MiBiz March 30, 2020 print edition

COVID-19 SPECIAL REPORT MARCH 30, 2020 • VOL. 32/NO. 12 • $3.00

TO OUR READERS, ADVERTISERS AND BUSINESS PARTNERS:

O

rdinarily, our next print issue would have arrived in your mailboxes today. But because we are living in extraordinary times, the paper isn’t there.

Instead, we produced an enhanced digital edition and a downloadable PDF version of the March 30 edition that was emailed to our 21,000+ print and e-newsletter subscribers. We’re also posting the digital versions on our website to make it available to the tens of thousands of non-subscribers that visit our website and social media channels.

We also lowered our paywall on March 16 to make all of our coverage of the coronavirus pandemic free to readers. And our newsroom has stepped up its coverage of business news, policy updates and what all this means for West Michigan companies and the region’s economy.

The print version of MiBiz will be back. Over the next two weeks, we’ll be giving print subscribers the option to have MiBiz mailed to their homes or offices, or to receive a digital edition in their email inbox. If you’re a regular print subscriber, look for an email from us on how to do this.

The net of it: We aren’t printing right now, but we’re still publishing.

Thanks for your continued readership and partnership.

Be well.

Brian Edwards, Publisher bedwards@mibiz.com

West Michigan execs talk leadership strategies amid pandemic PAGE 7

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

Arsenal of health:

‘CAN YOU HURRY UP?’

Race to add hospital capacity keeps West Michigan manufacturers on the job

By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com ZEELAND — As Brad Davis tracked news about the spread of the coronavirus in early March, he cautioned his production team at MedViron LLC that the company might need to shut down to do its part with social distancing.

At the time, his thinking was that the maker of medical furnishings had no need to keep production running. The best thing for the company and the employees was for them all to do their part in helping “flatten the curve” and curb the spread of the pandemic.

Davis “If we have to shut down, we have to shut down, that is what it is,” said Davis, the founder and president of MedViron. “I don’t give a shit about making money — it’s bloody serious; it’s scary.”

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Manufacturers shift operations to meet needs during pandemic

By JESSICA YOUNG | MiBiz jyoung@mibiz.com

D Zeeland-based MedViron has received numerous orders for its overbed tables from health systems across the country that are ramping up capacity to deal with COVID-19 patients. COURTESY PHOTO But then the company started getting emails and phone calls from large health systems across the country inquiring about MedViron’s overbed tables and the lead times to get orders filled. One order led to another and all of a sudden, the company’s strategy had to change.

“I have big hospital systems that are contacting us in a panic needing overbed tables in order to get rooms open,” Davis said. “All of a sudden, it was like boom: In 24 hours, we had an order and we’re told that there’s going to be another order coming for another 30 units, and then we got another order from (an existing customer) who’s all of a sudden moving forward on a project. I think it’s just the start.”

Davis said Wednesday the company had an order backlog of nearly 300 units, with a realistic expectation that it would grow to nearly 900 units by the end of the week. One customer from New York asked if they could get the tables within two weeks as the hospital races to increase its bed space.

See MEDICAL FURNITURE on page 5

emand for the mobile computer workstations produced by Walkerbased health care furniture manufacturer Altus Industries Inc. had already begun to spike as hospitals started setting up quarantine and triage areas in preparation for an influx of COVID-19 patients.

Then as Gov. Gretchen Whitmer issued a stay-at-home executive order on March 23, Altus began getting requests for a product not yet in the company’s wheelhouse: mobile ventilator carts.

“We had a customer using one of our carts already as a ventilator cart — it was close enough,” Altus co-owner Eric Kahkonen told MiBiz. The engineering team at Altus got to work using the company’s standard components to configure Kahkonen a cart designed to support ventilators, which mechanically “breathe” for patients unable to do so on their own. The COVID-19 virus attacks the lungs and, in severe cases, makes breathing difficult and requires medical ventilators.

After just a few days, the first ventilator carts were already in production. Altus has begun taking orders for ventilator carts as well as telemedicine carts, which allow doctors and See RETROFITTING on page 4

Work-sharing draws new attention as a ‘win-win’ alternative to layoffs

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

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or Michigan companies scaling back but not completely shutting down as the state tightens restrictions to stop the spread of the coronavirus, a little-used program is drawing new attention as an alternative to layoffs.

Michigan’s voluntary Work Share program, overseen by the Unemployment Insurance Agency, avoids layoffs by reducing hours across more employees. Instead of some being fully unemployed while others maintain full employment, more workers

Coronavirus concerns sideline West Michigan sports teams PAGE 14

qualify for a percentage of unemployment benefits based on their reduction in hours.

In the unique circumstances brought on by the coronavirus, in which businesses have been ordered to shut down for a certain time period, work sharing can be beneficial by keeping trained workers on staff without having to go through a new round of hiring.

“It’s potentially beneficial to both workers and businesses when the downturn is expected to be temporary,” said Susan Houseman, vice president and director of research at the Kalamazoo-based W.E. Upjohn Institute for Employment Research.

INSIDE:

“In many ways, this is an ideal downturn to use work sharing — we don’t think there’s a great need for restructuring the economy,” Houseman said. “In those circumstances, it’s really beneficial if possible to maintain those employment relationships.”

Work sharing, or “short-time compensation,” also allows employees to maintain health insurance benefits. Research has shown that fully severing the employment tie increases the likelihood of “persistent adverse effects to their employment and earnings for many years,” Houseman said.

See WORK SHARING on page 10

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State, federal policymakers take action to keep businesses and workers afloat

Gov. Gretchen Whitmer issued an executive order closing all nonessential businesses through April 13 in a move to curb the spread of the coronavirus. The state and federal governments are rushing through plans to get assistance to businesses and workers dealing with the fallout of the pandemic.

COURTESY PHOTO

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

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ov. Gretchen Whitmer and federal lawmakers have taken a variety of steps to help businesses and employees navigate the short-term harm posed by the coronavirus.

Economists say additional long-term measures should remain in focus to avoid a prolonged recession and widespread business closures.

After partisan disputes this past week over a federal stimulus package, largely over the way large corporations and small businesses and their employees are treated, the U.S. Senate unanimously agreed on a historic $2 trillion stimulus package on March 25. The U.S. House passed the bill on Friday, with President Trump signing it the same day.

President Trump had already signed into law the Families First Coronavirus Response Act, which includes requiring small companies to provide limited paid-leave Ballard benefits, paid for through federal tax credits and payroll-tax relief.

The latest stimulus in the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides nearly $1 trillion in business aid, including more than $500 billion in business loans, loan guarantees and investments from Houseman the U.S. Treasury Department and nearly $400 billion for small businesses. It also expands unemployment insurance, providing an extra $600 a week to jobless workers on top of state benefits. (Benefits in Michigan are capped at $362 a week.)

The stimulus package also includes protections against foreclosures and evictions, offers direct payments to individuals and suspends student loan payments — all actions economists say will be important to avoid severe economic effects from the pandemic.

The latest federal effort comes after Whitmer, through executive orders, freed up additional loans for small businesses and expanded unemployment benefits and programs for workers.

“The things I want to avoid are business failures,” said Michigan State University Economist Charles Ballard. “If you go out of business, the whole web of connections with your suppliers, workers, customers — all of that is broken. You want to keep businesses afloat even if they only have one nostril above the water. If they do, they’ll be OK.”

Small business The Senate bill includes three programs and more than $375 billion in programs for small businesses. While all three have different criteria, each loan program also has mechanisms that would turn them into grants that would not need to be repaid.

“A small business can’t incur any more debt today when they don’t know how they’ll survive in the future. They need immediate help,” Sen. Ben Cardin, D-Maryland, said during a Senate session last week.

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long-term policy recommendations to avoid the The first program provides more than $350 worst economic effects from the coronavirus billion of payroll relief for small businesses with pandemic. fewer than 500 employees. Companies can apply In the longer term, economists have proto receive a loan equal to two-and-a-half months moted more participation in work sharing, of its average payroll to cover future payroll and which spreads reduced hours among more certain other expenses such as rent and utility bills. employees to avoid layoffs, and “labor hoardThe loans, administered under the U.S. Small ing,” which maintains payrolls even with Business Administration’s 7(a) loan program, decreased demand. would be forgiven “if you follow the rules” and Upjohn Institute Senior Economist Tim Bartik maintain workforce levels during the pandemic, wrote recently that a labor hoarding proposal, Cardin said. adapted from a previous proposal in 2009, “would The program is designed to “give you the abilbe a 15 percent credit against employer payroll ity to keep afloat — and rebound,” Cardin said. taxes for payroll that exceeded 90 percent of the A second loan program, which is new, provides employer’s payroll in the corresponding quarter $10 billion for small businesses that need emerthe prior fiscal year. The proposal would go into gency disaster relief loans if they’ve been adversely effect in quarter 2 of 2020 (April through June), affected by the pandemic. The program provides and apply through quarter 4 of 2020 (October direct loans from the SBA of up to $10,000. through December).”

The third loan program in the Senate agreeBartik notes the incentive is a cheaper alterment provides a total of $17 billion in relief for native to eliminating payroll taxes for the rest of companies that have existing 7(a) loans or 504 the year. loans through the SBA. The program allows small “The goal of this proposal is to encourage businesses to defer payments for up to six months. more employers to keep their workers on their Susan Houseman, vice president and direcpayroll, by lowering the costs of doing so, even tor of research at the W.E. Upjohn Institute for if those workers are not immediately needed,” Employment Research in Kalamazoo, said the Bartik wrote. “The proposal also helps set a norm small-business assistance will be crucial in prefor employers that they should try if at all posventing companies from closing. sible to keep their current workers employed.

“They have low margins, and closing for any Norms matter to how businesses and workers period of time will potentially just put them over,” make decisions.” she said. “Here’s where states or the federal govMSU’s Ballard said he is concerned about ernment could step in and provide assistance to the long-term effects of running up a multithem and possibly cover their loans to help them trillion-dollar deficit, and how services in the ride out this current crisis. If lots of small busistate of Michigan would fare with decreased nesses close, that could make recovery much revenue. more difficult.”

Federal stimulus funding for states and local For workers, the stimulus bill creates a new governments “would go a long way to help pandemic unemployment assistance program Michigan’s government that extends benefits to keep going, because revpeople partially unemenue is going to be way ployed or for the selfdown,” Ballard said. employed, contractors “When we get to that May and “gig economy” workrevenue estimating coners. Houseman said these ference, it’s not going to are key sectors that don’t be pretty.” qualify for traditional The Lansing-based unemployment benefits.

Michigan League for The federal benePublic Policy, a nonparfits come after Whitmer tisan organization “dediexpanded unemployment cated to economic opporbenefits in Michigan, tunity for all,” says steps encouraged companies taken to expand unemto be flexible on paid ployment benefits are a sick leave and received good first start. a disaster declaration Alex Rossman, the from the Small Business League’s external affairs Administration, allowing director, said state lawbusinesses to qualify for makers could strengthen emergency loans up to these benefits further by $2 million. On March 26, expanding who qualiWhitmer also requested — CHARLES BALLARD fies. Such policy action President Trump issue a Economist at Michigan State University would be a reversal for major disaster declarathe Republican-led state tion to free up additional Legislature and major resources. business groups, but he “These are all basic remains optimistic. things available to deal with the short-term cri“This public health crisis has really undersis,” Houseman said. scored the importance of the safety net to Michigan residents, including unemployment, Next steps food access and child care,” Rossman said. “In Over the past two weeks, Upjohn Institute some ways, that’s a potential silver lining in all researchers have released a series of short- and of this.”

“The things I want to avoid are business failures. If you go out of business, the whole web of connections with your suppliers, workers, customers — all of that is broken.

You want to keep businesses afloat even if they only have one nostril above the water.

If they do, they’ll be OK.”

Published since 1988 MiBiz® is a registered trademark of MiBiz, Inc.

Publisher Brian Edwards / bedwards@mibiz.com Associate Publisher Denise Montambo / denise@mibiz.com Editor Joe Boomgaard / jboomgaard@mibiz.com Managing Editor Andy Balaskovitz / abalaskovitz@mibiz.com Senior Writer Mark Sanchez / msanchez@mibiz.com (finance, health care, life sciences) Staff Writers Sydney Smith / ssmith@mibiz.com (real estate, economic development) Jessica Young / jyoung@mibiz.com (manufacturing, agribusiness, nonprofits) Contributing Reporters Jayson Bussa, Marla Miller, Jane Simons Copy Editor Claire Boomgaard VP of Production & Audience Development Kristi Kortman / kkortman@mibiz.com Senior Advertising Consultant Shelly Keel / skeel@mibiz.com Digital Specialist/Ad Traffic Coordinator Danielle Affholter graphics@mibiz.com

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MANUFACTURING RETROFITTING Continued from page 1

health care professionals to use video conferencing to treat patients remotely — another increasing need as more states like Michigan order residents to shelter in place.

“Literally within the last five business days, we were able to reconfigure the necessary surface size and storage capability for what these customers were looking for, and it became an extension of what we already do,” Kahkonen said.

Altus has expanded its production capacity and is hiring additional assemblers to meet ongoing demand. The company has already increased its staff from 35 to 40 employees, and the entire team at Altus has “stepped up” to work long hours and weekends, according to Kahkonen.

Walker-based Altus quickly ramped up production on a mobile ventilator cart.

COURTESY PHOTO

Growing ranks Health care officials have repeatedly warned the public that the American hospital system will face a critical shortage of vital medical equipment in the face of the COVID-19 global pandemic. Altus is part of a growing group of regional manufacturers who are rapidly shifting their operations to fill the gaps.

Other companies that have joined the socalled “arsenal of health” include Ada-based Amway Corp., which rushed to produce hand sanitizer for Grand Rapids-based health system Spectrum Health. As well, a number of local distilleries such as Grand Rapids-based Long Road Distillers, Comstock Park-based Bier Distillery and Kalamazoo Stillhouse have pivoted to using their own alcohol to make sanitizer products.

Meanwhile, Petoskey Plastics Inc. is working with Grand Blanc-based McLaren Health Care to develop a prototype for a hospital isolation gown.

Rockford-based footwear and apparel retailer Wolverine World Wide Inc. donated 25,000 protective masks to an unspecified local hospital group and started plans to convert one of its manufacturing facilities to produce protective masks for health care workers.

Last week, Ford Motor Co. also announced it is working with Minnesota-based 3M Co. and Chicago-based GE Healthcare to produce medical equipment and protective gear for health care workers.

“We have to be creative and scrappy,” Jim Baumbick, vice president of enterprise product line management at Ford, said on a call with the press last week.

Ford will work with 3M to increase the production of 3M’s current respiratory device, while the companies also work together to prototype and produce a new Powered Air-Purifying Respirator (PAPR) for health care workers.

The Michigan Manufacturers Association announced efforts driven by communication and coordination with Gov. Whitmer’s administration to locate more companies that can produce specific products to enhance the effectiveness of the state’s health care response to COVID-19.

“Our message to public officials is simple — allow manufacturers to help drive the solution,” John Walsh, president and CEO of the Michigan Manufacturers Association, said in a statement.

“Governor Whitmer and her team recognize the critical nature and role manufacturing will have in moving the state forward in addressing this critical challenge.”

Workers at Ford Motor Co. are making medical shields to help health systems address protective gear shortages. COURTESY PHOTO As part of Whitmer’s executive order to slow the spread of the highly contagious COVID-19, all businesses in the state — including manufacturers — are temporarily required to suspend activities that are not “necessary to sustain or protect life.” However, manufacturing operations deemed “critical” are exempt from the order.

“I firmly believe continued operation of manufacturing will be the key to successfully addressing the challenges facing this state and nation, both in terms of public health and safety as well as ensuring a strong economy,” Walsh said.

Serving needs Earlier this month, the National Council of Textile Organizations (NCTO) and the International Economic Development Council (IEDC) surveyed manufacturers nationwide for information on companies that may be able to help meet the country’s needs for personal protective equipment and medical supplies.

Companies that would be able and have the capacity to produce antimicrobial wipes, hazmat suits, head covers, privacy curtains, lab coats,

equipment bags, face masks, surgical sponges, gowns and drapes, towels, temporary shelters or triage tents were a top priority.

The industry groups were working “as quickly as possible” with “high level officials within the Trump administration” and also on Capitol Hill to take a count of companies that would be able to make the needed products, according to a source within one of the organizations who spoke to MiBiz. Potentially, manufacturers could be called on by the federal government to produce needed items within their facilities through the Defense Production Act of 1950. The law, which was signed by President Harry Truman amid concerns about supplies during the Korean War, has been invoked multiple times — including in response to hurricanes and terrorism.

The act authorizes the president to require private companies to prioritize government contracts and grants broad authority to the federal government with the goal of ensuring the private sector is producing enough supplies to meet the needs of a war effort or other nationwide emergency.

Earlier this month, President Trump, who referred to himself as a “wartime president,” said he would use the law’s powers “in case we need it.”

Staying busy

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As the number of coronavirus cases in the U.S. continues to rise, local manufacturers and suppliers continue to act in advance of an official call to action. More than 80 percent of the components in the ventilator carts produced by Altus are manufactured in the Midwest, according to Kahkonen.

“We are designated as critical manufacturing right now because we supply nothing but hospitals,” he said. “With that, we’re able to supply a letter to all of our vendors or suppliers asking for their support. Virtually all of them have said yes.

They also gave us their commitment that they would prioritize our orders because they’re so specific to the cause of COVID-19.”

Altus expects to continue manufacturing the carts throughout the crisis, possibly adding a second shift to its already expanding workforce. The company has produced 3,000 additional carts in the last week and a half and is shipping the products nationwide. Locally, Altus has received rush orders from Spectrum Health in Grand Rapids, Beaumont Health in Royal Oak and Mercy Health in Muskegon, according to Kahkonen.

“As long as this needs to be supported, we’ll do the best we can to get the hospitals what they need,” he said.

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MEDICAL FURNITURE Continued from page 1

As health systems nationwide scramble to add capacity to deal with the rush of COVID-19 patients, it’s translating into brisk business for companies that deal with medical furniture and disinfection equipment.

At Zeeland-based Herman Miller Inc. (Nasdaq: MLHR), the contract furniture manufacturer’s health care division has seen customers inquire about expediting orders.

“We’re actually getting, in some cases on the health care side, people saying, ‘Can you hurry up?’” CFO Greg Bylsma said in a call with analysts in mid-March to discuss the company’s most recent quarterly results. “We have demand that maybe we didn’t have three or four weeks ago.”

While the health care division is a small part of Herman Miller’s overall business, accounting for about 15 percent of sales, “it is an interesting dynamic given all that’s going on,” Bylsma said.

Likewise, Cascade Township-based Skytron LLC, a distributor of capital equipment for hospitals and other industries, has seen a rush Wassenaar of interest in its UVC disinfection robots, which are deployed in rooms to kill viruses like the coronavirus, bacteria and fungi.

“In the last t h re e t o f o u r Byrne weeks, we’ve had inquiries and orders that probably are greater than what we had all of last year for these products. It’s just ramping up even more,” said Craig Wassenaar, president and CFO of Skytron.

Focus on cleanliness According to the U.S. Centers for Disease Control and Prevention, health care acquired infections in American hospitals account for an estimated 1.7 million infections and 99,000 associated deaths each year.

As awareness about the threat spreads, more health care organizations are prioritizing furnishings that are easy to clean, as well as deploying disinfection products that kill

“It’s something I’ve never seen in my career, how everybody’s banded together — the government included — to be flexible as people are going through the challenges.”

— CRAIG WASSENAAR President and CFO of Skytron LLC

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contagions in the hospital setting.

For disinfection product designer UV Angel of Grand Haven, “We have seen a tremendous uptick in demand across the country for our technology,” CEO Tom Byrne said.

The company produces a device that attaches atop laptop computers or equipment such as medical carts.

The device uses ultraviolet light to disinfect and sanitize surfaces, including for coronavirus.

A new product that’s about the come to market from UV Angel, called UV Air, fits into ceiling light fixtures.

Air goes in one side of the fixtures, passes under the ultraviolet light, and then exits clean on the other side.

“We have seen the interest as we have been in the design and production phases for our air technology going back to late last year,” Byrne said. “When the situation that we’re faced with hit, the curve went up substantially over the last 60 days.”

UV Angel initially targets its innovation toward the health care sector, a strategy that took on heightened importance in the coronavirus pandemic. UV Angel, which manufactures the device at GHSP in Grand Haven and at an Atlanta company, expects to announce new partnerships soon to scale up production.

“Our products represent a real protection mechanism for our health care workers, our doctors, our nurses, our first responders. Those are the individuals we really need to focus on,” Byrne said.

A pair of West Michigan companies — Skytron (above) and UV Angel (at left) — offer disinfection products that use ultraviolet light to kill viruses such as the coronavirus.

COURTESY PHOTOS

Designed for use For the MedViron overbed table, Davis focused on designing a product that was easily cleaned in a move to help stem hospital acquired infections.

“There’s such demand on getting those rooms turned around and they only have a certain amount of time, so if something’s very complex and difficult to clean, it doesn’t get cleaned.

That’s one of the things that our overbed table is addressing, so people are going after it and they’re buying it,” he said. “Everybody in the whole hospital is involved in the overbed table.

Interior design, architecture, inspection control, nurses, housekeeping, maintenance — everybody has a piece of that thing. You don’t realize it’s the second most-touched thing in the room after the bed.”

Jerome Alicki, customer service and marketing manager at MedViron, added that the overbed table’s seamless top provides “nowhere for bacteria and viruses to hide, and the material we use on the top surface is resistant to degradation from hospital cleaning chemicals.”

“If that surface can be cleaned easily and effectively, there is potential to reduce risk of hospital acquired infection or re-infection from contact with that surface,” Alicki said.

MedViron sells its products via dealers in all 50 states, but the recent push of orders for overbed tables has come from major health systems in Ohio, Texas, New York and southern California.

Inside the plant, the company has taken measures to spread workers at least 12 feet apart from one another and switched to 10-hour shifts four

days a week. Workers also clean all door handles and hand tools every two hours.

As well, personnel who do not work on the manufacturing floor have been working remotely to encourage social distancing and reduce interactions. That includes Davis, who has been working mostly from home in recent weeks.

“It’s really hard on me because I feel like you should be there to lead, but I also understand that leading right now is showing people that you need to stay away,” Davis said, noting that the pace of change and the rapid-fire flow of information is adding to the difficulty.

“It changes every bloody hour practically,” Davis said. “It’s really bizarre, and sometimes it’s overwhelming, but you’ve got to have the mindset that (coronavirus) is just not going to beat us.”

Challenges ahead A similar situation is playing out at Skytron, where up to 80 percent of the company’s employees are working remotely, except for the warehouse staffers.

“We’re doing all that we can to keep our employees safe. We’re monitoring everything and keeping clients updated, but it’s a very fluid plan,” Wassenaar said. “For one, as soon as you release something and update people, things change an hour later.

We’re doing our best and everyone’s faced with this right now.”

As well, the company uses its UVC robots to disinfect all conference rooms, common areas, bathrooms and “any other areas that people feel like they would be more comfortable if we hit those hard,” he said.

With hospitals focused on treating COVID-19 patients, Skytron is experiencing delays on some of its projects for the foreseeable future, while it’s running into supply chain challenges with its disinfection products.

“It’s going to be challenging,” Wassenaar said. “We don’t have complete knowledge right now of what’s going to happen. We’ve been pretty transparent with our employees and with our network of suppliers and customers and we always err on the side of being open with people about the status of things. We’ll get through it. We have great partners.

We’ve been in communication, too, with outside advisers and bankers just to let them know how things were going and most people are extremely understanding of the situation.”

Banding together As a “critical infrastructure” business, Skytron’s essential employees stayed on the job after Gov. Gretchen Whitmer issued a stay-home order on March 23, while practicing social distancing and taking various health precautions.

Grand Rapids-based furniture company Steelcase Inc. (NYSE: SCS) also received designation as a key supplier

from its health care industry customers and continues to work on filling their orders, President and CEO Jim Keane told brokerage analysts last week in a call to discuss quarterly results.

“We are continuing to serve health care customers. We’re continuing to do actual real-time co-design and special kinds of products they need just for this crisis as well, and we’ll be able to continue to do that,” Keane said.

Steelcase said last week that it temporarily laid off “nearly all” of its hourly manufacturing and distribution employees in Michigan in response to the stay-home executive order that forced non-essential businesses to close. Only essential businesses or suppliers to those businesses were allowed to remain open.

At MedViron, company executives opted to close the plant when the order took effect, but will reopen on Monday, March 30 at the urging of customers. Several hospitals sent the company letters designating it as a critical supplier that would allow it to stay open and make overbed tables, which they said were necessary in their efforts to add hospital capacity to combat COVID-19.

As he wrestled with the decision to ramp up production, Davis said his priority is keeping his workers safe and making sure the company can do its part to combat the public health crisis.

“It’s a national issue that we have to solve together,” he said. “Everyone understands the gravity of the situation.”

Echoing Davis, Wassenaar said the current situation and the response from the business community has been unprecedented.

“It’s something I’ve never seen in my career, how everybody’s banded together — the government included — to be flexible as people are going through the challenges,” he said.

MiBiz Senior Writer Mark Sanchez contributed to this report.

MiBiz / MARCH 30, 2020

5

HEALTH BIZ

Pandemic could offer tipping point for telemedicine

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

ince the beginning of the coronavirus and COVID19 pandemic, hospitals and other health care providers have urged people with symptoms to use telemedicine first to connect with a doctor.

That direction has led to a surge in the number of people using telemedicine, many for the first time. Given that surge, the pandemic could very well trigger a permanent change that transitions virtual doctor visits from a niche, low-use service to a commonplace practice with a wider role within the health care continuum.

“It gives telehealth the exposure that it’s needed for some time, because it’s out there and it’s been underutilized. It just hasn’t been utilized like organizations hoped,” said Jerry Konal, senior director of health and benefits at the Southfield office of Willis Towers Watson. “This is definitely an opportunity for the tele-

S

Konal

Fava

health movement to demonstrate the value they offer the health care delivery system. It’s most unfortunate that it takes a crisis to create awareness.”

The underutilization up until now came despite most employers having a telemedicine benefit built into their employee health coverage.

Konal hopes that as individuals learn more about telemedicine, how it works and the lower cost, and that once the present public health crisis ends, “telehealth will remain a relevant and useful resource.” Research shows that consumers who have used telemedicine tend to keep using it when they need to see a doctor, he said.

Key to the future is how well the platforms do for first-time users during the COVID-19 crisis, which could lead to increased wait times for a virtual visit with a doctor and frustrate some people, Konal said.

“My hope is, because it really is very cost-effective, that for all those basic needs beyond this crisis, people will consider it and I really do think it will have staying power,” he said.

“I think at this juncture it will highly depend … all on their experience.”

‘Nice solution’ Telemedicine has been billed as a convenient and lower cost way for patients

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to see a doctor for primary care visits and minor ailments. Of late, telemedicine has become a tool for some care providers to monitor a patient’s condition at home, as well as expanded into virtual visits for behavioral health services.

During the COVID-19 pandemic, Grand Rapids-based Pine Rest Christian Mental Health Services has moved all outpatient visits to a telemedicine platform developed over the last two to three years as part of an overall strategy to improve access to behavioral health, CEO Mark Eastburg said.

The telemedicine platfor m enabled Pine Rest to close outpatient clinics to curb the spread of the coronavirus, while continuing to provide care to patients.

“Digital provides a really nice solution to that,” Eastburg said. “We recognize that we have so many people that rely on us for care and continuing care.

We just can’t say, ‘Well, we’re going to take a couple months off in continuing your treatment.’ We’re really fortunate we could pivot so quickly.”

Pine Rest has about 70 therapists now trained in telemedicine visits and plans to reopen the outpatient clinics “once we get through this,” he Pletcher said. Eastburg expects Pine Rest by this week to serve 5,500 patients weekly through the telemedicine platform. He sees the potential for telemedicine to take on a greater role in providing care.

“Like everyone else, we’re asking t he question: W hat w ill t he long-term implications of this be in terms of if you have people doing their work in a different way for a month or two? Does that give you new insights into how you can do that work into the future?” he said.

“We’re obv iously st i l l lea r n i ng about that (and) it could prompt us to rethink how we deliver in the future, but at the end of the day, people still value face-to-face contact and that will continue.”

‘Expedited growth’ The pandemic and need for social distancing has heightened the public consciousness of telemedicine and driven volumes to far greater heights.

During the crisis, care providers say their telemedicine platforms have been useful both for them and their patients, providing a potential lasting effect for the technology.

“This is really an opportunity for virtual to step up from a system perspective,” said Jared Cowan, manager of virtual health at Spectrum Health,

Experts expect the use of telemedicine to increase as more people get exposed to the technology during the coronavirus pandemic. COURTESY PHOTOS which has experienced a significant increase in virtual patient visits. “Not only is this the moment for virtual to shine, but (we’ll see) long-term adoption and it’s here to stay from a provider perspective, a patient perspective, and really from a system perspective.”

The Grand Rapids-based health system’s Spectrum Health Now telemedicine platform recorded what Cowan calls “expedited growth” over the last five weeks or so. Through last week, Spectrum Health Now had seen a 111-percent increase in virtual visits over February, he said.

Spectrum Health Now started offering free virtual screenings for COVID-19 on March 6. By March 23, as the pandemic deepened in Michigan, Spectrum Health Now completed more than 13,000 virtual screenings by doctors, physicians assistants or nurse practitioners, Cowan said.

Likewise, Blue Cross Blue Shield of Michigan’s telemedicine service, Blue Cross Online Visits, grew 70 percent in a week in early March over the same period a year earlier, and more recently recorded a 300-percent increase in another week.

Janet Fava, Blue Cross Blue Shield of Michigan’s vice president of market solutions development, expects the present crisis to accelerate utilization rates even beyond the triple-digit yearover-year growth recorded since 2017 for Blue Cross Online Visits.

Satisfaction scores for the service, offered through the Boston, Mass.-based platform AmWell, short for American Well Co., are “very high,” Fava said.

“I think people have been hesitant to use it previously, but the people who do use it absolutely love it, and they’ll go back and use it again,” she said. “Once people use this technology and once they recognize and understand the convenience of it as well, that’s part of what we think will accelerate this growth.”

Teladoc Health Inc., a Purchase, N.Y.-based telemedicine platform, reported March 13 that its virtual visits grew 50 percent from the prior week to more than 100,000. In one day, Teladoc hosted 15,000 virtual visits, the company said.

‘Ton of interest’ As the public health crisis took hold, health insurers, Medicare and Medicaid waived out-of-pocket costs for a virtual visit to ensure finances did not prevent a person with symptoms from having an initial screening. The move also allowed people to avoid going to their doctor’s office, an urgent care center or hospital ER, all of which were expected to see a surge in patients with COVID-19 symptoms.

Priority Health has provided access to telemedicine to most members with zero copays. Amid the COVID-19 pandemic, Priority Health on March 20 waived copays to telemedicine service until April 30 across all product lines: commercial, individual, Medicare and Medicaid policies.

A few days earlier, Blue Cross Blue Shield of Michigan said it was providing telemedicine visits at no cost at least through April 30 for enrollees feeling symptoms.

The COVID-19 pandemic has increased the interest and use of telemedicine beyond patients.

Doctors who have never before used the service to connect with patients virtually are now increasingly wanting to connect. Blue Cross Blue Shield is working quickly to get those providers onboard with virtual visits, Fava said.

“We have a ton of interest from our providers right now to get the capabilities in order to deliver telemedicine,” she said. “This health emergency is really going to change the face of how care gets delivered for a lot of members now.”

In recent weeks, Spectrum Health added more than 900 affiliated primary care doctors and specialists to its platform, Cowan said. At any given time, the health system has 80 to 85 care providers staffing the 24-hour Spectrum Health Now service, he said.

Tipping point One element bringing more doctors into telemedicine has been changes in reimbursements by health insurers and Medicare, said Tim Pletcher, executive director of the Michigan Health Information Network, which provides

connectivity between care providers to exchange data electronically.

Doctors have invested for years in electronic health records systems and technology for sharing data entry, “so that whole stack of infrastructure is now in place” and better reimbursements for telemedicine are “just the thing that tips it over the hump,” Pletcher said.

“What’s been holding a lot of people back is the money hasn’t been there. You were sort of treated by the payer system as somehow that was less, so they paid less. Now that’s really being changed,” Pletcher said. “The value proposition has come completely around for the doctors now.”

Another driver could come from data showing many patients began canceling office visits “en masse” amid the COVID-19 pandemic’s move into Michigan, said Chris Bailey, director of national engagement and consumer health strategy for MHIN. Those cancellations left doctors “just standing around doing nothing,” Bailey said. Telemedicine can fill that void, particularly for patients with chronic illnesses who need ongoing care to manage or maintain their conditions, he said.

“What we’re seeing as a result is providers are doing whatever they can to keep those visits,” he said. “That’s a big dynamic that’s going to have a shift forever in how patients access health care.”

As the utilization rate for telemedicine grows, there’s a need “for the telehealth space to coordinate better with the in-person space so we more optimally use the two together” to share data more effectively, Pletcher said.

That includes better connection with national platforms where a doctor in one state sees patients in another state virtually without access to their electronic medical records or connectivity to their local care network.

“We really don’t want to get a call for somebody from another state over telehealth, and they go, ‘Yeah, we see that you’re sick, go to the emergency department’ without being able to have the medical information flow to the emergency department,” Pletcher said.

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COVID-19 SPECIAL REPORT

CRISIS MODE: West Michigan execs talk leadership strategies amid pandemic

By ANDY BALASKOVITZ, JOE BOOMGAARD, MARK SANCHEZ, SYDNEY SMITH and JESSICA YOUNG | MiBiz editor@mibiz.com

A

s a global pandemic began to hit West Michigan, executives around the region stepped up to lead their organizations and their employees through the time of crisis.

Faced with an unprecedented challenge, CEOs in many cases prioritized the safety of their employees and customers over their ability to stay open and continue operating. With no end in sight to the global health crisis, the leaders also will face many extraordinary challenges in the weeks and months ahead. But through it all, they say they’re focused on effective internal and external communication, informed decision making and sound business practices to lead their employees through the tumultuous times.

In the days after the crisis began to upend daily life and operations in West Michigan, the MiBiz editorial team spoke separately with the following business leaders to hear more about how they are approaching leadership during the coronavirus pandemic: n Franco Bianchi, president and CEO of Holland-based Haworth Inc. n Joan Budden, president and CEO of Grand Rapids-based Priority Health n Mark Eastburg, president and CEO at Pine Rest Christian Mental Health Services n Pat Greene, president of Grand Rapids-based Cascade Die Casting Group Inc. n Bryan Jones, CEO of Holland-based JR Automation n John Kuiper, executive vice president at Colliers International in Grand Rapids n Patti Poppe, president and CEO of Jackson-based Consumers Energy n Tom Rizzi, CEO of Grand Haven-based auto supplier GHSP and executive vice president and COO of parent company JSJ Corp. n Tim Schowalter, president and CEO of Grand Rapids-based Pioneer Construction n Mike Stevens, president and co-founder of Grand Rapids-based Founders Brewing Co. n Mary Anne Wisinski-Rosely, partner and office specialist at NAI Wisinski of West Michigan Here are some highlights from what they had to say.

What kinds of long-term planning are you doing around coronavirus within your company?

STEVENS: We’re obviously looking at this daily. We have executive meetings every day at 9 a.m. to discuss the day’s events. Unfortunately, this thing is unfolding to unprecedented levels on a daily basis. So we’re devising plans … and looking outward well into summer and what that looks like.

It’s our goal to do all we can to protect our employees and our community while trying to keep people employed to whatever extent we are able to and allowed to. Internally from a business perspective, we’re looking at our cash flows and what we can sustain in terms of length if this thing goes on.

Fortunately, we’re in a decent position to withstand more, but we also have to be diligent as we look to the future and what can be accomplished. … As a society, it’s important that we all realize that the more we can do now to dampen this curve the better, because I think economically we don’t want this to stretch out to four months obviously. Right now, the priority is let’s all come together as a human race, and do the right things to protect all, so that we can get through this as quickly as possible.

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SCHOWALTER: If the economy does go into recession and slow down, we expect to be impacted. Projects will be delayed or canceled. However it’s typically a one- to two-year lag that the construction industry feels as the rest of the economy slows down.

There are projects underway that will be completed. The impact more so is in businesses that decide to wait on the decision to start a project they may be planning on for next year. We don’t know what we don’t know yet on the downstream impact. We’ve been through plenty of pandemics, but we’ve never been through something where the reaction to it has been this strong and this severe.

WISINSKI-ROSELY: Short term, there is going to be some impact. Closings can still happen, from what I can understand. If there’s been closings in the works, that will still happen. For the most part, short term, it will definitely impact us. It’s hard to say long term how it’s going to impact us. I try to think positive. There’s always a need for real estate, whether it’s to dispose of it, to downsize, to rightsize — there’s always going to be a need. Hopefully things will bounce back, things that have been put on hold will come back.

It’s just a big unknown.

KUIPER: The folks that are managers

Bianchi

Poppe

Budden

Rizzi

or tenants for retail, they’re obviously dealing with an unprecedented situation where you’re more or less being told to shut down to some degree, which brings up the question of financial stability for the tenants. There’s obviously concern in the market as we’re trying to figure out what this looks like, but it may be that the best course of action right now is to remain calm and over communicate and try to stay up to date with where we’re at and what’s happening. … The bulk of warehouse and distribution companies are going to weather this very well. The crystal ball is cloudier on the retail side of things. That’s a hard one. There isn’t any historical data to point to.

POPPE: ‘Long term’ is an interesting time frame. It feels like each day is a long-term decision-making process.

We’re certainly preparing to make sure power generation, gas compression and power and gas delivery assets are safe and available during the coming months. We’re preparing and have run worst-case scenarios in the event that a large number of our co-workers are affected, whether it’s self-quarantine because of someone in their family or because of work interaction. Current actions are to have rigorous implementation of social distancing, sanitizing and cleaning of all surfaces that our coworkers could come in contact with. I’ve had great conversations with some of the multi-national companies located here that operate in China and Italy and Michigan — like Stryker, Whirlpool and Dow Chemical. They’ve had great success globally where the virus is the epicenter in those countries. We’re absolutely copying and pasting policy standards with our own facilities and workforce.

BIANCHI: We are a global company, so we started to talk about coronavirus in early January because we have two plants in China. We have a very strong presence in Europe and in Italy where unfortunately the outbreak is quite significant. We are dealing daily

Eastburg

Schowalter

Greene

Stevens

since early January with the evolution, the twists and turns, the bad news, the government reaction, the state reaction, the local reaction, the people and the emotional reaction and the family component daily. Long term, I see we are doing a lot of scenario planning, but the truth is I think you see how the market is reacting, there is a lot of uncertainty. And so, we are preparing for multiple options, from the most optimistic to the most serious ones.

BUDDEN: We began to watch this when it emerged in China. It was the kind of thing where you could see the wave coming ashore from a long way out.

We have actuaries on staff. I have probably one of the most renowned actuaries in the country and she’s done a great job forecasting ramifications on the number of cases. We’re trying to work with provider offices to make sure that they’re financially strong because we’re a partnership. We don’t have a product without the great providers delivering the care that our members need. We’re trying to think of it in a 360-degree way. It will accelerate how we work. It will accelerate how our provider partners work. It will accelerate a change on how members access the health care system and what they do around their care.

JONES: There is the immediate need of addressing what’s going on today, but you have to continue to focus as well on what the future holds and how this is ultimately going to change what the future even is. So it’s just trying to keep all those things in mind and at the same time making sure the team is taken care of in creative and new ways.

How do we continue to have the conversations that need to be had from a virtual perspective? How do we make sure that our team continues to get the support and the enabling that they need to continue to do their jobs in a new way that’s obviously quite different than what it was previously?

RIZZI: From a business perspective, our long-term plans remain unchanged.

Only the when and how of achieving

Jones

Kuiper

them will change s l i g h t l y. Mo re importantly, we have significantly improved on our ability to manage a crisis and keep our employees safe during a Wisinski-Rosely health crisis like this one. We’ve learned. It’s one of our core values: Learn by doing. We have managed this well on a global level. … We predict a temporary drop in passenger car volume, globally, which we’ll have to adjust to, but all of the opportunities for us to provide technology solutions to the auto manufacturers still exist. However, we are seeing multiple new opportunities utilizing UVC disinfection technology together with our partner, UV Angel. We are actively working on projects to provide UVC disinfection technology in the passsenger car, appliance and commercial vehicle markets we serve and we made the strategic decision to move more resources to these opportunities.

EASTBURG: The situation is changing from moment to moment. We are at this moment 95-percent occupied with short-term planning. We have two areas of focus: How can we keep our patients, residents and staff safe, and how do we keep access to behavioral health going today, tomorrow, the next day and the next week? We are into the budget-planning season. How do we even think about our budget and our strategic planning for the next year? From what I’m hearing from the health care system, they’re anticipating what they’re calling ‘the surge’ in the coming weeks, so we’re not really looking beyond the surge in terms of our energy.

From a business leadership perspective, what are your top priorities right now beyond keeping workers safe?

STEVENS: We’re minimizing exposure best we can by not allowing the public into the facility. We’ve greatly increased sanitation practices. In production, we’ve implemented work units that are isolated units amongst themselves. So should anyone get infected, that whole unit can be pulled out and another unit put right in place. It’s a way of isolating any kind of spread that might or might not incur. Fortunately, See CRISIS MODE on page 8 MiBiz / MARCH 30, 2020

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COVID-19 SPECIAL REPORT CRISIS MODE Continued from page 7

to date, we don’t have any cases, and I think isolating these units greatly allows us to protect our folks in terms of that exposure. I think just a lot of common sense and social distancing, and increased sanitation practices paired with breaking these units into work units (is going to) minimize any kind of spread and keep people safe.

SCHOWALTER: Not all projects will need to stop, and the reason for that is many of our clients fall under the category of essential businesses as defined in the executive order. If our clients fall under any one of those categories, they will make a designation that their contractors and suppliers are also an essential infrastructure supplier. Therefore those projects will continue to move forward.

WISINSKI-ROSELY: We have closed our office so pretty much everybody is working remotely.

I’m still working even though I’m at home, and I have some clients working on some projects.

New stuff is something to be seen, how much of that is going to happen in the next three weeks.

There has been some discussion with Michigan realtors, with the governor’s office, as to whether we are considered a critical service or not. I don’t believe there’s been any determination on that that I’m aware of. It’s more or less staying in touch with our clients. My plan moving forward is to stay in touch with clients, to reach out to past clients to see if I can assist them. It is a good opportunity in that regard.

POPPE: Liquidity is No. 1. We know we have customers who have been shut down by the governor’s orders. So the revenue impact of those decisions obviously has an effect on our business.

We’ve done all sorts of stress-testing and worstcase scenarios to confirm we have adequate cash flow and liquidity in place. We’re being prudent on expenditures that are discretionary so we can still achieve our financial objectives in the face of the uncertainty. It really is about stress-testing our original plan for the year against these new assumptions. That scenario planning has been very powerful for us to work through bookends of what could potentially happen. We’re running stress tests as we speak, doing it in real time.

BIANCHI: This moment that we are living in will have a profound economic impact and we have to delay as much as we can that economic impact to the paycheck of our workers, to the company, to the future, to our clients and to the state. … We closed very good in 2019 and we entered very strong into 2020. Our numbers are strong and our backlog pretty much everywhere is very strong. With that, we are starting to see the beginning of a reduction in orders. I would say it’s not extremely significant at this stage. With that in mind, we are planning for various future scenarios that include the different degrees of business reduction. We connect those scenarios to a strong balance sheet, but we are going to be very careful and connect all the scenarios to cash to make sure that the company will continue to stay strong.

BUDDEN: I’m a believer that when there’s chaos, there’s opportunity as well, so I love some of the innovation that’s occurred with new businesses doing hand sanitizers and face masks. That’s great. What we’re trying to say is what could we do differently to make our interaction with members, providers, agents, employers more efficient and more productive. What haven’t we thought of? What opportunities does this provide to us to really think about how we do our business differently?

JONES: First and foremost, it’s keeping our workers safe. That’s an easy one to answer. Secondary would be doing everything we can to take care of our customers’ needs during this time while keeping in mind and respecting the order that’s in place from the governor, and then trying to best interpret that from the perspective of the state’s guidelines.

RIZZI: Keeping employees safe, comfortable and

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MARCH 30, 2020 / MiBiz

calm in the workplace — in all our facilities globally — is top priority. This is not new for us. It is also very important for me to remind employees that they are important. They are what drives our success. Despite the recent and significant shortage of work in our North American plants driven

by OEM shutdowns and the associated revenue drop we are experiencing, we have offered more than two weeks of additional paid time off to our production workforce to support them during this difficult time. This is one example of demonstrating our commitment to our workforce.

Lastly, I like to remind employees that we’ve been in business for 100 years, we’ve seen other times of crisis, we’ll learn and grow and survive through this one, too.

EASTBURG: Making sure that we’re paying people. Making sure that our billing, coding and receiving reimbursement happens. That’s the lifeblood of an organization like ours. The backoffice work continues to be vitally important, so our accounts team and finance team are working really hard to make sure that happens. Most or all of them are at home or able to work from home.

What does this situation call for from an executive leadership perspective?

STEVENS: It’s important that we reflect inward and be very transparent — as transparent as we can. That’s what we’re doing at Founders. As a leader, you have to step up, and be very open with the situation at hand, but also provide support and a positive message. We’re going to get through this. It’s going to be tough. It’s a scary time. It’s going to get worse before it gets better.

But we will get through it, and I think it’s important that we try and send that message as well. It’s just important to remember that there’s a human element here, and as a leader you have to be sensitive to that, and you have to respect all concerns from all of your employees.

POPPE: At the heart of it, it’s all communication, both internal and external. I have a great team.

We have an incident command structure in place, right out of the Department of Homeland Security Emergency Response System. It allows us to interface well with state and federal emergency response resources and enables this very smooth communication flow. In a crisis, if too many people are talking to too many people, it can get very confusing very fast. The other form of communication is to my co-workers. I have been using direct means of communication. With great tools, I can do quick videos right from my desk. We have an employee app, email and social media. Eighty-eight percent of my co-workers said they feel they’re getting the communication they need and we’re handling the situation well.

We have daily safety briefings and I’m directly communicating and reassuring co-workers with their mental health in mind. For a lot of people this is extraordinarily stressful because it’s so uncertain. Because so many meetings are remote, we added a mental check-in at the end: How is everybody doing? We’re finding people are fundamentally green at work, the system is in control, but they’re red or yellow at home. Maybe it’s an elderly parent, or there’s something going on at home, maybe a child who is scared.

BIANCHI: Most of the leaders in the world have a title that suggests that they should be leading, but also we can see even with the people without a title where leadership really makes the difference. History will tell us how good of a job we are doing, but I think we have to keep people connected to a bigger purpose of one team, one company, one goal. We have to make sure that people communicate often to be very transparent. We are in the moment of no rumors, so we need to try to stay in front of most of the rumors inside the company and all the rumors outside of the company. You have to be present and visible. I try to be, and all of that in a local and in a global company organization is an interesting exercise, 24 hours a day, seven days a week. You have to communicate often, you communicate transparently and you have to communicate quickly because what makes sense today, in two

“I think the human element is paramount and more critical than the business element at this point. I think as long as we can send that message and stay focused on that initiative, we’ll be able to get through this with some positive messaging, and keep people comfortable with the way our business is moving forward.”

— MIKE STEVENS, PRESIDENT OF FOUNDERS BREWING CO.

days could feel false and out of place. You have to be truthful, which I think I try to do every day. You have to be you because at this moment, people will see through you very quickly. They understand when communications are fake.

BUDDEN: As a leader, my job is to remain calm and to evoke confidence to the people I work with and the people I serve. We are here to serve.

We have our members and employees’ best interests in mind and we’re here for the long run. We have a very good group of dedicated, well-intentioned, committed employees that are trying to help the members that we serve. Being overly emotional or to not have a calm demeanor will just create more chaos in the world, not help it.

JONES: I think one of the biggest best practices right now is just simply over-communicate. If you think that you’ve communicated something well, communicate it again and communicate those things often. Because again, in an environment where things are changing very, very rapidly, I think it’s critically important that even if something hasn’t changed, we communicate that it’s still the same. Really driving home those things that we do know, the things that we don’t know, and the things that we’re working on.

RIZZI: When things started to get really bad two weeks ago, I lengthened the duration of my daily huddle with my executive team and cash flow became one of the key metrics we started talking about on a daily basis. Managing cash is also not new to us, but we need to keep this in the forefront of our decision making now.

EASTBURG: It requires lots of communication among leaders. We have a daily response team meeting where we have 20 to 25 leaders in the organization on the call, going through what’s going on, how has the situation changed since we met yesterday. We’re constantly forming subteams to work on different projects. That sort of response team, huddle, crisis management — it’s a critical nuts and bolts, logistical requirement. It also requires really, really good communication.

We have ramped up communication and we’re getting out notices twice a day to staff of critical information. We’re sending information out if something changes that people need to know about now. We’re creating short video clips that are viewable by all staff talking about how their

work is different. It’s the housekeeping staff talking about how their work is different. It’s a nurse talking about how their work is different. I’ve done a couple of addresses talking about where we are as an organization, rather than send typed emails. Let people tell their stories. That’s important, to keep the human connection that’s harder to have right now.

What’s your best advice for employees who are looking to you for guidance in this era of uncertainty?

STEVENS: Because everybody manages this stress level differently, I just try to reiterate and reassure them that their worries and their concerns are top priority for us, and every decision we make on a daily basis is really centered around the wellbeing of our people. I think Founders is in a fortunate enough position where we can weather this storm. I think the human element is paramount and more critical than the business element at this point. I think as long as we can send that message and stay focused on that initiative, we’ll be able to get through this with some positive messaging, and keep people comfortable with the way our business is moving forward.

POPPE: I think there’s real power in maintaining that social distance, rigorous sanitizing and cleaning and hand-washing. They’re simple measures but they work. Then feeling optimistic and proud of the vital service that we provide. I’m extraordinarily proud of my team. I’ve been out in the field with some of our crews. They’re working, and working safely.

In a time when all of these things are outside of our control, to zero in on what you can control and know one can make a difference — that feels pretty good.

BIANCHI: Stay current with communication. Stay close to the leader of your company by listening and being open. Hopefully, we have created inside the company a culture where people are not shy. If they don’t understand, they ask questions. If they do not agree, they talk to their leader.

Ultimately, they even talk to me. They know that they can even talk to me or to the family. Never like today have people needed to be transparent but at the same time, they have to understand the context and stay current on all communication. A cool head is also a very important component of the right level of a behavior and right level of action.

BUDDEN: What I want to tell them is I care about them and I care about their health. We’re doing everything we can to make sure they are safe.

Our number-one mission is serving our members and we do that through our providers, and I promise that we have a lot of talented people working on how to do this best and keep our company sound so we can be here in the future to help other people.

JONES: Stay engaged in the process. Things are changing very, very rapidly and sometimes even multiple times per day. Give grace where you can.

There are a lot of things that just simply are not known at this time or are changing very quickly. I know a lot of people want answers and they want to be secure in those answers. The reality of it is that there are not many good, stable answers at this point other than the general human desire to make sure that we take care of our employees and that we take care of each other. That’s the biggest thing. How do you give grace in that situation when there are so many unknowns and there are so many things that are not clear.

RIZZI: Frequent communication, staying calm, showing empathy and support for what employees are going through, and reassuring them that we’ll get through this together.

EASTBURG: Reassurance that the leadership is working around the clock on your behalf, on behalf of patients to do the right thing to keep you safe, to find the personal protection equipment that you need. We’re part of a great team and family, and this is our moment as supervisors to step up and be what the community needs us to be. Health care workers around West Michigan are truly doing heroic work.

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IN BRIEF

editor’s NOTEBOOK

Compiled by MiBiz Staff

Applications open for Michigan small business grants, loans WEST MICHIGAN — The state of Michigan’s loan and grant program for small businesses affected by the coronavirus is now accepting applications.

The Michigan Small Business Relief Program includes $10 million in loans and another $10 million in grants, and state officials anticipate it will benefit 1,100 businesses statewide. The funding can be used for working capital to support payroll, rent, mortgage payments, utilities or “other similar expenses that occur in the ordinary course of business,” state officials say.

The grants will be administered in West Michigan by The Right Place Inc. ($1 million), Lakeshore Advantage Corp. ($300,000), and Southwest Michigan First ($800,000).

The local economic development agencies will establish review committees to determine which businesses are selected for grants.

The $10 million in loans will be referred to the Michigan Economic Development Corp. from the local economic development agencies, which will be reviewed by a loan committee. All loans will be approved by the Michigan Strategic Fund.

For businesses, the process involves a single application regardless of whether it’s for a loan or a grant. Companies can receive one but not both. Businesses that don’t receive a grant may still be considered for loans.

Interested businesses can apply at michiganbusiness.org/covid19/.

BCU doubles loan fund for businesses affected by COVID-19 BATTLE CREEK — The city of Battle Creek’s economic development agency

has doubled its emergency loan fund to $1 million as more small businesses are affected by the coronavirus.

Battle Creek Unlimited Inc. initially announced the fund in mid March with $500,000 aimed at food and beverage companies. The agency had processed nine loan applications as of last week, with requests totalling more than $400,000.

The agency will now take a “broader approach” with the additional funds following an executive order by Gov. Gretchen Whiter that closed non-essential businesses to help stop the spread of COVID-19, said Battle Creek Unlimited President Joe Sobieralski.

“We’re trying to take care of the most vulnerable businesses,” Sobieralski said.

Battle Creek Unlimited is one of several organizations in West Michigan that have created resources beyond what the state is offering for businesses that have scaled back or closed because of the pandemic.

T h e Kalamazoo Downtown Partnership initiated the Downtown Kalamazoo Gift Card Stimulus Program, which added $10 to any $25 gift card purchased for a participating downtown business. In total, more than 650 individuals purchased 2,000 gift cards across nearly 70 downtown businesses, bringing in $70,000.

Muskegon approves $150K in emergency loans for Lakeside businesses MUSKEGON — The Muskegon City Commission approved $150,000 in emergency loans for businesses in the Lakeside Business District that have struggled from a troubled road construction project and from forced closures due to the coronavirus.

During a virtual meeting last week, the commission unanimously approved

Spectrum Health prepares GVSU facility for patient overflow GRAND RAPIDS — Spectrum Health has moved beds and equipment into Grand Valley Spectrum Health installed beds and equipState University’s Cook- ment in GVSU’s Cook-DeVos Center to serve DeVos Center for Health as overflow for low-acuity patients in case Sciences in preparation for Butterworth Hospital reaches capacity with a surge in patients from the COVID-19 patients. COURTESY PHOTO COVID-19 pandemic.

The GVSU facility, across Michigan Street from Spectrum Health’s Butterworth Hospital campus in downtown Grand Rapids, has space for up to 250 beds. The added capacity, if needed, would go for non-COVID-19 patients and low-acuity patients. COVID-19 patients would remain at the hospital Spectrum Health decided to prepare the space, available under a standing partnership with GVSU, after executives studied models in other states that are near or over capacity with COVID-19 patients. They concluded “that the current capacity that we have within our hospitals will not be enough,” said Spectrum Health President and CEO Tina Freese Decker.

“When we’re at that capacity, even after using very innovative ways within the four walls of hospitals throughout our region, we will need to expand to other sites,” Freese Decker said. “We’ve had this partnership and plan in place for over 10 years, (and) never thought that there would be a chance that we would really be thinking about do we put this into place. So on one hand, I’m extremely grateful, (but) I’m saddened that this could be the next step.”

In Grand Rapids, Spectrum Health has 1,170 licensed beds between the Butterworth Hospital campus and the Blodgett Hospital campus in East Grand Rapids.

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allowing City Manager Frank Peterson to authorize the loans for up to $10,000 per business. The revolving loan program is available until May 30.

The city specifically targeted the Lakeside Business District along the south shore of Muskegon Lake as several businesses struggled from a lengthy road reconstruction project. A one-mile stretch of Lakeshore Drive did not reopen to two-way traffic until late October. The $6.5 million construction project began last April and was initially to be completed in July 2019.

“We were really worried that a lot of those businesses were having a very difficult time recovering from that,” Peterson said. “We make our money in the summertime here. Many of them were having a tough time making it through the winter.”

Lakeside is an established business district between downtown and Muskegon’s Pere Marquette Beach.

Businesses along Lakeshore Drive dealt with construction crews, road closures and lost revenue during the street reconstruction project, and now many of them are temporarily closed down due to Gov. Gretchen Whitmer’s stay-at-home order that closed non-essential businesses.

MSU, The Right Place form task force to connect manufacturers to hospitals in need GRAND RAPIDS — As the coronavirus pandemic spread to Michigan, Norman Beauchamp saw a need and an opportunity to coordinate manufacturers locally to supply equipment and supplies to hospitals expecting a surge in patients.

The Michigan State University executive vice president for health sciences contacted The Right Place Inc. CEO Birgit Klohs. Together, they quickly marshalled forces to create a task force that works to coordinate local manufacturers.

The task force was created to serve as a conduit between health systems and companies that can produce and provide what they need. The group gives local health systems seeking supplies and equipment during the emergency a single contact point for local resources.

The goal for the task force is to identify the existing and anticipated demand of local health systems, and to match them with the capabilities of manufacturers. The effort aims to provide better coordination and avoid chaos at a critical time as the pandemic worsens in the coming weeks.

The effort can result in more than helping get needed equipment and supplies to health systems. Companies that shift their production also qualify as a critical infrastructure business that can remain in operation during the state’s stay-home order, and allows them to keep working as other sectors begin faltering from the economic fallout of the pandemic.

The groups that came together in the last week initially sought to identify “the most essential needs” of health systems, which are mostly related to procuring personal protection equipment for health care workers, said Eric Icard, senior business development manager for The Right Place.

Companies interested in more information can contact Icard at icarde@rightplace.org.

Joe Boomgaard writes about business and craft beverages.

616-608-6170 • jboomgaard@mibiz.com

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Thank a journalist.

T

he coronavirus that’s affected lives and upended operations across the globe has become the kind of transformational business story that only comes around once every generation.

At MiBiz, we first covered the issue in early February, when it started disrupting supply chains for West Michigan-based auto suppliers. At the time, coronavirus seemed contained to an outbreak in Hubei province in China.

Little did we know the virus would be practically the only story on everyone’s minds back in West Michigan within a few short weeks.

In response, we ramped up our editorial coverage in early March as the coronavirus outbreak spread throughout the United States, eventually landing in Michigan. Including the articles in this edition, MiBiz has reported more than 100 stories related to the pandemic, its effect on West Michigan and the response from the acute economic fallout it caused.

On our website, we opened our journalism to everyone, lifting our paywall to allow anyone who wanted access to our coverage, which normally is available only to subscribers. It’s absolutely the right call in times of crisis when people are hungry for information, worried about their loved ones and their livelihoods, and trying to find ways to help.

After all, as so many people have said in recent days, “We’re all in this together.”

Based on our web stats, readers clearly took notice of our reporting. Our website traffic has nearly quadrupled in the past two weeks compared to the prior two weeks, and March has been our business month of web traffic ever, by far.

I say all that, yet our reporters are not paid by the click; they have no story quota they need to reach in a given time period, no social media engagement requirements.

Their directive: Do good journalism, and work with editors to hone story angles, write timely articles and provide value for our readers.

It’s as simple as that.

And they’ve stepped up in a major way, even without actually being together in the newsroom. All of us have been working from home for more than two weeks, keeping in contact via Google Hangout, text and email. We maintain a standing early afternoon conference call to discuss story ideas, help with sourcing and share tips, as well as check in on one another’s mental health, share memes or enjoy a quarantine-mandated virtual happy hour — at 2:45 p.m.

As an editor, it’s been remarkable to see our small but scrappy reporting team grind day in and day out to help readers make sense of this unprecedented crisis, from both a humanitarian and business perspective. Despite all the disruption, concern and remarkable volume of information flowing at them all day every day, they have risen to the challenge and delivered.

Their commitment to delivering old-school journalism has been inspiring to me, and judging by the emails and texts I’ve received this week, it’s been important for others, too.

Thank you for your readership. We will be here for you. *** In other news, one of our MiBiz team members is moving on starting Monday. After more than a year on the team, reporter Sydney Smith is departing for a new opportunity in a new industry, although she’s staying in Grand Rapids.

Sydney — or Scoops Smith™ as I’ve dubbed her on Facebook — has left her mark on the real estate coverage in MiBiz, particularly as it relates to affordable housing and new developments, as well as on women’s and equality issues.

While I’m bummed she’s decided to leave journalism — she’s what we call a “true believer” in the fourth estate — I’m excited to watch her grow into a new challenge. (And maybe now I’ll finally be able to catch one of her standup shows or comedy productions with the Funny Girls troupe without being her boss creeping in the corner.)

Because of the pandemic and bar closure, we didn’t even get to give her a proper send-off. Once all this blows over, perhaps it will need to be a roast instead.

Stay safe, stay healthy and wash your damn hands!

Cheers all.

MiBiz / MARCH 30, 2020

9

TALENT WORKSHARING Continued from page 1

Michigan employers’ participation in work sharing, however, has been paltry. Prior to the coronavirus-related closures this month, fewer than 60 companies in Michigan participated out of about 220,000 companies that pay unemployment insurance, according to state officials. Employers must work with the state to establish a work-sharing plan.

But interest has spiked since Gov. Gretchen Whitmer ordered bars and restaurants to close (except for takeout and delivery) and as manufacturers have had to scale back, according to Unemployment Insurance Agency officials.

“It went from cold to completely hot within a matter of a week,” said Darryl Hunter, director of the UIA’s Tax and Employer Services. “Our lines are flooded.”

Whitmer’s March 16 order that expanded unemployment benefits also increased access to the state’s work sharing program by waiving until April

“I see it as a win-win for employers and employees. It helped us out immensely when we were slow to keep people working and their skill sets sharp so they know how to do everything when we pick back up again.”

— KATIE MCCOOL HR Manager at Interior Concepts Corp.

14 a requirement that employers must have a positive reserve in their unemployment insurance account to participate. As of press time, Congress was also considering a stimulus package that included additional federal funding for state work-sharing programs, covering the costs to employers.

“If you do that, it’ll potentially be very attractive to employers,” Houseman said.

Lack of awareness Work-sharing programs date back to the late 1970s, with the first in California in 1978. Arizona and Oregon followed in 1982.

“Each recession we had, more states got interested and passed more programs,” Houseman said.

Congress promoted more statewide adoption of work-sharing through the Middle Class Tax Relief and Job Creation Act of 2012, which provided reimbursement to states for three and a half years and gave grants to start or expand programs.

According to a 2016 U.S. Department of Labor report, short-time compensation programs saved about 570,000 U.S. jobs since the beginning of the Great Recession. Twenty-six states covering about 70 percent of the workforce have work-sharing programs, and Michigan

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MARCH 30, 2020 / MiBiz

RETAIL was one of seven to adopt its program after the 2012 legislation.

However, the programs are not widely used.

Houseman said this is due to three factors: Most businesses “simply don’t know about it;” some “legal limbo” exists between state and federal unemployment systems; and there’s occasional “administrative burden” for unemployment agencies to process more claims from a single company.

Also, work-sharing is used less when the labor market is strong.

“Surveys showed very low awareness about it,” Houseman said. “But businesses in many cases would benefit from using the program.”

Houseman has researched work-sharing programs in Oregon and Iowa, finding even “simple messaging” to employers raised awareness “quite dramatically.”

Andy Johnston, vice president of government and corporate affairs with the Grand Rapids Area Chamber of Commerce, said Michigan’s program isn’t more widely used because of the recently strong labor market here.

“With such low unemployment, this hasn’t been a program that’s utilized very much,” he said. “The fact that (the state) is bringing attention to it is great.”

Johnston said the Grand Rapids Chamber in general is hearing more from employers about their first dealings with the unemployment system.

Michigan unemployment claims grew sharply over the past two weeks, reaching more than 80,000 in the first week of widespread closures.

Michigan’s Work Share program is somewhat limited, though, as employees must work at least 30 hours a week to qualify for unemployment insurance benefits.

Win-win For at least one West Michigan company, work sharing has benefitted both employers and employees. Spring Lake-based office furniture manufacturer Interior Concepts Corp. started work sharing in early February. Amid a drop in production, the company reduced its work hours by 40 percent, said human resources manager Katie McCool.

The reduction was spread among three-day-a-week shifts for all 19 of its hourly production employees, avoiding the need for layoffs.

“It keeps people working, it keeps them engaged,” McCool said. “You don’t have to worry about losing any of your core employees and don’t have to rehire and retrain.”

McCool said the process for employees was “as simple as setting up direct deposit.” The company runs the administrative piece which operates similar to payroll.

Before having to idle all operations after Whitmer’s March 23 stay-home order, Interior Concepts was planning to use work share on a month-tomonth basis and evaluate it based on needs. But the benefits of the program included being able to draw less from unemployment reserves while also keeping more people on the payroll.

“I see it as a win-win for employers and employees,” McCool said. “It helped us out immensely when we were slow to keep people working and their skill sets sharp so they know how to do everything when we pick back up again.”

Coronavirus price gouging spurs efforts to rein in ‘bad actor’ resellers

By JESSICA YOUNG | MiBiz jyoung@mibiz.com

P

anicked consumers stocking up on essential items during the early phases of the coronavirus outbreak have exacerbated what attorneys say are already weak agreements between manufacturers and distributors that spur unscrupulous resellers.

Across the U.S., these resellers have taken advantage of the conditions brought on by the pandemic and widespread quarantines. Public officials have ramped up efforts to combat price-gouging in various forms, including in Michigan.

Last month, Amazon.com Inc. said the company is working with state attorneys general to identify third-party sellers on the platform who are cashing in on buyers’ fears. By early March, the company said it had removed more than 530,000 products over price-gouging concerns and had suspended thousands of resellers’ accounts. eBay Inc. has banned the sale of face masks and hand sanitizers on its site altogether.

On March 25, Michigan Attorney General Dana Nessel joined a bipartisan group of more than 30 other state attorneys general, penning letters to online sellers saying they have an “ethical obligation” to root out price gouging during the pandemic and beyond.

The letters to Amazon, eBay, Walmart, Facebook and Craigslist said the companies’ efforts to crack down on overpriced items on their platforms have so far “failed to remove unconscionably priced critical supplies.”

More than half of the hand sanitizers and face masks available on Amazon had recent price spikes 50 percent higher than the 90-day average, according to a report from the U.S. Public Interest Research Group. Nearly one in six of the products sold directly by Amazon showed similar spikes.

Heightened monitoring and bans on certain advertisements and selling certain items haven’t worked, the attorneys general told the companies.

‘Bad actors’ Online selling platforms like Amazon and eBay have helped manufacturers reach a wider audience, but they have also made it easier for unscrupulous thirdparty sellers to deceive customers and generate price volatility, said Steven Cernak, a Detroit-based partner at the antitrust and competition law firm Bona Law PC. Cernak was formerly the in-house antitrust counsel at General Motors.

A combination of legal and business factors are “preventing manufacturers from just telling the bad actors to stop their bad actions,” Cernak said. For example, the vast number of potential resellers across numerous online platforms can make it hard to corral all of those players.

“If you’re a manufacturer and you’re not careful about your distribution channel, you can end up with too many resellers,” Cernak said, adding that online platforms take “a problem that is dated and make it even worse.”

He compared some third-party sellers to distant relatives of retailers generations ago who perhaps resold items out of a car or on the street.

“Some, a minority, of these third-party sellers on Amazon … might not have inventory. They might not be displaying the product properly or describing it accurately,” Cernak said, adding that consumers in some cases aren’t receiving what they expected from the retailer. “The ultimate consumer might not just blame that third party seller on Amazon. They might blame everyone, including that manufacturer.”

Legally, the manufacturer might not have strong enough protections in its agreements with its distributors to stop sales by unauthorized resellers, Cernak said. While some restrictions on resale practices are relatively benign under antitrust laws, he added, some are still viewed skeptically and may even be illegal.

The coronavirus has amplified the issue.

“Six weeks ago, I had most manufacturers come to me saying unauthorized resellers were selling at too low of a price,” Cernak said. “Now, people are trying to sell at too high a price. A manufacturer can’t stop a retailer from selling at too high a price unless they put into place something like a brand management policy in the first place.”

Clamping down Under normal circumstances, Michigan’s price-gouging statute is fairly broad compared to other states and applies beyond a state of emergency and necessities, Cernak said. The price of an item is also judged by any price available from any other seller, which is “really big, really open-ended,” he said.

However, as restaurants, schools and non-essential businesses across the state were shuttered for at least the next several weeks to slow the spread of the coronavirus and consumers flocked to stores to stock up on supplies, Nessel and Gov. Gretchen Whitmer tightened the state’s laws on price gouging.

Whitmer signed an executive order targeting excessive markups on supplies and food items through midApril. Nessel pushed for legislation that would provide more investigative tools, criminal penalties and enforcement authority to her office.

As of March 24, Nessel’s office had received more than 1,500 complaints of price-gouging related to COVID-19. During the week of March 16, the state’s consumer protection tip line received more than three times the number of typical daily calls.

Ultimately, stricter enforcement and criminal penalties from the state surrounding price gouging are meant to protect the end user from paying too much — not to protect the brand reputation of the manufacturer, Cernak said. Manufacturers are responsible for ensuring their own protection against unauthorized third parties.

“The options right now, in order to stop something that is already happening, are slim because it’s difficult to track down where these products are coming from,” Cernak said.

Still, manufacturers can take steps now to combat future abuse by third-party sellers, including stringent resale agreements and tracking. Serial numbers or other forms of tracing are also helpful for tracking the origin of products that do end up online or in the inventory of unauthorized sellers.

“The manufacturer can go back to the (authorized) retailer and say, ‘Look, we told you you’re not supposed to do this, you’ve got to do better,’” he said. “Or otherwise (they could) penalize those retailers.”

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REAL ESTATE & DEVELOPMENT

Property managers take case-by-case approach with commercial tenants affected by pandemic

By SYDNEY SMITH | MiBiz

things like rent, and how we can help promote their business within their limited services. If people had to shut down, like our restaurants, GRAND RAPIDS — Facility owners and property we’re working plans out on a case-by-case basis.” managers are working with their commercial Property owners and managers who spoke with tenants during a time when most retailers and MiBiz said they are identifying specific strategies tairestaurants have had to severely cut operations. lored to particular commercial tenants. This could To curb the spread of mean allowing tenants to pay the coronavirus pandemic, April’s rent over the rest of the Gov. Gretchen Whitmer year or making a rent credit or issued a stay-home order exchange with the business, for Michigan for at least among other options. three weeks through April “We’re open to cre13, bringing non-essential ative ideas on how to have business to a halt. The move it be mutually beneficial,” excluded retailers like groWheeler said. cery stores, as well as resGrand Rapids-based taurants that offer take-out.

Third Coast Development Some businesses have LLC has a mix of commercreated public fundraisers for cial tenants, from large-scale their employees. Some have manufacturing operations to laid off their staff to allow new small businesses. Some them to apply for unemployof these tenants are conment benefits. In the meansidered “essential” under — DAVE LEVITT Whitmer’s shelter in place time, the owners of commerPrincipal at Third Coast cial properties are discussing order, so they will continue options with their tenants. to operate as usual.

Development LLC “We’re working with Other tenants in Third commercial tenants in the Coast’s buildings are strugmost affected services, like gling with the effects of the restaurants and service-based retail,” said Jason shutdown, especially the health clubs and restauWheeler, communications director for Grand rants that lacked a robust take-out system.

Rapids-based Pure Real Estate Management.

The firm’s residential tenants have the same “We’re working with them to develop plans on varied situations: Some are getting paid and ssmith@mibiz.com

“A few days or a few weeks — everybody can kind of slog through it. It depends how much longer it lasts, where we’ll start seeing more concerns from tenants.”

working from home, while others are not, said Dave Levitt, a principal at Third Wheeler Levitt Sischo Coast. While Levitt empathizes with tenants, he noted that property owners also have ongoing costs to cover amid the pandemic.

The West Michigan office of Colliers “The biggest thing we’ve been asked about is, International manages 9 million square feet of ‘Do we have to pay rent on April 1?’ We’ve been real estate for property owners. Kyle Sischo, mantrying to look at the economics of the building in aging director of real estate management services question and say what, if anything, can we do?” at Colliers, has been busy communicating with Levitt said. “Our expenses go on. There hasn’t tenants and landlords. Colliers is keeping track been relief on utilities and taxes. We have to make of tenants that have informed the firm of closings sure we collect enough in aggregate that we don’t or reduced sales, as well as sicknesses that could put the buildings at risk.” be related to COVID-19.

Levitt said Third Coast has received calls from Sischo said commercial and residential tentwo or three tenants who are concerned about ants are being handled on a case-by-case basis, not making rent. “Some concessions have been but the most common solutions include spreadmade” for those who need it, and there’s been ing rent over the remaining term of a lease, or “goodwill on both sides,” Levitt said. forgiving the abated rent in exchange for a term “It’s just understanding your client, what extension on the lease. Colliers looks to the their situation is,” he said. “A few days or a few landlords it represents to make those financial weeks — everybody can kind of slog through it. decisions.

It depends how much longer it lasts, where we’ll “In the end, I think this is a perfect reminder start seeing more concerns from tenants.” for individuals and businesses alike to curb Small businesses can access options for relief. expenses right now as much as they can, but On March 19, the state announced the creation beyond this situation in the future to curb their of two funds totalling $20 million to support expenses until they have a safety net,” Sischo said. grants and low-interest loans to small businesses Pure Real Estate also is working with its comthat had to close or have been disrupted by the mercial tenants to develop plans for promoting pandemic. their businesses with limited services.

The Michigan Small Business Relief Fund will “Hopefully if there’s any silver lining to the “assist those businesses facing drastic reduccloud, our residents and commercial tenants will tions in cash flow and the continued support start to realize there is something deeper than of their workforce,” according to the Michigan the leases and agreements they sign,” Wheeler Economic Development Corp. said.

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MiBiz / MARCH 30, 2020

11

SMALL BIZ

Stimulus law directs $350B in support for small businesses

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

T

he historic $2 trillion federal economic stimulus bill signed into law Friday contains $350 billion in loans for small businesses that could transition into grants.

To seek a loan through a bank or credit union that lends through the U.S. Small Business Administration 7(a) program, companies need to average their monthly total payroll expenses for the last year. The SBA will provide loans of 250 percent of the monthly average.

Small businesses with fewer than 500 employees can use the loan to maintain their payroll, pay interest on debt that was outstanding before Feb. 15, 2020, and cover expenses

such as rent and utility bills.

As long as a small business maintains payroll at “about the same amount” as last year in compensation, the SBA will forgive the loan,

said Small Business Association of Michigan President Brian Calley.

“What will start out as a loan will be forgiven,” Calley said Friday in an SBAM daily briefing held shortly after the U.S. House passed and sent the CARES Act to President Trump, who quickly signed it into law.

Caveats in the bill include the SBA Fowler Klohs Calley forgiving a maximum of $100,000 per employee and small businesses putting Development Corp. opened the application employees back on the payroll that they had process for small business grants and loans laid off. supported through two $10 million relief funds The loans for small businesses that were hit created last week. hard or forced to close because of the COVDThe MEDC will work through 15 local eco19 pandemic do not require personal guarannomic development agencies covering all tees or asset checks, or that a borrower first get 83 Michigan counties to disburse the fundturned down elsewhere for a loan, Calley said. ing. In West Michigan, that includes The “This really is small business relief,” he said.

Right Place Inc. in Grand Rapids, Zeeland“We’re optimistic and we’re thankful. Now we based Lakeshore Advantage, and Southwest have to work out all of the details and make sure Michigan First in Kalamazoo. every single one of our businesses that wants to The state relief funding is for small busitake advantage of this — which I think (is) most nesses with fewer than 50 employees.

— gets connected to an SBA lender so that they “In this unprecedented time of economic can get the money sooner, rather than later, and and business stress, we want to get your team back together if you do everything we can for West had to lay people off.”

Michigan businesses that have In enacting the CARES Act, been affected by the COV IDCongress looks to stimulate the 19 outbreak,” said Birgit Klohs, economy once the COVID-19 criSponsored by: SMALL BUSINESS president and CEO of The Right sis wanes.

ASSOCIATION Place. “We are collaborating with Many small businesses have OF MICHIGAN our local and regional partners closed in Michigan under the in this effort to quickly and effistate’s stay-home order. The relief ciently provide much needed financial support the package provides can quicken the ability to small businesses.” for small businesses to operate again after a The Right Place received $1 million from period that’s been “economically devastatthe MEDC to administer across an 11-county ing,” Calley said. region.

“This is a finite time period we’re dealing Small businesses affected by the state’s with. There will be an end to this crisis,” he said. stay-home order can receive a $10,000 grant for “What they’re hoping for is businesses will be working capital, payroll expenses, rent, mortready to hit the ground running, reopen and gage payments, utility expenses, “or other simigo as soon as it’s safe on the health care front lar expenses that occur in the ordinary course to do that.” of business,” according to The Right Place.

Under the CARES Act, the SBA’s eligibility “There are over 76,000 small businesses requirements for a loan essentially contain just in these 11 counties and $1 million in funds,” two criteria: The small business was operating Klohs said. “We anticipate demand will far as of Feb. 15, and it had employees that were exceed availability of funding, which will paid salary and payroll taxes during the period, necessitate difficult decisions throughout the according to SBAM CEO Rob Fowler. grant review process.”

Also on Friday, the Michigan Economic

SMALL BIZ NEWS

Helping small businesses navigate the COVID-19 crisis.

Learn more at SBAM.org/COVID19

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MARCH 30, 2020 / MiBiz

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ENERGY

COVID-19 slows progress on clean energy, electric vehicles

By ANDY BALASKOVITZ | MiBiz abalaskovitz@mibiz.com

W

ind and solar energy companies wait in limbo and electric vehicle advocates expect a hit much like the rest of the automotive sector as the coronavirus causes uncertainty across the clean energy industry.

“We have heard from some members that there are concerns about things like supply chain interruptions, permit decision delays, and cancellations of orders. In general, I think the uncertainty is a big challenge for every business,” said Laura Sherman, president of the Michigan Energy Innovation Business Council, a trade group for advanced energy companies.

Like the rest of the economy, the outlook for clean energy remains fluid. Some advocates and lawmakers had pushed for extended wind and solar tax credits in the most recent stimulus package from Congress, although critics blamed the move — at least in part — for stalling negotiations.

Meanwhile, the state’s two large investorowned utilities have taken divergent paths when it comes to building new generation projects after Gov. Gretchen Whitmer’s stay-home order, which lasts from March 24 through April 13. As MiBiz previously reported, DTE has halted all non-critical infrastructure projects, including its $1 billion natural gas plant in St. Clair County, while Consumers continues plans for new wind and solar.

How smaller scale energy projects, such as residential rooftop solar, fare remains to be seen.

Mark Olinyk, president and CEO of Jacksonbased Harvest Energy Solutions LLC, said generally customers and suppliers are “more cautious and on a wait-and-see mode.” Also, it’s more difficult to move on public infrastructure projects and obtain permits and inspections.

“Certainly, it still has a huge effect on this sort of business,” Olinyk said.

Harvest Energy will maintain operations as an essential business under Whitmer’s stayhome order, but the company has had to scale back in multiple states, including Michigan.

Olinyk confirmed layoffs, but declined to say how many across its 70-employee workforce.

“Our plan is this is temporary,” he said, noting that federal action on solar tax credits could change the calculus. “I just don’t like to see people not only slowing down or laid off but being affected by this whole thing. It’s

“I just don’t like to see people not only slowing down or laid off but being affected by this whole thing. It’s nothing we did, the state did or the industry did. It almost feels like 9/11 all over again. The recovery feels like it might be the same slow comeback.”

— MARK OLINYK President and CEO of Harvest Energy Solutions LLC

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Experts expect the COVID-19 pandemic to slow clean energy and electric vehicle projects in Michigan and nationwide. COURTESY PHOTOS nothing we did, the state did or the industry did. It almost feels like 9/11 all over again. The recovery feels like it might be the same slow comeback.”

Instead of reinstating full federal tax credits for wind and solar, Olinyk and other experts have suggested that the federal government could simply push back the phase-dow n schedule because of the disruption.

Rob Rafson, founder of Muskegon-based Chart House Energy LLC, said construction has halted on a series of solar installations on property owned by the city of Muskegon Heights.

Rafson said the city directed him to stop work.

“Everyone wanted to continue, but we’re limited by the customer,” Rafson said, noting that with outdoors-based work, it would be relatively easy to maintain social distancing.

“Really all of our work is pretty much stopped.”

In the longer term, Rafson thinks the widespread closures may spur interest from cities to generate their own power. Municipalities are of “particular focus” for Chart House, he said.

“People are already reaching out to us to push forward on solar projects they were only sort of marginally considering,” Rafson said. “I expect that to sort of accelerate no matter how long this goes.”

Electric vehicles The role of coronavirus in driving down gasoline prices and halting production from U.S. automakers is expected to negatively affect

the nascent electric vehicle market. Michigan, in particular, has taken an active role in supporting the buildout of EV charging infrastructure and distributing millions in settlement funds from the Volkswagen emissions scandal.

But with auto dealerships closed aside from providing vehicle maintenance work, “We feel like the pain will be spread pretty evenly,” said Charles Griffith, director of the climate and energy program at the Ann Arbor-based Ecology Center. He also believes low gas prices will be relatively short-lived, adding that gas

prices are a decreasing factor in EV-buying decisions.

Griffith advocates the EV sector be included in some form of federal stimulus program, particularly for charging infrastructure, extending EV tax credits or a form of a vehicle buybuck program.

“It’s worth considering all of these different ideas as part of a stimulus program,” Griffith said.

“We might as well if we’re going to try and trigger spending in the economy and meet another social good by encouraging some of the cleaner technologies we want to promote.”

MiBiz / MARCH 30, 2020

13

SPORTS

EMPLOYERS TAKE VARIED APPROACHES TO LABOR ISSUES AMID COVID-19

By SYDNEY SMITH | MiBiz ssmith@mibiz.com

The Grand Rapids Griffins had seven home games remaining in the season when the American Hockey League suspended operations on March 12 because of the coronavirus pandemic. COURTESY PHOTO

West Michigan sports teams, events sidelined as they await next steps

By JAYSON BUSSA | Special to MiBiz jbussa@mibiz.com GRAND RAPIDS — Tim Gortsema’s office at Van Andel Arena might not seem like the locale for optimal social distancing.

However, with his Grand Rapids Griffins stuck in limbo and a statewide halt on sports and entertainment events, it’s offered him plenty of personal space.

“We made the decision corporately that ... our staff would be working remotely,” said Gortsema, president of the Griffins. “I’m kind of the exception to that rule for today, but I’ve got better social distancing at the office than I do at home.”

However, even if Gortsema were surrounded by his staff, the American Hockey League organization would still find itself in the same position as the rest of the semi-professional sports franchises in Grand Rapids and teams of every level across the country, which are facing prolonged cancellations due to the COVID-19 pandemic.

The AHL suspended operations on March 12 and, in a follow-up announcement on March 16, said that the suspension would not be lifted before May. The regular season was scheduled to end in the middle of April.

The Griffins had seven remaining home games on the schedule when the stoppage was announced.

That’s seven games of ticket, merchandise and concession sales, signifying a sizable blow to revenue.

(The 2019-2020 season includes 25 home games.) The Griffins were also in position to clinch a playoff berth to extend their season.

Despite the financial hit, Gortsema is confident in the organization’s chances of bouncing back.

“We have terrific ownership that is very well capitalized and that helps in the ability to weather a storm like this financially,” he said. “We also have a terrific staff and team. I’m super confident in our group once we get the green light and dig in our heels to go hard in preparation for either the post season or 2021.”

In the meantime, the organization is emphasizing communicating with fans as best as it can despite the volatile day-to-day nature of this pandemic.

“The social media and media departments are staying active, keeping our customers informed,” Gortsema said. “We want to combat a lot of what is largely negative news and keep people connected.”

Per recommendations from the National Hockey League, Griffins players were permitted to return to their home cities but remain prepared to return to Grand Rapids if the season does continue.

Gortsema acknowledged that it would be difficult to jumpstart the season at the playoff stage and pointed out that his organization would benefit from preparing for next year’s season, which will be Grand Rapids’ 25th anniversary.

Either way, he acknowledged that it was going to take some time and work to get fans back out.

“I think we’re going to have to rebuild some of the momentum,” Gortsema said. “This shelter in place timeline will be sufficient enough in length where it will take some work to get this process rolling again.

Certainly right now, we don’t know how long that timeline is.”

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MARCH 30, 2020 / MiBiz

Facing similar dilemmas Like the Griffins, the Grand Rapids Drive of the NBA G League suspended play on March 12 with five home games left on its schedule.

Team co-owner and President Steve Jbara was unavailable for comment, but the Drive issued a statement to inform the media and fans of the shutdown.

“The Grand Rapids Drive and the NBA G League will continue to coordinate with infectious disease and public health experts along with government officials to determine safe protocols for resuming our games,” the team said. “As the NBA G League develops the appropriate course for future games and events, we will keep you informed of any changes as soon as they happen.”

The West Michigan Whitecaps also announced it was delaying the beginning of the 2020 season, in line with Minor League Baseball and Major League Baseball. The club’s first game was slated for April 9.

No new date has been set.

The Whitecaps organization did not respond to a request for comment, but it recently sent out a similar statement as the Drive to update fans. The Whitecaps instructed ticket holders to keep their tickets to affected games.

WMSC schedule in jeopardy The West Michigan Sports Commission uses sports events to drive economic development in West Michigan — a feat that is proving difficult with all amateur and professional sports around the country sidelined.

Sports Commission President Mike Guswiler said the recent statewide quarantine effort has not yet disrupted core operations, but certainly could.

“Our core operations are trying to attract statewide and national sports tourism and we work six months to a year or two out,” he said. “That part can continue with minimal impact apart from trying to reach people.”

Some of the events that the WMSC has worked as a third party to help coordinate and promote have been cancelled, including the 2020 Griff’s Sled Hockey (March 20), Special Olympics Michigan state basketball tournament (March 20) and the 23 Elite Super Power Classic basketball tournament (March 27).

“Right now, our role for those is to communicate cancellations,” Guswiler said.

The United States Bowling Congress Intercollegiate Team and Singles Bowling Championship was scheduled for April 13 and was set to draw participants and fans from around the world. That event has been postponed, but not cancelled.

The Meijer State Games of Michigan, which operates as its own entity, looms ahead in the early summer.

“With sport tournaments, we’re reliant on lodging tax and hotel assessments and hotels are taking a hit,” Guswiler said. “It’s something we know is going to affect our bottom line, no question. Right now, it’s just in the short-term.

“We’ve been around for 14 years and we’ve managed the revenues we’ve had to work with. We’ll live through the short term, but who knows how long it will go. Right now, we’re not in emergency mode. Our board is on top of it and our budget is going to take a hit. At the same time, we’ll refocus when we get out of this pandemic.”

M

any businesses are grappling with labor issues amid a stay-home order issued by Michigan Gov. Gretchen Whitmer to help curb the spread of COVID-19.

As non-essential businesses shut down for at least three weeks, some employers have chosen to lay off employees so they can collect unemployment benefits, while other businesses are coming up with various different solutions.

“Three weeks is a long time to sustain that type of payroll for businesses, and they don’t want to delay people from getting their benefits either,” said Lisa Sabourin, president of Muskegon-based Employers Association of West Michigan.

Unemployment claims in Michigan initially spiked following the widespread closure of food and entertainment businesses. The week after Whitmer issued the order closing those businesses, claims grew by 1,500 percent, according to the Michigan Department of Labor and Economic Opportunity. The department saw 55,000 claims within three days.

Michigan mirrors national trends with a surge in unemployment claims during the pandemic. The U.S. Department of Labor’s most recent statistics released March 26 show the number of claims skyrocketed by nearly 3.3 million nationwide the week of March 16, shattering historic records.

Whitmer signed another executive order on March 16 that expands eligibility for unemployment benefits until April 14. The benefits are increased from 20 to 26 weeks, and the application eligibility period has increased from 14 to 28 days. The order provides benefits to workers who have unanticipated family care responsibilities, for workers who are sick or quarantined, and for first responders who are sick or quarantined.

As well, Whitmer issued another executive order on March 25 to give a six-week extension to workers who already had an active unemployment claim and to expand cost-sharing with employers. Unemployment benefits paid to laid off workers or people placed on a leave of absence will be assumed by the Nonchargeable Benefits Component, not the employer’s accounts.

Michigan has one of the “healthiest” general funds for unemployment claims in the country, said Darryl Hunter, the Michigan Unemployment Insurance Agency’s director of tax and employer services. The fund had close to $4.5 billion set aside for claims before the pandemic began. About 225,000 employers pay into the fund.

The department is looking into what effect the spike in claims will have on the fund, but it is difficult to determine given the uncertainty of how long the pandemic will last, Hunter said.

“I think we’re going to be OK,” Hunter said. “It’s certainly not going to run out of money. Everyone who applied for benefits, we’ll pay out — so far.”

The Employers Association surveyed its members after Whitmer’s stay-home order and found that most of the responding companies were exempt from closure because they are considered essential businesses.

Responding companies approached labor issues in a variety of ways. Some have laid off a portion of their staff, while another has put employees on furlough and will be paying 70 percent of their wages. Many employees are working from home, while some companies have opted to stagger shifts to allow for social distancing and cleaning. “(We) will be reducing hours and allowing any staff that wants to stay home to do so,” one company responded. “If this continues for any length of time, we will need to shut down due to lack of suppliers available to continue production.”

Only one business responded that it was ordered to close, and it has reduced the hours of salaried employees and laid off hourly employees.

The Department of Labor and Economic Opportunity (LEO) issued guidance March 22 to Michigan employers on how to avoid layoffs related to COVID-19. LEO Director Jeff Donofrio urged job Sabourin providers facing work shortages to place employees on leave and advise them that they expect to have work available within 120 days, as opposed to terminating them, so they can remain eligible for potential federal assistance.

That sentiment was echoed by Keith Eastland, a member of Grand Rapids-based law firm Miller, Johnson, Snell & Cummisky PLC in the employment and labor law section.

For employers considering their options with staffing, Eastland said it’s important to consider the federal Families First Coronavirus Response Act and how it applies to workers permanently laid off or Eastland on temporary leave. The distinction between those is important for employers to make, Eastland said. He also advised employers to pay attention to the stimulus package by the federal government to make sure employees get the maximum benefits they can.

“Consult with legal counsel or advisers so you can figure out how the laws fit together so you can map out your strategy, so you can come out of this healthy and taking care of your people,” Eastland said.

The other policies to keep in mind are internal benefits and the company’s insurance plan to see if it makes a difference whether the employee is on leave or laid off.

For larger employers, they also need to assess whether they have obligations under the Worker Adjustment and Retraining Notification (WARN) Act, Eastland said.

Sabourin advised that above all, getting timely and accurate information to employees is critical. The Employers Association offers a resource page on its website for companies. Sabourin said there is no blanket solution for businesses.

“There is no one size fits all,” she said.

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FINANCE

Banks leverage new flexibility to help businesses get through pandemic

By MARK SANCHEZ | MiBiz

from regulators.

T he Fi n a nc i a l Accounting St a nd a rd s Boa rd ( FA SB ), a n or ganization t hat sets generally accepted accou nt i ng pr i nciples in the U.S., a g r e e d w it h t he approach taken by

msanchez@mibiz.com

S

mall businesses that have been slammed by the coronavirus pandemic and expect to have difficulty making commercial loan payments should call their bankers now to work out possible adjustments.

Bank executives contacted by MiBiz say they’ll do what they can to work with business clients who were forced to close by a state order and had their cash flow suddenly interrupted, or were affected financially by the pandemic.

“It’s incumbent on all of us to work with our clients to get them through the pain,“ said Robert Kaminski, president and CEO of Grand Rapids-based Mercantile Bank Corp.

“We certainly are open to engaging in these kinds of conversations with our clients,” Kaminski said. “Everything has to be on the table right now.”

Banks can offer deferred payments on loans, modify loan terms and due dates, extend or increase operating lines of credit, provide access to short-term working capital, and waive fees, according to banking executives contacted by MiBiz. West Michigan market leader Fifth Third Bank, for instance, will offer payment deferrals for up to 90 days with no late fees as well as “a range of loan modification options.” The bank also is waiving all fees on Fifth Third Capital loans that offer borrowers unsecured lines of credit and term loans from $10,000 to $100,000.

Sparta-based ChoiceOne Bank also will offer borrowers a 90-day payment deferral with an option for a second 90 days “if this continues on,” CEO Kelly Potes said. The bank can make payment deferrals on a loan’s interest or principal or both, Potes said.

ChoiceOne also will consider extending operating lines of credit and waiving fees, he said.

Rather than take a blanket approach, the bank will decide on modifications based on the needs of individual borrowers, he said.

“We’re talking with each client and determining what’s best for them,” Potes said.

“Everyone is kind of unique. W hat might

GET THE LATEST E-NEWS SENT TO YOUR INBOX MiBiz publishes free e-newsletters highlighting local news and data, as well as best practices, events and resources: n NEW MiBiz Morning Edition – A daily roundup of business news and intelligence, published Monday-Friday. n Small Biz – A bi-weekly compendium of news, best practices and events. n Manufacturing Report – A bi-weekly digest of local manufacturing news. n West Michigan Nonprofits Report – A monthly roundup of news and information affecting the nonprofit sector.

because it modified the loan,” Ott said of the stimulus bill.

Staying safe

In response to the COVID-19 pandemic, banks and credit unions generally have closed their lobbies, except for appointments. They encourage customers to use ATMs, drive-thru lanes, online banking and mobile apps to do transactions.

Kaminski Potes Kessel Ott Many banks have increased call center be good for one client might not be best for staffing and expanded calling hours, according regulators. another.” to Community Bankers of Michigan President The massive federal stimulus bill that Many banks take the same or similar and CEO Mike Tierney.

Congress approved late last week gave furapproach. All urge clients who are having or The t rade g roup ther relief for banks anticipate trouble from the COVID-19 crisis to for community banks by suspending TDR contact them. across Mich iga n is requirements on any “It’s all about communication. That’s why work ing w it h reg uloa n mod i f icat ions we want to talk to our clients,” Potes said. lators “to relax rules that were made as of At Grand Rapids-based Independent Bank, t hat w ill help keep March 1 and extending “We are having conversations with every one of bankers and customeither through Dec. 31, our clients. ‘What can we do to help?’” President ers sa fe — like not 2020, or 60 days after and CEO Brad Kessel said. “We’re going to do re qu i r i ng appr a i sthe end of the national the right thing. It’s a real time to collaborate. ers to enter a home to emergency.

We’re going to do everything we can because a complete a real estate The stimulus bill community bank is only as strong as the comappraisal for a mortalso allows banks to munity it serves.” gage,” Tierney wrote make a permanent in an op-ed piece. modification to the “Community banks loan and still not treat — BRAD KESSEL Offering flexibility have been working it as a TDR, a long as the President and CEO of Independent Bank Recent regulatory guidance gives banks flexaround the clock to borrower is not more ibility to work with commercial and individual implement pandemic than 30 days past due borrowers. protocols, which address on payments, said Jeff The joint statement that an array of federal not only hygiene and cleanliness for customers and Ott, a partner at Warner Norcross + Judd LLP. and state regulatory agencies issued March 22 employees, testing procedures, checking back-up “It gives any financial institution a lot of encouraged banks and credit unions to “work systems in case any critical system is impacted, and f lexibility to work with their customers to constructively with borrowers affected by they have also looked at how to accommodate all make loan modifications to help customers COVID-19.” The regulatory agencies said they types of customers so they can maintain access to get through this crisis without treating it as would not direct lenders to categorize loan vital banking services,” Tierney wrote. a TDR and without having to suffer adversely modifications as “troubled debt restructurings,” or TDRs, in their accounting, which can lead to regulatory scrutiny and have financial implications.

“The agencies view prudent loan modification programs offered to financial institution customers affected by COVID-19 as positive and proactive actions that can manage or mitigate adverse impacts on borrowers, and lead to improved loan performance and reduced credit risk,” according to the joint statement www.triangle-inc.com Construction. Commitment. Unparalleled.

“We’re going to do the right thing. It’s a real time to collaborate. We’re going to do everything we can because a community bank is only as strong as the community it serves.”

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15

FOCUS: TRANSITION/SUCCESSION PLANNING

Crisis could slow exits, but owners need to keep planning

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

T

he COVID-19 pandemic that’s swept the nation adds a new issue for business succession and transition planning.

The crisis has caused wild swings on Wall Street that have affected investment portfolios, pushed the economy into an expected sharp decline for at least the second quarter, and generated uncertainty about what the future holds.

That all may lead some owners to reconsider an impending exit and sale of their business, said Chris Matthysse, an attorney in the Grand Rapids office of Mika Meyers PLC who works with business owners on succession and transition planning.

Just as with the 2008 financial crisis that affected and delayed exits by business owners, the COVID-19 Matthysse crisis could prompt some people to wait to retire until well after the crisis passes so they can have a better picture of what the future holds.

That’s particularly true if the predicted economic downturn brings down multiples, reducing how much an owner can get from the sale DeMaagd of a business.

“There is so much uncertainty out there right now it’s going to cause delays in exits,” Matthysse said. “When we have uncertainty, people like to cling to things they’re certain about, and a lot of time that is the business.”

The crisis may affect deal flow among buyers in the market, particularly if financing becomes harder to obtain, Matthysse said.

That scenario could play out in private equity.

The amount of dry powder, or what private equity firms have available to invest, sits at record levels. Firms will continue to deploy the capital, “albeit more slowly and perhaps more prudently

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MARCH 30, 2020 / MiBiz

than in the last few years,” according to a Pitchbook report this month that examined the effects of the crisis on both private equity and venture capital.

Yet the present crisis will someday pass, and owners still need to plan for the eventual transition and succession of their companies to new leadership.

Professionals say that the planning process needs to begin years in advance. A well-planned transition is more likely to go smoothly, enabling an owner to find the right buyer that’s a good fit for the business, and improving the chances of achieving the desired financial results from a transaction.

“Rather than doing it just in the last few months or the last year before they want to retire, really starting several years ahead and having that longer vision for it, that’s a big thing,” said Doug Bajor, a senior wealth management adviser at Greenleaf Trust in Kalamazoo. “If you can start putting the pieces in place three, five, seven years ahead of time, the value you can create for the business when you ultimately want to step aside can be that much better.”

Assembling a team Owners can begin the planning process by first deciding when they want to depart, either through an outright sale or transitioning to new leadership to run the company after they retire.

They also need to consider what they want out of a transaction and what they need financially to live on in retirement.

A sale could include retaining a minority stake in the company with continued involvement, perhaps in a compensated advisory role.

As owners plan, they should retain a team of legal, financial and tax advisers to help steer them through the process, experts say. When the time comes to put the business on the market, one of the first steps is to have a valuation done on the company so they can set an asking price.

In family-owned businesses, leaders should have the conversation with the next generation years in advance to see if a child wants to take over the business at some point. Don’t presume they do, professionals say. If the next generation expresses interest, get them involved in the business early

“If you can start putting the pieces in place three, five, seven years ahead of time, the value you can create for the business when you ultimately want to step aside can be that much better.”

— DOUG BAJOR Senior Wealth Management Adviser at Greenleaf Trust

and groom them to move through the ranks so they’re ultimately prepared to lead the company.

A good plan also should consider unforeseen circumstances and prepare the business for the sudden departure of an owner or leader, such as when a sudden illness leaves an executive unable to work or in the case of a death.

“If you’re gone, who’s going to run it? Do you have somebody in the business that understands it? Because if you don’t have somebody that understands it, the business — no matter what it’s value — is as good as gone,” Matthysse said.

“You need to have somebody to keep it going in the transition time period.

“If it’s the next generation, what do you need to do to get it down to that next generation? Most (business owners) have not thought about that until the question is really posed to them. I think they’re too busy running the business to think about who’s going to run the business if they’re not.”

Securing value Owners also should identify executives that someday could rise to lead the business, or who may want to buy the company.

Once an owner knows when they want to depart in the future, they can smooth the transition by turning over responsibilities and dayto-day duties to up-and-coming leaders as a way

to prepare them for the future.

Having the next generation ready to take over helps when negotiating a sale and ensures a prospective buyer that the company they are acquiring has leadership that’s well prepared, said Jeff Williams, the managing principal at Grand Wealth Management LLC in Grand Rapids who works with businesses on succession and transition planning.

“That’s really going to help them get their price for the business. It’s going to prepare the business to succeed without them,” Williams said. “It’s going to better protect the employees the owners care so much about, and it’s going to prepare them, too, for backing away or walking away from the business.”

An owner planning the company’s transition needs to take into account what they’ll do next in life, and prepare managers and employees for the transition, as well as communicate their plans well in advance.

If a business is prepared for a transition, owners are better able to secure a buyer who fits culturally, who will retain staff, and who will stay involved in the community.

“Some owners are going to say, ‘I just want to maximize the sale of this and move on with my life,’ and then you have other owners who are more tied into who is working for them,” Matthysse said. “A definite consideration for owners is: What happens to my employees? That’s a very difficult question.

These employees are family.”

Valuing legacy One increasingly popular option business owners are considering is forming an employee stock ownership plan, or ESOP. Brian DeMaagd, managing director of Vision ESOP Valuation LLC in Grand Rapids, has seen interest in ESOPs grow in recent years.

“Definitely, from a mid-market standpoint, there’s a lot of activity. For smaller businesses as well, there’s good opportunities,” DeMaagd said.

A company should have at least 20 to 30 employees and a minimum of $1 million to $2 million in EBITDA “before it makes a lot of sense” from a cost perspective to do an ESOP, DeMaagd said.

In the middle market, Vision ESOP Valuation’s average client typically has $50 million in sales, $5 million in EBITDA and about 100 employees, he said.

In an ESOP, which is managed by a trustee, companies transfer shares to employees over a period of years. That typically comes through an annual distribution of shares.

Owners seeking a transition or exit can take their money out of the business through standard bank debt that the company takes out to fund part of the transaction. Many ESOPs today also are funded through seller’s debt. As the company pays off the debt, the owner’s shares are released, DeMaagd said.

ESOPs have gained particular interest from owners who are concerned about their legacy after they exit or retire, according to DeMaagd.

ESOPs generally do not involve a name change and can retain the culture within a company that the owner built and nurtured for years.

In West Michigan, legacy is a “huge” consideration “and one of the primary factors why owners take the ESOP route” when preparing for their eventual departure, DeMaagd said.

“If legacy is important to the owner, ESOPs are a really good fit,” he said. “It’s a good alternative to private equity or a sale to a competitor, or a strategic-type sale, because of that.

“That’s why in West Michigan there’s a high concentration of ESOPs. A lot of the reasons are that culture, the kind of family, close-knit organizations where owners really want to reward the employees or give the employees more opportunity to share in the value increases.”

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UPCOMING ISSUES

Hudsonville community bank completes $8 million raise

State maps optimal EV charger network

PAGE 2

PAGE 7

JANUARY 7, 2019 • VOL. 31/NO. 6 • $3.00

Law tying state rules to federal standard no big deal, biz groups say

SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

www.mibiz.com

With $77M investment, Ablative could draw attention to Michigan’s life sciences industry

By ANDY BALASKOVITZ | MiBiz

By MARK SANCHEZ | MiBiz Netherlands-based Gilde Fund in Kalamazoo co-led the venabalaskovitz@mibiz.com msanchez@mibiz.com Healthcare led the Series D financing ture capital round, which includes an round in Kalamazoo-based Ablative unnamed major strategic investor and KALAMAZOO — The $77 million usiness and environmental Solutions, which developed a cathseveral local investors, some of whom investment in Ablative Solutions Inc. groups were equally surprised eter system to treat uncontrollable have backed the company since its ranks as the largest known venture at one of Rick Snyder’s final acts hypertension by deactivating nerves beginning in 2011.

Ablative Solutions of Kalamazoo capital deal ever in Michigan, possias Michigan governor: Signing a bill in renal arteries.

The investment will fund the comdeveloped a catheter system to bly helping draw more attention to making it more difficult for state agenPetoskey-based BioStar Ventures, pany over three to four years through treat uncontrollable hypertension the state’s life sciences research and cies to adopt rules stricter than federal Michigan Accelerator Fund 1 in Grand a pivotal late-stage clinical trial in the by deactivating nerves in renal development. regulations.

Rapids, and Novus Biotechnology See ABLATIVE SOLUTIONS on page 5 arteries. COURTESY PHOTO But while environmental groups say the move jeopardizes natural resources and public health, business advocates downplay the concerns.

“I think everyone was a little surprised he signed it,” said Jason Geer, director of energy and environmental policy with the Michigan Chamber PAGE 11 of Commerce.

Sponsored by state Rep. Triston www.mibiz.com

By SYDNEY SMITH | MiBiz Cole, R-Mancelona, ssmith@mibiz.com H.B. 4205 prohibits Geer state agencies from GRAND RAPIDS — Executives at nonadopting rules more stringent than profit development organizations think federal law “unless the director of the dissolution of the Kent County Land the agency determines that there Bank Authority will affect their operais a clear and convincing need to tions, even if some of the specific effects exceed the applicable federal stanwill remain unknown until the agency is dard.” The law also exempts emerGroups still hope to form healthWest Michigan manufacturers mostly are keeping the status quo with their pre-employment drug screenofficially closed. gency situations and special educaplans if appeal proves successfuling practices even after Michigan voters legalized cannabis use in November. MIBIZ FILE PHOTO: KATY BATDORFF The Kent County Board of Commissioners tion programs. on Dec. 20 voted to dissolve the Kent County “It just requires that if a departBy MARK | MiBiz Land Bank Authority, which is operating as ment wants toSANCHEZ promulgate a rule more msanchez@mibiz.com Innova-Lab, after a lengthy discussion of stringent than federal, they just need the organization’s mission. Ultimately, the to explain it,” Geer said. “I don’t see remedy everIt’s comes, Thewhy Employers’ majority of commissioners decided the land this asf aa hindrance. showing Association still wants to offer members bank had completed its initial mission, espewe’re going beyond federal standards an option forwe’re employee cially in light of improvements in the real and justifying why doinghealth it.” coverage.

The association was all set this past estate market since 2011.

While more than a dozen states spring to launch an association health plan.

Still, the end of marijuana proHowever, nonprofit developers who have similar laws that apply to enviManufacturers face questions Partnering with insurer Priority Health, The hibition will not mean a free-forhave come to rely on the Land Bank to ronmental standards, Michigan’s Employers’ Association planned to offer HMO over drug policies after all for citizens, according to Tami clear messy titles argued the organization applies across all state agencies. and point-of-service products to member VandenBerg, board member of still can play a role in the current market, Snyder vetoed similar legislation in Michigan legalizes marijuana employers, according to a filing with state MI Legalize, an organization that particularly given the affordable housing 2011, saying at the time he was conregulators who approved the coverage last fall. helped bring the legalization inistruggles in the region. cerned it would state’s Then came a“inhibit March 28the federal court ruling

By JESSICA YOUNG | MiBiz tiative to voters.

“It doesn’t seem like it cost the county ability to work withabusinesses and order by that struck down 2017 executive jyoung@mibiz.com The Michigan Regulation and really anything to have it in place,” said citizens to ensure regulatory President Trumpthat and our subsequent rules issued VandenBerg Taxation of Marihuana Act allows Jeremy DeRoo, executive director of LINC structure fits Department Michigan’s unique proby the U.S. of Labor that broadow that all adults in Michigan can legally individuals 21 years of age or older UP, a Grand Rapids-based real estate develfile.” In a bill-signing statement last of small ened the ability use marijuana, employers are weighto possess, consume, transport or process limited oper. “It seems to be more of an ideological month, Snyder said businesses his previous toconjoin together ing how the new law — and misunderamounts of marijuana or marijuana concentrate. difference between some of the commiscerns were addressed and that state health to form association standings about it — could affect their Smoking marijuana remains illegal in all public places. sioners and the role of a quasi-government rules can still be stricter “when accomplans. workforces.

“People get a little too excited,” VandenBerg agency in the real estate market.” panied by the appropriate explanation “We ended up pulltold MiBiz. “You’re not going to be arrested for it.

As it stands, the current Land Bank and support.” ing that off the table after Proposal 1 to legalize recreational cannabis passed 56 percent to 44 percent on the November That is a huge, huge win. That doesn’t mean you has 12 months to handle its liabilities and Geer wasn’t the only surprised thatone result from the court,” Jason Reep, presiballot and went into effect Dec. 6, making Michigan can smoke in your apartment if your landlord isn’t fulfill its agreements before it concludes. that Snyder backed said the bill. dent for The Employers’ the only state in the Midwest where adults can allowing that.”

What happens after the Land Bank ceases See FEDERAL on page 3 Reep STANDARD Association, based in See LAND BANK on page 2 legally consume marijuana at any time.

See DRUG POLICIES on page 4 Grand Rapids.

The Employers’ Association stands among a handful of organizations in Michigan that P E R I O D I C A L S had their plans scrapped by the federal court ruling. Reep still holds out hope for launching PAGE 18 an AHP if an appeal turns out successfully.

That could occur if the Department of SERVING MICHIGAN BUSINESS SINCE 1988 www.mibiz.com LaborWESTERN prevails in appealing the ruling

by U.S. District Court Judge John Bates of the District of Columbia. As well, Congress could enact

B

Grow Michigan plans second mezz fund JULY 8, 2019 • VOL. 31/NO. 19 • $3.00

4.13.2020

By SYDNEY SMITH | MiBiz ssmith@mibiz.com GRAND RAPIDS — The opportunity to lease brand new office space in the heart of downtown Grand Rapids offered Van Wyk Risk Solutions the chance to grow into a new location.

This month, Van Wyk will be the first tenant to move into the new Warner Building, located at 150 Ottawa Ave. NW in downtown Grand Rapids. After outgrowing its space on Wealthy Street in East Grand Rapids, the insurance agency will occupy 17,500 square feet on the 10th floor of the Warner Building.

Although the company viewed about 20 different potential office locations, the Warner Building came out on top because of its location, quality and amenities, and because it offered the firm the chance to move into new Class A office space, said Max Van Wyk, chairman and CEO of Van Wyk Risk Solutions.

“When you’re starting from scratch in a space, I think it’s always easier and more convenient to have new space, because you can build it out the way you want it to be,” Van Wyk told MiBiz. “We needed to look at spaces where we could accommodate everyone in a central location and provide the amenities our employees deserve.”

The vacancy rate for office space in the central business district and suburban market in Grand Rapids remained below 10 percent for the first time in 30 years, according to a report from the Grand Rapids office of Colliers International.

The report highlighted the need for more new construction or renovations in older buildings, as companies continue to seek out amenity-rich offices to attract and retain their employees.

Contract Deadline: 5.27.2020

4.27.2020

Drinking Economy Real Estate Spotlight: Mason County Contract Deadline: 4.15.2020

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WATERLOGGED WONDERLAND

Corporations re-examine their Unseasonably rainy weather coupled with near record-high shareholder Great Lakes water levels have left many West Michigan business commitment

owners hoping the region will PAGE 10 dry out in time to salvage the season for visitors and tourists. SEE PAGE 12 SEPTEMBER 3, 2019 • VOL. 31/NO. 23 • $3.00

STORY AND PHOTO BY MARLA MILLER

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Lawmakers push economic case for ‘licenses for all’

New $20M PE firm to target rural Michigan companies

Grand Rapids explores potential for Craft beverage producerssolar suepower MLCC,at allege 8 sites unconstitutional state laws, enforcement

M&A remains active among West Michigan manufacturers

See AHPs on page 7

By JOE BOOMGAARD | MiBiz jboomgaard@mibiz.com GRAND RAPIDS — Tensions between Michigan craft beverage producers and the state regulatory agency appear to be ratcheting up with the filing of a new federal lawsuit, MiBiz has learned.

In the case filed last week in the U.S. District Court for the Western District of Michigan, Sawyer-based Greenbush Brewing Co., Hudsonvillebased Farmhaus Cider Co., the Michigan Cider Association and Grand Rapids-based Vander Mill LLC are suing the Michigan Liquor Control Commission. The parties allege the

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agency’s enforcement actions and licenses, was in violation of state law Regardless of the federal question revisions stateBALASKOVITZ liquor code enacted regarding the state law, Greenbush By to ANDY | MiBiz over its bonded transfers of cider, last fallabalaskovitz@mibiz.com are unconstitutional, and that which it purchased from Vander Mill. owner Scott Sullivan said the comthe state laws are preempted by federal In the court documents, Greenbush pany met the requirements in the laws regarding production sale aresaid the enforcement division told the revised Michigan Liquor Control GRAND the RAPIDS — Cityand officials of alcohol, particularly which is at acompany it “was required to ferment Code that would allow it to particireviving plans forcider, a solar project classified as wine. pate in the bonded transfer of wine. former Grand Rapids landfill as theevery drop of wine that it sold,” seized Plaintiffs, who say their businesses Greenbush produces some of its own city sorts through broader questionsall of its cider inventory and told the are being financially harmed because company to stop using its small winewine and cider under the new definiBy JESSICA YOUNG | MiBiz about potential generation at seven of the actions, also allegeproperties. the new law maker license, effectively barring the tions, thereby qualifying it under state jyoung@mibiz.com other city-owned is unconstitutionally law to be eligible for bonded transfers.

The Grand vague, Rapidsleaving Office ofproducer from selling all cider and wine. beverage producers open to “arbitrary “This has happened to a number hen Grand Rapids-based Sustainability is leading an Energy The lawsuit challenges the constiand capricious” actions. of breweries before us, and for whatMulti-Automatic Tool and Advisory enforcement Committee that, amongtutionality of the seizure, which was Theother lawsuit stems is from the MLCC theeffected without a search warrant. The ever reason, no one has been willSupply Co. started searchtopics, considering enforcement division’s finding on June ing to stand up and take MLCC head ing for prospective acquisipotential for solar projects to helpstate currently is holding about $7,200 19 thatmeet Greenbush, which holds both in Greenbush’s property, according to on,” Sullivan told and MiBiz. “IfCulver, I thinkright, formed their own company to Cedar Run Decoy founders Corey Lucas, left, Boyd tions several years ago, the move came as a 100-percent renewable microbrewer and small winemaker SeeinLAWSUIT on pagePHOTO: 3 JESSICA YOUNG stores today. a reaction to many of the company’s cusenergy goal for city operations bycourt filings. produce traditional waterfowl gear not found tomers buying directly from small shops.

2025.

Convinced that he needed to diverA study conducted by the U.S. sify his business in order to compete, Department of Energy’s National President James Byl went looking for Renewable Energy Laboratory opportunities, but it looked at eight sites — including took a few years for the Butterworth Landfill on the the pieces to fall into city’s southwest side — for potential place and find the solar installations. After faulty modright target. eling this summer produced results

By JESSICA YOUNG | MiBiz “We hunt and we spend a lot of time out there “I began to look showing most projects would have jyoung@mibiz.com talking about how we can do things better and how three years ago, but the cost the PAGE 4 city over the 25-year life of some of the products we were using just weren’t companies that I saw the projects, officials are revisiting BATTLE CREEK — Cedar Run Decoy Co. LLC aims working for us,” Lucas said. “We wondered why at the time just didn’t the study, said Alison Waske Sutter, SEE PAGE 16 to provide hunters with new ways to get back to we couldn’t just simplify things, get back to the seem to be the right who leads the sustainability office.

Byl the basics of waterfowling. basics.” fit,” Byl told MiBiz. “We anticipate the results will The startup grew out of the frustration owners As a result, the experienced hunters decided “Five, six, seven years ago, coming out of show it does make sense economiCorey Lucas and Boyd Culver experienced in tryto team up and build their own products, at first the recession, I think I needed a few years cally and financially for us to install ing to find traditional gear — think hand-carved for themselves and now for others hunting from to rebuild as well. Now, banks are willing to solar at some facilities,” Waske Sutter decoys common in their grandfathers’ generation the potholes of the prairies to the big waters of the lend and it seems like a good time.” told MiBiz. — amid the motorized cheap plastic products freGreat Lakes region.

In July, Multi-Automatic, a minorityThe biggest of the eight is the quently stocked at most sporting goods shops. owned wholesale distributor of machine Butterworth Landfill site, which See CEDAR RUN DECOY on page 6 could potentially host a 15-megaSee M&A ACTIVITY on page 5 watt project, according to studies.

The city pursued a 2.25 MW project there in 2016, but the plan was abandoned after the developer “disappeared” and stopped communicating, city officials said previously. $2 million, according to federal securities filings.

The city hopes to issue a request Partners hope to incentivize developers to add ‘hundreds’ of units The group as of early July said in the filing that it for proposals by the end of the year had secured more than $1 million from investors. for a new project that would simiBy SYDNEY SMITH | MiBiz and securing local planning approvals from a The six investors in the fund include the larly be developed by a third party. ssmith@mibiz.com municipality, said Ryan Kilpatrick, executive direcCommunity Foundation, Holland-based finanFor at least some of the remaintor of Housing Next, an initiative focused on supcial/investment services firm Brooks Capital ing sites, however, Waske Sutter HOLLAND — A new fund aims to cover pre-develporting housing solutions in Ottawa County.

Management LLC, the West Coast Chamber of anticipates the city building and opment costs to incentivize developers to add “Very often, the development community is Commerce, and members of the Padnos family owning the solar projects. affordable housing in the Holland and Zeeland going to build what they know is successful in a who own Holland-based Louis Padnos Iron and The federal study looked at areas, MiBiz has learned. market,” Kilpatrick told MiBiz. “It’s a risk and it Metal Co. Two other investors asked to remain seven city-owned sites: the Lake The goal for the Holland/Zeeland Housing Pretakes a lot of front-end work to convince a municanonymous.

Michigan water filtration plant in Development Fund Inc. is to create projects that ipality that it’s the right project. Our goal would be The capital should be enough to accomplish the Ottawa County, the Market Avenue would make financial sense for a public or private to position a development appropriately for the mission of the fund, said Mike Goorhouse, presiretention basin, City Hall, the Grand developer to take on after pre-development work right group.” dent and CEO of the Community Foundation. The Rapids Police Department downis completed.

Housing Next, the Community Foundation of investors are hoping to initiate “hundreds” of units town station, the Bridge Street Fire The pre-development work can include site the Holland/Zeeland Area and several investors across the targeted communities, he said.

See SOLAR on page 3 control, environmental inspections, site planning helped organize the fund, which is targeting to raise See HOUSING FUND on page 15

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‘BACK TO THE BASICS’ Startup CedarINSIDE: Run Decoy brings traditional waterfowling Commercial gear back to the market

Lending Report

New fund aims to spur affordable housing development in Holland

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BUSINESS AS USUAL?

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Deep Dive: Immigration

Court ruling dashes plans for new AHPs

Amenity-rich Class A office space still in demand in GR, suburban markets

Commercial Lending Report Deep Dive: Immigration Part 3

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SERVING WESTERN MICHIGAN BUSINESS SINCE 1988

‘FLIGHT TO QUALITY’

6.8.2020

Industry 4.0

Closing of Kent County Land Bank presents unknowns for nonprofit developers

Could better commuter transit aid talent attraction?

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sales@mibiz.com | editor@mibiz.com | 616-608-6170 MiBiz / MARCH 30, 2020

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FOCUS: TRANSITION/SUCCESSION PLANNING

Early financial planning smooths path for company succession

By MARK SANCHEZ | MiBiz msanchez@mibiz.com

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xperts say many business owners don’t plan for their eventual exit until they are ready to leave or have begun to see the day they depart.

Even fewer take steps over the years leading up to that point to make sure their personal finances are planned out and in good order so they can carry on with their lifestyle after their exit.

Personal financial plann i ng by busi ness ow ners occurs “usua l ly not soon enough,” sa id Jef f Williams, a senior financial adviser and managing principal at Grand Wealth Management LLC in Grand Rapids.

“A majority of business Williams owners tend to focus the vast majority of their resources on the business and not as much on their personal finances,” Williams said.

“Some do good planning, but I’d say a lot of business owners are totally focused on the business, put everything they have into the business and neglect the Bajor personal side of planning.”

Quite often, that’s because they’re more devoted to building and running the business,

rather than personal financial planning for the future, and have linked so much of their net worth to the company.

Profits from the company are “just plowed back into the business and the thought is oftentimes that the business owner can make more money reinvesting in the business than they can outside the business,” Williams said.

Just as business owners should plan well ahead for the eventual transition of their companies to a new owner or succession to different leadership, they need to keep their personal finances in mind at the same time.

“For many business owners, the business is their life’s work. It’s generally their biggest asset, it’s their livelihood. It’s generally their best-performing investment, and so it is generally what they love to do,” he said. “A lot of business owners spend a lot of their energy on the business, put profits back into the business and nurture the business, and don’t always do the type of planning they should be doing for the eventual transition of the business.

“A best practice would be to separate the business finances from the personal finances.

Treat the business as a business. A successful business should be profitable and an owner should be taking profits from the business and create some level of financial independence from the business.”

Finding the time to plan All business owners need a well-developed personal financial plan that’s separate from their business, said Doug Bajor, a senior wealth

management adviser at Greenleaf Trust in Kalamazoo.

Personal financial planning should “go hand in hand” with business planning, Bajor said. Even if the company records steady profits and their net worth grows because of their

holdings in the business, personal financial planning by owners “will be secondary,” he said.

Bajor estimates that one-third to one-half of business owners “have really developed a clear strategy, number one, for the company

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FIVE KEY CONSIDERATIONS FOR CHOOSING A FAMILY BUSINESS SUCCESSOR

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significant amount of the world’s wealth is generated by family owned businesses. Some estimates provide that the total economic impact of family businesses to the global GDP is over 70%, and family businesses employ just over half of workers in the United States. Despite these impressive statistics, family businesses often struggle to implement successful succession plans. In fact, it is suggested that nearly half of family business owners have no succession plan in place at all, and only around 30% of all family businesses make the transition to the second generation, 12% to the third generation, and just 3% to the fourth generation and beyond.

There are many factors to creating a successful succession plan, but one of the primary considerations is choosing the right successor.

Below are five key considerations to choosing the right successor for your business:

1. Communicate your intentions First and foremost, it is essential that you communicate your intentions to your family early and often. This means having frequent discussions with your family about your plans and aspirations for your business in the future.

These discussions should occur even before your children may be old enough to work in the family business. Having frequent family meetings with all immediate family members in attendance is a good way to ensure your intentions are communicated consistently and openly to all family members. Taking this first step will help avoid potential disputes and hard feelings among family members, which is the ultimate goal to implementing a smooth, successful transition.

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2. Gauge interest By maintaining frequent discussions about your intentions, you are able to gauge which, if any, of your children are interested in working in the business and particularly in a leadership capacity. Often, this interest develops over time as children become more familiar with the day-to-day operations of the business and the requirements of a leadership positon. At this stage, it is important to also allow your children the opportunity to explore other career opportunities they may be drawn to naturally.

3. Determine strengths and weaknesses Once you have communicated your intent and begun to gauge a family member’s interest in the business, it is essential to analyze each candidate’s strengths and weaknesses for the leadership position. In order to do so, it can be helpful to have each candidate work in different capacities of the business. Your successor will need to understand every facet of the business as much as you do, and the best way to learn each candidate’s skills and temperament is by watching him or her perform in varying roles throughout the business. Additionally, it is a good idea to have outside advisors or an advisory board provide input on candidates’ strengths and weaknesses.

Outside advisors can provide invaluable, objective input that is free from bias.

themselves to you and to the other employees. Be sure to give each candidate time to learn, change, and grow. Great leaders are not made overnight.

Given time, you will see which candidate has the drive, skills, influence, and temperament necessary to be your successor.

5. Communicate your decision

4. Give each candidate the opportunity and time to prove themselves

Lastly, it is essential that once you have selected a candidate, you communicate that decision to your chosen candidate. It is equally important to keep other family members apprised of your decision and address any concerns they may have regarding the succession plan.

Selecting the best candidate to be your successor should be a business decision. Evaluate all options, allow each candidate to prove

While selecting a successor creates a foundation on which to build a successful family business transition, there are other key

considerations for the transition including business governance documents as well as estate planning and trust administration.

Selecting a collaborative legal team will assist you in navigating all the legal factors and the implications to your unique family situation.

For further information on creating a successful family business transition, contact Andrea Snyder or another member of the Rhoades McKee Business Law Team.

rhoadesmckee.com Visit www.mibiz.com

“A lot of business owners spend a lot of their energy on the business, put profits back into the business and nurture the business, and don’t always do the type of planning they should be doing for the eventual transition of the business.”

— JEFF WILLIAMS Managing Principal at Grand Wealth Management LLC

and, number two, have a pretty good handle on their overall net worth.”

“They may have pockets of investments through different advisers, spread over a number of different firms, yet they don’t have a really good, clear picture for it,” he said. “It’s easy to get caught up in the energy of the day and the challenges of the day, but it’s good to bring them back into the fold (to focus on) different issues that may come to affect them, what are their broader goals and their longer goals, and to take a more positive focus on it.”

Future focused Through good financial planning, when the time comes to sell, owners will have better positioned themselves personally for the future. They won’t have to rely solely on the

proceeds they make from the transaction, giving them greater flexibility in selecting a buyer if they place a high value on what happens to the business and their legacy after the sale.

As well, if owners lack a well-developed personal financial plan and have not positioned themselves well personally for the future, they may set an asking price for the business that’s too much, according to Bajor.

“That can stymie a deal, if there’s a set figure in mind that isn’t going to be realistically attained, either through a financial buyer or a strategic (buyer),” Bajor said. “That can slow the process quite a bit.”

In other cases, an owner may pursue a deal structure and demand terms that limit the pool of prospective buyers, especially if the owner has heavy personal debt, he said.

If all or a majority of an owner’s personal net worth is not tied up in their business, they can “be a little more patient” in seeking a buyer and negotiating a sale, Bajor said.

A strong personal financial plan for an owner after an exit from the business typically involves a mix of stocks and bonds in an investment portfolio, Williams said. A personal financial plan also forces owners to think about what they need to live on once they depart, as well as issues such as transitioning wealth to family and any charitable giving, he said.

Personal financial planning also helps an owner to consider what they want to do after a sale “when they don’t have a business to go to every day,” Williams said.

“Oftentimes, business owners love what they do and they have spent so much time in the business, even knowing how they’re going to spend their time is difficult,” he said.

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FOOD BIZ

During pandemic, food-focused nonprofits face heightened demand, volunteer constraints

By JESSICA YOUNG | MiBiz jyoung@mibiz.com

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hen Gov. Gretchen Whitmer announced the first two cases of COVID19 in Michigan and declared a state of emergency on Clark Whitney Wideman March 11, Lisa Wideman knew Meals on Wheels Western Michigan would be forced to adapt to a new reality. create more fear in a population that “The very next day, it became very is already compromised either physiapparent that we were going to lose cally or emotionally or financially. some key volunteer delivery groups,” It’s really important that we stay the said Wideman, COO at Meals on course as long as we possibly can for Wheels Western Michigan. them.”

Normally, Meals on Wheels Meals on Wheels is just one of the Western Michigan is powered by volmany local nonprofit organizations unteers who transport food to more that have had to rapidly transform than 6,500 seniors each year. People operations in the wake of efforts to who receive the meals are unable to slow the spread of COVID-19. As more leave their homes because of illness people move into self-isolation within or physical mobility. Many of the relitheir homes, organizations lose valuable volunteers who transport food able human resources. At the same and much of the staff who keep Meals time, the volume of people who need on Wheels running are also seniors. help has skyrocketed alongside a total Older adults and people who have shutdown of schools, business closerious underlying medical conditions sures and widespread unemployment. may be at higher risk for more serious complications from the highly contaServing needs gious COVID-19 virus, according to In the first week after the state ordered the Centers for Disease Control and all K-12 schools closed on March Prevention.

16, Grand Rapids-based Kids’ Food “They’re afraid. Volunteers and Basket delivered 33,000 meals to chilour staff who are older, in many cases, dren who are unable to get adequate decided to self-isolate,” Wideman said. nutritious food with“We’ve had to really pivot out the breakfasts and quite a bit.” lunches served in school To accommodate the buildings. new conditions, Meals on Sponsored by: “Strong access to Wheels began using the DAN VOS healthy nourishing food resources they still had CONSTRUCTION is some of the most to deliver extra “shelfCOMPANY important work in the stable” meals to seniors, world — especially in a in case of further disrupcrisis,” Kids’ Food Basket CEO Bridget tion in service. As well, drivers began Clark Whitney told MiBiz. dropping the meals off on porches The organization — which norinstead of inside homes. mally sends “sack suppers” home with “It’s a very fine line because we’re students before they leave school each really worried about passing the virus evening — serves children who attend by continuing services, but we have schools where 70 percent or more of seniors very, very afraid that they are the student population receives free not going to get their meals. We’re their or reduced-cost lunch, an indicator of security net,” Wideman said. “If we familial and regional poverty. don’t deliver to them, it’s just going to

FOOD BIZ

“As long as it’s safe and responsible to do so, we’re going to continue serving especially where the needs are greatest,” Whitney said. “We had had some preparation for this because last year, during the polar vortex, we served emergency meals. But this is very, very different. Not only do we need to reach as many children and families right now that are in need of access, but we also need to do that by taking extreme measures to mitigate risks and to protect the kids that we’re serving and our volunteers and our team.”

Kids’ Food Basket, which usually uses hundreds of volunteers per day to pack and organize food donations, has been forced to work with just 30 volunteers per week who are following strict distancing and safety protocols.

The building is also cleaned multiple times a day, according to Whitney.

Meals are distributed three days a week at community and school sites in four counties, which change “by the hour,” Whitney said.

“Things are changing really quickly, and we don’t see this pandemic reducing the amount of people that need our services,” she said. “We see this pandemic only increasing the need for Kids’ Food Basket.”

Staying flexible The coronavirus crisis has brought together local nonprofits with missions around food security like never before, according to Wende Randall, director of the Kent County Essential Needs Taskforce.

“I’ve been really impressed,” Randall told MiBiz. “I really appreciate all the energy that people have been putting into their partnership.”

Organizations are banding together to share ideas, donations and information. They’re also asking one another for help when they need it.

“We have done a lot of work and relationship building behind the scenes in order to ensure that we have strong communication throughout these networks, and it’s really been visible now in the last

Grand Rapids-based Kids’ Food Basket delivered 33,000 meals to children in the first week after the state ordered all K-12 schools to close. COURTESY PHOTO “Those are things that people can week seeing everyone come together, receive multiple quantities of and provide updates regularly, offer up they’re going to stay safe without resources that they wouldn’t normally refrigeration for a week or two weeks have to offer up,” she said. “Things or three weeks,” she said. like vehicles for delivery of meals or Some organizations also have making different locations available requested more canned goods. for food drop-off sites — those types Fresh fruits and vegetables are still of things, people are really working a big part of the sack suppers that Kids’ collaboratively.”

Many food pantries and organizations have had to change the way they mobilize and utilize volunteers, just like Meals on Wheels and Kids’ Food Basket. The contagious nature of the virus and increased need for services have also forced organizations to change their intake processes, according to Randall.

“They’re easing up some of those requirements because we’re expecting — LISA WIDEMAN that people who maybe COO of Meals on Wheels Western Michigan normally wouldn’t need or wouldn’t use the food pantries are going to need to Food Basket puts together for chilnow,” she said. “Also (they’re trying) dren, which are eaten within a day or to reduce face-to-face time together, two. The nutritional value of food has because some of those intake connever been more important than now, versations can be 10 minutes or they according to Whitney. can be an hour and a half. In order “Because of the nature of this panto ensure that we’re making the food demic, food is even more critical — pickup processes as quick and effifood is medicine,” she said. “Healthy cient as possible, we’re letting go of food is critical for a strong immune some of those processes now.” system and when families are struggling to get healthy food resources, ‘Food is medicine’ they are more susceptible to this Although organizations are still virus and is affecting them in a worse assessing their changing demands, way. If we are to work on our collecdonations like shelf-stable fruits and tive health, as a community, we must vegetables — such as apples and carbe intentional about serving and conrots — are needed by multiple food necting with and caring for our most organizations, according to Randall. vulnerable citizens.”

“We’re their security net. If we don’t deliver to them, it’s just going to create more fear in a population that is already compromised either physically or emotionally or financially.”

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NONPROFIT ORGANIZATIONS

Stock market volatility could affect philanthropy in years ahead Foundations act quickly to get funds to people affected by coronavirus shutdown

invested to provide stability and consistency during market volatility that we are now seeing. We have a spending policy that helps to guide the foundation and its fundholders in the distribution of funds we pay out each year.”

The GRCF’s spending rule is 5 percent of the average fair market value for the past 16 quarters based on its fiscal year, which

By JANE SIMONS | MiBiz ends June 30. jsimons@mibiz.com “We monitor and benchmark that on a regular basis and that policy is the same one used at many foundations,” Vander Roest he amount of money area foundations are able to give said. “We manage payouts in the type of market volatility we are away this year won’t change much, if at all, but 2021 now experiencing. We average it to provide stability of payouts could see some level of decreases depending on what over a longer period of time.” happens with the stock market in subsequent quarters.

That policy is completed at the end of the fiscal year and does That’s according to Mike Goorhouse, president and not change. Every July, GRCF looks back at the last 16 quarters, CEO of the Community Foundation of the Holland/Zeeland Area, does an average and calculates 5 percent to determine the funds who said “from a dollars and cents standpoint, the short answer is available for payout, Vander Roest said. ‘no’ to any changes in giving levels” for his organization this year.

The foundation’s current budget calculation was completed “This is not me punting, but it’s too early to tell because of in July 2019. the weird dynamic,” he told MiBiz. “A month “The market volatility we’re currently experiencing has no ago, the markets were at 28,000. Obviously, we impact,” Vander Roest said. know it tanked, but how much we give away This may not be the case when calculations are done for 2021. is determined by calculations that look back That payout will likely be affected because the quarters ending in three years.”

March and June of this year will have been affected by the volatilFoundation leaders will look at those 12 ity in the markets. However, Vander Roest said he does not expect quarters to see how many end up significantly the effect to be “significant” for GRCF. lower and how low they may be, Goorhouse While he said he doesn’t know what’s going to happen with said. the markets as businesses and organizations navigate their way “March will be significantly lower, but the through shutdowns as part of efforts to contain the spread of the Goorhouse second quarter ends in June and we’ll see how coronavirus, he said there will be short-term implications. As well, much lower that is,” he said. “We’re hopeful, the foundation has the ability to make any necessary changes in but we know that this first quarter number the long term. is going to be bad. If we can “Most of our funds are invested in a balanced bounce back part way by the plus-pool, which is a very widely diversified group second quarter and even more of investments, assets, stocks, bonds, and hedge by the third quarter, by the funds,” Vander Roest said. “This will help to limit Sponsored by: time we do the calculations for the volatility of the funds. We are more diversified GRAND RAPIDS 2021, it might not impact us as than just stocks and bonds in our portfolio.”

COMMUNITY much.”

He credits the depth and breadth of knowledge FOUNDATION Vander Roest However, if the market that members of his investment review committee remains as low as it has been bring to the table for the foundation’s ability to get for the remainder of the calendar year, and three or four of the through tough times. quarters remain suppressed, it will have a more meaningful effect “We’ve weathered through a lot of stuff, but this being a medical on how much the foundation is able to give in 2021. issue makes it even more complex. I’m not going to tell you there’s “We’ll be looking at how long it stays low and how this will not concerns from a financial side,” Vander Roest said. “While we’re impact 2021,” Goorhouse said. “The markets being cyclically down always concerned when the market drops as quickly as it has been, are not helpful, but they’re not impacting what we give away in we have a really amazing investment review committee that man2020. Back in 2008/2009 following the recession, the markets ages our investments and assets.” bounced back fairly quickly.”

The Grand Rapids Community Foundation also is expressing Concerns for vulnerable populations cautious optimism about its giving levels going forward.

Aside from the effect that the coronavirus could have on future “Obviously this virus, like a lot of things that come along, was philanthropic giving, Goorhouse expressed deep concerns for unexpected and unprecedented, but through its 100-year history, members of the community who are facing financial instability our foundation has proven to be a source of consistent support for because of layoffs and a lack of access to critical services because our community,” said Stan Vander Roest, CFO of the Grand Rapids of the state-mandated stay-home order that began March 23.

Community Foundation.

“All of these things hit the most vulnerable the most. They miss “We want to make sure our community can thrive and grow,” two paychecks and they’re in trouble,” he said. “It could be that he said. “We have financial policies and procedures and funds

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NONPROFIT SECTOR NEWS

“As we make investments in our community, we have to ensure that financial opportunities are available to all.”

Reneé Williams

they’re not able to pay the rent or a mortgage or buy food. You combine that with schools being closed and kids in our community are in homes that are not safe because of physical or emotional abuse.

“If school was a respite for you or if work was a place where adults got away from abusive home situations and now you’re at home for four weeks and you’re not really allowed to go anywhere, that’s a problem.”

He also cited mental health, which may likely become more of an issue because of the coronavirus.

“Even the most stable of stable people right now are struggling with the uncertainty, and this time we’re in is not helping,” Goorhouse said.

But his foundation, like so many others throughout the state of Michigan, created an emergency fund because they wanted to do what they could in the moment.

The day after statewide school closures were announced on March 12, as part of the state’s effort to stem the spread of the coronavirus, a coalition of the Community Foundation of the Holland/ Zeeland Area, the Grand Haven Area Community Foundation and the Greater Ottawa County United Way came together. Each entity contributed money to the newly created Emergency Human Needs Fund, which began with a total of $85,000. The group gave away $40,000 on March 13.

The coalition then began seeking contributions from thirdparty donors and has collected a total of $400,000. As of last week, 15 Ottawa County nonprofits have received more than $120,000 in emergency grants. They include Barnabas Ministries, City on a Hill, Community Action House, Coopersville Cares, Four Pointes Center for Successful Aging, Good Samaritan Ministries, Harvest Stand Ministries, Holland Rescue Mission, Kids’ Food Basket, Love in Action, Love Inc. Allendale, Love Inc. Hudsonville, Resilience, The People Center and The Salvation Army.

Serving immediate needs As committed dollars are received, the coalition is working quickly to distribute the funds to the greatest need.

“Local nonprofit agencies are facing unique challenges in providing services due to the social distancing mandates — now further compounded by the Stay Home, Stay Safe shelter-in-place order signed

by Governor Whitmer,” Goorhouse said in a statement announcing the coalition. “These agencies have committed to keeping local citizens housed, fed and healthy, but need additional support from the community. Monies from the Emergency Human Needs Fund are distributed in real-time to help these hardworking agencies manage the unexpected financial costs caused by the pandemic.”

He acknowledged that this is a very different process from what community foundations typically go through, but the needs are immediate and the financial resources need to be in place quickly.

He and coalition members talk every Tuesday and Friday for about 30 minutes by phone, discuss the needs, determine the money raised and send it out.

“There’s no time to convene a big community process,” Goorhouse said. “Each of us will eventually decide what to do with our regular grant-making processes. This rapid response makes us act very differently to make decisions quickly and get things out the door.”

Likewise, Vander Roest said the GRCF has partnered with Heart of West Michigan United Way on the Kent County Coronavirus Fund and is working extensively with partners in the community.

“In addition to immediate needs, there will be long-term impacts and this is the best thing we can do to respond to those long- and short-term needs,” he said. “We are actively working with all of our community partners to assess what the needs are on a short- and longer-term basis.”

Meet our One Hundred New Philanthropists Reneé Williams partners with Grand Rapids Community Foundation to leave a personal legacy. She says that financial stability is essential for creating a thriving community.

Learn more about how you can make an impact through philanthropy by contacting Jenine Torres at 616.454.1751 or jtorres@grfoundation.org.

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reporter’s NOTEBOOK Mark Sanchez writes about finance, health biz and life sciences.

616-608-6170 • msanchez@mibiz.com

WFH tips to get through the quarantine

N

ow that so many people are working from their basements or spare bedrooms, or like me have a rickety desk setup off to the side in the living room, I want to say: Welcome.

Working from home has its advantages and drawbacks, and its own abbreviation, WFH. I have worked at home for more than eight years in my role at MiBiz. While I surely would never pass myself off as an expert, I do know a thing or two about how to make it work.

So here’s my quick advice for people who are now required to work at home: n You will need to develop the discipline and routine required to avoid easy distractions so you can focus on your work and stay productive. For some of you, that requires figuring out activities for the kids who are no longer going to school. (I love empty nest-hood!) n Set up a designated spot in the house for your workspace. n Separate your work time from your family time. n Step away occasionally for household chores. Take 10 minutes or so every now and then to take care of the laundry, empty the dishwasher, do a little cleaning and so on. Your spouse will love you even more for it. n The flexibility is great, but do not attempt for a second to exploit the situation. Act like a pro, do your job and handle your business. Remember: This is a time to shine, demonstrate value and show the bosses how well you can step up and respond in crisis. You better believe they are thinking the same way. n Likewise, for employers: Give people a little slack. All of us are in this situation together and people are learning to adapt on the fly. They are bound to have a little difficulty adjusting. Now is not the time for rigidity and inflexibility. Presume people are professional, earnest and trying to do their best at a difficult time. n You will not miss, even for a nano-second, rush-hour traffic. n Taking a walk in the middle of a gorgeous spring day is a beautiful thing. So is quietly sitting at your desk on a warm, sunny morning as a cool breeze drifts through the windows and the birds are chirping away. n Dress code? Sweat pants and old, torn T-shirts are perfectly appropriate attire for your home office. There are, of course, some exceptions. n Keep a hat within arm’s reach at all times in case of that unexpected Skype call or knock at the door. n Routine is good, although there is no longer a formally designated lunch hour or break time. n Not showering until 3 p.m. is absolutely fine. n You will need to develop tactics to avoid developing a daily sense of isolation. Talking to people on the phone, communicating with supervisors and co-workers through email, texts and DMs, or engaging in thoughtful conversation with the pets or the house plants may not completely cut it. n Supervisors take note: Sometimes a DM is just not a good way to communicate or provide direction. Human interaction still works effectively in the Digital Age. Bottom line: This is a time for clarity, not to make people read your mind. Pick up the phone and have a conversation to make sure everyone is on the same wavelength. n Try to avoid scheduling telephone and conference calls at the same time garbage trucks are pounding down the street for weekly pickup. Street sweepers are even worse. n The cat(s) will require your immediate, full and undivided attention at least once a day, probably more. Accommodate them. They will not go away easily, and resistance is futile. n Yes, your neighbor is a tad crazy and you will wonder how you never noticed it before. Learn to ignore it. n You will come to quickly have bad thoughts about people who insist on mowing their lawns, using leaf blowers or operating snow blowers during the day as you are trying to concentrate and get work done. Learn to cope and adjust accordingly. n And, finally, stay safe, stay healthy, and wash your hands.

Mark Sanchez’s home officemate, Willow. PHOTO: MARK SANCHEZ

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MARCH 30, 2020 / MiBiz

FINDING A NEW NORMAL

Mental health pros offer advice for anxious employees, employers

By MARK SANCHEZ | MiBiz

know that what they’re feeling is normal and that it’s common, and that a lot of us are in the same boat in terms of feeling anxious or scared or feeling disconnected,” she said. “It can be really healing for people to just have that sounding board and that listening ear of someone to help validate what they’re going through.”

msanchez@mibiz.com

T

he abrupt disruption in daily routines and work lives has surely raised the anxiety level for people, on top of what they may already feel from the COVID-19 pandemic.

Even before Gov. Gretchen Whitmer’s stay-home order last week, many employers already had employees working from home. That can cause issues for employees who were suddenly disconnected from co-workers with whom they spend each day.

“A lot of our folks enjoy working with each other, so all of a sudden they’re finding they have less contact with colleagues and friends and less of an opportunity to socialize with people that they kind of consider to be a secondary family in many ways.

That’s a big loss for them,” said Dr. Tory Seif, a psychologist and manager of the Forest Hills clinic for Pine Rest Christian Mental Health Services.

“All of a sudden you don’t have it, and if you’re a creature of habit, that can really drive you bonkers,” Seif said.

“If you’re used to an office environment or something and all of a sudden you’re thrust into isolation, you are not used to having to develop that — that’s a different roller coaster.”

Seif’s advice to ease that ride: Find ways to stay connected through texts, video conferencing, and daily phone calls. That’s the same advice Pine Rest has provided its own employees who now work from home.

Employees who’ve never had to work at home should establish a daily routine and structure. Continue your daily exercise or workout routine, set a schedule for the day, and separate work time from family time, Seif said.

“That sense of normalcy is good for us all,” said Seif, who also stresses that exercise, whether at home or going out for a daily walk, helps to burn off anxiety.

Employees are bound to feel anxious about the future if the company has had to halt any operations during the crisis or faces financial difficulty, according to behavioral health professionals.

The Grand Rapids-based Pine Rest in the last few weeks has had “quite a few” requests from employers asking how to help employees handle shifts in the business and work structure because of the COVID-19 pandemic. The change is even more difficult for introverts where work is their main social environment and they don’t do much socializing in the evening or weekends, Seif said.

“Now they’re in a spot where they don’t have any social opportunities.

That’s a big change,” he said.

Seif also advises people coping with the pandemic to avoid spending too much time on social media, “to be sensible” about where they get their news or updates, and to avoid “information overload” that only worsens anxiety.

“There’s a certain point in time where too much information, even if you think it’s helpful, is just going to strengthen your fears,” Seif said.

“I would advise people to check out information once a day at night, and then unplug. Read a book. Watch a

Seif

Meldrum

movie. Play a video game. Chat with your family.”

Developing a new hobby or taking on a home project can help fill the time away from work, providing “something that at the end of this you look back on and say, ‘This is how I moved forward during this time,’ versus ‘This is how I waited this out for the impending senses of doom,’” he said.

“There’s a certain point in time where too much information, even if you think it’s helpful, is just going to strengthen your fears. I would advise people to check out information once a day at night, and then unplug. Read a book. Watch a movie.

Play a video game.

Chat with your family.”

— DR. TORY SEIF Psychologist at Pine Rest Christian Mental Health Services

Importance of listening In Muskegon County, the community mental health provider HealthWest has seen a similar increase from employers seeking advice on helping employees cope with the crisis.

HealthWest has been in constant contact with individuals, other agencies and businesses to look at partnering and doing shared messaging to staff on COVID-19, “and how to take care of each other,” said Community Relations Director Lauren Meldrum.

Meldrum encourages supervisors to make sure they take the added time and truly listen to the concerns of employees who suddenly had their daily routine upended.

Understanding and flexibility, particularly for workers with young children at home because schools are closed, helps to ease the anxiety and fears of employees, Meldrum said. Let them vent, she added.

“It’s really important to listen to your staff and to help validate their concerns of what they’re going through because it is scary and uncertain,” Meldrum said.

“People oftentimes are not looking for someone to try and fix a situation or have all of the answers, but it is very helpful to have someone who is willing to listen and to help them to

Setting boundaries Employers also can establish “healthy boundaries” for staff now working from home. Let them know it’s OK during the day to take a break to prepare meals, do household chores, take a walk, or to spend some time with their children.

It’s also important to inform them “that when the work day’s done, it’s done and try to turn that off switch so they come back refreshed the next day,” Meldrum said.

“When people start working at home, sometimes it’s easy to work too much and not feel like there’s an off switch,” she said. “That can be a hard transition for a lot of people, feeling like they need to be on all of the time.”

Meldrum suggests that managers let staff know of any behavioral health or other support that’s available, perhaps through an employee assistance program or other means.

Mobile apps, websites and online training on “mindfulness” can “help people focus on being present in the moment and try not to be anxious and worry for the future,” she said.

Employers should communicate to employees how they’re working to keep them safe and mitigate their risk during the pandemic, Meldrum said.

They also need to make sure they help to answer any questions employees have and “be really honest and transparent in those answers.”

“At the same time, it’s OK not to know all of the answers. Be up front about that. Just to let people know that while you might not know what’s going to happen, that we’re in it together and that they have support from their leaders and people on their team” helps to ease anxiety, she said.

Humor helps A sense of humor or lightheartedness can help as well, Meldrum said. One day last week HealthWest had a “pajama party and encouraged people to wear their silly pajamas. We could all see each other on the Zoom video,” she said.

Sharing jokes through group texts or chats can keep people connected when they are stuck working at home, Meldrum said.

As they navigate through the crisis, employers should keep work routines, schedules and staff meetings “when it’s possible.”

HealthWest has increased the frequency of staff meetings “so people are having that sense of community,” Meldrum said. Staff in the Zoom calls are encouraged to use the video function “so that they can see each other’s faces and laugh when someone tells a joke.”

“Actually seeing people’s kids and dogs in the background can help you to feel connected to someone in a different way,” she said.

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