Inc., which acquired Trendway in 2019, intends to terminate another 30 employees around July 18, and two more a week later. The fourth phase of layoffs will occur around Aug. 22, affecting 34 employees, and another 11 workers will lose their jobs around Aug. 29.

The last round of layoffs involv-

COMPANIES / PEOPLE ON THE MOVE

BANKING & FINANCE

Old National Bank

BEVERAGES

Moersch Hospitality Group

ENGINEERING

Wightman

ing 23 workers comes Oct. 10, or within two weeks afterward, according to the WARN Act notice.

Fellowes Brands, a privately held manufacturer of office equipment, announced plans in February to close the nearly 500,000-squarefoot production plant located at 13467 Quincy St.

CEO John Fellowes said in a statement at the time that the corporation had experienced shortfalls that led to the plant’s closure and related structural changes.

“Unfortunately, Fellowes has now reached the point of exhausting its resources and support while still experiencing meaningful shortfalls to our brand promise and financial responsibility in this area of our business,” Fellowes said in February’s announcement. “As difficult as it is, we must face our reality and plan a future which confronts and definitively resolves these challenges.”

The Salvation Army in Kent County

Old National Bank is pleased to announce the addition of Timothy Martin as a Corporate Banking Relationship Manager, SVP, West Michigan Expansion Market. Tim will be based in Kalamazoo and is responsible for expanding the Bank’s corporate lending portfolio and services throughout West Michigan. Martin is a seasoned corporate banker with more than 25 years of experience. He is also an active community leader currently serving as a board member for the Boys and Girls Club of Kalamazoo.

Ryan Thornburg, Chief Hospitality Of cer at Moersch Hospitality Group, is a seasoned professional with a rich background in all aspects of hospitality management. His passion for innovation and commitment to excellence are reshaping culinary offerings across the group’s establishments. With a career spanning from Executive Chef at Tosi’s Restaurant and Bistro on the Boulevard, to Corporate Chef for FL Reps., Thornburg’s leadership ensures top-notch guest experiences companywide.

Wightman is proud to appoint Steve Carlisle as president. With 27+ years’ experience at the rm, he’s served as Director of Engineering, Government Sector Leader, and Chairman of the Board of Directors. The appointment re ects Wightman’s continued commitment to delivering client-centered solutions, fostering client relationships, and maintaining the rm’s position as a leader in the AEC industry. Carlisle’s strategic vision and dedication to excellence make him ideal to lead Wightman forward.

Kapnick Insurance welcomes Justin Michalski, a 21-year veteran, as their new Client Executive located in their Caledonia of ce. Specializing in trucking and transportation, Michalski’s commitment to customer service and risk management mirrors Kapnick’s mission. As Kapnick continues to grow and evolve, Justin’s expertise will be a valuable asset in providing innovative solutions and exceptional support for their clients’ evolving needs.

The Salvation Army in Kent County is pleased to welcome Cathy Blackburn as their new Development Director. Blackburn has a background in marketing, communications, and public relations with proven fundraising experience working for Hope College and Grand Valley State University. She received her B.A. Degree from Hope College and has completed the Institutes for Organizational Management program through Notre Dame, the Institutes for Healing Racism program and is a graduate of Leadership Holland.

Natalie Baggio COREWELL HEaLTH

Contract furniture manufacturer Trendway Corp. was founded in 1968 in the Holland area. | COURTESy PHOTO

Corewell Health South campus in St. Joseph. | COURTESy PHOTO

CANNABIS

From Page 3

research grant opportunities and, most importantly, end a rigid tax regime that until now has stifled growth in the highly regulated industry.

“A reclassification of marijuana from Schedule I to a lower schedule or full legalization would represent a significant victory for the industry,” Jonah Folbe, CFO of Birmingham-based Quality Roots, said in an email to Crain’s. “It would bring substantial relief in terms of cash flow, affecting all aspects of the organization, including taxes, banking, marketing, payroll, and more.”

The DEA’s proposal comes after President Joe Biden called for a review of federal marijuana law in October 2022, and has moved to pardon thousands of Americans convicted federally of simple possession of the drug.

Classifying marijuana as Schedule III drug is the most consequential regulatory move the DEA has made on marijuana since classifying it as having “no currently accepted medical use and high

HISPANIC

From Page 3

Esparza-Gonzalez said.

“Our goal is to invite more partners to connect with the Latino community in our new space,” Esparza-Gonzalez said.

While the large worship building needs significant investment and updates, it does include an auditorium that would allow the center to host more events for the community, Esparza-Gonzalez said. The Hispanic Center plans to gather community input to determine what should be included in the project, she added.

Founded in 1978, the Hispanic Center of Western Michigan has various programs to support workforce development, youth and education services, family

HOTEL TAX

From Page 1

effect to have more funding come in to bring more destinations to Grand Rapids to continue bringing guests in,” said Kyle Holst, general manager with Canopy by Hilton Grand Rapids Downtown.

“We’ve seen a great rise in occupancy over the last two years and this would be an additional thing that would bring more people to Grand Rapids.”

Kent County’s lodging excise tax, which has been set at 5% since 1989, is levied on hotels and motels that provide lodging for guests for less than 30 consecutive days.

Kent County voted in December 2023 to use $15 million from its lodging excise tax revenue for the $184 million Acrisure Amphitheater being developed by Grand Action 2.0.

People who spoke in favor of

potential for abuse” under the Controlled Substance Act in 1970. It would also eliminate a tax code law that was put in place in response to a clever drug dealer finding a loophole on his taxes in 1974.

Rescheduling marijuana eliminates the IRS Tax Code 280E, which prevents individuals from writing off business expenses involved in the trafficking of narcotics translating to a 70% or sometimes higher effective tax rate for marijuana dispensaries instead of the regular 21% corporate rate.

Given an epic marijuana price collapse in Michigan — wholesale prices have fallen from more than $500 per ounce of flower in early 2020 to less than $100 per ounce today — caused by oversupply, margins for cannabis operators have evaporated. Marijuana not falling under 280E means instant cash flow for the industry.

The industry has been battling in Washington, D.C., to rid legal-state operators from 280E to no avail.

In 2017, the Congressional Budget Office estimated that repealing 280E for cannabis businesses would mean the feds would lose

support, language services and community outreach for the Latino community throughout West Michigan.

“At the end of the day, we want this to be a real community center that our Latino community feels they can design and contribute to,” Esparza-Gonzalez said.

“(The new building) was much needed with the many services that we’re offering to the community. It required another location to better serve the needs of the Latino community.”

The Hispanic Center plans to offset the building purchase with a $1 million grant from the Michigan Department of Labor and Economic Opportunity, which was awarded as part of the state’s $64 million Community Center Grant program.

Part of the $1 million grant also

the hotel lodging tax increase stressed that visitors will largely be the ones paying the fee increase, not residents.

However, former Kent County Commissioner Robert Womack — without taking a formal position on the proposal — urged commissioners to consider how the tax increase could affect local families and people at risk of being homeless who use hotels.

A resident in the Plaza Towers Condos downtown was alone during the public comment portion of the meeting in speaking against the tax increase because of the potential noise from the Acrisure Amphitheater. The Grand Rapids City Commission voted in July 2023 to exempt the amphitheater from the city’s noise ordinance and that noise should instead be managed at the venue by when events conclude.

Several Kent County commissioners, including Tom Antor, Tony Baker and Ivan Diaz, said

out on $5 billion in taxes over 10 years. But legislators from weed-legal states and industry insiders argue that’s a shortsighted view.

Rep. Earl Blumenauer, a Democrat from Oregon and founder of the Congressional Cannabis Caucus, has argued that 280E is a catalyst for marijuana companies to cut corners and adjust their business practices for tax avoidance. The representative has introduced the Small Business Tax Equity Act several times in recent years.

Ankur Rungta, CEO of Ann Arbor-based C3 Industries, which operates 13 retail stores under its High Profile Cannabis Shop brand, said in an email to Crain’s last fall that eliminating 280E would cut his company’s tax bill by more than half.

The rescheduling would also open up the marijuana industry to banking, more than it is already. Traditional large banks have avoided financing or even holding accounts for marijuana businesses or their employees.

Congress has spent nearly four years kicking around the SAFE Banking Act, which would provide certain protections to banks that

will support upgrading the building, though the total budget for renovations will likely be close to $4 million or $5 million. The Hispanic Center is working with IFF, a Chicago-based CDFI that has been involved in several projects in Grand Rapids in recent years, to configure the capital campaign, design and RFPs for the project, Esparza-Gonzalez said.

“The new space will not only serve as a hub for community events, workshops, job trainings and essential services, but also contribute to the overall well-being and empowerment of the community,” states a press release about the state grant funding for the project. “Furthermore, it will foster stronger connections with the neighborhood residents and nonprofit partners, creating a more vibrant and inclusive envi-

choose to provide financial services to the legal marijuana industry. The law passed the U.S. House of Representatives in 2021 but has advanced no further.

Besides instant liquidity, the rescheduling could open up loans, which could lead to much faster expansion of industry in states where marijuana is legal.

Michigan’s weed industry is effectively the top market in the country already.

Last year, the industry sold $3.05 billion worth of product and is projected to top that record this year. Statewide sales hit another all-time record in March, recording more than $288.8 million, up nearly $28 million, or 11%, from February, according to data from the Michigan Cannabis Regulatory Agency.

Given the current pace, the industry would surpass $3.17 billion in sales this year.

It’s hard to imagine the industry could continue to grow at that clip, but positive cash flow would likely cause consolidation of troubled players and further maturation of the industry, standing it up to compete nationally as companies grow inside and outside the state.

ronment for all.”

The building most recently housed The Edge Urban Fellowship before the church announced its plans to leave the space last year because of the amount of work the aging facility needed. The state announced that Edge Urban Fellowship is set to receive $400,000 in funding from the same community center grant program to make updates to the aging building, even though the church’s pastor announced plans in December 2023 on the church’s instagram to sell the property. Church leaders did not immediately respond to a request for comment on plans for their ministry moving forward.

While the grants to The Edge Urban Fellowship and the Hispanic Center of West Michigan were both announced and awarded

Rescheduling could, though, lead to some unknown conundrums in the future for the industry. Technically, Schedule III drugs are pharmaceutical products like ketamine and testosterone regulated by the U.S. Food and Drug Administration.

There is fear the FDA could upend the industry with new rules, though there is no evidence that is on the horizon.

“Facially, this is a monumental development,” said Benjamin Sobczak, partner at Detroit law firm Dickinson Wright and former counsel of cannabis operator Pleasantrees. “Looking deeper, the nuanced implications of rescheduling marijuana in this manner are unknown. Certainly, 280E tax relief will be a welcomed benefit, but the new classification is also sure to bring new challenges and obstacles to which operators will need to quickly adapt. Those concerns, however, are for another day. Today, we should celebrate this symbolic event for what it is –validation for the cannabis community and a showing of accountability by the federal government.” Dustin Walsh is a reporter for Crain’s Detroit Business.

separately, funds have not yet been distributed, Jason Alexander, communications director for the Michigan Community Service Commission, said in an email. State officials are working with both organizations to complete program agreements and determine how the funds will be used.

The Hispanic Center joins other local efforts to support and empower the local Latino community. Also in the Roosevelt Park neighborhood, the West Michigan Hispanic Chamber of Commerce plans a new $9.5 million headquarters that will repurpose a former manufacturing building at 1101 Godfrey Ave. SW. That project has received $5 million in state backing and is part of the Hispanic Chamber’s broader effort to elevate Latino business voices.

of government affairs, said in a statement. “These investments will support talent attraction and retention, bring more than $1 billion in net new economic activity and create hundreds of new jobs.”

The Acrisure Amphitheater and soccer stadium projects are expected to break ground this year.

The aquarium is in the beginning planning stages. A feasibility study completed in 2023 by Canopy Strategic Partners that has not been made public shows that an aquarium could generate $2.9 billion net economic activity in Kent County over 10 years, according to John Ball Zoo.

they think it’s important that the county invests in projects outside of downtown Grand Rapids.

“I would love to have investments made throughout the county so our constituents can get to explore and get to know the entire county,” Diaz said.

The Grand Rapids Area Chamber of Commerce has been a vocal

supporter of raising the county’s hotel tax to fund major projects.

“Bringing these transformational projects to life is one of the chamber’s top priorities and we the thank the Kent County Board of Commissioners for taking this critical step in making them a reality,” Josh Lunger, the Grand Rapids Chamber’s vice president

“The aquarium is a long journey, but potential funding is always an important first step,” John Ball Zoo CEO Peter D’Arienzo previously told Crain’s Grand Rapids Business about how the lodging tax could potentially fund the aquarium project. “There is a lot of progress happening behind the scenes.”

Grand Action 2.0 Executive Director Kara Wood speaks in favor of increasing the county lodging tax to fund large entertainment venues. | KATE CARLSON

downtown right now,” Loeks told Crain’s Grand Rapids Business on an exclusive hard hat tour of the tower on April 26.

He said he is especially thrilled about this phase of the Studio Park project because he plans to make one of the larger units on the 21st floor his primary residence.

“I’ve been dreaming about this building and how it functions, what the amenities are, the location and how it connects to the overall neighborhood through the lens of, ‘Do I want to live here?’” Loeks said. “The more of the details that come together with this project, I get more and more excited about leaving East Grand Rapids and being able to walk to all my favorite restaurants, entertainment and the riverfront.”

The $62 million tower project is the second residential phase at Studio Park following construction of the $135 million, phase-one mixed-use development.

The first phase included 106 apartments (Studio Park Lofts) and 350,000 square feet of commercial space anchored by insurance brokerage and fintech firm Acrisure LLC. The project also is home to the nine-screen Celebration Cinema Studio Park movie theater, One Twenty Three Tavern and other restaurant/retail space, a courtyard for live music and events, the Midtown music venue and the Canopy by Hilton hotel.

Kate Bylsma at East Grand Rapids-based Patriot Realty listed all 25 condominiums under construction on floors 19 through 22 of Studio Park Tower on April 22. As of late last month, nine of the condos were reserved, with 16 left to sell.

“It’s probably the most unique project that’s been started in downtown Grand Rapids in the last 20 years,” Bylsma said. “I also think the amenities, like J.D. said, that we’re bringing to the market are so unique. … The location, in this part of town with what’s happening with the amphitheater and all the

other up-and-coming projects, also makes it unique.”

Emilee Krish at KMG Prestige, the property management and leasing company for Studio Park, opened apartment leasing for the project April 26. She said she’s excited for the opportunity to impress new tenants with the city views. To her, there’s something special about working at a development that takes up an entire city block.

“I have worked for Studio Park for two years, so I know a lot of the individuals that live in the lofts already, and I just kind of feel like their steward, which is a really cool job,” she said.

The condos

Prices for the condos start at $595,000 for one-bedroom units, $715,000 for two-bedrooms, and $1.15 million for three-bedrooms.

Condos on the 21st and 22nd floors are being marketed as “white box,” or unfinished units that can be built to buyer specifications, with pricing between $695,000 and $1.25 million.

Of the condos, four are one-bedroom units that range from 989 to 1,257 square feet, 15 are two-bedroom models that range from about 1,300 to more than 1,600 square feet, and six are three-bedroom units ranging from about 1,800 to more than 2,400 square feet.

All of the condos will have their own balconies.

The top two floors of condos will have the larger units, with just five condos on the 21st floor and four on the 22nd, compared to the eight condos apiece on floors 19 and 20. The top floor has a slightly smaller footprint due to the building setback.

Loeks’ excitement was palpable when showing off the seventh floor, which contains all of the tenant amenities. It is considered the “base floor” of the residential tower because it’s built on top of the six-story parking garage that will be shared by condo owners, tenants, hotel guests and moviegoers alike.

The seventh floor interior will offer co-working space and private “Zoom rooms,” a full-size kitchen

and community room with a large flat-screen TV, a fitness center, sauna, golf simulator, dog wash and commercial laundry.

Bridging the gap between indoors and outdoors, an approximately 12-foot-by-75-foot, competition-length pool with an exterior glass wall will open onto the outdoor entertainment deck. The deck will have a grilling station, seating areas with firepits, green space for lawn games and a pickleball court.

Since the developers wanted residents to have a space that feels like an outdoor “oasis,” the seventh-floor deck will be shielded from view by a tall fence to create a sheltered, private feeling and reduce the noise of highway traffic.

“Everybody will have great views of the city from their units, so this space is just kind of an escape for them,” Loeks said.

The apartments

Krish said the 11 floors of apartments will include 22 studios, 99 one-bedroom units, and 44 two-bedrooms. They’ll range from just more than 500 square feet up to about 1,200 square feet.

Rents will start around $1,500 for a studio up to approximately $3,200 for the largest two-bedroom unit. Many, but not all, of the apartments will have balconies and walk-in closets.

Krish said as of late April, KMG was still working to push floor plans and renderings to the Studio

Park Tower website, but for now, she is fielding questions from people interested in pre-leasing.

She said the Studio Park Tower leasing office also will be open daily at the tower’s street-level entrance off Oakes Street SW. Currently, it’s set up as a sample floor plan to give prospective tenants a sense of the finishes and amenities.

Part of a bigger dream

Loeks said he first began dreaming of a downtown movie theater around 2008, when the family closed the Studio 28 cinema on 28th Street in Wyoming. It was the first of the 11-location chain’s multi-screen theaters. Built in 1965 by Loeks’ grandfather John D. Loeks, it was believed to be the first multiplex in the country.

The younger Loeks saved bricks from that building when it was demolished. They sat on his desk for more than a decade and now grace part of a wall in the indoor lobby of Celebration Cinema Studio Park.

Back then, he said he couldn’t have imagined the years it would take to realize the family’s vision to bring the silver screen downtown.

He also had no conception of the essentially self-contained neighborhood that it would become. But conversations with the Downtown Development Authority and Downtown Grand Rapids Inc. during the master planning process for the Arena South District revealed a desire for more than just

the movies.

“We had started with a much smaller idea of just putting some parking and a movie theater downtown,” Loeks said. “They were the ones that originally came to us and said, ‘Hey, what do you think about doing this much larger mixed-use project?’ and we kind of took it from there and talked to others I knew in development, and the idea really snowballed wildly out of control.”

Now that all 22 stories are framed, the Studio Park Tower is officially downtown Grand Rapids’ fifth-tallest building. By total stories, it ranks behind Plaza Towers (34 stories), River House Condominiums (34 stories), Amway Grand Plaza Hotel (29 stories) and the JW Marriott Grand Rapids (23 stories).

Krish, the property manager, said she’s not a Grand Rapids native, so when she first moved to the area, she pictured Van Andel Arena as the hub of the city. Now, when she gives people directions to Studio Park, she tells them, “We’re right behind Van Andel.”

Loeks quipped: “We’re working on changing the narrative from ‘We’re right behind Van Andel,’ to ‘Van Andel’s right behind us,’” he said, laughing.

In all seriousness, though, Loeks said the development was always intended to build off the buzz that started with the creation of the Arena District.

That’s why Loeks said he was one of the people “at the tip of the spear” when it came to working with the city and DGRI to envision the forthcoming “Heartside Linear Plaza” that will convert an alleyway along the east side of Van Andel Arena into a public greenspace and social district and park that will connect the arena to Studio Park.

“One of their considerations that they had and their objectives for Studio Park was to create a psychological connection between the north and south parts of downtown,” he said. “Now, five years later, they’ve kind of hit the green button on a renovation that … will fulfill the long-term vision of connecting north and south.”

plan financing agreements executed in May 2023 to cover the cost of the dealer acquiring boats from its primary supplier, Loudon, Tenn.-based Malibu Boats Inc.

Tommy’s Boats is in separate litigation with Malibu after alleging in a lawsuit filed April 10 that the manufacturer engaged in an inventory oversupply fraud scheme that left Tommy’s unable to generate enough sales revenue to pay its debts.

Malibu officials have denied the accusations and claimed that all boats sold to Tommy’s were ordered by the dealership.

A spokesperson for Tommy’s Boats said in a statement to Crain’s Grand Rapids Business that the company is cooperating with the court’s receivership order.

“By consenting to the receivership, we believe we will be in the best position to manage our financial situation, and ultimately

emerge with a revitalized and stronger Tommy’s business, while our lawsuit against Malibu is ongoing,” the statement said. “This decision provides us with the best path to move forward, and one that we believe will create the best available opportunities for our employees, customers, other stakeholders and company.”

The consent order granting receivership names Grand Rapids-based Tommy’s Holding Company LLC, its 15 dealerships in eight states and its president and majority owner Matthew Borisch as defendants.

The order grants Beane Associates possession of Tommy’s Boats assets but not title to the company’s property, according to the court filing.

As a result of the order, Beane Associates will take possession over all of the defendants’ income on deposit wherever it’s held, including at all financial institutions where Tommy’s does business.

The order also covers income that may be generated after the effective date of the receivership, on

an ongoing basis.

“Defendants and defendants’ agents are prohibited from removing any receivership property, and are prohibited from diverting any income,” according to the court order.

The order also gives the receiver power to enter the defendants’ downtown corporate offices to change the locks and secure any property.

Beane Associates also has the authority to liquidate inventory, cancel service and maintenance contracts, and “enforce, amend or terminate any existing contracts affecting the receivership property,” per the court filing.

Additionally, Simplified Facilities LLC, a holding company tied to Borisch, is behind on $10,821 in taxes on the former Peninsular Club building that he acquired in March 2023 from RDV Corp. for Tommy’s corporate headquarters, according to property records.

On April 24, Mercantile Bank filed suit against Borisch, a couple of his holding companies and sev-

eral family members, seeking to foreclose on and seize property that the family owns in Boyne City and pledged as collateral to guarantee a commercial loan of more than $9.5 million for Tommy’s Boats locations in California, Nevada and Arizona, according to Kent County Circuit Court filings.

The bank, which alleges the family and related entities have defaulted on the loan, is now seeking foreclosure of the property in

Boyne City to repay the loan, along with a money judgment to cover costs, expenses and attorney’s fees. An attorney for Mercantile Bank did not immediately respond to a request for comment.

Tommy’s Boats said through a spokesperson that the family used their personal property as collateral to guarantee acquisition debt for the three locations in question but declined to comment further on the Mercantile Bank suit.

Renderings show the future outdoor terrace at Studio Park Tower. | RENDERING COURTESy

Carlos Martinez scales up People First Economy to statewide reach

Carlos Martinez moved to People First Economy in early January to become president after working a year as director of development at the West Michigan Hispanic Chamber of Commerce. He succeeded Hanna Schulze, who departed to join her family business, Globe Design and Vision in Holland. People First Economy promotes sustainable business practices and equitable economic growth through Local First, Good for Michigan and People First Impact programs. The Grand Rapids-based nonpro t in March merged with Detroit-based Southeast Michigan Sustainable Business Forum, creating greater scale for promoting environmental, social and corporate governance (ESG) principles and supporting small businesses across the state. Martinez has a background in economic development, higher education, community engagement, and global partnerships. Earlier in his career, he served as manager for global career development at New York University. He holds a bachelor’s degree in sociology from Michigan State University and a Master of Education from Grand Valley State University. Martinez spoke with Crain’s Grand Rapids Business about People First Economy during a recent interview at Lantern Coffee Bar & Lounge in downtown Grand Rapids. | Mark Sanchez

Why did you leave the West Michigan Hispanic Chamber of Commerce to run this organization?

I always viewed People First Economy as a strong ally in the type of work we were trying to do at the Hispanic Chamber and, more broadly, community leaders who I would speak to held the former president, Hanna Schulze, in high regard, and so there was a level of trust. I felt it was a great opportunity to push for sustainable business growth in an inclusive manner. I just thought it was an exciting project to jump in and help design what that next chapter of our story looks like.

What does ‘People First Economy’ mean?

I always like to connect it to the concept of the triple bottom line. It’s this idea that we have di erent stakeholders as business owners. We promote the idea that you treat your people right, meaning both your employees and the community members who you serve, and you take actions that will bene t them. You consider the environment and our planet, and then you have pro t. We’ll say that you can make all three of those components be very successful, but we’re always people-centered in our approach. When you’re a business owner, it could mean things like are we paying our team members a living wage. We also are supporting local business owners to help build up the local supply chain. So, it’s still ‘local rst’ as well. More broadly, it’s about the actions that we can take as a business owner to make an improvement in the social impact that we’re able to make. ings like giving our team members time o maybe for an hour or two to go vote so they can be civically engaged, paying them well, access to health care, and making choices where our people are happy and the communities in which we serve to feel that we’re good neighbors as well.

How is that movement gaining traction?

e movement to build sustainable businesses is growing

globally now. It looks a little di erent depending on the market that you’re in. In Michigan under the Good for Michigan program, we’re helping business owners measure their social and environmental impact.

It’s growing so much that you’re also seeing the pendulum almost shifting in the other direction a little bit right now. Look across national headlines and you’re going to see a lot of anti-ESG commentaries. You’re going to see a lot of anti-diversity, equity and inclusion commentaries. My counter argument would be that just like any market, any market force, there’s going to be peaks and valleys, but the long-term trend is still up just like in the dot-com boom. In the recession in the early 2000s, people were selling gloom and doom, but the long-term trend is still up. e major banks are still telling you that the green energy transition is a multitrillion-dollar transition.

Does the movement resonate more with younger generations?

Studies will show that the younger generations, Gen Z in particular, have a predisposition to choose companies that better align with

their values to support companies nancially. ose values just happen to be in alignment, more or less, with what we would call the ESG movement — the purpose-driven company movement.

I wouldn’t say it’s just them. When you go back decades, the ’60s: ere was a lot of green energy in there. ere were a lot of sustainability frameworks. So you keep seeing it grow around the world and it’s an international movement.

It’s really something that’s occurring globally, but that gets executed locally. When you consider it and you contextualize it within a global movement, we’re trying to craft a local approach to that global movement. Local First is central to this work. How do we build a very strong living, local economy where it doesn’t mean that you’re fully rejecting any companies who aren’t from the area and setting up shop? We know that’s a part of what you need to develop an economy. But how do we identify the local supply chain rst and support it locally and then take another layer to that? e way you know that it’s working is by rst

CrainsGrandRapids.com

President

Group

(312) 397-5503 or jkirk@crain.com

Executive editor Mickey Ciokajlo, mickey.ciokajlo@crain.com

Editor Joe Boomgaard, joe.boomgaard@crain.com

Managing editor Andy Balaskovitz, andy.balaskovitz@crain.com

Special projects editor

Tim Gortsema, tim.gortsema@crain.com

Director of audience and engagement

Elizabeth Couch, elizabeth.couch@crain.com

Audience engagement editor

Matthew Pollock, matthew.pollock@crain.com

Director of Visual Media Stephanie Swearngin

Creative director

Thomas J. Linden, tlinden@crain.com

Associate creative director Karen Freese Zane

Digital design editor Jason McGregor

Art directors

Kayla Byler, Carolyn McClain, Joanna Metzger

Notables coordinator Ashley Maahs

REPORTERS

Kate Carlson, real estate, kate.carlson@crain.com

Jack Grieve, audience engagement, jack.grieve@crain.com

measuring it. You can’t change what you don’t measure. at’s going to show me your values.

What’s your vision for the organization as president? e really long-term dream vision is that when folks are talking about creating a strong local and living economy rooted in local business ownership, when folks are having conversations around business sustainability about social and environmental impact through the world of business, we want to make sure that People First Economy starts rising up to the top of those conversations around the state of Michigan because we want to be a good thought partner and a good friend to these e orts.

Why merge with the Southeast Michigan Sustainable Business Forum? We’ve been working and collaborating with the Southeast Michigan Sustainable Business Forum going back a little over four years now. at’s been teaming up on some grants to support small business owners in some sustainability training, promoting things like employee-owned corporation models and making that transition. As Mike (Shesterkin) was trying to determine what the next steps look like, there were conversations about do we expand, do we merge into someone? We both really felt that we were missing a line.

After four years, the conversations naturally drew to how do we expand the work that People First Economy is doing in a more concrete manner and build on their 20-year history. (Merging) made good organizational sense. He felt strongly that nobody in Southeast Michigan was approaching small business sustainability support in the way that People First Economy was, and so a merger became the solution. What that will mean more speci cally is we will be engaging small businesses in the area through some of our training. It also means continuing some of the coalition groups that he was a part of.

Abby Poirier, restaurants, retail and agribusiness, abigail.poirier@crain.com

Mark Sanchez, health care and nance, mark.sanchez@crain.com

Rachel Watson, residential real estate, insurance and tourism, rachel.watson@crain.com

Danielle Nelson, research and data, danielle.nelson@crain.com

ADVERTISING

Senior vice president of sales

Susan Jacobs, susan.jacobs@crain.com

Advertising & event sales director

Jill May, jill.may@crain.com

Account executive

Jennifer Maksimowski, jennifer.maksimowski@crain.com

Michigan events director

Samantha Flowers, samantha. owers@crain.com

Events Planner

Tressa Brondyke, tressa.brondyke@crain.com

People on the Move manager

Debora Stein, dstein@crain.com

Classi ed sales

Suzanne Janik, sjanik@crain.com

Sales assistant Rachel Smith

CRAIN’S CONTENT STUDIO

Senior director of Crain’s Content Studio Kristin Bull, kbull@crain.com

Crain’s Content Studio manager Clare Pfeiffer Content marketing specialist Allie Jacobs

PRODUCTION

Vice president, product Kevin

Carlos Martinez has been president of People First Economy since January. Crain’s

Renee Tabben President, Bank of America Grand Rapids

Tomorrow is loving more of the moments we love today.

Tomorrow is on.SM

What we do today impacts tomorrow. Like how a silly moment with loved ones can create memories that last a lifetime. Or how Enbridge is investing in enough renewable energy projects to power more than one million homes. It’s part of how we’re fueling quality of life, so you can turn more moments into memories for years to come

Learn more at tomorrowison.com