MiBiz August 15, 2022 edition by MiBiz

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F or more than two years, global supply chain disruptions have delayed orders of the ubiquitous semiconductor chips found in products as diverse as home appliances, video game consoles and high-grade weapons. The small but integral components manage the flow of electric currents of devices in an exponentially electrified world.

The automotive industry, while just one player in the global demand for chips, has proven to be particularly vulnerable. The vehicle market swayed rapidly in either direction early in the pandemic, while demand for other devices continued to soar. The chip shortage has caused automotive OEMs to idle plants in some cases, which inevitably trickled down the supply chain. Although auto suppliers and the industry at large still aren’t out of the woods, a glimmer of

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

In the CHIPS Act, auto suppliers see a light in the tunnel ACT on page 6 Inside: Dealerships contend with inventory constraints. Page 4 AUTO SUPPLIER OUTLOOK By ABIGAIL HAM | MiBiz aham@mibiz.com L and use changes driven by population growth and habitat loss and degradation continue to stress the health of the Great Lakes, according to a recent report jointly issued by federal environmental agencies in the U.S. andTheCanada.annual State of the Great Lakes Report, released late last month, uses 40 sub-indicators examined by more than 110 authors to assess the health of the lakes. While the report overall found Lake Michigan’s health to be “fair and unchanging,” the region faces ongoing pressure from lakeshore and rural real estate ernbythesebuilding.cultureture,tionincludeLanddevelopment.usechangestheconstruc-ofnewinfrastruc-expandingagri-andlakeshoreInMichigan,changesaredrivenmigrationtothewest-lakeshoreandgrowing populations in non-urban areas, said Alan Steinman, director of the Annis Water Resources Institute at Grand Valley State University The West Michigan lakeshore has become increasingly attractive to new residents — Ottawa County alone gained about 35,000 people in the last decade, while Allegan and Muskegon counties have also gained steadily, according to the U.S. Census Bureau. As communities expand to accommodate more people, natural cover like forests and fields are replaced with hardened surfaces like asphalt, Steinman said. Water passing over an artificial surface like a parking lot or driveway has more Steinman Great Lakes report highlights land use pressures, natural solutions

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See GREAT LAKES REPORT on page 11 companiesBeverage seize on movement‘mocktail’ PAGE 20 ‘Lab testingdisruptallegationsshopping’cannabismarket PAGE 10 Gran vengeance’‘withinreturnsFondo2023a PAGE 8 INSIDE: GrowthLendingCommercialQuarterly:Capital Pages 13-15

2 AUGUST 15, 2022 / MiBiz Visit www.mibiz.com -Flier’s Quality Water

On Last Mile’s partnership with Rising Grinds Cafe: MACKENZIE: “It was a lot of fun. Destiny is one of my very good friends, and I was fortunate enough to pop in there and experience Rising Grinds. … Just being able to help them get set up … was probably a little bit of a trial run for what I’m doing at Last Mile right now.” Visit mibiz.com/podcast to listen to the full episode.

GrandtheneerssupportandConvention/Arenaupconstructionamphitheater.structionproposalsinvolvesthePlacewithilaramphitheater.tiesnershipongoingrecentRichardAuthorityConvention/ArenaLegalCounselWendtsaidduringapublicmeeting.TheMOUreinforcesthepublic-privatepartbetweenthetwoentiforthe12,000-capacityThedealissimtoagreementsassociatedVanAndelArena,DeVosConventionCenterandDowntownMarket.GrandAction’sroleissuingarequestforandselectingaconmanagertobuildtheAdesignandcommitteemadeofmembersfromboththeAuthorityGrandActionintendstothearchitect,engiandconstructionfirmfor$116millionproject,saidAction2.0Executive Director Kara Wood. The amphitheater would be constructed on an 11.6acre, city-owned property at 201 Market Ave. SW along the Grand River near downtown. The anticipated $24.3 million sale of the parcel was recently delayed six months as addi tional designs are being com pleted, as MiBiz previously reported.

Local officials recently took additional steps to make a Grand Rapids riverfront amphitheater a reality. COURTESY PHOTO

On expanding with a brick and mor tar cafe in Southeast Grand Rapids: ARICK: “That’s the neighborhood I grew up in. I’m so excited. I liter ally used to ride my bike and walk around that neighborhood, and like, wow. It just means so much to me. This neighborhood, this huge, mas sive ZIP code has one or two coffee shops, so it feels underserved.”

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F or Arick Davis, co-founder of Last Mile Cafe who devel oped his love of coffee at a young age, sustainabilityenvironmentalandtheethi cal treatment of people is at the core of his business. After working in unsatis fying nonprofit and technology roles, Davis and his co-founders decided to build a company that they wanted to work for and that represented who they were. After forming The Last Mile cafe as a coffee roaster and an online retailer, Davis is now prepar ing to open a brick-and-mortar coffee shop in Southeast Grand Rapids near Davis’ childhood home. Davis and his head of coffee, MacKenzie Tollas, joined The MiBiz Podcast to discuss the mission behind the sustainablefirst business and why cutting corners simply is not an option. On why the Last Mile Cafe staff is committed to making the world a better place: ARICK: “That’s why we came into this. We wanted to do the right thing. Our team is not in this busi ness to cut corners. Getting sus tainably sourced coffee, really going through and trying to do the due diligence to make sure that it’s coming from a place in a way that is safe for the people that are farm ing it, and producing it here in a way where our employees are being taken care of. It’s hard, but it’s the right thing to do.”

Holland voters say ‘yes’ to fiber network City of Holland voters nar rowly approved a $30 million proposal to build out a pub licly owned, fiber broadband internet network. The 25-year millage that permits the city to bond for up to $30 million to build the high-speed internet infrastructure passed by 213 votes, or a little more than 51 percent of the total vote, according to unofficial results from the Aug. 2 election. Holland BPW staff in the coming months will secure engineering services to com plete a final design of the network, while construc tion could start in mid 2023, said Holland Board of Public Works General Manager Dave Koster. Officials expect to finish construction in 2025, allowing for 1-gigabit service and the opportunity for pri vate internet service provid ers to join the open network. City officials expect the service to cost about $45 per month under a 51-percent take rate. Property owners will be assessed $1.50 per each $1,000 of their property’s valuation. State submits $110M EV charging plan Multiple highway corridors through West Michigan would land high-speed electric vehicle charging stations in the coming years under a plan submitted recently for federal infrastructure funding. State officials submitted the formal plan to deploy $110 million over the next five years for the fast-charg ing stations meant to mimic the experience of filling up for gas. The plan was required to receive the state’s share of the $5 billion program that’s part of last year’s federal Infrastructure Investment and Jobs Act. State officials expect U.S. Department of Transportation approval by the end of next month. Another $2.5 billion will be available on a competitive basis in the coming years. The plan sets forth a map for fast-charging electric vehi cle stations along already des ignated fuel cor ridors” throughout the state. These include U.S. 31 from Mackinaw City to Holland, U.S. 131 from Petoskey to Kalamazoo and I-96 from Muskegon to Detroit. MI 49501. Subscriptions cost to qualified Paid to those meeting qualified $99/year. Single copy and back (when available) $3 each, plus first class postage. Call 1-877-443-1977 to order. INC. 1059 Wealthy St. SE, #202 Grand Rapids, MI 49506 616-608-6170 phone • 616-608-6182 fax COPYRIGHT ©2022. All Rights Reserved. Reproduction or use of any portion without permission of the publisher is prohibited. Published since 1988 MiBiz ® is a registered trademark of MiBiz, Inc.

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BIZ BRIEFS A recap of recent stories from MiBiz.com. The MiBiz Podcast: Last Mile Cafe Publisher Brian Edwards / bedwards@mibiz.com Associate Publisher Justine Burdette / jburdette@mibiz.com Editor Joe Boomgaard / jboomgaard@mibiz.com Managing Editor Andy Balaskovitz / abalaskovitz@mibiz.com (energy, policy) Senior Writer Mark Sanchez / msanchez@mibiz.com (ﬁnance, health care, life sciences) Sta Writer Kate Carlson / kcarlson@mibiz.com (real estate & development, small biz) Editorial Intern Abigail Ham / aham@mibiz.com VP of Production & Audience Development Kristi Kortman / kkortman@mibiz.com Graphic Designer Kaylee Van Tuinen / kvantuinen@mibiz.com Executive VP/Sales & Business Development Denise Montambo / denise@mibiz.com Senior Advertising Consultant Shelly Keel / skeel@mibiz.com Director, Finance & Administration Tarah Buchan / tbuchan@mibiz.com Circulation For address corrections or subscriptions, contact MiBiz at 1-877-443-1977 or subscribe@mibiz.com MiBiz ISSN 1085-4916 • USPS 017-099 Established 1988 MiBiz is published every other week by MiBiz, Inc., P.O. Box 1629, Grand Rapids, MI 49501. Telephone (616) 608-6170. Fax (616) 6086182. E-mail: info@mibiz.com. Subscription changes: subscribe@mibiz.com. Periodicals Postage is paid at Grand Rapids, MI. POSTMASTER: Send address changes to MiBiz, P.O. Box 1629, Grand Rapids,

Plans for a Grand Rapids riv erfront amphitheater took another step forward this month after the Grand RapidsKent County Convention/ Arena Authority unanimously approved a memorandum of understanding with Grand Action 2.0 for the project construction.“Thisisa very important step in the amphitheater project,”

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On how operations are informed by being Black- and woman-owned: ARICK: “For us, again, it goes back to why we started this business. We didn’t feel represented. There isn’t a coffee shop where I go there and I’m like, ‘This is the perfect spot for me. I like the coffee. I like the music. I feel comfortable and I feel welcomed here.’ That’s what I’m trying to give to every one: This idea that you can come here, you can be comfortable. This is for you. Good quality, good tasting coffee is for you. Environmentally friendly busi nesses are for you.”

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City commissioners narrowly approved a resolution last week to amend Grand Rapids’ can nabis social equity program and hold off on enforcement until the beginning of 2023. The extension, approved on a 4-3 vote, will delay enforce ment of the city’s Marijuana Industry Development Agreement (MIVEDA) pro gram, which was created in 2019. Eight out of 11 cannabis dispensaries in MIVEDA are not fulfilling their social equity promises, which were made voluntarily and initially allowed operators a better chance of getting their zoning and licens ing approved by the city. In the next 30 days, city staff will present an adminis trative policy to City Manager Mark Washington that details changes to the city’s medi cal and recreational canna bis social equity programs. Changes are expected to include options for operators to transfer social equity points or make a donation to the city’s cannabis nonprofit — referred to as the Community Reinvestment Fund — as a way to achieve social equity compliance.Industry leaders in Grand Rapids are “cautiously opti mistic” that last week’s vote will soon resolve operators’ confusion with the city’s social equity program, but more questions remain.

Cannabis equityfor‘cautiouslyoperatorsoptimistic’newsocialplan

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Fox Motor Group’s new 50,000-square-foot flagship Subaru store in Cascade Township includes a lounge, fireplace and living wall, among other amenities.

Constraints persist According to the latest forecasts, ana lysts are betting that inventory con straints will continue to affect the industry for the foreseeable future. S&P Global is in the process of revis ing its U.S. light vehicle sales forecast, which stands at 14.5 million units, Wall said, noting a likely downward revision given the slower-than-expected sales so far this year. The seasonally adjusted annual rate (SAAR) of new car sales hit 13.5 million units in July, which Wall said was a “recessionary level.”

“We think our distribution model today is about $2,000 per unit more expensive than Tesla. About a third of that is inventory. We have all this inven tory sitting around in dealers, in tran sit, (and we’ve) got to get rid of all that,” Farley said during the Bernstein Strategic Decisions Conference, noting that public advertising also costs the company $500 to $600 per EV. Under Farley’s new vision for Ford, dealerships would still exist, although their model would shift to focus on ser vicing vehicles that customers purchased online.Statements like that have cer tainly been cause for concern among dealerships.“Whenyou look at the EV situation, especially in the next couple of years, we’re going to have a raft of new vehicles, a number of new nameplates. This is part of the reason why you see the automakers consider different go-to-market or dis tribution strategies,” Wall said. “They’re going to have all these new nameplates in varying volumes and they’re going to want to make sure they get the models that are desired into the hands of the peo ple that want them and not run the risk of having these stockpiles in various areas. It’s a challenge for them, it’s a challenge for the dealers. “It causes some concern on the dealer side. They want to make sure they’re part of the process; they don’t want to be left out. Obviously, the vast majority of the market is still buying internal combus tion (vehicles), but they don’t want to be left holding the bag as the market transi tions to battery electric. That’s why they want to make sure they have a seat at the table. At least thus far, the automakers understand that.”

More change ahead If the companies do opt for that destina tion charging model, it could certainly lead to more store renovations and remodels and boost what’s already been a positive sector for many construction companies like Triangle Associates. “The retail sector is way down for us, but automotive is the bright spot,” said Watt, who also thinks dealerships will change to react to different models and different needs of EV owners. “Everyone is being influenced by electric vehicles. They’re wanting charging stations out front for people to use when they come in to pick up things, or charging stations for the ser vice areas and for cars on the lot. “It’s always been an evolving indus try and always changing. Dealers change and adapt to customer demand.” To that end, stores might quickly need to evolve away from the traditional dealership layout with large parking lots for inventory.

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Persistent inventory constraints, shifting EV sales model could change dealership format

“I see the trend going to almost very small dealerships, since everything will get built online,” Watt said. Triangle Associates continues to carve out a niche in the sector and has worked on several projects in West Michigan and Chicago for Fox Motors and other dealership groups. The company is involved in a hand ful of dealership projects that are in the planning stages, including sev eral driven by automaker-mandated store redesigns to reflect new brand standards.“(Dealerships) have not slowed down. They continue to grow and expand their business,” Watt said. “The market in general continues to be strong, and the pandemic hasn’t slowed that down. The pace of new car sales has slowed only by difficulty to get parts and pieces.”

A newly built flagship Subaru store that Fox Motor Group LLC opened in Cascade Township demonstratessimultaneouslythelatestin new dealership technology and what could become a fading part of the auto motive retail industry. The gleaming 50,000-square-foot store reportedly takes the crown as the largest Subaru dealership in the country, featuring 22 service bays, six express ser vice lanes, two tire change hoists, a pair of EV service lanes and an alignment rack. Designed by Ghafari Associates Inc. and built by Walker-based Triangle Associates Inc., the store also includes a range of customer-centric amenities and features, including a lounge, fireplace and living wall. Fitting with the Subaru brand, Fox expects later this year to open an indoor dog park, complete with a water fountain, benches and an agility course. “They wanted to provide the best dealership experience with the best amenities, including workspaces and soft seating areas with video games and TVs,” said Mitch Watt, senior vice presi dent and principal of Triangle Associates. While the new facility shows off the latest in store design for the Subaru brand and Fox Motors, it’s also firmly rooted in the dealership industry of the past, with parking space outside for an inventory of more than 400 new and pre-owned vehicles.That’s likely an ambitious amount of space, at least for the foreseeable future, given that most dealership parking lots have stood largely underutilized — if not nearly vacant — over the last two years amid inventory shortages related to a global lack of semiconductor chips. At the same time, automakers and dealers have leveraged the lack of inven tory by switching — at least temporar ily — to a higher-margin sales model in which customers spec out the vehicles they want and then work through the dealership to order it. A confluence of factors has allowed some dealers and automakers to “thrive with lower inventory,” said Mike Wall, executive director of automotive analy sis at S&P Global in Grand Rapids. “It’s a little artificial, it’s manufactured because of the crisis, but everything has aligned so it’s been possible for them to do this,” Wall said. “They have learned that, ‘We can make decent money and have discipline on inventory.’ But it will be interesting, once we are able to produce more vehicles: Will we have the discipline to maintain this inventory strategy?”

Considering new sales models Beyond the immediate component shortages and lack of inventory, the auto motive dealership model faces several fundamental challenges as the industry gradually shifts away from internal com bustion engines to more electric vehicles. EV upstart Tesla and new entrants like Rivian and Lucid have gone to mar ket with direct-to-consumer sales that do not rely on the traditional franchise brickand-mortar dealership model. The model has taken root for EVs such that even legacy automakers are considering direct-to-consumer sales for their EV brands. To that end, Ford Motor Co. CEO Jim Farley told a recent investor conference that the company needs to shift to a “100 percent online” sales model with non-negotiated pric ing for its EVs.

Destination opportunitiescharging Even a shift to servicing EVs poses a new challenge, given that electric motors have fewer moving parts than internal com bustion engines and have a different, if not less frequent, maintenance schedule. Even so, Wall still thinks the dealer network has plenty of opportunities ahead. For one, EVs still have parts that wear out and have the potential to break. As well, dealers’ finance and insurance (F&I) profit center is likely to remain lucrative, particularly for products tailored to extended battery warranties.Wallalso envisions dealerships capitalizing on new revenue streams by repurposing some of their footprint that had been dedicated to inventory to instead focus on fleet management for the growing ranks of autonomous and electric vehicles, including electrified commercial vehicles used for last-mile delivery services, for example. “There’s a potential for these deal ers to have a lot more room to work with if they don’t need as much parking lot,” WallLikewise,said. the dealer network also poses some opportunities for automak ers to build out their charging infrastruc ture. Unlike EV companies such as Tesla that lack a brick-and-mortar presence and have to build their infrastructure from scratch, legacy automakers already have physical locations. The legacy automakers and their dealerships “haven’t even scratched the surface” in figuring out how to lever age the distributed franchise dealership model to rapidly deploy charging stations across the country, Wall said. Building off of the amenities many dealerships currently offer, Wall said stores in some areas could capitalize on serving as a “destination charging” location.“Notevery dealer is going to want to be in the restaurant business, but could that present an opportunity for a lunch spot, or some other destination oppor tunity? Maybe it’s retail or shopping in general,” he said. “This isn’t going to work for every dealer, but it has the potential to recast the conversation around the dealer itself and it can create some additional opportunities.”

Forecast revisions will factor in sup ply chain pressures as well as macro economic factors that could cause con sumers to back away from buying new vehicles.Thenear-term forecast is almost entirely driven by component avail ability, while concerns over the econ omy have yet to affect buying decisions, Wall said. He thinks macroeconomic factors have the potential to “flare up” and become an issue in 2023. “We’ll see growth in production this year, which is certainly a positive, but sales are going to be a challenge,” Wall said. “Finding a home for those parts in the right sequence is tough and then getting that to market is proving to be challenging. That’s going to continue even into next year. We still see that as being a headwind.”

By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com

FOCUS: AUTO SUPPLIER OUTLOOK

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And those are the proverbial big fish. A much wider manufacturing supply chain expects to follow if large semiconductor plants are built soon in the U.S., since semiconductors rely on various components, materials, substrates and wafers.

—PAT GREENE President, Cascade Die Casting Group Inc.

“The analog chips are clearly the constraint right now. A vehicle uses so many analog chips already,” Wall said. “They’re complex in the sense that there could be different uses for those analog chips. You could have an analog chip for a power supply be plentiful, but an analog chip for a transceiver be in tight supply. You only need to be shy on one and you’re not building that car.”

The CHIPS Act allocates $53 billion for semiconductor chip research and manufacturing. The funding provides subsidies for manufacturers to invest in U.S. plants, including $24 billion for a 25-percent investment tax credit for building plants. The bill also creates a $500 million fund to help bolster the security around semiconductor supply chains. “The fact that we’re just making a focus on chip capacity in general is certainly a positive,” said Mike Wall, executive director of automotive analysis with S&P Global in Grand Rapids. While Wall noted a “natural lag” in the time it takes to invest in and ramp up capacity, the CHIPS Act “will certainly help incentivize those investments. The fruits of that labor might be more 2024 to 2025, but it’s certainly much needed, nonetheless.”

6 AUGUST 15, 2022 / MiBiz Visit www.mibiz.com hope has emerged, even if its effects remain perhaps a few years away. After two years of legislating, congressional lawmakers recently coalesced around the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act. Signed into law by President Joe Biden on Aug. 9, the $53 billion plan aims to bring semiconductor chip research and manufacturing to the U.S., hoping to future-proof against similar supply chain disruptions caused by a heavy reliance on producers based overseas, particularly in Southeast Asia.

“I think Michigan is very well positioned to be an important part of that supply chain,” Stevens said, noting the presence of Hemlock Semiconductor, a global leader in polycrystalline silicon used in semiconductors.“There’sareally concerted effort on the part of the state, Michigan Economic Development Corp., regional economic development agencies and the administration to make sure Michigan is a leader of the supply chain,” Stevens added. “The big mothership, labs-to-fab facilities — I think Michigan has as good of a shot as anybody to land one of those projects.”Inlanding the large projects, Stevens pointed to the “economics of site selection,” which include several factors — overall business climate, competitive energy rates and highly skilled labor availability, to name a Anotherfew.new factor also appears to be emerging, Stevens added. Last week, executives at Indianapolis-based Eli Lilly & Co. — one of the largest and oldest employers in Indiana — released a statement saying the state’s new abortion ban bill may limit the company’s ability to attract workers and therefore may have to look elsewhere.

That’s on top of struggling to hire enough employees and “keeping them busy” when there is a delay, Greene said. “The chip crisis continues to cause interruptions for our business and makes it hard to plan,” he said. “There’s no reliable outlook for what the future holds. In our business, you need to be ready for the customer, but if the customer doesn’t buy the product, it’s pretty expensive to wait.”

Wall also noted the “disconnect” between more advanced chips and simpler analog chips meant to withstand more durable conditions and situations.

The CHIPS Act allocates $2 billion to incentivize the production of “mature node,” or analog, chips. Indeed, the global chip shortage ripples throughout the entire automotive supply chain, from OEMs to suppliers who may not even use chips but their customers do. That’s where Cascade Die Casting Group fits. The company’s book of business is about 75-percent“It’sautomotive.beensignificant because the demand is there in the marketplace for automobiles, but the supply isn’t there,” Greene said. “In our world, we get our capacity in place to make the parts then the customer doesn’t need them. We sell to Tier 1 (suppliers) and they’re not able to make vehicles because they can’t get the chips.”

Meanwhile, the Whitmer administration has touted several victories in the ongoing competition to lure chip suppliers and manufacturers to Michigan, including an SK Siltron R&D facility announced last year near Bay City. The semiconductor industry contributes $4.6 billion in gross regional product in Michigan, according to state officials.Glenn Stevens, executive director of automotive cluster MICHauto, sees three significant components to the CHIPS Act: Controlling the intellectual property of high-tech components, onshoring to protect against supply chain disruptions, and building a highly talented workforce in the U.S. “There’s a really interesting workforce need and opportunity for where these (manufacturing facilities) are located,” Stevens said. “These plants are what they call labs to fab. There’s a lot of R&D and technical work that’s done in these factories. It’s not simply an assembly process.”

Stevens singled out Intel’s $20 billion plan for a semiconductor manufacturing facility in Ohio. The company expects to employ 3,000 people at an average annual salary of $135,000. “That’s incredible,” Stevens said. “Talk about an economic impact to a city, community, region, state or — in this case — a country, where you’re going to have those types of operations.”

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FOCUS: AUTO SUPPLIER OUTLOOK CHIPS ACT Continued from page 1

CHIPS and economic development

“When you look at where a company’s going to move their headquarters, R&D or manufacturing facility, I think more and more companies will go to places with inclusive cultures and communities with the right to express themselves and the rights to do and choose things,” Stevens said. “You’re going to hear more about that. It’s business climate, energy, land, talent and that inclusive community. I hope Michigan stacks up really well in those categories.” — MiBiz Editor Joe Boomgaard contributed reporting to this story. “ ere’s no reliable outlook for what the future holds. In our business, you need to be ready for the customer, but if the customer doesn’t buy the product, it’s pretty expensive to wait.”

While joined by industry and elected leaders earlier this month to celebrate the passing of the CHIPS and Science Act, Gov. Gretchen Whitmer signed an executive directive to leverage state resources to take advantage of the new law.

How we got here Multiple factors contributed to the global automotive chip shortage over the past couple of years, including the significant growth in the number of chips used per vehicle. From 2017 to 2021, the number of chips per vehicle nearly doubled with the proliferation of electrical components, digital displays and driver safety measures. That’s on top of growing demand in other sectors, such as consumer“Thenelectronics.combine the lockdowns in the spring of 2020 and the ripple effect sent out through the system, it really did profoundly impact the chip industry,” Wall said. “We’ve been trying to catch up ever since.”

“I see it as a very positive step. I see it as something that will make us less reliant on other countries for something that’s critical to our supply chain,” said Pat Greene, president of Tier 2 supplier Cascade Die Casting Group Inc. “I think it’s important we control our own destiny, and I think that’s a step in the right direction.”

Visit www.mibiz.com MiBiz / AUGUST 15, 2022 7 SEPTEMBER 12, 2022 Carry over from previous years, with tie-in with transition/succession planning. What are notable family-owned businesses in West Michigan and how have their outlooks shifted after the pandemic? What is being done on a regional basis to preserve the family ownership of businesses as a key economic strategy? How are state and local efforts focused on preserving family businesses’ charitable contributions that are more than PEowned ﬁrms’? Don’t wait to be in this issue! Contact us by Wednesday, August 31 to advertise. Contact Us Today! 616-608-6170editor@mibiz.comsales@mibiz.com Coming Soon! BUSINESSFAMILY TOP NOTCH CUSTOMER SERVICE” — Dermatology Associates of West Michigan We have had top notch customer service from every Independent Bank employee we have encountered. It’s what sets Independent apart from other ﬁnancial institutions.” “ IndependentBank.com Scott Rowley SVP, Commercial Banking 616.233.7113 | SRowley@ibcp.com Contact your local Commercial Banker today!

Tris4Health expands In the Grand Rapids Fondo, Tris4Health aims to “elevate the cycling experience for athletes, spectators and the community,” said race direc tor and co-owner Jon Conkling. Conkling and business partner John Mosey acquired Tris4Health in 2019 from Andy and Ann Vidrow, who started the company in 2011 with the Grand Rapids Triathlon. Since 2019, and after navigating through the pandemic, the two have grown Tris4Health from two events — the Grand Rapids Triathlon and the Michigan Titanium — to nine events with the addition of next year’s Grand Rapids Fondo. Conkling said “we jumped at” the opportu nity to take over the Grand Rapids Fondo and add another signature event that draws thousands of people to downtown.

“Having a road event like this, especially right in downtown Grand Rapids, it’s kind of a no-brainer for us. We love putting on these big events. We love the challenge of it, and we have the infrastructure and operations to be able to pull it o .”

—JON CONKLING Co-Owner, Tris4Health

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ConklingHughes

SPORTS

GR company takes over popular Gran Fondo bicycling event as portfolio grows

By MARK SANCHEZ | MiBiz msanchez@mibiz.com T he cycling event that Bob Hughes cofounded nearly a decade ago returns in 2023 with a new name and under new management by a Grand Rapids company that’s built a portfolio of endurance athletic events in Michigan. Aligning with Tris4Health assures that the renamed Grand Rapids Fondo has longevity well into the future as an annual event staged in downtown, Hughes said. “The Fondo’s best days are ahead,” Hughes said. “This is great for the city and will make sure the event continues and gets evenThebetter.”president of Advantage Benefits Group Inc. and a cycling enthusi ast, Hughes in 2013 started what was formerly known as the MSU Gran Fondo. The cycling event raised nearly $1.2 million over the years for skin cancer research at Michigan State University’s College of Human Medicine. When the event last ran in 2020, the MSU Gran Fondo attracted more than 2,200 cyclists who biked one of four courses that started in downtown Grand Rapids and covered routes that ranged from 12 miles to an 80-mile round trip to Ottawa County’s North Beach Park north of Grand Haven and back. The Grand Rapids Fondo also becomes the latest endurance event for Tris4Health, which now owns and organizes nine events, includ ing the Grand Rapids Triathlon, trail runs and cycling races. The newest is the Road to Hell Gravel Race, a gravel cycling event in Jackson, Washtenaw, Livingston and Ingham counties that debuts Oct. 8 and goes to Hell, Mich. Participants will ride one of four courses over mostly gravel roads that cover 25, 39, 65 and 101 miles. Flagship events include the Grand Rapids Triathlon that this year attracted nearly 2,500 partici pants, the Michigan Titanium in Plainfield Township — featuring a 2.4-mile swim, 112-mile bike ride, and 26.2-mile run — and the Dirty Mitten Gravel Triathlon & Bike Race on Sept. 24 and 25 in Middleville.

Participants in the 2021 MSU Gran Fondo bicycling event, which is staged in downtown Grand Rapids with some routes that travel to the lakeshore and back.

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New connections Organized for years with assistance from the MSU College of Human Medicine, the Gran Fondo was not held this summer because of staff changes that left the medical school unable to continue providing admin istrative support to the event, Hughes said. Road construction in downtown Grand Rapids that interrupted the tra ditional start and finish area also con tributed to taking a year off, he said. Rather than undertake the “big, big job” to organize the event alone with MSU’s administrative support, Hughes connected with Tris4Health to takeHughesover.essentially gave the Grand Rapids Fondo to Tris4Health and remains involved in working with spon sors. Tris4Health now manages plan ning and logistics — from setting routes and organizing volunteers — to coordi nating with police departments in Kent and Ottawa counties and arranging the post-event party that features locally brewed“Thebeers.goal (in 2013) was to have it be a signature cycling event in West Michigan, and it’s done that,” Hughes said of the decision to turn over the event. “It was: I need some additional help because I just can’t do everything with our Underteam.”Tris4Health’s management, the Grand Rapids Fondo returns June 24, 2023, “with a vengeance” and as “the same great event,” Hughes said. As well, the Grand Rapids Fondo has a new beneficiary in West Michigan Trails , a nonprofit organization that works to promote development of regional trail systems. Hughes formed the Gran Fondo after Advantage Benefits Group sponsored a cycling racing team with Mark Bissell of Bissell Inc. He recalls how they went on the road to watch the team “and we’d see these big races downtown where there’s 10 people deep on the sidewalk cheering, sup porting the restaurants and stuff.” From the team sponsorship arose the Herman Miller Brickyard Criterium where cyclists raced through downtown Grand Rapids around the Arena District. They later transitioned to an event beyond a cycling race for a few hundred profes sional and “hard core” amateur riders, plus spectators, Hughes said. Out of the Herman Miller Brickyard Criterium spun the MSU Gran Fondo, an event intended to “get a lot more people out on bikes,” and model events that have been popular in Europe for years. Participants in rural portions of the 2021 MSU Gran Fondo event. COURTESY PHOTO

T here is no shortage of information available re garding industry 4.0 technology. Small and medi um-size manufacturers curious about these tech nologies can often find themselves drowning in a sea of whitepapers, blogs, vendors, sales calls, and other information – making it too overwhelming to even begin their journey. While each of these pieces of information has its place, sometimes it’s most effective for manufacturers to cut through the murk and hear a fellow company’s story. That’s the purpose of a new webinar series co-hosted by The Right Place, Michigan Manufacturing Technology Center - West (Center West), and MiBiz. Owing to the success of this year’s pre vious series on workforce development, “Build for Now, Build for Future,” this new two-part series, “Stories from the Road” show cases local manufacturers’ journeys implementing industry 4.0 technology. In this first episode, a pair of manufacturers – one a small niche food processor, the other a large contract sheet metal manufacturer – gathered with other experts to discuss how they used industry 4.0 technology to improve their operations. Like many companies, Conklin-based Umlor Orchards opt ed to invest in advanced manufacturing technology to keep pace with industry standards and remain competitive. The packaging and storage company primarily handles apples and other fruit and serves as a contract packer for large fruit producers in the region. During peak production, Umlor Orchards employs 30 workers, processing approximately 40 million apples over a given season. “Something is always going to come up,” said Vince Um lor, president and plant manager at Umlor Orchards, of his decision to invest in advanced technology. “Whether it’s labor shortage, costs or new requirements. You have to be able to change on the fly. If you’re holding back from moving forward technology wise, or any other way, it’s just going to put you back even farther when something new comes up.”

The company opted to begin their industry 4.0 journey by implementing technology that could compensate for human error when sorting apples. Umlor found that fatigue and sim ple differences in judgment were causing apples to be discard ed that actually met the quality standard, or allowing apples through packaging that were not up to quality. The company invested in a vision system that uses infrared imaging to cre ate a 3D model of the apple and evaluate each fruit’s color and detect bruising and other damage. The technology also pass es light through the fruit to determine the chemical footprint inside each apple. The vision system takes 25 photos of each fruit and processes 20 apples per second. During the webinar, Umlor recounted that early on in the implementation of this technology they ran into a situation where the machine began discarding a large amount of apples that looked pristine. Thinking it was a technology issue, they shut the machine down. However, when they cut into the fruit, they found it was totally brown inside. “Without that technology, those apples would have made it to the store because they looked perfect on the outside,” Umlor said. Umlor Orchards also uses advanced technologies to im plement their bagging equipment to reliably pack each bag with between 3.02 and 3.04 pounds of apples. The technology picks through the apples to optimize each bag, without going over and unnecessarily packing more than they should. Umlor chalks it up to an annual gain of $375,000 through this optimization.

Tris4Health generates rev enue from entry fees and event sponsorships.Conklingdescribes Tris4Health as a “health and wellness company” that organizes events with various levels of participation. The company’s goal is to inspire people to better health and fitness and overcome personal barri ers through endurance events. “The point of our company is basi cally to show people that exercise barriers they think they have, or any physical barriers that they think they have — that they can’t run, they can’t bike, they can’t swim — really don’t exist. The hard part is just deciding that you’re going to sign up for some thing, that you’re going to do it, and you’re going to very quickly learn whatever barrier that you think you have or whatever line that you think you can’t get past, you can,” Conkling said.After expanding to nine events in just a few years, Tris4Health intends to focus over the next year or so on its present portfolio and “making sure that we’re keeping the level of execu tion and the athlete experience the same, if not better, and really trying to refine the events that we have and keep them growing,” Conkling said. “A lot of them have the potential to be much larger events than they are now,” he said. “But also we need to stay flexible enough (so) if there are other opportunities that come up that make sense for our company, (we’re) able to seize those and be nimble enough to jump on these great opportunities.”

Marne-based DeWys Manufacturing was founded on a framework of implementing technology to improve pro cesses and performance, said Mike Stream, director of continuous improvement at the Marne-based contract sheet metal manufacturer. Founded in 1977, DeWys Man ufacturing incorporated robotic welders into its workflow in the 90s. However, Stream says the difference between those early automated systems and today’s modern tech nology comes down to flexibility. Since 2012, DeWys has primarily focused on integrating collaborative robots and data analytics into its operation. “The reason we’re going down this road, as everyone on this call knows, is there’s a labor shortage,” Stream said during the webinar. “It’s not new. It’s just worse. If you go back to 2010, there was a labor shortage then. It’s just been exem plified after the COVID 19 pandemic. That’s a big reason why we’ve pushed more toward automation.” DeWys uses data it collects across the plant floor to inform the majority of decision making. Nearly every change, process im provement, or other decision needs data behind it, Stream said. Stream attributes DeWys’s successes with advanced manu facturing technology to the company’s focus on continuous improve ment and its employees’ willingness to jump on new technologies. “I don’t know if it’s as bad as it was, but in the past if people heard we were adding a robot, they thought it meant we were cutting staff,” Stream said. “It doesn’t. You still need staff to run these things. It’s how can technology help us make their job easier. Or how we can increase growth without add ing more labor hours on them. It’s really about keeping them informed about what the plan is and making sure you have a vision for your company so there are no surprises.” One of the ways DeWys encourages process improvement is through a bonus structure aimed at promoting ownership and engagement. Under this program, an employee is rewarded half the bonus for suggesting the idea, with the other half paid out once the worker helps implement the process improvement. The company issues the bonus on a quarterly basis. “They really have to have a vested interest in it and we really feel that helps with sustainability because that gives them that pride in being part of the change,” Stream said. Some companies may be hesitant to invest in Industry 4.0 technology because they’re afraid it could fail, or may not be implemented properly. However, by keeping investment and im plementation of advanced technology initiatives to a controllable level, companies can avoid putting undue strain on their busi ness. If the business is properly shielded from this strain, failure is just part of the journey, according to the webinar participants. Stream shared a story of DeWys attempting to put a collab orative robot into one of their powder coating booths. The com pany designed a designated booth and built a cover for the robot to keep the powder out of its vital components. However, despite their efforts, the difference in parts passing through the booth made the robot too challenging to code. That’s how advanced technology implementation works at times, Stream said. DeWys chalked the situation up to a learning experience and moved on. “Failing doesn’t mean that you’ve failed,” Stream said. “It means that you’ve tried. Hopefully you’ve failed safe and you’ve failed fast…The goal is that you don’t try too hard to where you’re bailing out a sinking ship. It may not always work, but at least you’ve tried.”

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“It kind of expands our potential participation base. We were a triath lon company to start but this year we moved into the cycling realm,” he said. “Having a road event like this, especially right in downtown Grand Rapids, it’s kind of a no-brainer for us. We love putting on these big events. We love the challenge of it, and we have the infrastructure and opera tions to be able to pull it off.”

The Cannabis Regulatory Agency (formerly called the Marijuana Regulatory Agency) in November 2021 recalled an estimated 64,000 pounds and nearly $229 million worth of Viridistested products. In December, a Michigan Court of Claims judge partially reversed the action and limited the recall to half of the initial product. More recently, the CRA filed formal complaints against Viridis Laboratories on May 19, raising questions about the THC potency in testing results and the lab’s testing methods. Viridis also filed its own lawsuit late last year against the CRA and multiple agency employees. Litigation is ongoing in both“Icases.really can’t get into it, but we’re in the throes of it with (the CRA) right now,” Viridis co-founder and Chief Operations Officer Todd Welch told MiBiz . “Before the recall, we were testing for nearly 70 percent of Michigan’s flower market. The recall obviously impacted us, but immediately after, the judge rolled back half the recall and our customers started flooding back to us, in addition to newRespondingcustomers.”

Atlanta cannabisstate’sreturningneurosurgeontoGRtoopenﬁrstBlack-ownedtestinglab

By KATE CARLSON | MiBiz kcarlson@mibiz.com

However, the CRA claimed in court proceedings that Viridis Labs’ testing methods were not approved. Operators like Palmatier question why it appears the CRA is struggling to enforce its own rules. “The CRA is not treating everybody equally and some labs are getting away with inflating numbers and passing product and basically doing things they shouldn’t be doing in several different ways that I’ve heard,” said Palmatier, whose company also was the subject of a state regulatory investigation in 2019 for reportedly inaccurate THC test results, though the issue was quickly resolved. The CRA’s formal complaints against Viridis “speak for themselves,” agency Spokesperson David Harns said via email. “The CRA always strives to apply the law and rules consistently to licensees across the industry,” Harns added. Chris Silva, account manager at Redemption Cannabis, said it’s crucial for cannabis growers and retailers to work with labs that have built public“It’strust.important to us that the lab thing works,” Silva said. “We want to support all the good actors that we can. Most people are doing a good job, it’s just a couple outliers.”

Silva added that a major focus on high THC levels is “one of the worst things that’s happened with mass legalization.”Palmatier agrees. “The consumers think that THC is the most important thing on the planet,” Palmatier said. “As long as the entire industry is running on profits that are completely based on high THC numbers, we’re never going to get out of this situation.”

GRAND RAPIDS — Dr. Paul King is returning to his hometown to open the state’s first Black-owned cannabis safety compliance facility in Grand Rapids. King, an Atlanta, Ga.-based neurosurgeon who grew up in Grand Rapids, plans to open Hummingbird Labs on Division Avenue roughly 1 mile south of downtown and near his childhood home.King said he promised his late wife that he would pursue opening a cannabis testing facility after she found cannabis brought her relief from side effects brought on by cancer. With cannabis still illegal in Georgia, King’s home state was a logical choice to launch the venture, which will be located at 1001 S. Division Ave. “It’s a big thing for me because I see that area has gone down. For us to provide jobs and provide a building that looks good and that is functional and not dilapidated — that might draw more people and other businesses to the area,” King told MiBiz “Grand Rapids is also such a think tank and has so many scientists available: Why not go to some place where you have so many scientists in the area?”

Named after the frequent flurries of hummingbirds King sees in his backyard in Atlanta, Hummingbird Labs also will be the first Black-owned cannabis safety compliance facility to open in the state, according to company officials. This not only provides an opportunity for the business to give back to the community, but it also helps dispensaries and suppliers doing business with the lab to achieve social equity goals, said Hummingbird Labs co-founder and Partner Glen Clanton.Grand Rapids, for example, has voluntary social equity programs for both medical and recreational cannabis operators that have helped companies gain an advantage while seeking city licenses. “The social equity program in Michigan involves using minority suppliers,” Clanton said. “Since all cannabis has to be tested, growers and processors can get social equity credit by using our Hummingbirdlab.” Labs acquired the Division Avenue building from Great Lakes EMS Academy Inc. for $815,000 on June 1, according to property records. The cannabis testing facility will be on the second floor, and the owners plan to rent out the rest of the space, King added.The “sophisticated buildout” of the second floor will cost about $1 million and will include new HVAC systems, special flooring and specialized testing equipment, which will cost another $1.5 million to $2.5 million, King said. Hummingbird Labs is raising money on crowdfunding platform Mainvest to help fund the redevelopment and purchasing lab Hummingbirdequipment.

By KATE CARLSON | MiBiz kcarlson@mibiz.com

The recent drop-off in cannabis prices in Michigan also is likely exacerbating lab shopping. The average price of medical flower per ounce was $112.30 in June of 2022, compared to $209.87 in June 2021. “In general, there is a problem with the entire industry, with the financial barriers to entry and the capital you need to get into the industry,” Silva said. “Especially getting into the lab side, that is really expensive.”

For safety compliance operators, Palmatier said it’s “very frustrating for someone who is trying to do good here to succeed. The worst thing is the patients and consumers are the ones paying for it.”

L inda Palmatier recently closed her Kalamazoo cannabis testing facility, The Spott Laboratory, hoping state regulators create what she sees as a more level playing field for businessPalmatier,owners.who opened The Spott Laboratory in 2014 while Michigan had only legalized medical marijuana, and others say the state’s business climate for state-licensed safety compliance facilities has run astray. These facilities are critical links in Michigan’s nearly $2 billion cannabis market, ensuring commercially grown products are safe for human consumption and free of harmful chemicals. However, controversy has clouded the sector, including with a key legal dispute between the Michigan Cannabis Regulatory Agency and a single company that has captured a majority of the testing market. Viridis Laboratories ’ two locations in Lansing and Bay City test more than 60 percent of the state’s product, according to Viridis executives. As well, both operators and regulators have accused the company of supporting “lab shopping” in which growers and processors seek a specific lab to yield higher THC results, which typically create higher-priced products. As of June 30, 2022, Michigan had 19 active safety compliance facility licensees. “When one lab has that kind of percentage of the entire business in the state of Michigan, it’s not because they are better than everybody,” said Palmatier, whose company stopped accepting samples for testing on July 30. “I’m still here, but I refuse to participate in the market where accuracy is not the priority. It’s too expensive to stay open.”

‘Lab shopping’ accusations create tough environment for cannabis testing facilities

Labs is working with Pontiac-based TDG Architects on renovations. The goal is to start construction in September and open the lab in August 2023, King said. Equipment has to be calibrated and validated by the state, which can take three to six months, King added. King and his partners have been working from Georgia to make connections with Michigan growers and processors, which has been difficult, King“That’ssaid. been an ongoing challenge, but (me and Glen) were both in Detroit for CannaCon, so we were meeting growers there and we are trying to get our name out there as much as possible,” King said. “It’s an ongoing task making growers and processors aware of business and making our presence known.”

Viridis controversy

10 AUGUST 15, 2022 / MiBiz Visit www.mibiz.com ECONOMIC DEVELOPMENT

Welch Hummingbird Labs plans to open a cannabis safety compliance facility at 1001 S. Division Ave. in Grand Rapids.

PHOTO BY KATE CARLSON MIBIZ FILE PHOTO

to allegations that Viridis tests disproportionately yield higher THC levels than other labs, Welch said the company spent months developing a more accurate extraction method. “We know our results are much more accurate and precise than a lot of other testing labs in the industry,” said Welch, a retired Michigan State Police forensic scientist. “That’s proprietary information, as much as the CRA and maybe some of our competitors would love us to share that method. We have to share that with the state and had to before we had approval.”

CantonKing

issue!

More than two years since the pandemic started, how are banks, credit unions, mezz funds and other alternative lenders doing? Was there a big shakeout? More consolidation? New entrants into the market? Winners and losers in the sector? Recap small business, commercial real estate, growth lending activities, trends. wait to be in this Contact us by Wednesday, November 9 to advertise. QUARTERLY

GREAT REPORTLAKES Continued from page 1 KrumwiedeNOVEMBER 21,

Property values fluctuate with water levels Water levels in Lake Michigan reached an all-time high around 2018, Steinman said. Although they have since dropped, they’re still above the long-term average, presenting an ongoing challenge to lake front property owners. The last decade has set records for both high and low water levels in Lake Michigan, keeping waterfront property owners on their toes. The high levels also put a damper on waterfront property sales. “To put in a seawall, you’re run ning anywhere from probably $50,000 to $300,000 or $400,000,” said Curt Carini, a West Michigan broker and owner of Holland-based Carini & Associates Realtors . “People aren’t necessarily wanting to buy those properties to then spend another $50,000 or $400,000 to try and keep it from falling into the lake.”

Steinman added that the issue in West Michigan is that “the bluff is so abrupt and the homes are built as close to the water as possible to get the best possible views. These homes are just very vulnerable.”

Engineered protections against high water may keep properties from wash ing into the lake, but they come with consequences.“Whileyoumight have protected this section of shoreline, you may actually be causing harm to your neighbor or your neighbor three houses down because of that armoring,” Krumwiede said. Shoreline hardening changes nearshore currents and the natural courses of sediment transport along the lakeshore — changes that can exacerbate erosion downstream and alter habitats, accord ing to Moreover,researchers.restoring hardened stretches of shoreline to a natural shore line has positive effects on the entire eco system, Steinman said. “That’s going to improve the habi tat, that’s going to allow the vegetation to come back,” he said. “And once the vegetation comes back, the bugs come back. And when the bugs come back, the fish come back, and when the fish come back, the people come back.”

“A lot of [shoreline hardening] has happened over the last decade in response to the high water levels that we’ve experienced in the Great Lakes,” Krumwiede said. “There’s a lot of these alterations that are occurring because of our affection for the water, but that can also have damaging repercussions.”

Don’t

Shoreline hardening Fluctuating water levels — including recently high levels — bring another com plexity. Installing seawalls and other forms of shoreline hardening have become the norm for maintaining lakefront property. While hardening protects properties in the short term, it can have negative con sequences for the ecosystem and down stream neighbors, researchers say.

Visit www.mibiz.com MiBiz / AUGUST 15, 2022 11 REAL ESTATE & DEVELOPMENT opportunities to pick up contami nants, which can then be carried into Lake Michigan without the benefit of being filtered through the ground. “So instead of that water naturally per colating down through the ground and being filtered, it’s just running straight to the lake and increasing the amount of contaminants and the speed at which those contaminants arrive into our water bodies,” said Brandon Krumwiede, a Great Lakes geospatial coordinator with the coastalaplacesdevelopmentthe(NOAA)AdministrationAtmosphericOceanicNationalandandoneofreportauthors.Lakeshorealsopressureonkeyecosysteminwetlands.

The Lake Michigan shoreline faces ongoing disruptions from real estate development and “shoreline hardening” that attempts to limit the effects of rising water levels.

Loss of beaches also weighed down property values, Carini said. However, demand for lakeshore property remains high, said Karly Smothers, maintenance and customer service manager at Lake Michigan Cottages LLC , a vacation rental and property management company oper ating along Lake Michigan. Many of the properties that Lake Michigan Cottages manages have put in rock or sand retain ing walls as an extra safety precaution, Smothers said. While a wide array of contributing factors make it difficult to predict water level changes, Steinman said climb ing global temperatures and extreme weather events associated with climate change will likely contribute to similarly extreme water levels in Lake Michigan in the future. Natural solutions Krumwiede said a systems approach — an understanding of the Great Lakes that takes the entire region’s ecosystems and developments and their effects on one another into account — can help people look beyond their local geography. “This is where it’s important to be thinking about it outside of the interstate boundaries,” Krumwiede said. “What happens here in Kenosha, what does that mean for the folks down in Waukegan, or similarly down into Chicago?”

“The local municipalities want devel opment, they want a tax base. People want to live by and see the Great Lakes,” Steinman said. “And coastal wetlands, for a lot of people, are not looked at as this wonderful ecological habitat. They’re looked at as a place where mos quitoes can Accordingcrop.”to Krumwiede and Steinman, these wetlands are not only a critical habitat for species essential to Michigan’s natural food web, but also a natural filtration system for water headed into the Great Lakes.

Nature-based solutions can help to offset that vulnerability without harden ing the shoreline. For instance, allowing emergent vegetation like cattails and bulrushes to grow along the shoreline can protect lakefront property from erosion by diffusing the force of waves, Steinman said. Like wetlands, this vegetation is important but unpopular. Because it obstructs views of the water and makes navigation difficult, lakeshore prop erty owners tend to want to tear it out, Steinman said. “It’s not weeds. They’re actually doing an ecological service and function for the ecosystem, benefiting all and the beauty of ecosystem services. They’re doing it free of charge and providing that service to humans,” Steinman said. “It’s just a matter of convincing the humans that they need it … that it’s in their best interest.” 2022

“Both for local governments and developers and utilities, there’s huge benefits for doing this because of the long-term certainty,” Sherman said, noting that disputes often unfold between local governments and property owners involving the taxation of renewable energy projects.

L egislation similar to bills that Gov. Gretchen Whitmer vetoed in 2020 involving the taxation of commercial solar energy developments was reintroduced this summer with changes to gain broader support from local governments. Senate Bills 1106 and 1107 — both introduced on June 30 by Republican state Sens. Kevin Daley and Curt VanderWall — would allow governments to opt into payments in lieu of taxes (PILOT) for commercial solar developments as an alternative to developers paying local property taxes. Backers of the concept say the bills would provide more financial certainty for both local governments and developers as they pursue a growing number of solar installations across Michigan. “While it’s the same overall concept, the mechanisms of how it works are very different,” Michigan Energy Innovation Business Council President Laura Sherman recently said of the changes from the 2020 bills. “These bills make it very clear that local governments have complete discretion to approve or disapprove of a (PILOT) application.”

“As a result, tax payments are held up over time, folks are stuck litigating instead of receiving money they planned,” Sherman said. Following Whitmer’s veto in 2020, the MEIBC went to work connecting with local government advocates to reach common ground. That included several months of work groups and meeting with local assessors who have been grappling with these projects, said Herasanna Richards, legislative associate for state and federal affairs at the Michigan Municipal League. “We want to make sure we’re looking into the impact to revenue to local governments, and that it’s fair and inclusive to the needs of local governments,” Richards said. Richards said while the MML doesn’t have a formal position on the bills, “we are much more confident with the foundation.” That foundation provides a new starting point for the committee process and hopefully another round of legislative approval, advocates on both sides of the issue told MiBiz “There’s a whole lot of compromise in the legislation — I don’t think it’s exactly what anyone wanted,” Sherman said. “That gives me hope that we have achieved a balance and is something we hope the Legislature will take up and will view favorably.”

11:00AM–12:00PM What are the Critical Mechanics of Success? Join us for our final webinar of the year, the one that ties everything together. Learn why Industry 4.0 is a strategic issue for today’s manufacturers and how manufacturers need to tie the workforce and the technologies together. (Spoiler alert: there are competitive benefits of doing so!) Hear from local manufacturers about how they are approaching and implementing Industry 4.0. They’ll be sharing what they did to prepare their employees for the journey, what they learned along the way, what technologies they implemented, and how it’s going today. Brought to You by: Webinar FIVE AUG. 31stSCANHERETOREGISTER 2022 Webinar Series Build for Now, Build for Future Industry 4.0, Stories from the Road: ENERGY Once-vetoed solar taxation bills resurface with changes to build local support ShermanRichards Commercial solar developers could make direct payments to municipalities instead of property taxes under legislation being considered in Lansing.

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

Whether local governments would be mandated to offer PILOT was a key sticking point two years ago for organizations like the Michigan Municipal League and the Michigan Townships Association Whitmer and local governments also previously cited incomplete data involving best practices for taxing commercial-scale solar projects. The proposed legislation would set a PILOT price per megawatt (MW) of capacity for solar projects bigger than 2 MW. The recently introduced package sets the price at $7,000 per MW for 20 years in most cases, compared to $4,000 in the previous bills. The PILOT rate would be lower to incentivize developments in certain areas, such as brownfields. To the MEIBC and its members, which include solar developers, a PILOT approach provides far more certainty than an ad valorem system that can vary over time. Sherman says this certainty also benefits local governments with steady revenue.

12 AUGUST 15, 2022 / MiBiz Visit www.mibiz.com

Huntington Bank (Nasdaq: HBAN), the secondlargest bank operating in West Michigan that merged a year ago with the former TFC Bank, grew total commercial loans at a 12-percent annualized rate in the second quarter, excluding PPP.

Even with increases, interest rates remain “very low on a historical basis,” he said. Businesses also are investing in automation and equipment to offset labor shortages and drive efficiencies, Steinour said.

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Grand Rapids-based Mercantile Bank Corp. (Nasdaq: MBWM) reported that commercial loans through the second quarter grew at an annualized rate of 11 percent “with the commercial pipeline remaining at high levels,” said President and CEO Robert Kaminksi, Jr. Mercantile Bank’s commercial loan backlog “remains consistent with prior periods as we fund this impressive level of growth,” Reitsma said. At the end of the second quarter, Mercantile Bank had $175 million in loan commitments for new construction that it expects to fund over the next 12 to 18 months. Commercial clients’ use of present credit lines also increased from 30 percent to 34 percent in the second quarter, he said. As interest rates rise, with another 0.50-percentage point increase expected in September following the 0.75-percent federal funds rate increase in July, Reitsma does anticipate some softening for commercial loan demand in the second half of 2022.

Policy and

B usiness lending remained strong through midyear despite rising interest rates and economic uncertainty that’s generating worries about a potential recession, according to regional banking Regionalexecutives.and

local community banks that reported quarterly earnings last month generally recorded good growth in commercial lending for the April-to-June period, after excluding Paycheck Protection Program loans made two years ago that were forgiven and removed from the books. The quarterly earnings reports indicate that — at least through the first six months of 2022 — business demand for credit to support growth held up even as interest rates rose. “Today the rate increases have not really impacted loan demand in a material way. I’d expect that future increases would start to dampen some of the loan requests related to commercial real estate projects in particular,” Mercantile Bank President Ray Reitsma told analysts in a July conference call to discuss quarterly results. “That would be mitigated by the fact that housing is in such short supply, so that particular slice will probably have more resilience than other types of projects. I would suspect that that would be the first place that we see that demand soften, but I would emphasize that, to this point, that hasn’t occurred.”

Sparta-based ChoiceOne Financial Services Inc. (Nasdaq: COFS), the parent company of ChoiceOne Bank, saw total organic loan growth in the second quarter of $60.7 million, or 23.8 percent, with $42 million coming from commercial lending.

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

As banks large and small reported earnings and volume growth in their July reports, many noted the credit quality remains in good shape for now. Bill Demchak, CEO at Pittsburgh, Penn.-based PNC Financial Services Group Inc. (NYSE: PNC), told analysts that he believes rising interest rates and the resulting slower economy will eventually begin to affect credit quality. Any trouble “lies somewhere in the middle of next year, not any time in the next six months,” Demchak said. “I think you’re just going to see a slow grind with credit losses increasing over time as we get into the slowdown,” Demchak said. “The overall quality of our book actually improves quarter-on-quarter. Eventually, that has to stop. And eventually, I think the Fed has to slow the economy to a pace to get inflation under control, and I think that’s going to be harder to do than the market currently assumes, and I think it’s going to take longer than the market currently assumes. And when that happens, we’re going to see credit costs go up at least back to what we would call normalized levels. But … I don’t see any particular bubbles inside of the banking system as it relates to credit.”

Columbus, Ohio-based Huntington Bank has a “very strong pipeline” for commercial loans and set a record in the second quarter for equipment financing, he “Wesaid.doa lot of business in this space and we’re certainly seeing it,” Steinour said. Cincinnati, Ohio-based Fifth Third Bank (Nasdaq: FITB), the market leader in West Michigan, last month reported what Executive Vice President and Chief Financial Officer Jamie Leonard called continued “robust” commercial loan growth across its 11-state footprint in the Midwest and southeast. THEILE COO, Director of Public Economic Analysis, Anderson Economic Group

Huntington Bancshares Inc. Chairman, President and CEO Stephen Steinour told MiBiz in a recent interview that part of the loan growth came from manufacturers investing now in supply chains after more than two years of component shortages, providing a “tailwind” to the economy. “Demand was never fully met. It was a distorted recovery because had we met full demand the economy would have been even better,” Steinour said. “There’s a lot of on-shoring and reshoring.”

Business borrowing strong As the Federal Reserve implements further rate increases to fend off high inflation, the economy will likely slow and temper business demand for credit, according to analysts. In a note to clients after the Federal Open Market Committee on July 27 made the latest increase in the federal funds rate, PNC Bank Chief Economist Gus Faucher wrote that despite a “very small decline in the second quarter, business investment demand remains solid. PNC expects annualized U.S. economic growth of about 2 percent in the second half of 2022. Economic growth will slow to about 1 percent in 2023 and 2024 “as higher interest rates continue to weigh on the economy,” Faucher wrote. Part of what’s driving commercial lending growth now is businesses borrowing to build up inventory to avoid paying higher prices later in inflationary times or a higher interest rate, said Tyler Theile, chief operating officer and director of public policy and economic analysis at the Anderson Economic Group in EastTheileLansing.believes businesses may also have started conserving cash anticipating an economic downturn and opting to use credit. “If you’ve been considering holding a line of credit for your business, and maybe you don’t even need to spend the money tomorrow but you want that line of credit established before rates go up further, you’re doing that now,” she said. Among other banks based in West Michigan, Grand Rapids-based Independent Bank Corp. (Nasdaq: IBCP) grew commercial loans by $71.6 million in the second quarter, and $77.3 million when excluding PPP payoffs. Minus PPP, Independent Bank for the first half recorded a 24-percent annualized growth rate for commercialIndependentloans.Bank expects the pace of loan growth to moderate in the second half “with a continued strong pipeline” that will still generate a double-digit growth rate in the third and fourth quarters, Executive Vice President for Commercial Banking Joel Rahn Holland-basedsaid.Macatawa Bank (Nasdaq: MCBC) reported $37.1 million in total commercial loan growth in the second quarter, excluding PPP payoffs. The bank noted in its quarterly earnings report that the “loan growth experienced in this time period was the direct result of both new loan prospecting efforts and existing customers beginning to borrow more for expansion of their businesses as pandemic risks to economic conditions decrease.”

Banking execs see strong commercial lending environment at midyear Reitsma Steinour Theile

Credit quality uncertainty

CLQ - GROWTH CAPITAL LET’S MAKE A SO Y OU GREAT PLAY CAN HelpingYourFinancialGOAT.comPROSPER.businesses&people: “If you’ve been considering holding a line of credit for your business, and maybe you don’t even need to spend the money tomorrow but you want that line of credit established before rates go up further, you’re doing that now.” —TYLER

3. By using more sustainable sources of energy, your business can advance its sustainability goals. So, if you’re ready for a crash course on energy management, here are three ways you can start today! How to Use Less Energy and Save There are multiple ways you can use less energy and save on costs while keeping your business running smoothly.Daily operation changes include replacing lights with energy-efficient LED bulbs and installing smart thermostats. Long-term changes to your facility include replacing HVAC systems or installing network lightingPlus,controls.Consumers Energy offers over 500 rebates on energy-efficient products and services that can help offset your investment costs. These rebates apply to energy-efficient lighting, HVAC equipment, building automation controls and much more that can help you save money on your monthly energy bill.

2. By shifting your energy use during high-demand times, to avoid using more costly sources of energy.

How to Shift Energy Use (and Get Paid!) Did you know that it pays to shift your energy use during high-demand times? When everyone’s using energy at the same time, demand goes up, and so does stress on the energy system. But by strategically shifting your energy use to times of the day when demand for energy is lower, you’ll reduce the need for energy companies to provide power using more expensive, less efficient energy sources. This strategic shift helps ease the energy burden on your business’ bottom line and your community. Consumers Energy offers programs for both small and large businesses that pay your business to shift its energy use during times of peak demand. That’s money you can invest directly back into your business and support your local communities. Now that’s spreading good energy! How to Create a Sustainable Energy Strategy Last, but certainly not least, Consumers Energy can help your business transition to sustainable energy sources with turnkey renewable energy programs, free assessments on fleet electrification and rebates on EV chargers to support your employee and customer sustainability efforts. These energy efficient resources will help increase your business’ bottom line, while meeting your sustainability goals. It’s a win for your business, a win for your customers and a win for our state. A triple win! Let’s Become a Force of Change Together, we can become a positive Force of Change for Michigan. No matter if your business adopts one, two or all three of these energy management solutions, your contributions add up to make a big difference for our state—and your bottomRunningline. a business is hard. But managing your energy doesn’t have to be. Consumers Energy has Energy Advisors who are ready to help you find the best ways to save and manage energy and Trade Allies to help you get the job done. Whether you’re a small business owner or a large business leader, our friends at Consumers Energy are ready to help you Save Energy, Save Money and Become a Force of Change!Learn more about how to manage your business’ energy ConsumersEnergy.com/charlesatwork.at

A s businesses gather an increasing amount of consumer information, consumers’ concerns about who knows what about them are becoming more pronounced and businesses’ legal obligations regarding that data are becoming more complex. Pew Research reports that many consumers have elected to not use a product or service due to concerns about how a business may use (or misuse) their data. In response to these concerns, numerous states have enacted consumer privacy laws with seemingly conflicting standards on what information businesses may collect, what they may – and may not – do with this data, and what level of notice they must give to and permission they must obtain from consumers before collecting and using consumers’ personal information. Many states, including Michigan, have similar statutes working their way through state legislatures. Against this backdrop, Congress is currently considering enacting a national data privacy standard. Until that time, businesses must consider the following factors when collecting consumers’ data:

Rhoades McKee shareholder Hal Ostrow, CIPP/US, regularly advises clients on cybersecurity, privacy, data aggregation, information technology, and public policy. He and other members of the Rhoades McKee Technology Transactions, Privacy, and Cybersecurity Team are available to answer any questions you have about state and federal data laws, rules, and regulations.

1.Which businesses are subject to each state’s privacy law. Thresholds for which businesses are subject to state data privacy laws include the amount of revenue a company generates, either overall or through certain endeavors relating to the sale of personal data; the number of consumers whose data the business possesses; and whether the business processes or controls personal information in the applicable state.

2. What constitutes “Personal Information” and “Sensitive Personal Information.” Personal information generally means information that can be used to identify, relate to, describe, or is associated with an individual, but each state’s definition of “Personal Information” or “Personal Data” has a slight variation on this general description. The definition of what constitutes “Sensitive Personal Information” varies even more from state to state, with many statutes including racial and ethnic origin; religious beliefs; information relating to mental and physical health; sexual orientation; and genetic and biometric data in the category of “Sensitive Personal Information.” Some, but not all, definitions of “Sensitive Personal Information” include geolocation data; information provided by a minor; and citizenship status.

3.Whether businesses must allow consumers to opt out from selling or using consumers’ personal information and sensitive personal information. Most jurisdictions mandate that consumers may opt out of the sale or use of their personal information or sensitive personal information. Some states are more specific about the type of use from which consumers may opt out, while others allow consumers to opt out of all transactions that include their personal information. Other di erences include what constitutes a “sale” of personal information and whether businesses may treat consumers who have opted out of a sale of their personal information di erently than consumers who have not.

ADVERTISEMENT Five Key Factors Businesses Must Consider When Collecting Consumer Information

5. Whether consumers can access, correct, and delete their information — and how. Most state privacy laws require that businesses disclose what information they have collected about consumers and allow the consumers to correct or delete this information. However, the means of this disclosure, including limits on how frequently a consumer may make such requests, vary from state to state.

Hal Ostrow

1. By reducing energy use, you only pay for the energy your business needs.

How to save on your business’ energy bills this summer

14 AUGUST 15, 2022 / MiBiz Visit www.mibiz.com Michigan summer has arrived, and so have opportunities to save on your business’ energy bill. So, let’s talk about them! I’m Charles, your friendly hometown energy expert - and I’m here to talk about energy as a strategic resource. For starters, let’s talk about energy management and what it can do for your business. The energy your business relies on every day is not just a business expense but a strategic resource that can and should be managed. For example, Michigan businesses waste up to 30% of the energy they buy. That’s like buying 30% more parts than you need and never using them. That’s not good for your bottom line. The good news is Consumers Energy has programs that help you manage energy in three ways:

4.Whether consumers must opt in before businesses use their personal information and sensitive personal information. Some states require opt in, and virtually all state privacy laws contain a requirement that businesses collecting consumers’ information inform the consumers at the point of the collection which data is being obtained and the purpose or purposes for which the data will be used. Additional requirements include notifying consumers how long the business will retain their data and how consumers may exercise any individual rights they have under the applicable statute or regulations.

“It’s enabled us to build some infrastructure we didn’t previously have,” Medsker said. “It’s created a much better situation.”

BEKNOWFIRSTTHETO

“I was a little more aggressive in making key hires for strategic positions as we grow,” Medsker said.

Kerschen

Charter Capital Partners prepares to raise second, larger mezzanine fund

The mezzanine capital helps fill the gap between the amount of capital a business needs and what it can secure from a senior lender through a conven tional commercial loan. Of the nine companies that Charter Growth Capital has backed, five are based in Michigan. Kerschen expects the fund will make a total of 12 investments and begin seeking investors for the suc cessor fund after another one or two deals, probably in the fourth quarter. Five of the nine investments were syndicated deals completed with another capital investor, Kerschen said. The other four involved capital from the business owner. When making an equity investment, Charter Growth Capital obtains a minority stake in the company.“Wewant to be a meaningful part of that capi tal structure, but not necessarily control,” Kerschen said. “The entrepreneur maintains control, or our syndicate partners are the control investor and we’re supplemental.”Thecompany does not have a specific dollar tar get to raise for the second mezzanine fund, although Kerschen expects it “to be a significantly larger fund than fund one.”

With investments in nine companies over three years and a robust pipeline of prospects, the deal flow indicates continued demand for a second fund that targets investments in a segment of the market that’s below where many larger mez zanine lenders participate. “We feel our initial thesis when we contemplated fund one has confirmed or validated that there is need for this — we’ll call it junior capital — at the lower end of the middle market,” said John Kerschen, president and managing partner at Charter Capital Partners. “That means we’re going to start thinking about fund two. We believe there continues to be market demand for this kind of capital.”

In preparing for a second fund, Charter Capital Partners intends to approach institutional investors, family offices, banks and high net worth individuals to invest, Kerschen said. The next fund will “probably allow us to write little bigger checks” of up to $7 million to $8 mil lion per investment, “so we can stay solidly in this lower tier,” he said. “There’s some good companies out there that just need a little additional capital to buy out a partner or do an acquisition or to pursue a growth opportunity, and they don’t have the collateral base or cash flow that a conventional lender would require,” Kerschen said. Recent deals for Charter Growth Capital Fund include a February investment in Grand Rapidsbased Lambert Global LLC, the holding company for public relations and investor relations firm Lambert & Co. and its affiliated companies.

Founder and Chairman Jeff Lambert said at the time that the Charter Growth Capital investment would go to support growth, set up new practice areas and recruit talent and accelerate M&A. Lambert Global, which recorded a compound annual growth rate of more than 20 percent over five years, then made a subsequent minority investment in March in Detroit-based Van Dyke Horn Public Relations LLC Charter Growth Capital’s first deal came in October 2019 with an investment in Kalamazoobased Keystone Solutions Group, a provider of product design for the medical device, aerospace and automotive industries, plus contract manufac turing for medical devices.

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

Visit www.mibiz.com MiBiz / AUGUST 15, 2022 15 CLQ - GROWTH CAPITAL

GRAND RAPIDS — Three years after forming a fund to invest in companies needing growth capi tal, Charter Capital Partners LLC has begun pre paring to start a larger, successor fund. The Grand Rapids-based investment bank’s first mezzanine fund, known as Charter Growth Capital Fund, has so far deployed $31 million of the $41 mil lion it raised from 43 investors.

Additionally, Charter has served as a key adviser, “sounding board” and valuable referral source for Keystone, especially as the company navigated through the pandemic, he said.

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In a recent interview, Medsker said he began talking to Kerschen, who he had known for years, and eventually “one thing led to another and we did this deal” with Charter Growth Capital Fund for a minority position in the company. The investment has provided growth capital “to position this company for good, sustainable, long-term growth,” Medsker told MiBiz. Keystone Solutions Group added production capacity, including new clean rooms and high-speed pack aging equipment, and implemented an enterprise resource planning system. The investment also allowed Keystone to scale up its head count.

Rely on MiBiz to break through the noise, go beyond the easy stories and deliver top-notch local business news and information not available from any other source.

Founded in 2019, Charter Growth Capital Fund invests $1 million to $5 million through loans or noncontrolling equity investments, or a combination of the two, in fast-growing, profitable companies in the lower end of the middle market. The fund targets grow ing companies with annual revenues of $10 million to $50 million in the Great Lakes region: Michigan, Ohio, Indiana, Illinois, Wisconsin and Minnesota.

At the time, Keystone Solutions Group owner and President Jim Medsker was seeking a capital partner to have “some financial horsepower behind you,” expand and maintain growth, and mitigate his risk in the business. The offers he received were from prospective investors who wanted a majority share in the business, which he did not want to give up.

The Best Day Details has paused further expan sion for now, she said. “I didn’t want to hire even more than 10 people in order to match 2022’s metrics because that might be a crash and burn rate,” DeRitter said. “I am just cautiously optimistic right now.”

mily DeRitter formed Grand Rapidsbased wedding coordination com pany The Best Day Details LLC in lateThe2019.company’s first wedding season coincided with a massive dip in events because of COVID-19: Her team worked on 25 weddings in 2020, many of which were ultimately canceled or rescheduled.Butasrestrictions eased in 2021, business came flooding in. DeRitter now oversees a team of 10 peo ple with more than 150 weddings scheduled in 2022. Across Michigan, wedding events have come roaring back since the first year of the pandemic. Though still lower than 2019’s rate, the number of Michigan weddings this year is set to far exceed the number of weddings that took place in 2020 or 2021. Planners like DeRitter have expanded their teams to meet the demand and hope the trend will continue to support their newfound capacity.

While the dip in weddings was most significant in 2020, DeRitter said couples remained tentative about scheduling in 2021 as many chose to elope, downsize or delay. Michigan experienced 50,996 weddings in 2021, up from just 41,977 in 2020 but still below the 51,758 in 2019, according to market research firm The Wedding Report. Online wedding planning service The Knot also found that wedding sizes shrank early in the pan demic, but toward the end of 2021 guest lists started growing again. The Midwest region put up the high est average guest list size and the closest to pre-pan demic numbers, according to The Knot. “Generally people are still of the mindset of: We can have a party now, so let’s have a big party. But I think that something did shift in the culture to maybe intimate is better,” DeRitter said. An ‘insane’ boom One pandemic upside for West Michigan wedding planners was the sudden appeal of the region’s scenic outdoor venues. The need for large outdoor venues for COVID-safe weddings drew couples to Michigan from larger urban areas like Chicago, said Lindsay McLaughlin, owner and lead coordinator of Grand Rapids-based Paper Hat Weddings LLC. A study earlier this year from The Knot predicted that 2022 would bring an “extremely busy” wedding sea son, with more than 2.6 million couples planning to marry across the country. “It seems that once the restrictions lifted, people became even more motivated to celebrate with their friends and family,” McLaughlin said. DeRitter agrees. She hired her first team mem ber in early 2021, and began assigning her weddings almost right away as spring couples rescheduled to fall dates DeRitter had already booked. “It’s just been insane [this year],” DeRitter said. “I probably could have booked a team twice my size almost fully for this wedding season.”

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Wedding coordinators grow capacity for post-pandemic boom, hoping it lasts

The chaos had a significant effect on the business.“Income that we planned on for one year was pushed off to a different date or even disappeared completely,” Torno said. “In the wedding industry, open Saturdays are a commodity and when a cur rent client rescheduled to a future date, that was one less we could book a new client on, so there was loss of new income due to that as well.”

16 AUGUST 15, 2022 / MiBiz Visit www.mibiz.com

By ABIGAIL HAM | MiBiz aham@mibiz.com

Crawling out of COVID

The past two wedding seasons brought unique challenges for the team at Red Heels Events LLC, which plans weddings and private events across West Michigan. “I have been planning events in West Michigan for over 17 years and have never experienced any thing like it,” said Michelle Torno, owner and lead planner. “We assisted couples with completely rescheduling their weddings to new dates, down sizing their weddings to comply with the current restrictions and then redoing them again when the restrictions changed.”

To meet the demand from new couples as well as weddings delayed from the past two seasons, Paper Hat Weddings has had to hire additional coordi nators to manage as many as three weddings per weekend.“Withthe amount of weddings in 2020 and 2021 delayed and rescheduled, 2022 is turning out to be one of the busiest years in a long time,” said Torno of Red Heels Events. “The amount of inquiries we have received is much higher than normal. Other plan ners in the area are experiencing this same increase for both 2022 and 2023.” McLaughlin and Torno both believe the boom will continue at least through 2023. “We are already experiencing a very high level of inquiries and bookings for 2023. Favorite venues are booking up quickly, couples that desire to have their weddings at these venues are having to push their dates out further and further. Our calendar is also filling up faster than normal and we will reach our limit sooner than ever before,” Torno said. DeRitter is more cautious. Although her team is already about 50 percent booked for 2023, she said some vendor friends aiming for 25 bookings are still hovering around two to three.

‘LONG OVERDUE’: Restaurant workers welcome higher wages, bene ts as owners warn of closures

for inflation, said Peter Ruark, senior policy analyst at Michigan League for Public Policy. The mini mum wage for tipped workers would gradually increase to $12 an hour by 2024, effectively elimi nating the tipped pay scale. The paid sick leave law requires 72 hours of paid sick leave per year. Lawmakers in 2018 amended the provision to 40 hours per year and exempted employers with 50 or fewer workers. Ruark noted that the Legislature’s adopt-andamend strategy backfired, and actually set up the potential for faster wage hikes than what was ini tially“Weproposed.willgoright to where the minimum wage was supposed to go,” Ruark said. “That will be quite a jump in minimum wage for restaurants, but I would like everyone to remember that if the Legislature had not tampered with this minimum wage going to the ballot, it would have gone much more gradu ally and slowly. I sympathize with businesses that are going to feel a little bit of a shock, but they only have the Legislature in 2018 to blame for that. They worked to thwart the will of the voters.”

Michigan Restaurant & Lodging Association President and CEO Justin Winslow said late last month that Shapiro’s stay “successfully prevented the immediate economic decimation of full-service restaurants, but it leaves a teetering industry unsure of its future and incapable of making informed deci sions to regain stability.” Winslow added that he is hopeful Shapiro’s rul ing will be appealed and Michigan’s smaller wages for tipped workers is maintained. West Michigan restaurant owners previously told MiBiz they were worried that the hike in the minimum wage could have unintended conse quences for both owners and employees, poten tially causing customers to tip less. Owners may also need to reevaluate their business model if smaller tipped wages are phased out, including raising menu prices. However, ROC United Acting CEO Alicia Renee Farris countered that employees’ reliance on a tipped wage is part of a deeper, systemic issue. “The tipped wage is a legacy of slavery, that’s what it is,” Renee Farris said. “People didn’t want to pay a wage so they decided workers should be dependent upon generosity. As a result of COVID19, most have had to raise (wages) anway, and we were concerned there has to be a policy on record to hold people legally accountable to.” Renee Farris also noted that the tipped wage phaseout would take place in 2024 under the law. “We have a long way to go in terms of really bringing about economic justice, but it’s one step at a time, and this is a step in the right direction,” Renee Farris said. “We want businesses to succeed, we do, but we also want to create thriving wages for restaurant workers.”

A focus on serving others serves Waterbury well during four-decade legal career plan ahead to ensure smooth Preparing for Transition F 81%

J HELMINSKI PILOTS AUXO TO GROW COMPANIES WHILE MAINTAINING WHAT’S ‘SACRED’

Restaurant workers welcomed recent court decisions that could lead to an increased minimum wage and expanded paid sick leave benefits in February of 2023.

—ALICIA RENEE FARRIS Acting CEO, Restaurant Opportunities Centers United

Visit www.mibiz.com MiBiz / AUGUST 15, 2022 17

By KATE CARLSON | MiBiz kcarlson@mibiz.com

W hile restaurant owners have warned of impending industry collapse — or at least uncer tain operating conditions — by swiftly changing the state’s mini mum wage and paid sick leave requirements, their workers have welcomed recent developments that they say ensure economic stability. That includes Detroit chef and industry veteran James Hawk, who called the prospect of a $12 an hour minimum wage for restaurant workers “life changing.” The restaurant industry experienced potentially massive changes in recent weeks. On July 19, a state Court of Claims judge ruled that previous ballot ini tiatives to gradually raise the minimum wage, as well as strengthen paid sick leave requirements, would soon take effect after maneuvering in 2018 by the GOP-led legislature to water down the proposal. On July 29, Judge Douglas Shapiro granted the state’s request for a temporary stay on his earlier ruling, delaying implementation until Feb. 19, 2023.

Restaurant Opportunities Centers United (ROC), a restaurant workers organization, led a vir tual press conference on Aug. 5 to ensure Shapiro’s initial ruling is upheld. “This is going to affect all of the restaurant work ers here in Michigan and I’m really happy about that and am grateful and thankful for that,” Hawk said during the press conference. Hawk is also a plaintiff in the Court of Claims case initially brought by the organizers of the 2018 paid sick leave and minimum wage ballot initiatives. Fellow restaurant worker Roquesha O’Neal agreed with Hawk, saying the ruling — if upheld — would bring peace of mind to restaurant workers. “This saves a lot of us from not being worried about paid sick time if our children get sick,” O’Neal said. “With the raising of gas prices and utility bills and other bills, it’s hard for me to support my chil dren and pay the rent each month on time. With paid sick time, that will protect my household — that’s the bottom line. This is long overdue.” Shapiro approved the state’s request for a stay to give employers time to make operational changes. Mark Brewer, the plaintiffs’ attorney and former chairperson of the Michigan Democratic Party, has worked with the state and the attorney general’s office to potentially speed up the court briefing pro cess for an earlier determination of when the ballot initiatives could become law. “The goal of the request (on Aug. 5) is to get a decision from the Court of Claims before the (stay) expires,” Brewer said. “We need to make sure these long-overdue raises and sick time are awarded to Michigan workers who badly need them. But neither we nor the state are going to appeal Judge Shapiro’s decision to put it on hold.” Giving employers “a few months to adjust” is sat isfactory to Brewer and his clients, he said during the Aug. 5 press conference. Brewer added that he is “rea sonably confident” the court will expedite the case.

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“We have a long way to go in terms of really bringing about economic justice, but it’s one step at a time, and this is a step in the right direction. We want businesses to succeed, we do, but we also want to create thriving wages for restaurant workers.”

Swift changes If allowed to take effect as proposed, the new law would immediately raise the minimum wage to $12 an hour and $9.60 for tipped workers when adjusted

18 AUGUST 15, 2022 / MiBiz Visit www.mibiz.com

Grand Rapids Community Foundation is commemorating a century of responding to the everchanging needs of greater Grand Rapids and marking the beginning of a new century of service and impact. We are grateful for partners like Chelsie Wyse and Ken and Tamasha James, who give us the strength and vision to make bold change possible. To join the celebration, visit GRFoundation.org/Centennial.

A NEW CENTURY OF SERVICE AND IMPACT

GRCF_Centennial 2.indd 1 5/20/2022 1:19:08 PM

Basic tech literacy has become an important key to independent living, Kortenhoven added. “I think technology is an area where we’re leaving the older generation behind the fastest,” Kortenhoven said. “We just thought it’d be great to have a program to bridge that gap.”

The program’s curriculum also includes an intro duction to cybersecurity threats and internet fraud, which cost seniors more than $3 billion last year, according to the AARP. Other senior living facilities in West Michigan, including Holland Home, have taken an active role in educating residents about cybersecurity risks, particularly after technology usage increased during the COVID-19 pandemic. “We’re hoping that we can make an impact in that regard as far as teaching them what to look out for, who to respond to and who to not respond to, and what the markers are of someone trying to get their information,” Kortenhoven said.

Madiol grew familiar with local nonprofits while managing Amway’s grant programs and volunteering efforts, which helped guide him into the new position.

By ABIGAIL HAM | MiBiz aham@mibiz.com

Guiding Light focuses on helping men recover from substance use addiction and homelessness, find work and return to society through its Recovery program, the social enterprise Iron House sober-living community, and the Job Post staffing firm.

—PETER KORTENHOVEN Program Coordinator, Senior Neighbors

— Reported by Abigail Ham.

A Grand Rapids nonprofit provid ing independent living services received a boost this month when Kent County voters extended a senior services millage that will help the organization’s recently launched tech nology support program. County voters in the Aug. 2 election approved the eight-year senior millage extension by a wide margin, according to the Kent County clerk’s office. The millage will generate about $13.3 mil lion this year to support more than 50 services. Senior Neighbors, a Grand Rapids nonprofit that helps local seniors maintain independence, last month announced its technology support program that includes group workshops, one-onone support and a technology lending library for residents over the age of 60. Nonprofit officials say the program will help seniors adapt to — and participate in — the rap idly shifting technology landscape. “One of the common themes with a lot of our clients is the feeling of being overwhelmed by the technology demands in their lives,” said Peter Kortenhoven, Senior Neighbors program coor dinator. “A lot of the services they apply for, a lot of the forms and communication happens via the internet — online documents and things like that.”

David Madiol. COURTESY PHOTO

The program welcomes all adults over 60. “The bottom message I would like to portray is that everyone is welcome and we really want to make a difference and help them boost their independence,” Kortonhoven said.

Voters support seniors Shortly after Senior Neighbors announced the technology support program, roughly 71 per cent of Kent County voters approved an eightyear extension of the county’s senior services millage, according to unofficial election results. The Area Agency on Aging of Western Michigan (AAAWM) administers the millage funds in partnership with 32 local agencies. Each year, the AAAWM identifies priori ties for the millage funding. Officials identified technology as a priority in 2021 and selected Senior Neighbors as the partner to address that need. The Kent County Senior Millage Review Committee, made up of county commissioners and older adults from the community, approved Senior Neighbors’ proposal. “We’ve seen the need really grow since COVID hit,” Kendrick Heinlein, AAAWM’s director of con tract services and program development, said of technology programming for seniors. While a variety of support services are avail able to seniors in the area, most now require basic technology skills to access the programming, Heinlein said.“(Senior Neighbors is) a trusted partner. We’ve worked with them since the millage started in 1999,” Heinlein said. “Their proposal really had a mix of in-home and class ses sions, which we wanted … and it really focused on serving all older adults.”

G rand Rapids-based Guiding Light Mission Inc. has tapped a longtime Amway Corp. community relations specialist to lead the nonprofit’s fundraising and communications.

David Madiol started last month as Guiding Light’s development and communications director after serv ing nearly 27 years with Amway, most recently as its head of global corporate social responsibility and West Michigan community relations.

“I knew what I really wanted to do for this next chapter of my life was to work in Grand Rapids in a nonprofit role, to give back to the community,” Madiol said. The new position places him on the other side of the corporate philanthropy equation, Madiol added.

In his new role, Madiol will develop strategy and lead action plans to sustain and increase Guiding Light’s donor base.

Kent Co. senior millage extension to boost nonpro t’s new technology support program

NONPROFIT ORGANIZATIONS

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Longtime Amway employee joins Guiding leadershipLightteamGrand Rapids nonprofit Senior Neighbors recently launched a new program to support seniors learning new technology platforms.

“The experience that I had in the nonprofit world and seeing the philanthropic environment here in West Michigan really enticed me,” he said. Madiol also was excited by the prospect of joining a relatively new leadership team and helping to develop new goals for the organization. “I do come to the table with a large amount of com munity contacts,” he Guidingsaid.Light leadership is in the midst of expanding the 93-year-old non profit’s recovery program. Over the past decade, the organization has shifted its focus from a traditional shelter to a pro gram-based nonprofit that helps people recover and return to work. “We have this unbelievably great recovery model here … it’s incredibly effective,” Madiol said of the donationfunded program that’s free for participants.

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The program will prepare seniors to use tech nology for a variety of purposes, including com municating with family and friends, completing online applications for services and navigating telehealth systems.

“I think technology is an area where we’re leaving the older behindgenerationthefastest.”

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By ELYSE WILD | MiBiz A s a sober resident in a city widely recognized for its craft beer scene, Paul Clark struggled to find non-alcoholic options outside of soda, coffee or sparkling water.

The NielsenIQ data also show that 78 percent of non-alcoholic beer, wine, and spirits buyers also purchase alcoholic drinks. A growing number of distilleries also are dedicating portions of their menus to mocktails. Jon O’Connor, co-owner and co-founder of Long Road Distillers LLC and president of the Michigan Craft Distillers Association, believes it’s essential for establishments to offer high-quality, non-alcoholic cocktails as an option. “We offer non-alcoholic cocktails at all of our locations. It seems to be something people have been asking for,” O’Connor said. “We make all of our own mixers and juices and syrups, so we have the ability to create a lot of great mocktails. We all have a desire to be out and with one another, especially with how isolated we have been for the past couple of years, and that can come without having alcohol.”

According to food and drink research firm CGA, 35 percent of U.S. adults participated in Dry January in 2022, up from 21 percent in 2019. Justin Rewa is the founder of DRY Social Sober, a social group that hosts regular gatherings centered around fitness, dancing, music and other activities — sans alcohol. A personal trainer by trade, Rewa has been sober for four years after realizing that his weekend warrior lifestyle was at odds with his personal and professional goals. Rewa held his first sober event in 2020 in Denver, which drew 40 people to enjoy a live D.J. and practice yoga. He returned to Grand Rapids in 2021 and began hosting sober yoga and D.J. socials. Today, the group has more than 500 members on Meetup.com and has hosted more than 115 events since 2020. “I think the pandemic had a little to do with it,” Rewa said. “Many people got sober when they had a moment of clarity that their life might be better without alcohol. I saw the surge happening before the pandemic, and many people who don’t drink want to feel included and participate.”

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Dan Vos Construction Company Office Headquarters | Ada, MI Alt City Beverage Company Inc. in Grand Rapids’ Downtown Market. COURTESY PHOTO

The Clark brothers are banking on that shift with their plans for a retail location on Grand Rapids’ west“Weside.will be able to host tastings and do community engagement to acclimate people to this thing we know a lot about and that a lot of people are really excited about,” said DeMeester, the Clark brothers’ business partner. “There is a lot of traction right now with these products.” NEWSBIZ Sponsored by: DAN CONSTRUCTIONVOSCOMPANY companies seize on ‘mocktail’ movement driven by the sober curious ConstructionGeneralDesignwww.danvosconstruction.comBuildContractingManagement

NA options grow Non-alcoholic alternatives have been available for decades — Anheuser Busch’s O’Doul’s or the Shirley Temple, a classic kiddie cocktail, for example — but until recently haven’t shaken the stigma of being a less-than-adequate replacement for the real thing. Today, a rapidly growing number of establishments serve high quality, NA alternatives to popular spirits. Nationally, top zero-proof brands include Monday, Seedlip, Athletic Brewing, and Ritual Zero Proof. Bellaire-based Shorts Brewing Co. recently released Thirst Mutilator — a non-alcoholic sparkling hop water — in June. “Since we have opened, there have been so many new products hitting the market,” Chad Clark said. “And they are getting better and better. Of course, some mimic the alcoholic counterpart, like tequila or gin, but then all these fun botanical things are their own complex adult beverage without necessarily mimicking a spirit.”

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“I’ve been sober almost eight years,” said Clark, a Grand Rapids resident. “I had to deal for so long without good options and just made do by drinking lots and lots of sparkling water.” Clark and his brother, Chad, launched Alt City Beverage Company Inc. in 2019 after using the Downtown Market Incubator program to develop recipes. Today, Alt City Beverage is a vibrant presence at the entrance of the market hall, with lime green countertops and branding that embraces a bright, geometric, early ‘90s aesthetic. With what appears to be colorful bottles of spirits artfully on display and a mixologist skillfully crafting drinks behind a bustling counter, it’s easy to miss that all of Alt City’sofferings contain exactly zero units of alcohol.Thecraft drinks at Alt City are all made with zeroproof spirits and are inspired by staple cocktails, including the Paloma, Maiden Fair, Citrus G&T and Moscow Fuel, to name a few. With fresh ingredients and innovative recipes, the beverages are elevated, complex and leave little to be desired. “I love seeing people’s reactions to the drinks,” Chad Clark said. “People will come back and double check that there really isn’t alcohol in the drinks because they are so good. To me, that is super cool.” As Grand Rapids’ first business to exclusively offer thoughtful and thrilling non-alcoholic adult beverages, the rise of the sober curious movement and the surging mocktail market show that Alt City Beverage may very well be on to something. Alt City Beverage isn’t slowing down, either. Along with partner Neal DeMeester, the Clark brothers recently signed a lease for a retail location in the West Leonard Business District, where they plan to open the city’s first non-alcoholic liquor store in October, just in time for the holiday season. The NA beverage market has, to put it mildly, exploded. Trade publication Wine Industry Advisor in October 2021 reported a whopping 315-percent increase in online sales of non-alcoholic and lowalcoholic beverages from 2020 to 2021, according to NielsenIQ data. Alcohol sales also soared early in the pandemic but have since slowed. According to the Michigan Liquor Control Commission, alcohol sales increased 20 percent in 2020 from 2019, the highest increase in four years, before slowing to just 5.5 percent in 2021. Sober curious Market researchers attribute the rising demand for zero-proof products to growing health consciousness among consumers. Indeed, the Clark brothers told MiBiz that the primary customers at Alt City are not those in recovery from alcohol addiction, but rather the sober curious — people seeking to reduce their intake of alcohol. “Most people come to Alt City for the zero-proof cocktails, and most of them are sober and curious; they aren’t necessarily sober,” Chad Clark said. “We also get a lot of pregnant women, as well as younger people who just don’t necessarily want to get into drinking.”Social media trends like #DryJanuary and #SoberOctober, which have been around for nearly a decade, reinforce the trend. Each challenge encourages participants to abstain from alcohol for 30 days.

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O’Connor added that Long Road hasn’t yet explored creating zero-proof spirits, but it’s possible in the company’s future. Meanwhile, several reports have indicated that — much like plant-based meat alternatives — the zero-proof market is less of a trend and more of a cultural shift.“We don’t see it has a trend,” Chad Clark said. “We see it as a lifestyle shift. Younger generations are a little more health conscious than in the past, and that has definitely driven the market.”

— Reported by Andy Balaskovitz.

n The Gilmore , an arts organization in Kalamazoo, has named Seth Abramson the first director of a recently announced Jazz Awards program. The Larry J. Bell Jazz Artist Award and Larry J. Bell Young Jazz Artist Award were founded thanks to an $8 million gift to The Gilmore Endowment. The Jazz Awards plan to distribute about $350,000 every four years to top jazz pianists. Abramson, who is known for his music production company Rabbit Moon Productions Inc. and for his artistic direction of the renowned Jazz Standard club in New York City, will establish and oversee the selection process for the awards.

GOVERNMENT n Kent County has hired Mark Rambo as second deputy county administrator. Rambo brings more than 20 years of experience in local government and community leadership, most recently as deputy city administrator for the city of Kentwood, where he led recent efforts to establish priorities and sustainable funding options for its parks and recreation department. He also chairs the Kent County Road Commission and is a credentialed man ager through the International City/County Management Association. For the county, Rambo will coordinate and oversee activities of the equalization, facilities, parks and infor mation technology departments.

MANUFACTURING n Kadant Johnson LLC has promoted Danielle Rohrer to vice president for commer cial operations. Kadant Johnson is a subsidiary of Three Rivers-based industrial equipment supplier Kadant Inc. Rohrer has a bachelor’s degree in sales and business marketing and a master’s in business administration from Western Michigan University. She joined the company in 2008 as a marketing manager and has since taken on additional responsibilities in sales, applications and marketing.

LEGAL n Smith, Haughey, Rice & Roegge — a law firm with offices in Grand Rapids, Holland, Muskegon and Ann Arbor — has hired Kaley Pleva as director of marketing and business development. Pleva has a bachelor’s degree in communications from Grand Valley State University and specializes in content and digital marketing, business-to-business campaigns and search engine optimization. She comes to the firm from Beene Garter, where she worked for six years, most recently as senior marketing manager.

n Janice Oshinski has been named chief financial officerof Kalamazoo-based invest ment fund Sleeping Giant Capital LLC Oshinski has held financial leadership roles at Cascade Engineering, Viking Group and Elston-Richards, leading strategic mergers and acquisitions, restructuring, divestiture, audit and compliance. She also has served as an audit manager at Ernst & Young. At Sleeping Giant Capital, formed two years ago by two Western Michigan University professors, Oshinski will support financial and accounting activities both internally and for portfolio companies.

ECONOMIC DEVELOPMENT n The Right Place Inc. has hired Rob Llanes as senior vice president of business develop ment. Llanes previously served as sales and business development director at Ottobock Industrials, co-founder and chief operating officer of Wafer Inc. and manager of cus tomer strategy, operation and system con sulting at Accenture. He has a bachelor’s degree in information and decision science from University of Illinois and a master’s degree in engineering management from Northwestern University. A U.S. Army vet eran, Llanes will lead The Right Place’s pros perity arm, focusing on business retention, expansion and attraction.

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Meanwhile, the energy sector also is experiencing a sig nificant transition to clean energy. Black-Watson said the MEWDC’s role will involve closely identifying employers’ needs during that “Certainlychange.there’s great demand as it relates to clean energy and mobility,” she said. “We are still working with the technolo gists to figure out what the demand will be.”

n East Lansing-based GreenStone Farm Credit Services has promoted Kimberly Brunner to executive vice president and chief financial officer. Brunner succeeds Travis Jones, who recently transitioned to the role of CEO. Brunner has more than 30 years of expe rience in accounting and finance. Before join ing GreenStone in 2019, she was vice president of enterprise risk management at AgriBank. In her new role, Brunner will oversee the rural lender’s long-range financial strategy and dayto-day financial activities.

Harris Hunt Kashyap MeadLlanes Oshinski Pleva Rambo Tucker

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“The awareness, exposure and exploration that the consortium has identified is really key to drawing diverse populations,” she said.

PEOPLE IN THE NEWS Email people news to: editor@mibiz.com FINANCE

EDUCATION n Keenan King has been named the next executive director of Kent School Services Network . He will succeed Carol PaineMcGovern, who plans to retire at the end of August after more than 13 years. King comes to KSSN from KConnect, where he is currently director of system building. KSSN is a community school coalition focused on promoting equitable education and increas ing opportunities for achievement.

HEALTH CARE n Holland-based mental health and fam ily services provider Arbor Circle has hired Chelsea Tucker as child welfare director. Tucker previously led the organization’s foster care program and spent several years as a foster care case manager. As child welfare director, she will oversee Arbor Circle’s foster, adoption and court appointed special advocates program. n BHSH Spectrum Health West Michigan has hired Vikram Kashyap as vice president and department chief of the Frederick Meijer Heart & Vascular Institute, and Jon Ashford as chief operating officer of Spectrum Health Grand Rapids. Kashyap is a professor of surgery at Case Western Reserve University School of Medicine and comes to Spectrum from the Harrington Heart & Vascular Institute in Cleveland. At Spectrum Health, Kashyap will oversee the Heart & Vascular Institute’s recruitment, finan cial sustainability and clinical strategies. Ashford has been with Spectrum Health West Michigan since 2020, serving as chief operating officer at Spectrum Health United and Kelsey Hospitals, where he oversaw the Community Health Needs Assessment and the COVID-19 vacci nation program. In his new role, Ashford will oversee operations of the Grand Rapids hos pitals and medical center campus. Compiled by Abigail Ham.

ARTS/NONPROFIT n Lisa Knight has been named the Girls Choral Academy’s next executive director. She will succeed Lori Tennenhouse, who plans to retire Oct. 1 after nine years. Knight has been active in the arts community for more than 30 years and recently served as chief operating officer with Public Thread, a textile upcycling company. She holds a bach elor’s degree in criminal justice and a master’s in organizational leadership from Cornerstone University. Girls Choral Academy is a Grand Rapids-based choral arts program designed to nurture and support young women.

n DeAndre’ Harris has been appointed to the Boys and Girls Clubs of Grand Rapids Youth Commonwealth board of directors. An attorney with Warner Norcross + Judd LLP, Harris focuses his practice on labor and employment law. The Boys and Girls Clubs of Grand Rapids Youth Commonwealth is a non profit that provides edu cation, recreation and arts experiences for local youth.

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LONGTIME STATE WORKFORCE DEVELOPER TO LEAD ENERGY JOBS CONSORTIUM

Black-Watson — who worked for the state for more than 34 years in various workforce development roles — was named statewide director of the MEWDC that was created through the Michigan Chamber of Commerce Foundation. That extensive workforce develop ment experience prepared her for a new role that aims to meet utilities’ and other companies’ energyrelated labor needs. “The consortium has been really suc cessful in bringing to bear resources that support projects around career aware ness, exploration, developing customized education and training programs, and even looking at retention issues within the energy industry,” Black-Watson told MiBiz The MEWDC formed in 2009 as an industry-led partnership to help identify workforce needs in the vast and rapidly evolving energy industry. Its board includes executives from major utilities, energy developers and workforce Black-Watsonagencies.saidlabor needs primarily involve electricity generation, gas distribution and overall infrastructure, such as line work workers, technicians and tree trimmers. The state’s two major investor-owned utilities, which play key roles in the MEWDC, are in the midst of multi-billion-dollar grid infrastruc ture plans to help bolster grid reliability across the state.

n Grand-Rapids based AIC Insurance Services has hired Derek Mead as risk adviser and Dolores Drewek as benefits spe cialist. Mead’s previous experience includes time at Farmer’s Insurance Claims Branch as well as several years as an insurance agent. As a member of both the personal and commer cial teams, Mead will provide comprehensive risk management solutions. Drewek brings 33 years of experience in the insurance indus try. On AIC’s commercial solutions team, she will help employers provide creative benefits and solutions to their employees.

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n Community West Credit Union direc tors have appointed Heidi Hunt as presi dent and CEO. Hunt succeeds Jon Looman, who stepped down from his role with the organization. Hunt has more than 25 years of experience and started her career with Community West in 2011 by managing loan portfolio growth and since 2021 had been chief lending officer. The Kentwood-based Community West Credit Union has six West Michigan offices with 20,835 members and $258.7 million in assets as of June 30, accord ing to a recent quarterly financial report.

M arcia Black-Watson ended a brief retirement stint to lead the Michigan Energy Workforce Development Consortium, effective Aug. 1.

Another key aspect of Black-Watson’s work will involve reaching out to more diverse communities to attract work ers. That will involve marketing education, training and preapprenticeship programs.

CAPITAL RAISE n Zeeland furniture startup Quint Workspaces LLC, which seeks to play into the growing home ofﬁce trend, has secured $1.5 million in capital from investors around Michigan. Formed in 2020 by ofﬁce furniture industry veteran Don Goeman, the company plans to use the early-stage funding to support new product development, expand delivery services to major markets, and enhance ecommerce capabilities. Goeman previously worked for 40 years at the former Herman Miller Inc., now MillerKnoll Inc. He served as executive vice president of research, design and development from 2005 to 2019 before forming Quint Workspaces.

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What are the main issues keeping small business owners up at night right? There is an ongoing struggle with some regulatory agencies and some of them affect every small business. The challenges we’ve had at the state of Michigan with unemployment insurance agencies have been pretty profound with employees and employers. All employees are looking for some clarity and responsiveness on rate changes. This happened during COVID, too, when there were changes in shutdown restrictions that had effects the following day. It’s really hard to deal with that. Another big challenge right now is not being able to control expenses, including salary costs with wage inflation along with inflation of materials costs. We can’t always pass those costs down to our customers. Sometimes we can, but at a certain point they wonder if they need the goods or services that are being sold. Are you seeing more concerns among business owners about housing shortages affecting their ability to attract talent? There are some regions that are so vastly struggling with housing that if (a business) has a position open, they can’t fill it because they can’t get housing for a person that would be moving to the area for employment. Certainly for hospitality that is the case. As a company that often deals closely with supply chain snags, how is JetCo Solutions dealing with these challenges? I don’t get to control prices that I pay, but I get to know about these challenges and I get to be creative on how we handle them. We have a mantra here that crisis breeds creativity, so when we have a crisis when costs exceed revenue, we have to get creative and look at how we are positioning ourselves. We have gotten creative in how we are consolidating truckloads of things and we have gotten creative in the way we consolidate materials. It’s been a tough couple of years and I’m not alone in saying that. As a small business, you don’t have much control of those externalities, but we make sure our employees have tools to better understand and review what’s happening with raw material trends for any contract we have that it relates to.

n A New York investment ﬁrm has acquired Burke Porter Group Co., an Ada-based producer of automated diagnostic, testing and production equipment for the life science, automotive, aerospace and other specialty industrial markets. AEA Investors’ Middle Market Private Equity bought Burke Porter Group from Hong Kong-based China Everbright Ltd.’s CEL Global Investment Fund LP, which acquired a controlling stake in the company in 2015 for $90 million. Through the partnership with CEL Global Investment, Burke Porter Group was transformed “into a leading global platform of automation solutions,” according to an announcement this month on the sale to AEA Investors. Terms of the deal with AEA Investors were undisclosed.

n Kauhale Health in Westerville, Ohio, acquired assisted living and memory care community Vicinia Gardens of Otsego. The deal was Kauhale’s first acquisition and part of an aggressive regional senior living investment and management strategy. It also follows the company’s March appointment as manager of Continuing Care Retirement Community Vista Grande Villa in Jackson. Kauhale will rename Vicinia Gardens of Otsego as Kauhale Otsego. n Traverse City-based automotive lifestyle brand and specialty insurance provider Hagerty (NYSE: HGTY) has entered into a definitive agreement to acquire the outstanding shares of Okemosbased Broad Arrow Group Inc. for $64.8 million. The all-stock transaction, which is expected to close on Aug. 16, comes after Hagerty earlier this year acquired a 40-percent equity stake in Broad Arrow, which specializes in transactional segments of the collector car market. The deal supports Hagerty’s Marketplace, a proprietary classifieds platform that connects buyers and sellers of collectible cars. Hagerty eyes significant opportunity in the live and online collector car auction industry: In the 12 months ending on June 30, 2022, Hagerty members bought and sold more than 300,000 collectible cars worth nearly $12 billion, according to the company.

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M&A n Global appliance manufacturer Whirlpool Corp. has acquired a leading manufacturer of food waste disposers and instant hot water dispensers for $3 billion. In the all-cash deal, Benton Harbor-based Whirlpool (NYSE: WHR) has entered into a deﬁnitive purchase agreement to acquire the InSinkErator business, based in Mount Pleasant, Wis., from parent company Emerson Electric Co. (NYSE: EMR) of St. Louis, Mo. Founded in 1938, InSinkErator maintains a more than 70-percent share of the food waste disposal industry, serving both home and commercial users. Emerson Electric acquired the business in 1968. InSinkErator employs nearly 1,400 people.

A Q&A with Sue Schweim Tellier, vice chairperson of the Small Business Association of Michigan and president of JetCo Solutions LLC J etCo Federal President Sue Schweim Tellier has stepped into a new advocacy role after being named vice chairperson of the Small Business Association of Michigan ’s (SBAM) executive committee. Through the Grand Rapids-based supply chain and logistics consulting firm, Schweim Tellier has seen firsthand how widespread supply chain disruptions, inflation and labor shortages have taken a toll on small businesses. Schweim Tellier recently discussed the creative solutions that she and SBAM members have adopted in response to challenges. How has SBAM’s role changed over the past couple years? SBAM’s role at the beginning of the COVID-19 shutdown was to serve as a credible source of information because we had information coming at us from all directions. Being able to have one source we knew we could rely upon — that became how I saw SBAM changed. Every employee at SBAM also became a customer service employee to answer questions.

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Investors in the early-stage capital round include Grand Rapids-based Michigan Capital Network, Invest Detroit Ventures, Michigan Rise in East Lansing, and Detroit-based Invest Michigan, plus individual investors.

n The owners of the Shops at CenterPoint mall in Grand Rapids have sold the property in a $63.5 million transaction. New York City-based Stonemar Properties LLC, a real estate investment and property management ﬁrm, closed on the off-market transaction for the mall with a fund managed by New York-based DRA Advisors LLC in partnership with Illinois-based Pine Tree Commercial Realty LLC. The CenterPoint deal marks Pine Tree’s entry to the Grand Rapids market and comes as the ﬁrm has gone on a buying spree in the last year, deploying some $375 million in transactions, according to a statement. The 537,948-square-foot shopping center, located near the busy, retail-heavy intersection of 28th Street and East Beltline Avenue, includes retailers T.J. Maxx, HomeGoods, Nordstrom Rack, Sierra Trading Post, DSW Designer Shoe Warehouse, Ulta Beauty, Five Below, JOANN Fabrics, Planet Fitness and Dunham’s Sports.

Heartland Home Services LLC, a private equity-backed HVAC, plumbing and electrical home service provider, has added a second Wisconsin-based firm to its portfolio of companies in recent months. Following the recent acquisition of The Thielmann Group, Heartland Home Services officials announced this month that the company has acquired Hurlburt Heating, AC & Plumbing of western Wisconsin. Hurlburt has been family-owned and operated since 1959. Terms of the deal were undisclosed. Heartland Home Services — which is owned by New York Citybased private equity firm The Jordan Co. — has now announced a half dozen deals in 2022, gradually expanding its Midwestern reach after acquisitions this year in Cincinnati, St. Louis, Kansas City and the Chicagoland area. n Portage-based HTSE Inc., a provider of process automation and machine control systems, has been acquired by GrayMatter Systems LLC, a private equity-backed cybersecurity, technology and consulting firm based in Warrendale, Pa. The acquisition will add complementary capabilities to help GrayMatter meet the demand for industrial intelligence solutions, according to a statement. Founded in 1989, HTSE currently serves customers in the food, beverage, pharmaceutical, chemical and broader manufacturing industries. The deal is GrayMatter’s third strategic acquisition in the four years since the company received an investment from Hamilton Robinson Capital Partners, a Stamford, Conn.-based private equity firm. Terms of the HTSE deal were not disclosed. n Zeeland-based ODL Inc., a manufacturer of door glass, door blinds and other building products, has acquired Robover Inc., an insulated glass manufacturer based in Quebec. Robover has served the Canadian market for more than two decades. ODL plans to maintain all of Robover’s employees and locations after the close of the deal, which will bring new products and capabilities into the company. Wells Fargo financed the deal. Fifth Third Securities served as financial adviser to ODL, which was advised by law firms Honigman LLP in the U.S. and Faskens LLP in Canada. Terms of the deal were not disclosed. n Sawyer-based Corvette Central, a manufacturer and supplier of restoration parts for Chevrolet Corvette sportscars, has sold to Chattanooga, Tenn.-based Legendary Companies, a private equitybacked manufacturer and supplier of collector car tires, wheels and restoration hard parts. The family owned Corvette Central was founded in 1975 and offers parts to upgrade, repair or restore all models of Corvettes. The deal adds a vast array of parts and a reputation for customer service to Legendary Companies’ operations, which also includes Coker Tire and Paragon Corvette. Legendary Companies has been a portfolio company of New York City-based Irving Place Capital since 2018. Terms of the deal were not disclosed. Grand Rapids-based investment bank BlueWater Partners LLC served as financial adviser to Corvette Central in the transaction.

What are some additional ways that your company and other small businesses have gotten creative to overcome these obstacles? A lot of employers say their biggest challenge is access to talent and access to employees. If you can’t control that, you can look at other ways to rethink expenses. One of the things we’ve done is consolidate services and look at what we can outsource at a lower price point. We had an employee whose job was to coordinate our wellness programs, which we were able to outsource to a thirdpartyWe’vecompany.alsoseen creativity among business owners of rethinking office space and how much is needed. There are a lot of small businesses that still make things and need physical space. When we have conversations about virtual work, we need to make sure we’re also having conversations about alternative work environments for people who need space to produce things. JetCo Solutions expanded into a larger facility on Feb. 8, 2020, and we have a lot of unused space right now because the growth plans we had were curtailed a bit because of COVID. That doesn’t freak me out because we have a couple different companies working in our space and we share some services between companies. We have a payroll provider that serves both companies, for example, and our marketing and tech support is shared as well. Interview conducted and condensed by Kate Carlson.

The InSinkErator business expects to generate sales of about $650 million, with more than $170 million in earnings before interest, taxes, depreciation and amortization (EBITDA) for the ﬁscal year ending on Sept. 30, 2022.

n Lakeshore energy transition: pages 17-18 Home weatherization funding: page 21 T POWER TRANSFORMATION e West Michigan lakeshore embodies the energy transition ‘Big discussesWallaceBen’ new West Mich. biz venture transplantspediatriclaunchingHealthSpectrumheart contractorsforrelationships’buildsNonpro‘deepminority PAGE 23 retaildowntowntoSportsGazellehopesprovideGRspark PAGE The Ludington Pumped Storage Plant in Mason County. ISSUESUPCOMING Contact Us Today! sales@mibiz.com | editor@mibiz.com616-608-6170 8.29.2022 Life Sciences Contract Deadline: 8.17.2022 9.12.2022 Family Business Contract Deadline: 8.31.2022 9.26.2022 Michigan’s Energy Future Education/Talent Development Contract Deadline: 9.14.2022 10.10.2022 Real Estate: Industrial Contract Deadline: 9.28.2022 10.24.2022 Cybersecurity Contract Deadline: 10.12.2022 11.7.2022 Diversity, Equity & Inclusion (DEI) Contract Deadline: 10.26.2022 11.21.2022 CLQ: Commercial Lending Wrap Up Contract Deadline: 11.9.2022 12.5.2022 Real Estate: Construction Wrap Up Contract Deadline: 11.23.2022 12.19.2022 Crystal Ball edition Contract Deadline: 12.7.2022 W of Byron Center-based SpartanNash (Nasdaq: SPTN) in September 2020 after resigning as CEO of Dallas-based 2013. Both have terrific legacies.” Over nearly two years now, Sarsam has overhauled the company’s corporate leadership team. The investor group pushing seat three new directors on the company’s meeting on June 9. MAY 23, 2022 •VOL. 34/NO. 16• $3.00 SERVING WESTERN MICHIGAN BUSINESS SINCE 1988 Byron Center-based grocery distributor and retailer has overhauled its executive leadership team as part of CEO Tony Sarsam’s transformation plan — an activist investor group has

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By JAYSON BUSSA MiBiz jbussa@mibiz.com F acing widespread sup ply chain disruptions over the past two years, the U.S. are increasingly sourcing components closer to ensure product reliability. This strategy rang true Vision Lights LLC which man ufacturers lighting products for machine vision systems and had maintained supplier base pandemic struck, President Dave Spaulding said he and his team noticed potential weaknesses the company’s supply chain and decided bring production not just stateside, but also within its “We just started to see lot of signs — some of was Taiwan and China were starting not play so nice,” Spaulding said. “This was before the (micro)chip shortage, MAY 9, 2022 SERVING WESTERN MICHIGAN BUSINESS SINCE 1988 on page

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Manufacturers ramp up reshoring to avoid supply chain setbacks on page bis businesses along with providing account ing, payroll and other centralized functions. Weed Dispensary is one such brand. Represented by Mark Shapiro of Steinberg Shapiro & Master Equity Group faces between company owes its top 18 creditors total of $176,255, per the filing. Some the largest unsecured claims are from Angola, Ind.-based Flooring for $26,109, Portage-based inter Revision Legal Chicago-based Adams Outdoor Advertising Shapiro and Tucker did not respond to requests for comment. Federal, state laws collide However, the case far from an ordinary bank ruptcy filing. Master Equity Group profits from its involvement — albeit indirectly — in the produc tion, marketing, sale and distribution of mari juana, which still illegal at the federal level. taken notice

U and down the West Michigan shoreline, local officials, employers and economic development agencies are strategizing ways reinvigorate the regional economy and future-proof for decades come. These efforts include bringing back to life barren downtowns where residents have fled, finding compro mise over short-term rental housing, deploying millions dollars federal pandemic relief funding, and bringing new indus tries where others are moving out. MiBiz reporters tackled each these topics and more this edition’s focus section looking at Muskegon Heights plans downtown ‘renaissance,’ page 11 Statewide tax cuts still on the table as lawmakersWhitmer,negotiate Small biz group o ers guidance on socialvoting,issues employersrefugeesconnectsNonprowith Mary Free Bed, hospital$60MannounceSpectrumchildren’s

B way for new reporting requirements involving The Legislature’s plan largely mirrors pro posal by Voters for Transparency and Term Michigan Chamber Commerce leader Rich Studley, former Michigan AFLPresident Mark Gaffney, Detroit Mayor Mark Duggan and former Republican House Speaker Jase Bolger. The proposed reforms wouldn’t elimi nate the term limits in Michigan that currently House terms and two Senate terms, totaling 14 years. Instead, the proposal would allow lawmakers to serve total of 12 years, but they could do so in single chamber combina Business advocates say the proposal would eliminate “revolving door” culture Lansing politics that often places inexperienced lawmakers at the center of key decision making and churns former lawmakers into the lobbying sector. See TERM LIMIT REFORM on page 10 localgreateradaptprocessorsSeafoodwithretail,focus WESTERN MICHIGAN BUSINESS SINCE 1988 THE ECONOMYLAKESHOREFUTURE

24 AUGUST 15, 2022 / MiBiz Visit www.mibiz.com The MiBiz podcast is supported by the Michigan Film and Digital Media Ofﬁce. Ep. 8 Row, Row, Row Your Boat (with Solar!) Available August 19, 2022 TUNE IN TO THIS WEEK’S EPISODE NOW HEAR THIS Lessons in opportunistic thinking Creative problem solving Passionate vision in action Industry news and insights New hosts! MiBiz goes behind the scenes to ﬁnd out what makes West Michigan entrepreneurs and small biz owners tick Scan here to download The MiBiz Podcast wherever you listen to your favorite podcasts. SPONSORED BY