Crain's Detroit Business, January 16, 2023, issue

Tate takes House speaker role. PAGE 3

RAPID GROWTH

Manufacturers grapple with declining morale

Increased stress from pandemic and beyond takes toll on mental health

BY KURT NAGL

ere is something broken at manufacturing plants across Michigan, and it isn’t just the supply chain. Employee morale has su ered profoundly as troubles in the automotive industry over the past three years, including sta ng shortages, production volatility and recession fears, weigh on the workforce, according to labor leaders and industry experts. e issue was brought to the forefront after a fatal shooting in the parking lot of a Forvia plant in Highland Park last month, the day after it was reported the company planned to lay o 268 workers. Police say an argument between two employees over tools was the cause of the shooting.

It’s impossible to ignore all of the other stressors that may have contributed to the violence, said Waymon Halty, vice president of UAW Local 155, which represents workers at the Forvia plant. It also remains to be seen what long-term impact the incident could have on employees.

“Obviously, with the history of manufacturing, they just need bodies,” Halty told Crain’s. “We just need a human being to be there, and what a lot of times happens is, we get a lot of people with stress and a lot of people with heartache and a lot of people with hardships and all it takes is a small little spark to ame up something.”

BY NICK MANES

In the spring of 2021, as the COVID-19 pandemic fueled a buying spree, nearly three-quarters of homes placed on the market in Southeast Michigan were sold within two weeks.

ose days are over.

Data from Seattle-based real estate brokerage Red n and elsewhere shows that the time homes are sitting on the market around metro Detroit — and the rest of the country — has been steadily in-

creasing. It’s yet another sign of a cooling real estate market.

While acknowledging that the length of time a typical home sits on the market is up signi cantly from the highs of mid-2021 and into last year, the situation is far from dire, according to metro Detroit real estate agents.

Updated homes with newer ooring and countertops, as well as updated plumbing, xtures and other infrastructure do get snatched up quickly by buyers who tend to be impervious to the higher interest rate environment, agents told Crain’s.

ESTATE INSIDER Dan Gilbert has reached the $100 million mark in east Detroit riverfront property acquisition.

REAL

TECHNOLOGY

Will artificial intelligence improve your next trip to Ford Field?

The Grand Rapids area bucks slowing economic trends as nine projects, including a medical hub and airport expansions, are full steam ahead. PAGE 9

BRYAN

CRAIN’S

 BUSTED BRA SHOP MOVES DETROIT LOCATION DOWNTOWN

THE NEWS: e rapid expansion of Lee Padgett’s Busted Bra Shop company continues as the specialty bra shop last month moved its New Center area store to the Lofts of Merchant Row building in downtown Detroit. Padgett relocated in early December from her original space at 15 E. Kirby St. in the Cadillac Place building, which opened in late 2013, to a space on the ground oor at 1247 Woodward Ave. e new location is near a cafe Padgett operated, Cafe de Troit, from 2003-06.

WHY IT MATTERS: Padgett expects her stores — two in Detroit, one in Rochester Hills, another in Ann Arbor and two in Chicago — to bring in about $3.2 million in revenue in 2023. at would represent a 30 percent increase over 2022.

 FOUNDERS BREWING CO. MERGES INTO PARENT COMPANY

THE NEWS: Founders Brewing Co. and Colorado-based Avery Brewing Co. merged with Mahou Imports into Mahou USA. Mahou Imports in 2019 purchased a 90 percent stake in Founders, which in 2014 sold a 30 percent stake to Mahou to help bolster Founders’ expansion.

WHY IT MATTERS: e creation of Ma-

hou USA will allow for a larger portfolio of craft beers, including many products from the Madrid brewery that were previously unavailable in many parts of the U.S., while retaining each company’s character and equity, Mahou said in a release.

to retitle vehicles they purchase to Michigan” on their own.

 LAFONTAINE ADDS GRAND RAPIDS AREA DEALERSHIP

THE NEWS: LaFontaine Automotive Group LLC is adding to its West Michigan market presence with a deal to acquire Grand Rapids-based Pfei er Lincoln Inc. e deal also includes Pfei er Wholesale Parts distribution business, which generated annual sales in excess of $21 million.

COURTS

DIA ordered not to move Van Gogh painting in dispute

 CARVANA AGREES TO SURRENDER NOVI LICENSE

THE NEWS: A Carvana Co. outlet in Novi agreed to surrender its dealer license in lieu of further administrative action by state regulators, who in October suspended that license over titling, registration and odometer issues they found to be in violation of the Michigan Vehicle Code. e Carvana dealership in Novi agreed it had violated the law and to have its dealer license revoked for three years, the Department of State said in a statement.

WHY IT MATTERS: Michigan residents can still buy vehicles through Carvana’s website, though they will “need

WHY IT MATTERS: e deal adds the second Lincoln store to the Highland Township-based LaFontaine Automotive Group, which entered the Grand Rapids market in August 2022 with the acquisition of the former Keller Ford.

 DELTA TERMINATES DETROIT CABIN CLEANING CONTRACT

THE NEWS: Delta Airlines plans to terminate its cabin cleaning service contract at Detroit Metropolitan Airport on April 1, resulting in the potential loss of 516 jobs. Prospect Airport Services noti ed the Michigan Department of Labor and Economic Opportunity of the job losses.

WHY IT MATTERS: e largest job category impact, 331 jobs, are groomers, who clean the inside of the plane between each departure. Delta has already signed a successor contract.

e Detroit Institute of Arts has been ordered to not remove, alter or damage a Vincent van Gogh painting on exhibit after a lawsuit was led claiming the painting was stolen before arriving at the museum. e 1888 painting, known as “Une Liseuse De Romans” or “ e Novel Reader,” is at the DIA as part of its ongoing “Van Gogh in America” exhibition, which wraps up Jan. 22.



A lawsuit led Tuesday in the U.S. District Court for the Eastern District of Michigan claims the painting was borrowed by the DIA from someone who was not the rightful owner and did not have title to the artwork. e lawsuit, led on behalf of Gustavo Soter, said the Brazilian art collector purchased the Van Gogh in 2017 for $3.7 million, and he now estimates it to be worth $5 million.

“Plainti asserts that an unidenti ed third-party immediately took possession of the Painting, but that plainti never transferred title to or any interest in the Painting to the third-party,” the lawsuit claims.

On Wednesday, U.S. District Judge George Caram Steeh issued a temporary restraining order against the DIA to prevent the painting from being moved. He also set a hearing for oral arguments for 10 a.m. Jan. 19.

According to a display at the DIA, the painting is on loan to the museum from a private art collector in São Paulo, Brazil.

The 1888 painting created by Vincent van Gogh titled “Liseuse De Romans,” also known as “The Novel Reader” and “The Reading Lady,” is on display at the Detroit Insitute of Arts as part of a special exhibit that ends Jan. 22. | COURT DOCUMENTS

New House speaker traveled from Spartan Stadium to Afghanistan and back again

Joe Tate was 2 months old when his dad, Coleman, a Detroit reghter, was killed in the line of duty after being thrown o -balance from a fast-moving re engine during an emergency response in 1981.

His mom, Debra, was a Detroit public school teacher and the “rock” for Tate and his three siblings following the loss.

“I grew up learning about service through them. His memory was something that was always

talked about … what he did and why he decided to serve the city that he grew up in and eventually give his life for it. It had a big impact, just the kind of person he was even though I didn’t have a chance to really know him,” Tate told Crain’s. “Everything she did was really for us. ... She really taught us about service and giving back to the community that raised us.”

Tate, 41, became speaker of the Michigan House when lawmakers began their two-year session Wednesday. It is the latest step on a path in which the co-captain of

the 2003 Michigan State University football team spent time on NFL practice squads, completed tours of duty overseas, earned three master’s degrees, worked for Detroit’s economic growth agency and won election to the Legislature.

e unassuming third-term representative, a Detroit resident, is the rst African American to head the 110-member House and the chamber’s rst Democratic speaker in a dozen years.

“I’m in this role because I’m standing on the shoulders of oth-

ers,” said Tate, whose mother died recently. “Black legislators have paved the way for me to have this opportunity. at’s de nitely something that stays with me as I step into this role.”

Voters’ approval of a term limits amendment in the fall election could enable him to lead the majority or minority longer, a change from shorter leadership stints that were seen when legislators could serve up to six years in the House.

Heart procedures move out of hospitals

Costs are about half in surgery centers

DUSTIN WALSH AND RACHEL WATSON

On Jan. 6, the first heart catheterization procedure was performed outside of a hospital in Michigan.

e procedure, which involves guiding a thin tube into a blood vessel to the heart to treat clogged arteries or irregular heartbeats, was the culmination of nearly ve years of Dearborn-based Platinum Medical Group working with the state’s Certi cate of Need Commission and the Centers for Medicare and Medicaid Services to be able to perform the procedures.

e state CON approved outpatient cardiac procedures in ambulatory surgery centers in September 2021, a move supported by CMS in recent years to lower costs.

A heart catheterization costs about $1,800 in an outpatient ambulatory surgery center, plus physician fees, compared to more than $4,500 plus physician fees in the hospital, said Elias Kassab, cardiologist and president and CEO of Platinum Medical. at’s due in large part to the smaller facilities requiring less equipment and sta than full-service hospitals.

“We can do the same procedure in the ambulatory setting for half the cost with equivalent safety,” Kassab told Crain’s. “We think this is huge news for the state of Michigan.”

Platinum was the rst to receive approval to perform the procedures — which include heart caths, pacemaker installation and percutaneous coronary intervention treatments, along with stents and angioplasty — but health systems are applying to perform the outpatient procedures as well.

Valade’s former adviser pleads not guilty to stealing from heiress

e former adviser to a Gretchen Valade trust has pleaded not guilty to four felony charges alleging he stole millions from the late Carhartt Inc. heiress, entrepreneur and philanthropist.

Grosse Pointe Farms Municipal Court Judge Charles Berschback gave attorney David Sutherland, 57, a $250,000 bond with no surety and ordered him to wear a GPS tether and surrender his passport during an arraignment Wednesday afternoon on charges of embezzlement of more than $100,000; embezzlement of more than $100,000 from a vulnerable adult; and conducting a criminal conspiracy. ey are felonies each worth up to 20 years in prison.

Sutherland’s attorney, James Sullivan, said his client was not a ight risk and has been present at all previous court dates, including civil proceedings as lawsuits were led in Wayne County Circuit Court and Wayne County Probate Court over his handling of the Gretchen C. Valade Irrevocable Living Trust.

Sta in Grosse Pointe Farms Municipal Court on ursday said Sutherland posted bond.

Berschback said “the amount that’s being alleged (was stolen from Valade) is staggering,” although a precise dollar gure has not been revealed. A Wednesday afternoon press release from Nessel’s o ce described the gure as “millions of dollars.”

Sullivan said that what Attorney General Dana Nessel’s o ce, which brought the charges, was considering

in its case was “a small fraction of the whole story,” without elaborating.

“I think once the whole story is told and people hear it, there is going to be a much di erent climate and attitude toward my client than there is right now,” Sullivan said.

e next court date is Jan. 25 at 1 p.m. for a probable cause conference.

The alleged crimes

Sutherland’s handling of the trust — which was to bene t her former business partner, omas Robinson, and charitable endeavors after life insurance bene ts were paid — has been the subject of lawsuits in both Wayne County Circuit Court and Wayne County Probate Court.

House Speaker-elect Joe Tate, of Detroit, speaks at the inauguration of Gov. Gretchen Whitmer on Jan. 1 at the Capitol in Lansing. | DALE G. YOUNG/CRAIN’S DETROIT BUSINESS

DAVID EGGERT

KIRK PINHO

Attorney David Sutherland walks out of Grosse Pointe Farms Municipal Court after pleading not guilty on four felony charges, including embezzlement and conducting a criminal conspiracy. | CRAIN’S DETROIT BUSINESS

Gilbert crosses $100M milestone in east riverfront spending spree

For those keeping track at home (this might be just me, TBH), Dan Gilbert has now reached the $100 million mark in east Detroit riverfront property acquisition.

e billionaire real estate and mortgage baron crossed that with the estimated $12.5 million purchase of the 108-room Roberts Riverwalk Hotel last month.

Since the beginning of the pandemic, Gilbert has been assembling a sizable portfolio of o ce, commercial and hotel properties — not to mention land and parking — roughly between Chene and Adair streets south of Je erson Avenue, becoming a major property owner in that neck of the woods.

e precise vision for the area has not been revealed, although Gilbert’s Bedrock LLC real estate company — which declined comment for this piece — has started some place-making activity in the area that is to include murals and other features.

Gilbert picked up the 420,000-square-foot former UAWGM Center for Human Resources for an estimated $52 million a little over a year ago; a large portfolio of former Stroh family property in two separate purchases for no less than $35.65 million; a chunk of east riverfront land pre-pandemic for $5 million; and a new parking lot with a unique backstory at Je erson and Chene for $1.3 million.

All in, so far, that puts his running tally at $106.45 million.

We’ll see what, if anything else, he picks up — not to mention what he does with it, of course.

New leases in Birmingham

A prominent law rm and insurance company have picked up new downtown Birmingham o ces in a building owned by developer and landlord Ron Boji.

Detroit-based Clark Hill PLC has signed a lease for about 33,200 square feet on the second and third oor of the building at 220 Park St., while Hylant Insurance is taking nearly 11,000 square feet on the

building’s rst oor in long-term leases.

Clark Hill’s previous Birmingham o ce is the 151 South Old Woodward building, while Hylant was at 2401 W. Big Beaver Road in Troy.

e deals were brokered by Southeld-based brokerage rm Advocate Commercial Real Estate Advisors.

A press release from Boji last month said the 220 Park Ave. building was purchased a year ago and $21 million was spent renovating it.

The wrath of the Bath

Struggling legacy junior-box retailer Bed Bath & Beyond Inc. is widely reported to be considering a bankruptcy, as well as selling o business parts or all of it, the New York Times and other outlets have reported.

And for Michigan, that means ve retail stores are set to be closed.

e company announced Tuesday the closure of stores at Ann Arbor, 3645 Washtenaw Ave.; Auburn Hills,

4780 Baldwin Road; Brighton, 8467 W. Grand River; Lansing, 5845 W. Saginaw Highway; and Muskegon, 5540 Harvey St.

If BB&B ultimately folds, retail landlords could be left looking for a new user to ll their vacated space.

Here are the chain’s locations in metro Detroit: 

Roseville, 44,500 square feet.  Troy, 36,400 square feet.

Sterling Heights, 42,600 square feet.  Auburn Hills, 43,700 square feet.

Taylor, 30,400 square feet.

Beverly Hills, 41,100 square feet.

Novi, 33,300 square feet. 

Rochester Hills, 38,200 square feet.  Brighton, 31,200 square feet.  Westland, 25,400 square feet.

In all, the retailer occupies nearly 339,000 square feet across 10 stores in the region, according to CoStar Group Inc., a Washington, D.C.based real estate information service.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

Detroit considering tax change, Duggan says

ARIELLE KASS

e city of Detroit is looking into ways to change its tax structure to incentivize development, Mayor Mike Duggan said Tuesday, saying the city was “80 percent of the way to a solution” that would allow a split-rate tax structure.

e taxation method would mean properties are taxed on land value, not improvements like structures, and could encourage speculators holding property because the cost to do so is low to sell or develop the land.

While Duggan said at the Detroit Policy Conference that conceptually there are plans to move it forward, he also said it’s “the most legally complicated thing I’ve ever seen.”

“We don’t yet have a formula that works,” the mayor said. “Conceptually, it’s a great idea.”

e state Legislature would have to approve any reforms, Duggan said, then voters in the city would have to approve any changes. He said if a solution is found, property owners would encourage people not to sit on land.

At an earlier panel, Nick Allen, a Ph.D. candidate in urban studies and planning at the Massachusetts Institute of Technology, said a new tax structure could bring tax relief to both residents and businesses in the city. If done right, he said, the e ort would bene t people who have been historically hurt by disinvestment.

Such a move could take away uncertainty from future development because land values would be known, said Roderick Hardamon, the CEO of URGE Development Group. He also said a change in taxation could reduce the need for future abatements, something Duggan echoed.

And Anika Goss, the CEO of De-

troit Future City, said such a change could wipe out tax foreclosure completely.

“ ere’s an absence of additional support for people who have been here and built up the city,” Allen said. “ is is that support.”

Duggan said there are “lots of upsides” for the discussion.

“We’re working hard at it,” he said.

Additionally, Duggan told conference participants that he has plans to beautify the city before it hosts the NFL Draft next year. Work will continue on the Joe Louis Greenway, he said, and garbage pickup will be increased. e mayor also said he’s asked the state transportation department to give the city money and permission to maintain the freeways, including cutting grass there.

“If I’m going to get the blame, I might as well have the responsibility,” he said of the road e orts.

Duggan said residents are xing up their homes as they see progress elsewhere and the city will continue to prioritize murals and other work to make the city look nicer.

“I’m obsessed every day,” he said of the beauti cation e orts.

Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB

Detroit Chamber downsizing into new downtown o ce

e Detroit Regional Chamber is shedding some of its o ce space as it moves into a new downtown o ce building.

e business organization is leaving the 26,000 square feet it leases in the Dan Gilbert-owned One Woodward high-rise to move into 18,500 square feet in South eld-based Redico LLC’s One Kennedy Square building on Campus Martius Park.

Others that have shed space downtown or nearby during the COVID-19 pandemic as hybrid work remains popular include Deloitte LLP, WeWork and Meridian Health, among others.

e chamber’s lease expires this summer, according to a news release. It occupies two oors in the One Woodward building, where it has been since 1997. When it moves to One Kennedy Square, it will consolidate everyone on one oor, which the chamber said in a release was a priority.

e chamber is leasing space that had previously been occupied by Meridian Health, although it’s not part of the large block of 40,000 square feet the health care company put up for sublease last year.

South eld-based HED — formerly Harley Ellis Devereaux Corp. — is the project architect.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

The Roberts Riverwalk Hotel has 108 rooms on the east Detroit riverfront. Dan Gilbert paid an estimated $12.5 million for it last month. COSTAR GROUP INC.

Detroit-based Clark Hill PLC has signed a lease for about 33,200 square feet on the second and third oor of the building at 220 Park St., while Hylant Insurance is taking nearly 11,000 square feet on the building’s rst oor in long-term leases. GOOGLE MAPS

Kirk PINHO

Struggling legacy junior-box retailer Bed Bath & Beyond Inc. is widely reported to be considering a bankruptcy, as well as selling o business parts or all of it. | BLOOMBERG

The

city of Detroit is looking into ways to change its tax structure to incentivize development, Mayor Mike Duggan said CITY OF DETROIT/ FLICKR

REAL ESTATE

KIRK PINHO

The One Kennedy Square o ce building on Campus Martius Park in downtown Detroit. | COSTAR GROUP INC.

Why a ban on noncompetes could be good for business

The Federal Trade Commission took aim earlier this month at a long-held practice by businesses to drown out workforce competition.

e agency proposed a new rule that would prohibit employers from imposing noncompete agreements on workers — a practice that’s been upheld by the Michigan Supreme Court for nearly 40 years.

e agency says the practice is widespread and exploitative with nearly 30 million American workers held under such agreements, most of which are skilled and educated employees. In Michigan, a 2019 survey by the Economic Policy Institute revealed roughly 55 percent of the state’s more than 4 million workers were subject to noncompete agreements.

“ e freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said FTC Chair Lina M. Khan in a statement. “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand.”

e agency is right. Noncompetes sti e worker mobility, which in turn lowers productivity which in turn lowers economic growth. Noncompetes contribute to the dreaded brain drain Michigan’s business leaders have harped on about for a generation. And, nally, noncompetes are not even required to protect critical trade secrets.

But, beyond the moral conundrum of contractually prohibiting employees from seeking greener pastures in the eld in which they excel, these agreements contribute to an unhappy workforce and ultimately damage the economy writ large.

Contractual handcu s.

e basics are such: Noncompete agreements often force workers, upon leaving the company they are contractually obligated to, to leave their chosen occupation entirely, thus leaving behind the valuable training and experience that would/could advance the eld; Noncompetes also reduce job churn. Workers leaving jobs for better ones increases overall productivity in the economy by matching appropriate skills to appropriate jobs and employers.

And let’s not forget that rms use these agreements in a wholly clandestine manner by pushing the noncompete agreement after an employee has accepted a job o er. e U.S. Treasury estimates 37 percent of workers with a noncompete were informed of the noncompete after accepting the job and after they turned down competing o ers.

One need not look farther than California to see why eliminating noncompetes is good for business. California banned the legal enforcement of noncompete clauses in 1872 — though it’s estimated 19 percent of workers in the state are still forced to sign the agreements — long before it became a technology hub and a world capital of innovation.

A study published in 2015 in the journal Research Policy, showed that noncompete agreements encourage inventors to leave their homes for states that do not enforce the bans, and that the most talented inventors are also the most likely to be negatively af-

fected by such contracts. It’s a homegrown brain drain, the researchers say, stripping some regions of local talent while enriching others.

e study, which looked at the behavior of people who had registered at least two patents from 1975 to 2005, focused on Michigan, which in 1985 reversed its longstanding prohibition of noncompete agreements. e study’s authors found that after Michigan changed the rules, the rate of emigration among inventors was twice as a high as it was in states where noncompetes remained illegal. Basically, Silicon Valley wouldn’t have

LETTER TO THE EDITOR

happened with the enforcement of noncompete clauses, particularly tting as Michigan continues its quest to be a tech hub in the age of electric cars.

But even if you, public relations rm owner or engineering rm executive, don’t care about the economic impact of noncompetes, you must still ask why you are willing to enforce them.

It’s costly and time consuming to seek legal injunctions against a former employee. And, really, what are you protecting?

What it means to be middle class in Detroit

LETTER TO THE EDITOR:

ank you for your recent article about what the “middle class” means in metro Detroit. In addition to identifying the income necessary to be middle class, it is also important to highlight why a strong middle class is important to both Detroit and the region and to consider who has access to the middle class.

At Detroit Future City, we believe that everyone in the region must be able to achieve not only a basic standard of living, but also be able to meet their unique needs and become part of the middle class. e middle class represents a position of economic security, well-being, and access to opportunity for education, entrepreneurship, and career growth that serve as a bedrock for generational change. A strong middle class is also important to the nancial well-being of the city and region as it provides the basis for a stable tax base for city government.

But the middle class is currently out of reach for many and disparities exist between the city and region. DFC’s recent State of Economic Equity 2021 report found that Detroit experienced little to no change in its

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com Please include your complete name, city from which you are writing and a phone number for fact-checking purposes.

share of middle-class households since 2010, resulting in one of the lowest shares of middle-class households in the country. In 2019, only 27 percent of Detroit households were middle class compared to 40 percent of households in the metro Detroit region. is has largely been driven by Detroit’s loss of African American middle-class households over the past 20 years. Today, 54 percent of the African American middle-class in the region lives outside of Detroit.

Growing, retaining, and attracting the middle class is key to growing an equitable and prosperous Detroit and region. e city must o er high quality neighborhoods that can attract middle-class households and retain those whose incomes rise. We need to make Detroit a place that the middle class wants to invest, live, and grow in. To do this, we must address historic disparities and avoid displacement of one population by another.

Ashley Williams Clark

Vice president Detroit Future City director

Center for Equity, Engagement, and Research at Detroit Future City

Sound o : Crain’s considers longer opinion pieces from guest writers on issues of interest to business readers. Email ideas to Managing Editor Michael Lee at malee@crain.com.



Crain’s Managing Editor Michael Lee talks about the week’s stories at 6:15 a.m. Mondays on WJR 760 AM’s Paul W. Smith Show.

Dustin WALSH

The FTC has moved aggressively to curb the power of major corporations under Chair Lina Khan, a legal scholar and Washington outsider whose appointment by President Joe Biden signaled a tough antitrust stance. BLOOMBERG

Will arti cial intelligence improve your next trip to Ford Field?

Detroit Lions use tech to improve fan experience

BY JAY DAVIS

e Detroit Lions are partnering with a New York-based arti cial intelligence and machine learning company to help make the football games better for the team’s biggest supporters.

e Lions last week announced that Wallaroo.AI has signed on to be the NFL franchise’s o cial arti cial intelligence and machine learning partner. e Lions and Wallaroo will work together to scale the team’s use of AI across a variety of areas, according to a news release.

Wallaroo technology will be integrated into the new Trace3 Analytics War Room at Ford Field, established earlier last year.

In the rst phase, Wallaroo will work directly with the Lions’ analytics team during home games to improve the fan experience in areas such as ticketing, parking, concessions, retail and fan sentiment as it relates to the in-arena experience, the release states. Wallaroo technology will be integrated into the new Trace3 Analytics War Room at Ford Field, established earlier last year.

Using AI and machine learning will allow the Lions to discover trends quicker and enable team sta to react in real time, Lions Senior Vice President of Strategy and Analytics Ashton Mullinix told Crain’s in an email.

On the eld, analytics helps coaches to optimize play-calling during games through statistical breakdowns of various plays and in-game situations. e Lions also will use analytics to learn things like when and where fans purchase concessions, where they sit in the stand, and how a team’s standing a ects fan spending at games.

“Whether it is analyzing ticketing data, concession transactions, retail information or football data there is an opportunity to improve decision-making across our company by using the most up-to-date and accurate data for each project,” Mullinix said. “Our goal is to make sure we’re using data in the most e ective way possible to help improve our perfor-

mance on and o the eld.”

Improving the in-game experience for fans is vital during a time when attendance is falling amid the COVID-19 pandemic, and more fans opt for an in-home experience, which includes no travel or parking fees and less-expensive drinks and snacks. NFL attendance figures remain strong, unlike a collegiate counterpart that has seen attendance decline every year since 2015.

e partnership begins this month. Both sides declined to share more details on the deal.

Pro sports teams such as the Lions generate mass quantities of data from sources such as ticket sales, concessions, retail, social media,

vendors and player stats. e data represents a wealth of information, Wallaroo Labs CEO and founder Vid Jain said in the release.

“... but it’s only valuable if you can understand and apply it to make better decisions. is is where AI comes in,” Jain said. “ e Lions’ commitment to applying AI to optimize performance and nd new ways to use their data both on and o the eld makes this an exciting collaboration for Wallaroo.AI.”

e Lions are very strategic about their partnerships, said Alex Ballew, the team’s director of data strategy and insights. With Wallaroo, Ballew said, the team saw an experienced partner that has used AI to drive positive performance results.

“We look forward to leveraging this technology across our business and providing a better fan experience to our fans,” Ballew said.

Mullinix said the deal is the culmination of the Lions working over the last handful of years to build a strong foundation of analytics across the organization.

“... we’re always trying to identify ways to improve our business, especially through new, innovative ideas,” he told Crain’s. “In order to do that, we are constantly evaluating technology partners and products to ensure we are partnering with the right companies to achieve this goal.”

Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

& DRINK

Ford’s Garage forges on with expansion plans

BY JAY DAVIS

e local franchisee of a Florida-based business is moving forward with plans to expand in Michigan.

Ford’s Garage restaurant franchisee Billy Downs plans to open a second location at 44175 12 Mile Road in Novi in the rst quarter of 2023, according to a Ford’s Garage spokesperson.

e Novi location will follow a West Dearborn location Downs opened in 2017. Downs also plans to open three other Michigan locations. e sites will be announced at a later date, according to the spokesperson. e expansion plans were announced early last year.

e site of Downs’ rst Ford’s Garage, located at 21367 W. Michigan Ave., has been sold.

According to Wayne County land records, Ford's real estate arm, Ford

Ford’s Garage second Michigan restaurant will open by the end of March in Novi.

Franchisee Billy Downs plans to open three more Ford’s Garage locations. FORD’S

Land Development Co., sold the Ford's Garage building to an entity called 21367 Michigan Avenue LLC for what Crain's estimates is $4 million in November. at entity is registered to Christopher Barbat in Birmingham.

e restaurant will continue to operate out of the space.

Downs still plans to open three more Ford’s Garage restaurants in Michigan. Each restaurant will be about 8,900 square feet with seating for 250 guests and employ 95-115 people. e total investment to open a Ford's Garage, including a $50,000 franchise fee, ranges from $1.46 million to $6.35 million.

Crain’s Senior Writer Kirk Pinho contributed to this report.

Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

Financial challenges? We’re here for you!

The Detroit Lons have enlisted New York-based analytics company Wallaroo.AI to help the team track aspects of the game to improve the fan experience and more. | DETROIT LIONS

Sta in the Detroit Lions’ Trace3 Detroit Lions Analytics War Room at Ford Field track data such as ticket sales, parking, concessions, retail and fan sentiment to help improve the fan experience. | DETROIT LIONS

FOOD

Ilitch, Ross seek $616M in ‘brown eld’ funding for projects

ing:

A series of developments and redevelopments in the Ilitch family’s District Detroit area is seeking $616 million in so-called “transformational brown eld” funding, which until now has been mainly given to Dan Gilbert projects in Detroit.

e total value of the request that Stephen Ross’ New York City-based Related Cos. and the Ilitch family’s Olympia Development of Michigan is requesting was revealed during a Neighborhood Advisory Council meeting held at Cass Technical High School on Tuesday evening.

In all, some $797 million in public funding through a variety of incentive and loan programs is being sought, including $48 million or so in Downtown Development Authority funding — from a new loan program for deeply a ordable housing downtown, as well as infrastructure — and another $37 million in Neighborhood Enterprise Zone funding and $96 million in commercial property tax abatements.

“ ere are no incentives until the projects are constructed,” Andrew Cantor, president of Related’s Michigan division, said during the meeting. He said the hope is to break ground on the rst project — a proposed new ofce building — by the third quarter, contingent upon public nancing approvals.

e transformational brown eld incentive package needs to be approved by the Michigan Strategic Fund as well as the Detroit City Council and the Detroit Brown eld Redevelopment Authority board.

A press release from the Detroit Economic Growth Corp. says that the 10 projects, consisting of new highrise buildings and rehabbed historic buildings, are expected to generate $751 million in new city tax revenue over 35 years and another $1 billion for the state. Other taxing authorities would receive $394 million during that time period, a press release says.

e transformational brown eld program allows developers to capture various taxes — primarily state taxes but also those that would otherwise be captured by the DDA — to help oset the cost of major developments in Michigan, although the vast majority of the funding authorized during the program’s ve-year lifespan so far has gone to Gilbert developments downtown.

Other public funding

On Wednesday, the DDA board signed o — with some passionate dissent — on perhaps $48.75 million in public funding for deeply a ordable District Detroit area housing as well as infrastructure improvements.

e approvals give way for $23.75 million in DDA loans for 139 a ordable units in three new developments at 50 percent of the area median income as well as up to $25 million for road improvements, utilities, security and public space upgrades for the area.

If none of the projects have started by Jan. 1, 2029, none of the funding would be awarded and would be distributed to other projects.

At points, some on the DDA board expressed serious frustration with the funding proposed for the e ort.

"I support housing. I support infrastructure. But I cannot support $25 million being given to one entity when

(there are) so many demands, so many needs for the continuation of redevelopment and prosperity of this entire downtown," said Marvin Beatty, a DDA board member and Hollywood Casino at Greektown executive.

"It's too goddamn much money and too much tax money here to get nothing, to see it all go to one place. It's unconscionable for this board to just sit and give away a totality of its money with any expectation that there is any growth money possibility down the road. Help somebody else. Help them. I love 'em, but help somebody else."

ere were also concerns about affordable housing loan forgiveness parameters stating that if those living in the a ordable units have been city residents for at least three years, the loans could be forgiven, whereas previously the requirement was ve years. at could contribute to gentrication, he said.

Ultimately, however, the board gave its blessing to the funding, with only one or two no votes on the various proposals.

The process

Wednesday's DDA voting at the Guardian Building downtown caps o what has been a frenetic few days of discussions around taxpayer dollars going toward the District Detroit, the Ilitch family-controlled area where its Detroit-based real estate company, Olympia Development of Michigan,

and mega-developer Stephen Ross's New York City-based Related Cos. are working on some $1.5 billion in proposed projects.

“Incentives are only recommended for approval after a thorough nancial review and a determination that a project would not be able to proceed without that form of public support,” Kenyetta Hairston-Bridges, executive vice president of economic development services at the DEGC, said in the release. “ e developer receives nothing up front and must put up the upfront costs of their development themselves. Ultimately, these incentives are discounts on the future taxes they’d be paying on these developments, which will generate far more revenue than the value of the incentives.”

e total $797 million incentive package discussed represents about 53 percent of the $1.5 billion proposal cost, while the $616 million transformational brown eld package represents 41 percent.

Nevan Shokar, associate director of special projects for the DEGC, said during the Tuesday NAC meeting that without incentives, the returns on the District Detroit project would be 2 percent; with incentives, they are 4.4 percent. Cantor described the returns as “well less than the stock market but hopefully better than a savings account.”

“ is project cannot move forward without the incentives discussed here today,” Hairston-Bridges said at the

NAC meeting.

Originally billed as a program to help developers around the state transform communities with new and repurposed buildings, the overwhelming majority of the funding approved to date has gone to Dan Gilbert projects in Detroit, Crain’s reported in 2020.

e program allows for developers to capture taxes generated by newly created jobs and new residents tonance projects, as well as forgo paying sales taxes on construction equipment and materials, among other things.

In addition, Related and Olympia are seeking $133 million in captures that largely would go to the DDA, the release says.

e $1.5 billion proposal, revealed last year, calls for the creation of 1.2 million square feet of new o ce space, 695 residential units (nearly 140 of which would be considered affordable), 100,000 square feet of retail and 467 hotel rooms. ere is also a proposal to redevelop a series of residential buildings at Cass and Henry with 170 units, 84 of which would be a ordable at rents starting at 30 percent of AMI.

A new anchor to the area, following Little Caesars Arena, is the proposed $250 million Detroit Center for Innovation, a University of Michigan graduate school campus which would teach things like mobility, AI, sustainability, cybersecurity, nancial technology and other elds.

at plan has secured a $100 million earmark from the state in its budget process last year, plus a $100 million personal commitment from Ross, a Detroit native who is also the owner of the Miami Dolphins.

A ordable housing

Mayor Mike Duggan said Tuesday at the Detroit Policy Conference that Related and Olympia are the rst to pursue the DDA loans through the Housing, O ce, Retail Development and Absorption Fund.

e loans are an e ort to increase a ordable housing in the downtown area. e loan program is available for other developers building in the DDA area as well.

e Ilitches have already received hundreds of millions in tax incentives to build the new Little Caesars Arena on Woodward, among other projects.

In all, the Ross/Ilitch team is seek-

A $10.9 million DDA loan for a $216 million development of a new 20-story high-rise at 2250 Woodward Ave., with 20 percent of the units a ordable at 50 percent of Area Median Income. ere would be 287 units total. Construction would begin in the fall 2024.



 An $8.8 million loan for a $147 million residential project at 2205 Cass Ave. is would be a new 18-story tower with rst- oor retail and 261 residential units, 54 of which would be a ordable at 50 percent of AMI.

 A $4.1 million loan for a $68 million redevelopment of the former Hotel Fort Wayne at 408 Temple into 131 residential units. First- oor retail is planned, and 27 of the units would be a ordable at 50 percent of AMI. is project, in an earlier form, was announced in May 2017 but never materialized.

e loans come two months after the DDA signed o new parameters for its Housing, O ce, Retail Development and Absorption Fund allowing for loans up to 40 percent of the hard construction costs for developments in the DDA area with 20 percent of their units set at various AMI levels.

ere are no loans available under the program for a ordable units at 80 percent AMI; loans of 20 percent of hard construction costs for units at 70 percent AMI; loans of 30 percent of hard construction costs for units at 60 percent AMI; and loans of 40 percent for units at 50 percent AMI. At least 10 a ordable units are required to qualify for the loans, and loans would be capped at $200,000 per unit based on a sliding scale.

e loans have a term of 34 years with a 1 percent interest rate.

In addition, the committee on Jan. 6 signed o on $15.9 million in road improvements, $5.6 million in utilities, $1.5 million in security and $8.5 million in public space funding for the area.

e DDA is obligated for up to $25 million of that, and the rest of the funding sources have yet to be determined.

The timeline

Work would begin on the o ce building at 2200 Woodward this year, if the requested public incentives are nalized.

e District Detroit, since it was announced in July 2014, has been slow to materialize, and some of the projects announced in the more than eight years since have either not been built, remain half-built or took years longer than originally anticipated to start.

Keith Bradford, president of Olympia Development and e District Detroit, said the two buildings next to Little Caesars Arena that are partially built are among those being discussed by the development team although no rm plans have been nalized.

However, some new construction and redevelopment has taken place, including construction of the Wayne State University Mike Ilitch School of Business, a new o ce building at 2715 Woodward Ave. and the new Little Caesars Global Resource Center.

How much of the vision laid out by Ross and Ilitch in recent months becomes reality remains to be seen.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

KIRK PINHO

A new o ce building at 2200 Woodward Ave., currently surface parking in front of Comerica Park. Executives said it would have 493,000 square feet of o ce space and 28,000 square feet of retail. ILITCH HOLDINGS INC.

Nevan Shokar, associate director of special projects for the DEGC, said during a Neighorhood Advisory Council meeting Tuesday night that without incentives, the returns on the District Detroit project would be 2 percent; with incentives, they are 4.4 percent. |

KIRK PINHO / CRAIN’S DETROIT BUSINESS

OUTPACING MILESTONES

Nine Grand Rapids development projects slated for completion in 2023

GRAND RAPIDS — Despite supply chain snags, in ation, labor shortages and rising construction costs, Grand Rapids could see the start of a record number of new developments — including a few big projects slated for completion in 2023.

e city reported a banner year for new private investment in 2021. Now, Economic Development Director Jeremiah Gracia said, the city is on track to outpace those milestones again in 2022.

“When we ended ’21, we were wondering how the economic conditions would impact the deal ow. e real numbers are showing we actually had a larger number of projects and total investment (in 2022). So, we’re really focused on seeing that happen again in 2023,” Gracia said.

e city plans to report 2022 outcomes in the rst quarter of 2023, but Gracia said it’s clear what the report will show.

“Honestly, the demand at this point has not slowed down for us. ( ere are) still a lot of meetings and ongoing discussions, despite recent news coverage of rising interest rates and the like. We also know that we’re a growing market, and folks are taking that seriously,” he said.

While focused on retaining companies already headquartered in Grand Rapids, the city is to recruit new companies by connecting developers to tax incentive programs and improving quality of life in the region, Gracia said.

One of the city’s primary pain points is a housing shortage made worse by the cost of construction materials. Gracia said the city is looking to support mixed-use developments whenever possible through legislative policy and incentives.

Randy elen, president and CEO of e Right Place, an economic development nonpro t that covers eight West Michigan counties, painted a murkier picture of 2023. He forecast a “kind of bumpy” rst half of the year that could delay investment decisions as companies wait for calmer waters. But sometimes, the opposite happens, he said.

elen is excited about developments like the rst phase of the Gerald R. Ford International Airport $500 million expansion, which will add capacity to the region’s transportation network. His biggest concerns are severely low industrial real estate supply and an ongoing talent shortage as the state looks to compete in the EV battery space.

“HONESTLY, THE DEMAND AT THIS POINT HAS NOT SLOWED DOWN FOR US.”

—Jeremiah Gracia, Economic Development Director, Grand Rapids

CRAIN’S MICHIGAN BUSINESS: GRAND IN THIS PACKAGE

RAPIDS NEW TENANTS MSU’s Grand Rapids-based medical hub gains steam

10

MSU’s Grand Rapids-based medical hub gains steam

Spartan Innovations, tech consulting rm Twisthink to open this year in 7-story building

RACHEL WATSON

GRAND RAPIDS — A little more than a year after opening, an MSU development is garnering more interest in the hub it’s building for medical tech companies in downtown Grand Rapids.

Michigan State University’s seven-story, $85 million Doug Meijer Medical Innovation Building, which opened in late 2021 on Grand Rapids’ Medical Mile, expects to welcome two new tenants this year.

e MSU Research Foundation’s Spartan Innovations will open a satellite headquarters and startup incubator on the fourth oor early this year. Tech consulting rm Twisthink plans to move its headquarters from Holland to the building’s sixth oor in May.

at’s good news for MSU. As of Jan. 10, the building at 109 Michigan St. NW was about 77 percent occupied, with lease negotiations in progress for a few thousand more square feet, although leasing agent JLL has not disclosed names of prospective tenants.

Project background

e Meijer building project, which was aided by $19.5 million from Doug Meijer, was planned well before the pandemic upended the o ce real estate market. It is one of three buildings in MSU’s Grand Rapids Innovation Park. e others are the $88 million MSU Grand Rapids Research Center that opened in 2017 and a 10-story building housing Perrigo’s new $44.7 million headquarters that opened in July 2021.

ey are part of MSU’s long-term goal to establish a major clinical and research presence in Grand Rapids. e university moved its medical school to the city in 2010 after constructing the College of Human Medicine’s Secchia Center. Two years later, MSU bought the former Grand Rapids Press building, which it demolished in 2014 to make way for the Innovation Park.

In 2019, the school signed a longterm lease with Health Innovation Partners, a joint real estate development group made up of Chicago-based MB Real Estate, Walsh Construction/Walsh Investors in Chicago and Grand Rapids-based Rockford Construction to build the Meijer building and future Perrigo headquarters, along with a 600-car parking structure for the Innovation Park facilities.

All told, MSU received roughly $30 million in state and local browneld reimbursement and tax increment nancing incentives for environmental cleanup of the site. e reimbursements will be paid out over a period of 25 years.

In 2021, Lansing-based Anderson Economic Group conducted a study estimating the park’s economic impact at $339 million annually.

Where things stand

Mike Mraz, president of real estate development for Rockford Construction, said members of Health Innovation Partners have done a remarkable job luring tenants amid

“incredible market dynamics” brought on by the COVID-19 pandemic.

“It’s a brand-new building and in lease-up. Obviously, these things don’t happen overnight,” he said.

In fall 2022, the Meijer building’s anchor tenant, BAMF Health — a cancer-treatment startup whose name stands for Bold Advanced Medical Future — launched operations on oors one, two and seven of the building. Corewell Health leases the third oor, and Spartan Innovations will take up most of the fourth.

MSU operates bioinformatics, bioengineering and arti cial intelligence research on the fth oor.

And Twisthink will occupy part of the sixth oor.

The new tenants

Kyle McGregor, a director for Spartan Innovations, said his organization’s Grand Rapids headquarters — dubbed “ e Bridge” — will o er programs like the Conquer Accelerator for early-stage startups as well as events, coaching and funding opportunities for new companies. e Bridge will consist of 24 o ce spaces ranging from 239 to 2,394 square feet that can be leased by startups for $673 to $6,730 per month. Tax capture from the Grand

Rapids SmartZone Local Development Financing Authority, the MSU Research Foundation and venture capital fund the incubator.

McGregor said the startups Spartan Innovations will host will mostly be “health tech” companies in the nancial wellness, environmental, agricultural tech or medical tech spaces.

“I think it’s really just being open-minded about who these groups are and the impact that they could have,” he said.

Incoming tenant Twisthink helps industrial, mobility and life sciences companies with arti cial intelligence and the Internet of

MSU's Meijer Building, oor by oor

Here's what's inside (or coming to) MSU's new Grand Rapids facility.

Floor 1: BAMF Health, lobby.

Floor 2: BAMF Health; 10,000 square feet unoccupied.

Floor 3: Corewell Health.

Floor 4: Spartan Innovations; 5,000 square feet unoccupied.

Floor 5: MSU researchers; 11,000 square feet unoccupied.

Floor 6: Twisthink; 24,000 square feet unoccupied.

Floor 7: BAMF Health; communal terrace for tenants.

ings-powered devices, like robotic vacuums and feeding tubes with cameras.

Twisthink founder Robert Niemiec sees the Innovation Park as a place where West Michigan tech companies will meet in the future for events, collaboration and partnerships. e company’s former and current clients and partners include Corewell Health, Perrigo and MSU. Twisthink has about 50 employees and will have room to hire at least 20 more in the new o ce. Niemiec said most of its new hires and many of its clients are based in Grand Rapids.

“ ere’s hope and opportunity to serve others on the Medical Mile — but honestly even serve others that are in the region of West Michigan and are still grappling with their own needs for growth … in a way that’s linked to innovation,” he said.

Contact: rachel.watson@crain.com (989) 533-9685; @RachelWatson86

The seven-story Doug Meijer Medical Innovation Building is one of three facilities in the Michigan State University Grand Rapids Innovation Park that’s been underway for over a decade on Medical Mile. | ROCKFORD CONSTRUCTION

BAMF Health and the lobby occupy the rst oor of the Doug Meijer Medical Innovation Building, at 109 Michigan St. NW in Grand Rapids. | ROCKFORD CONSTRUCTION

SOURCE: JLL AND ROCKFORD CONSTRUCTION

Grand Rapids airport’s $110 million concourse expansion plan

RACHEL WATSON

GRAND RAPIDS — One of the fastest-growing airports in the U.S. is expanding to catch up with passenger demand and prepare for projected growth over the next 20 years.

Named the second-fastest growing airport in the U.S. by Airline Weekly in 2018, the Gerald R. Ford International Airport, at 5500 44th St. SE in Cascade Township, broke passenger tra c records for the seventh straight year in 2019. Like other airports though, Ford Airport experienced a dramatic downturn in business when the pandemic hit.

However by September 2022, the airport exceeded its pre-pandemic tra c levels, said Casey Ries, Ford Airport’s engineering and facilities director.

Grand Rapids’ growth as a destination is being driven by a robust convention and meetings business, renewed corporate travel, youth and amateur sporting events and weekend leisure business that is “o the charts,” said Airport board member Doug Small. Small is president and CEO of the Kent County convention and visitors’ bureau and destination marketing arm dubbed Experience Grand Rapids.

e increased travel contributes to the airport being “back to a growth mindset,” Ries said.

“With that comes the necessity for the airport to provide additional terminal core infrastructure for our traveling passengers, both business and leisure,” he said.

e expansion project, which launched in 2021, is part of the Ford Airport’s ve-phase, $500 million “Elevate” expansion campaign that includes terminal and parking upgrades, moving the air tra c control tower, adding a federal inspection station and streamlining the checked baggage and TSA operations. e project will take place over several years, with construction on the nal phase beginning in 2025 and completing in 2028.

In 2019, United airlines approached the airport about leasing an additional gate, but there were none available, Ries said. at year, Ford Airport conducted a master plan study that found three main constraints hindering the airport’s

growth: the terminal curb front, baggage claim area and aircraft gates.

e Elevate project will address all three pain points.

e rst phase — the $110 million Concourse A expansion — will add eight new gates, increase the number of seats per gate holding area, improve the executive lounge and expand dining and retail o erings. Ocials expect it to be complete in June 2023. Lansing-based Christman Co. is the construction manager with Lansing-based Mead & Hunt, Chicago-based HKS and Grand Rapids-based TowerPinkster handling architecture and design. Here’s what’s coming:

Gates

e Concourse A project will add eight new gates to its existing six, expanding the airport’s capacity to 22 gates.

e small-hub airport currently accommodates six airlines: United, Delta, American, Frontier, Southwest and Allegiant. e expansion will allow Ford Airport to sign additional carriers, including international airlines with direct ights to Latin America, the Caribbean and — someday down the road — hopefully Europe, Ries said.

Size

e expansion calls for widening the 66-foot Concourse A to up to 120 feet and lengthening it by 510 feet, adding more than 155,000 square

feet. Of that, more than 90,000 square feet will be designated as public use.

e original gate holding areas were designed to accommodate passengers on 30- to 50-seat planes. Today, the airport is ying aircraft with 150-plus seats apiece. Seating will be added to each gate to re ect that evolution, Ries said.

e improved business lounge will include tables where travelers can work on their laptops while they wait.

Food and beverage

e airport currently has one Starbucks, a grab-and-go counter with limited hours and only two restaurants — MI Taproom and Prospect Hill, which Founders Brewing Co. owns.

e expansion will allow for additional food and beverage kiosks and more seating, Ries said. ough the airport is not yet ready to disclose tenants, he said there will be an emphasis on local food and beverage businesses.

Immersive design

e concourse will highlight West Michigan life with representative artwork, color schemes and seating by West Michigan furniture companies, Ries said.

e rst part of the concourse will be decked out in blues to represent water, then tans to represent beach sand, greens for forest hues, andnally purple “city hues,” with a window at the far end that shows a frost-

ed outline of Michigan and the Great Lakes. A photo at the far end will show a view of the Great Lakes at nighttime, captured by Grand Rapids-born astronaut Christina Koch from the International Space Station.

“I think it’s important to acknowledge the airport is the rst thing you see when you get to town and the last thing you remember when you leave,” he said. “So it’s important to us when you step o the aircraft, you realize you’re in West Michigan.”

When the phase-one expansion

is complete, the airport will renovate the existing part of Concourse A, which it expects to complete in 2024.

e Christman Co., based in Lansing, is the construction manager on the Concourse A project, with Lansing-based Mead & Hunt, Chicago-based HKS and Grand Rapids-based TowerPinkster handling architecture and design.

Contact: rachel.watson@crain.com (989) 533-9685; @RachelWatson86

Project aims to catch up with demand, prepare for growth

A rendering shows eight new gates as part of the $110 million Concourse A expansion at Gerald R. Ford International Airport. The project is expected to be complete in June 2023.

| GERALD R. FORD INTERNATIONAL AIRPORT

A window at the far end of Concourse A will have a frosted outline of Michigan and the Great Lakes.

| GERALD R. FORD INTERNATIONAL AIRPORT

PROJECTS

From Page 9

It may be too soon to say how various issues a ecting future development will shake out, but the following projects are expected to bolster key sectors of Grand Rapids’ economy in 2023.

Business incubators

 Kzoo Station: A Community Kitchen + Eatery

This food startup incubator is part of the Boston Square Together plan by Amplify GR and its partners to redevelop 9 acres in southeast Grand Rapids into commercial space, affordable housing, an early childhood learning center, a food hall, a community center and green space.

Kzoo Station, which is primarily for women-owned businesses and entrepreneurs of color, will open in a 1,416-square-foot building that Rockford Construction is renovating at 1445 Kalamazoo Ave. SE in February. The building will be able to house about 20 entrepreneurs looking to start or grow food retail or restaurant concepts. Project cost was not disclosed.

 District 2012

Grand Rapids Area Black Businesses, a nonprofit founded by Jamiel Robinson, will open its headquarters in a renovated building at 2012 Eastern Ave. SE in spring 2023.

The 4,500-square-foot building will include co-working and retail space, a business incubator, a resource center and an outdoor public market. The budget is approximately $700,000. GRABB hired primarily Black-, brown- and woman-owned contractors for the project, including Grand Rapids-based Pure Architects, Tiffany Eden Design and Robinson’s construction management firm Isle Construction, which he established in May with William Robinson and Brad Laackman.

Health care



Corewell Health Center for Transformation and Innovation

Led by Rockford Construction, Corewell health system’s new $100 million West Michigan headquarters — originally slated to open in May 2023 but delayed until early 2024 — spans 4 acres at 635, 706 and 725 Bond Ave. NW. e site includes renovation of the adjacent 155,000-square-foot historic Brass Works Building at 648 Monroe, construction of a 160,000-square-foot, eight-story building on an adjacent surface parking lot, and two seven-story parking structures that will contain about 680 total spaces. e campus will consolidate 1,200 human resources, nance, facilities management, medical group and other administrative employees from 18 o ces across West Michigan and have capacity for about 800 more employees, according to documents led with the city.

Housing

Division Ave. will be developed, owned and managed by ICCF Community Homes. It will offer 56 units of affordable and market-rate housing for adults 62 and older and have a fitness center, library, community center, leasing office, conference room and outdoor lounge. It is expected to open in early 2023. ICCF is a nonprofit that owns and manages about 600 affordable rental units in mixed-use buildings, apartment complexes, duplexes and single-family homes throughout the city of Grand Rapids.



Victory on Leonard

The $21 million, approximately 85,000-square-foot, four-story project by Victory Development Group at 900 Leonard St. NW will include mixed-use retail and 120 studio, one- and two-bedroom units affordable to those making 80 percent to 100 percent of area median income. Tenants for the retail component of the project have not been selected. It is expected to open in June 2023.

room units between three stories at 608-626 Coit Ave. NE. e apartments will be designated a ordable to those making 30 percent to 80 percent of the AMI. It is slated to open in August 2023.

Technology



Twisthink

Twisthink, a digital consulting rm that helps industrial, mobility and life sciences companies with AI and the Internet of ings, is spending $2.2 million to move its headquarters from Holland to the seven-story, 200,000-square-foot Doug Meijer Medical Innovation Building at 109 Michigan St. NW in downtown Grand Rapids. e building opened in late 2021 as part of Michigan State University’s Grand Rapids Innovation Park. Twisthink’s relocation is expected in early 2023.

ing opportunities for new companies. e Bridge will consist of 24 o ce spaces ranging from 239 to 2,394 square feet that startups can lease for about $673 to $6,730 per month. e incubator will be funded by tax capture from the Grand Rapids SmartZone Local Development Financing Authority, the MSU Research Foundation, and venture capital. e cost of the buildout wasn’t disclosed. It is expected to open this month.

Transportation





The Southgate: A Senior Living Community



This $19 million, four-story, 58,000-square-foot project at 438 S.

 Union Suites on Coit is $12 million, 46,000-squarefoot development by Dwelling Place of Grand Rapids and developers Tom Ralston and Nick Lovelace will split 52 one-, two- and three-bed-

The Bridge e Doug Meijer Medical building will also house MSU’s Spartan Innovations in an o ce space called e Bridge. A venture development arm of the MSU Research Foundation, Spartan Innovations programs in the e Bridge will include the Conquer Accelerator for early-stage startups, events, coaching and fund-

Gerald R. Ford International Airport Concourse A is $110 million project will add 155,000 square feet to house eight new gates to Grand Rapids’ regional airport, an improved executive lounge and new dining and retail. e current 66-foot-wide Concourse A will be widened and lengthened. e expansion is part of the airport’s $500 million, ve-phase capital improvement campaign. e Concourse A portion is opening in June 2023. e full project is scheduled for completion by 2028.

Contact: rachel.watson@crain.com (989) 533-9685; @RachelWatson86

Kzoo Station: A Community Kitchen + Eatery is expected to open at 1445 Kalamazoo Ave. SE in the Boston Square Business District in February 2023. | BRYAN ESLER/CRAIN’S DETROIT BUSINESS

A $21 million, approximately 85,000-square-foot, four-story project is planned by Victory Development Group at 900 Leonard St. NW. | VICTORY DEVELOPMENT GROUP

Twisthink will move into a 12,000-square-foot suite on the sixth oor of the Doug Meijer building in May. | TWISTHINK

Lear moves to sell its manufacturing plants in Russia

KURT NAGL

South eld-based Lear Corp. is working to sell its three manufacturing plants in Russia almost a year after suspending operations due to Russia’s war on Ukraine.

e company is aiming to sell its assets in Russia within the rst half of this year, CEO Ray Scott told Crain’s in an interview Monday, adding that legal issues and other complexities have made the process slow moving.

“We’re exiting Russia,” he said. “( ere are) issues that we have to take care of, but we’re exiting. For the most part, all of our manufacturing plants are shut down.”

Before the war began Feb. 24, Lear operated seating plants in Russia with about 1,000 employees, generating about $100 million in annual revenue.

at’s a fraction of overall business at Lear, which is expected to announce next month more than $20 billion in revenue in 2022.

Just 50-60 Lear employees work in Russia now, mainly to keep the lights on and maintain the plants, Scott said.

In September, the company determined the values of substantially all of its operating assets in Russia were impaired and took a charge of $19.9 million in the third quarter related to the impairments of inventory, property, plant and equipment and right-of-use assets.

“It’s not even just the assets, it’s the people side,” Scott said. “We have good people that are in Russia that we have to make sure that we’re mindful of.”

e company has identi ed prospective buyers, Scott said. Getting a fair price for the plants will be a challenge. Russia’s invasion of Ukraine sparked an exodus of Western businesses, many forced to sell assets at cut rates. ere had even been threats of the Kremlin seizing the assets of companies that withdrew.

“We’re going through the process of what’s best for the assets … It’s not easy to sell assets right now in Russia,” Scott said.

A week after signing a lucrative licensing agreement, Ann Arbor-based pharmaceutical startup Evoq erapeutics Inc. hired a new CEO.

e company announced just after the new year that public biopharmaceutical conglomerate Gilead Sciences Inc. would license its rheumatoid arthritis and lupus treatment technology in a deal that could net Evoq (pronounced “evoke”) as much as $658.5 million total in upfront funds, an options exercise and milestone payments across all programs, as well as tiered royalties on product sales.

Last Monday, the company announced the appointment of early-stage biotechnology entrepreneur David Giljohann to CEO and board member, replacing founding CEO William Brinkerho in the role. Brinkerho will remain a board member for the company, Evoq said in a Monday news release.

Giljohann most recently served as CEO of Exicure, a publicly held biotech rm he co-founded in Chicago that developed spherical nucleic acid

constructs to treat neurological disorders and prevent hair loss. He departed the CEO role with other top executives amid sustained money loss in 2021 but remained with the company as a board member until February 2022. e company has since cut the majority of its workforce and at least temporarily shelved its research and development. Its share price has plummeted from $171 per share when it went public in 2018 to just $1.38 per share as of early trading Monday morning.

Giljohann was a Crain’s Chicago Business 40 Under 40 honoree in 2019 and earned a doctorate from Northwestern University where he developed DNA- and RNA-modi ed

nanoparticles.

Evoq also named Greg Barrett its COO; he has been president of the company since 2018. Prior to Evoq, Barrett was president of the U.S. commercial division of Japan-based pharmaceutical company Daiichi Sankyo Co. Ltd. He’s launched 10 pharmaceutical products throughout his career, the company said in the release.

Barrett earned a master’s degree in biochemistry from the University of Illinois at Urbana-Champaign.

“David’s previous experience at the helm of an early-stage biotechnology company and his extensive work with nanoparticles coupled with Greg’s expertise working with pharmaceutical and biotechnology companies will be crucial to the company as we move forward,” Brinkerho said in the release. “On behalf of everyone at Evoq, we are honored to welcome David and Greg to our team.”

It’s unclear what Brinkerho ’s next move will be, but he’s demonstrated a long career of startup success.

In 2005, Brinkerho co-founded Cerenis erapeutics in Ann Arbor. e company developed therapies to

treat metabolic diseases. It raised $153 million in three venture capital funding rounds and later moved to Laberge, France, where it went public in 2015 on the Euronext Paris stock exchange in a public o ering of about $59 million.

Brinkerho and Cerenis’ other co-founder, Jean-Louis Dasseaux, previously worked in Ann Arbor at Esperion erapeutics Inc., with Brinkerho as vice president of business development in 2002-03. Esperion was founded in 1998 to develop a drug to boost HDL and was sold to P zer Inc., in 2004 for $1.3 billion.

When P zer pulled out of Ann Arbor in 2008, Esperion founder Roger Newton bought back some molecules from P zer and launched a second Esperion, which went public in 2013.

After leaving Cerenis in 2011, Brinkerho joined AlphaCore erapeutics LLC as head of business development. He later became president and helped negotiate the sale of the company, which made an enzyme to drive cholesterol from the body, to MedImmune, a Gaithersburg, Md.based division of London-based As-

Michigan companies’ presence

Lear isn’t the only company in this predicament. Canadian automotive supply giant Magna International Inc., which has a major presence in metro Detroit, has six manufacturing plants and 2,500 employees in Russia. e company also idled operations there in March.

e plants remain shut down, and the assets are still owned by Magna, a company spokeswoman told Crain’s on Tuesday.

Other manufacturers have also moved to sell o assets after pausing or scaling back operations.

Ford Motor Co. and General Motors Co. halted business in Russia, and Ford sold its stake in a joint venture in the country.

Koch Industries, the parent company of Auburn Hills-based Guardian Industries, sold its business in Russia, composed of two glass-making plants and 600 employees, to Vladimir Alexandrovich Voronin, president of FSK Group, for an undisclosed sum in July.

Benton Harbor-based appliance giant Whirlpool Corp. sold its Russian business to Arcelik in an August deal, according to a company spokesman. Terms were not disclosed.

Kellogg Co. initially continued making staple foods in Russia, where it has about 1,600 employees and operates three plants. However, company spokeswoman Kris Bahner conrmed to Crain’s on Tuesday that Kellogg will sell its Russia business to local company Chernogolovka.

“Our primary goal as we exit this market is to ensure the safety and wellbeing of our employees,” Bahner said in an emailed statement. “ e sale is subject to a number of local government regulatory approvals.”

As of May, some other Michigan-based companies still had operations in Russia, including Domino’s Pizza Inc., Tenneco Inc. and Dow Inc.

Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

traZeneca. Brinkerho then became a mentor-in-residence at UM’s o ce of technology transfer, where he helped vet the tech that would lead to Evoq.

Under the agreement with Gilead, Evoq will collaborate with the company on clinical development and Gilead has exclusive rights to the technology, which uses what the company calls a nanodisc made up of a synthetic high-density lipoprotein to deliver antigens to the immune system and trigger a response.

“Despite key advances over the past two decades, there remains signicant unmet need for people living with in ammatory and autoimmune diseases,” Flavius Martin, executive vice president of research at Gilead, said in a news release. “We are excited to collaborate with Evoq to further expand our autoimmune pipeline with the goal of addressing the needs of people living with these conditions.”

Evoq is also working on treatments for HIV, viral hepatitis, cancer and inammation.

Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

Before Russia’s war on Ukraine began nearly a year ago, South eld-based Lear Corp. operated seating plants in Russia with about 1,000 employees, generating about $100 million in annual revenue. NIC ANTAYA/CRAIN’S DETROIT BUSINESS

Lear employed fewer than 1,000 workers at three seating plants in Russia before the war in Ukraine broke out. | LEAR VIA FACEBOOK

DUSTIN WALSH

Brinkerho Giljohann

Longtime Children’s Center

CEO’s departure ‘a call to action’

Matthews to leave amid Medicaid challenges

SHERRI WELCH

Debora Matthews, the longtime CEO and president of e Children’s Center, will hand over responsibility for leading the Detroit nonpro t to someone else come fall.

She’s the latest executive to signal her departure from a metro Detroit agency amid challenges with state Medicaid reimbursement rates for community mental health services. But she said she won’t be the last.

“I’ve been in nonpro ts for almost all of my career, and I’ve loved it,” the 66-year-old said. “But the ght has become a little bit too much for me.”

Matthews said she’d begun to think about retirement in recent years, but she made a rm decision to do so after she su ered a heart attack last summer.

“I owe it to myself and my family … I have seven grandchildren. I want to be around for them.”

Matthews said she will remain associated with the center in some way and an advocate for children at the local and state levels.

e Hunter Group is leading the search for a new president and CEO following Matthews’ departure at the end of September.

e Children’s Center has been fortunate to have Matthews as its leader for so many years, board Chair Elizabeth Agius, associate director of research administration at Wayne State University School of Social Work’s Center for Social Work

building on Alexandrine Street in Detroit to Advantage Health in March 2021 for $2.8 million, Matthews said. With the proceeds from the sale and Paycheck Protection Program loans for its more than 200 employees, it ended the year about $5 million in the black.

But the center fell on hard times again in scal 2022. Revenue dropped with its ability to take on new clients amid competition for sta who left to join private-payer service providers without the new paperwork requirements tied to Medicaid, join telehealth providers or go into private practice, Matthews said.

Underscoring the other issues, Medicaid reimbursements from the state, paid through Detroit Wayne Integrated Health Network, don’t cover the costs to provide behavioral health services, she said.

e Children’s Center would have ended its scal 2022 in September millions of dollars in the red, but DWIHN provided additional funding to help cover costs at year’s end, Matthews said. With that and a $1.4 million employee retention tax credit, it ended last year near break even with an excess of $200,000.

Wayne County’s mental health authority had the ability to make the extra allocation because e Children’s Center’s service encounters in 2022 were far less than they had been in previous years, Matthews said, questioning why it didn’t pay enough to cover costs throughout

Motown Museum moves forward on nal phase of expansion with $10M earmark

SHERRI WELCH

e nal phase of construction on the Motown Museum expansion is underway, thanks to a $10 million federal earmark.

e funding was included in hundreds of millions of dollars that came to Michigan as part of a federal supplemental budget bill passed in late December.

U.S. Sen. Debbie Stabenow provided strong backing to secure it.

With the federal dollars, the largest single chunk of funding so far to Motown’s expansion project, fundraising has reached a total of $55.5 million.

at would have exceeded the museum’s earlier, revised goal of $55 million, but with in ation, construction costs have continued to rise, said Robin Terry, chairwoman and CEO.

Research, said in an emailed statement.

“She combines wisdom and empathy to be a powerful advocate for children ... (and) has used her knowledge and talents to advocate, not only for e Children’s Center, but for all children in need in Detroit.”

A career of ghting

Matthews has spent the better part of her career, more than 37 years, with e Children’s Center. She was named president and CEO after serving for 17 years as a trustee, treasurer and chairman of the board and as nance director on the sta for two and a half years before that.

Under her leadership, donations tripled to $3 million each year; the center’s budget doubled to $20 million and its client numbers — mostly children — grew to 7,500 annually from 4,500.

More than half of the center’s budget comes from providing behavioral health services for children, most covered by Medicaid through a fee-for-service model. After seeing a $1.7 million de cit in scal 2020 with the loss of clients during the COVID-19 pandemic shutdowns, the organization sold its original

the year.

“I really think it’s an equity problem. It’s primarily Medicaid clients not getting what they need because we don’t have enough funding or enough sta .”

e center is trying to raise money to ll in the gaps with generous contributions from the Ford family and other donors, she said. But it’s not enough.

“I’m so passionate about providing behavioral health services for children and families, but it’s really stressful when I have to look at cutting the budget, reducing sta ng levels, ghting with our various funders over rates,” Matthews said.

Matthews said she is the most recent community mental health agency executive to step down, but she won’t be the last to depart amid the stressors of inadequate reimbursement.

“In our circle there are a couple of other CEOs moving towards (retirement). We’re going to have some serious leadership de cits” in community mental health agencies that take Medicaid and serve indigent clients, Matthews said.

“ is is a call to action, I think.”

Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

e museum will need to raise an additional $9.5 million to cover rising costs, she said.

Terry declined to guess at when construction could be complete, given the uncertain market and rising costs.

“ e challenge with construction when you are in our position where you have to raise the capital for the project is that you’re always trying to keep those dollars raised in alignment with the construction schedule,” she said. “If you don’t raise those dollars, you run the risk of interrupting the construction.”

e Motown team is celebrating having reached the $55 million milestone, she said. “We are in a space of celebration and real gratitude to Senator Stabenow for just getting us to such a critical point.”

“Our hope is that we can raise the rest of the money sooner rather than later because that’s the only way that you stop the in ation and everything else, the things that are out of our control.”

Motown announced the project in fall 2016 and began work on it in 2019.

In August, the museum celebrated the completion of the rst two phases of the project, the new educational programming and creative hub for entrepreneurship, Hitsville Next, in

three nearby, renovated buildings, and Rocket Plaza with Motown greats including Smokey Robinson, Martha Reeves and Otis Williams.

e museum where the Motown greats made history remains housed in the Hitsville building at 2648 W. Grand Blvd.

e third phase is focused on construction of a two-story building that will house the Ford Motor Company eater, retail and immersive exhibits, Terry said.

e project has attracted funding from contributors including: Ford Motor Co., Ballmer Group, the Vera and Joseph Dresner Foundation, Rocket Cos. and the Gilbert Family Foundation, W.K. Kellogg Foundation, Hudson-Webber Foundation, Kresge Foundation and Bank of America, among others.

Beyond the main campus expansion, the museum is developing plans for a nearby property it acquired last year.

Motown purchased the property at 2550 W. Grand Blvd, west of Rosa Parks Boulevard, with part of a $5 million gift from MacKenzie Scott,

Terry said. Scott is the former wife of Amazon.com Inc. founder Je rey Bezos.

e property includes a 36,000-square-foot building and a gated, surface parking lot with 195 spaces that will give the museum almost all of the parking needed for the expansion, she said. e museum is looking at providing a shuttle to the museum from the lot for those who don’t wish to walk.

As for the building, “we’re still deciding but we know that we will use it for additional programming,” Terry said.

e rst oor is a very large, open space that could be used for many things, she said.

“We are evaluating that now to see how we might best use it to support what we’re doing on the main campus.”

e MacKenzie Scott gift has also helped the museum cover de cits from the pandemic years and is providing a reserve that will fund leadership sta who will be hired over the next couple of years, Terry said.

“As we are growing and expanding the business model, you want to nd and be able to really recruit the best talent for the development.”

Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

Motown Museum is moving forward with the nal phase of its expansion with a $10 million federal earmark. | MOTOWN MUSEUM

The Hitsville USA buildings in Detroit. | MOTOWN MUSEUM

Terry

“I’VE BEEN IN NONPROFITS FOR ALMOST ALL OF MY CAREER, AND I’VE LOVED IT. BUT THE FIGHT HAS BECOME A LITTLE BIT TOO MUCH FOR ME.”

—Debora Matthews, CEO and president, The Children’s Center

HEART

Corewell Health plans to build the state’s rst dedicated facility for same-day heart procedures in Grand Rapids, and Detroit-based Henry Ford Health told Crain’s it is also interested in performing the procedures in an ambulatory setting in the future.

Why move cardiovascular care out of hospitals?

e CMS rst approved outpatient heart procedures in 2019 with the addition of 17 cardiac operations added to the list of those able to be performed at ambulatory surgery centers. It took the state another two years to approve the list.

CMS was interested in pushing those procedures to an outpatient setting because of the high costs from patients on Medicare. CMS paid out $682 million for roughly 532,000 Medicare bene ciaries who underwent heart catheterization procedures in 2016.

Prior to the rule, only cardiovascular procedures involving lower-extremity angioplasties were allowed to be performed outside of a hospital.

Hospitals were against the rule change, citing safety issues, but there are nancial implications as well.

(For its part, the Michigan Health and Hospital Association told Crain’s it did not take a stance either way on the rule changes.)

As pressure builds among payers to move more procedures to an outpatient setting, hospitals are moving with the opportunity.

Corewell Health was approved by the Grand Rapids City Planning Commission on ursday for a planned redevelopment district amendment for about 2 acres at 2984 Bradford St. NE, next door to its cardiovascular medicine o ces.

e health system plans to build a single-story, 19,500-square-foot cardiovascular ambulatory surgical center at the site, in partnership with At-

las Healthcare Partners, which has experience operating these centers.

In its application led with the city, Corewell said the outpatient center will employ 24-28 people, with typical weekday hours of 8 a.m.5 p.m.

e building will include 16 prep and recovery bays and three cardiac catheterization labs, with space for a fourth cath lab, Ellen Bristol, manager of corporate public relations for Corewell, said in an email.

Corewell didn’t grant an interview, but said in a statement that the center will provide cardiovascular care at a lower cost than it can in hospitals.

“ is partnership of a health care system, ASC company and expert physicians coming together to provide an unparalleled patient experience in an ambulatory outpatient environment is what makes the planned cardiovascular ASC unique,” Dr. David Wohns, cardiology division chief at Corewell Health West, said in the statement. “With a focus on the patient experience and exceptional outcomes in an outpatient environment, this center represents the next advance in caring for patients with heart disease in West Michigan.”

e Corewell surgery center is expected to open in early 2025.

Henry Ford Health is also moving forward with its approval process, Herb Aronow, medical director of heart and vascular services for the health system, said in an emailed statement.

“Doing so will provide greater access to patients across the state in the coming years, and Henry Ford Health hopes to provide these procedures in outpatient settings in the future,” Aronow said.

Platinum Medical Center in Dearborn, which opened in 2012, is a 20,000-square-foot ambulatory surgery center with four operating rooms and 12 patient rooms.

e facility was built to perform increasingly complex procedures, said Kyle Sheiko, COO of Platinum Medical and former corporate vice president of cardiovascular services at Detroit Medical Center.

“We built this in many ways to be bigger and more patient-friendly than the heart hospital at DMC,” Sheiko said.

Cash ow over blood ow?

Despite major pushes by Medicare administrators in recent years, it’s unlikely most heart procedures will move outside of the hospital. Many ambulatory surgery centers generally lack labs, imaging and ultrasound services. at helps them reduce costs, but it also limits their ability to treat more complex issues.

And while some of the state’s major health systems are moving toward performing these procedures in an ambulatory setting, pro t margins remain key for what is essentially an industry recession.

e median margin for U.S. hospitals through July last year was negative 1 percent, according to a recent analysis by Kaufman Hall. at pain reverberates through the nearly $1 trillion industry in the U.S. In Michigan, the sector is simply struggling to remain solvent while also maintaining the services patients require.

Michigan’s hospitals are already back in Lansing asking for another bailout after they received millions under federal COVID-19 pandemic funding. e state is sitting on $750 million in unallocated American Rescue Plan Act funding and about a $3 billion budget surplus in the state’s general fund.

Receiving fewer Medicare reimbursement dollars for the same treatments in the hospital doesn’t improve the bottom line, but systems like Corewell and HFH believe the cost savings to perform the procedures may be worth it.

Kassab, however, believes the opportunity outpatient heart procedures o ers Michigan residents — particularly those in rural areas — will prove invaluable.

“Being able to develop these much-easier-to-build surgery centers in rural areas of Michigan is critical,” Kassab said. “Access to excellent cardiovascular care is almost nonexistent for patients in rural areas. Today they have to drive too many hours to get to a tertiary care facility. With proper management, you’ll be able to provide this care in a rural community at much lower cost in a 15-minute to 20-minute drive.”

Contact: rachel.watson@crain.com (989) 533-9685; @RachelWatson86 Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

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Corewell Health plans to build a cardiovascular ambulatory surgery center on land it owns at 2984 Bradford St. NE in Grand Rapids.

The parcel is occupied by a house that will need to be demolished. | RACHEL WATSON/CRAIN’S DETROIT BUSINESS

Henry Ford Health is among the rst Michigan systems hoping to move some heart procedures into pared-down outpatient facilities.

The Fred and Lena Meijer Heart Center in downtown Grand Rapids, where Corewell Health currently performs West Michigan cardiovascular operations. | COREWELL HEALTH

—Kyle Sheiko, COO of Platinum Medical

ey allege that, as its trustee, Sutherland treated "the trust as his own personal piggy bank," lending himself $7.7 million and lending a business of which he was a 50 percent owner more than $7.6 million.

Among the things current trustee, South eld-based Plante Moran Trust, sued Sutherland over is trust money he is alleged to have given to the Temple Hotel and Residences project in Detroit in the form of a loan. e hotel project is west of the Masonic Temple and north of Cass Technical High School.

In addition, the complaint claims, Sutherland wrote checks to his own businesses from the trust and that he made the trust take out loans at market-rate interest rates to lend to himself and a liates at below-market interest rates.

None of those loans were reviewed by an independent co-trustee, the complaint alleges.

For example, Sutherland took out a loan that was limited to $5 million but he borrowed "millions of dollars" more than that, according to the complaint, which says he charged himself an interest rate of just 0.75 percent. However, the complaint says, he "made no e orts" to collect interest or principal due on the loan — which was not disclosed until after he was removed as trustee in August 2020.

e complaint says Sutherland also made a similar loan to a business of which he was a 50 percent member, although which business is not revealed. e money is "millions

of dollars" more than the $5 million limitation set forth in the trust, according to the complaint. at loan had an interest rate of just 0.96 percent and matured Sept. 1, 2020, the complaint says. Similarly, according to the lawsuit, Sutherland "made no e orts" to collect principal or interest owed and did not disclose the loan until after he was removed as trustee.

e complaint also says Sutherland "caused the trust to lend millions of dollars" — which was not documented and had no established interest rate — to an entity called Temple Group Holdings LLC, which is managed and partially owned by another entity, Temple Group Management LLC, which he manages and in which he has a nancial interest.

e trust is a loan guarantor but does not have an equity stake in the development, according to the complaint. e lawsuit says Sutherland didn't collect any interest or principal and the loan is in default and has not been repaid.

e case was brought to Wayne County Circuit Court in March 2021 but was dismissed in September 2021 because Sutherland's attorneys

successfully argued that it was led in the wrong court.

It was re led in Wayne County Probate Court in April and is pending. Last year, a judge ruled the case could proceed after a motion to dismiss it by Sutherland's attorney was denied.

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

TATE

From Page 3

Tate grew up on Detroit’s west side before moving to Southfield for high school. He started three years as an MSU offensive lineman after being recruited by thencoach Nick Saban. While the team had three permanent head coaches and one interim head coach in Tate’s time on campus, he was grateful to find stability with his position coach.

“It taught not only teamwork but resiliency as well,” he said. “And being able to be flexible and adapt-

infantry officer and serving two tours in Afghanistan, first as a platoon commander and then as a company executive officer. He helped to protect a series of villages and hamlets while the U.S. was involved in counterinsurgency operations in the dangerous Helmand province.

“It was there, in that role, where you really understand the importance of leadership and why it matters and why it’s necessary,” Tate said. “I learned a lot from the Marines that I served with. I probably learned more from them than they learned from me.”

He downplayed the risks, saying “it was something that we trained for, and I certainly wasn’t alone at it.”

“Joe is disarmingly nice, but he also just has a really impressive background,” said Pugh, who is now senior director of public affairs at the Truscott Rossman public relations firm. “He was just somebody who really stood out at the time and now as having an almost unbelievable amount of life experience packed into a relatively short period of time.”

He said Tate is authentic, has a winning personality and will bring an effective leadership style despite being underrated by some.

“What takes a little bit longer to get to know with Joe is that he’s somebody that’s really committed to his ideals and to his goals. When he decides that he wants something, he’s going to figure out a way to get it done. Folks should underestimate him at their peril.”

“Our message has resonated. We want to be able to show that voters that may have not had a voice in Lansing recently now have that voice.”

Early priorities will include wiping from the books a near-total abortion ban that voters effectively repealed in November and focusing on pocketbook issues like increasing a tax credit for lower-wage workers and reinstating tax exemptions on retirees’ income. Democrats also plan to add LGBTQ protections to the anti-discrimination law and stick with economic development efforts, he said.

“That’s something that we can and we will continue, to ensure that investment is still coming to the state of Michigan.”

NONCOMPETE

From Page 6

A company doesn’t need to enforce a noncompete to protect intellectual property. Nondisclosure agreements are wholly justi ed and plenty enforceable, especially in a state like Michigan with longstanding court support of protecting inventions and ideas.

e reality is noncompetes enforce a company’s ability to maintain a competitive edge at the cost of employee mobility and the economy.

e agreements are contractual handcu s for bad managers who can’t keep good employees.

able, too, because coaches instilled in us every day you have to work at it to get better, you have to earn it.”

Following graduation, he played on a few NFL practice squads and in Europe and then got a master’s degree in kinesiology from Michigan State. He later decided to “give back,” enlisting as a Marine Corps

After earning master’s degrees in business administration and environmental planning and policy, he worked as a program manager for the Detroit Economic Growth Corp. and then successfully ran for the House in 2018. He had lost a Democratic primary for the same seat in 2016, nishing fth in his rst run for any o ce.

Josh Pugh met Tate that year and was a consultant for his second campaign.

Tate, who was the highest-ranking Democrat on the powerful House Appropriations Committee last term, said he is proud of being able to work across the aisle. He cited agreements on K-12 education, child care and water infrastructure spending, and his sponsorship of a law to help reopen the state’s first and only historically Black college.

While he said bipartisanship will remain important, particularly given Democrats’ narrow 56-54 edge, Democrats’ agenda aims to elevate issues that got no traction during Republicans’ lengthy run in the majority.

One lawmaker with whom Tate has forged a good working relationship is Sen. Thomas Albert, a Lowell Republican who led the House budget panel the past two years. Albert also was a Marine, so they share a bond.

“He’s a thoughtful person,” he said of Tate, saying they had sharp political differences but worked together, too. “He’s always calm under pressure. I’ve never seen him get riled up, which is easy to do in this job. Those are very good qualities that he has that will help him succeed with what he has coming.”

Contact: david.eggert@crain.com; (313) 446-1654; @DavidEggert00

Employer groups are largely against the White House’s proposal — the U.S. Chamber of Commerce says the outright ban of noncompete agreements “overturns well-established state laws” to govern contracts.

It’s clear the FTC will face legal challenges to the rule if nalized — though the Federal Trade Commission Act of 1914 permits the government to prevent unfair methods of competition.

But if you’re supporting the use of noncompete agreements, it’s important to understand why. Every business should have competitive secrets protected, but noncompete agreements amount to nothing but a contrived relationship of a jealous partner.

Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

“OUR MESSAGE HAS RESONATED. WE WANT TO BE ABLE TO SHOW THAT VOTERS THAT MAY HAVE NOT HAD A VOICE IN LANSING RECENTLY NOW HAVE THAT VOICE.”

—Joe Tate, Michigan House speaker-elect

James Sullivan (left), attorney for David Sutherland (right), speaks to his client as Grosse Pointe Farms Municipal Court Judge Charles Berschback looks on following an Sutherland’s arraignment on four felony charges on Jan. 11. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

Valade

Increased stress has pervaded nearly all industries and workplaces over the past three years during the COVID-19 pandemic and its fallout, and it has had a particularly strong impact on Michigan’s largest sector, said David Worthams, director of employment policy at the Michigan Manufacturers Association.

After years of trying to mitigate the crippling microchip shortage, a different type of crisis has cropped up in the automotive industry: Employers are grappling with the growing issue of mental health — long a taboo topic in the workplace, especially for an industry de ned by grit and hustle.

In response to the general increase in stress and burnout across workplaces, the state announced ursday that it is launching a hub to centralize resources and strategies to address mental health.

e hub started from a work group launched last March and operates with existing resources from the Labor and Economic Opportunity department. Deputy Director Sean Egan said he is working on a legislative proposal to secure funding for it.

e plan is to drill down into different sectors to identify industry-speci c problems, Egan said.

Manufacturing and health care are at the top of the list as sectors most hampered by workplace mental health issues.

“What we see from anxiety and depression is that chronic stress is a precursor of our minds kind of moving in that direction,” Egan said.

Egan will also host monthly webinars starting Jan. 19 focused on dealing with mental health.

“In general, coming out of the pandemic, there is a sense that the workplace is not as energizing as it used to be,” Worthams said. “In society in general, people don’t like talking about mental health issues because they see it as a weakness.”

In a 2022 study conducted by nonpro t Mental Health America, which surveyed 11,300 employees in the U.S., four in ve respondents said workplace issues a ect relationships with family, friends and co-workers. A third of employees said their company’s leadership talks openly about mental health, and nearly 60 percent

MARKET

From Page 1

“Move-in ready homes can go quick,” said Gino Tozzi, a Clinton Township-based associate broker with Real Estate One, noting that at the height of the market in 2021, the condition of a home didn’t matter much.

at’s no longer the case, Tozzi said.

Still, multiple recent reports show the vast di erence of the present, calmer market compared with the frenzy of mid-2021, a time when rock-bottom interest rates served as a catalyst for a frantic residential real estate market in metro Detroit and around the country:

 Looking back to late February 2020, just before the pandemic took hold, nearly 60 percent of homes for sale in metro Detroit were o the market in two weeks.

 In the spring of 2021, at the peak of

of respondents said they spent time looking for another job.

Sta ng shortages persist in Michigan and elsewhere, from manufacturing plants to hospitals. e Forvia plant in Highland Park has struggled to hire enough employees and balance sta ng with volatile customer production schedules, Halty said.

Absenteeism compounds employee dissatisfaction, according to Michelle Kaminski, associate professor at Michigan State University’s School of Human Resources and Labor Relations. at’s because workers who do show up are forced to pick up the slack and are often pressed by supervisors.

“Work is the top stressor for a lot of people, and it never used to be like that,” Kaminski said.

Across the 50 plants UAW Local 155 represents, Halty said there has been a signi cant increase in employee issues related to stress, burnout and violence.

“It’s the job itself, it’s the stressors of having to be a just-in-time plant, having to get these parts out,” Halty said. “It’s coming to a head, unfortunately.”

For the Forvia incident, after the suspect was apprehended and the

the home-buying bonanza, more than 70 percent of pending home sales in the region were o the market within two weeks.

 In the nal week of 2022, about 33 percent of pending home sales in metro Detroit were o the market within two weeks, a decline of about 7.4 percent year-over-year, according to Red n data.

e market experience during spring 2021 was unique, Tozzi noted, and unlikely to be experienced again in the foreseeable future.

Also ticking up is the overall number of days from when a home is listed to having a signed contract. e most recent market reports from Farmington Hills-based RealComp and RE/MAX of Southeastern Michigan show that average days on market in November were at 33 and 34, respectively, up about ve days from the same time the year before.

Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

victim transported to a hospital and declared dead, operations resumed at the plant, which makes seats for the Jeep Wagoneer built at the Stellantis Warren Truck Assembly Plant.

at’s not unusual, Halty said. e underlying rule in just-in-time manufacturing: Don’t shut down the customer.

To be fair, Forvia followed proper protocols to a tee after the shooting, Halty said. e plant has had a beefed-up security presence since summer 2021, when an employee threatened to blow it up.

“We do have a robust security protocol at the Highland Park facility, which includes guards in the parking lot,” Forvia spokeswoman Misty Matthews said. “It’s important to note that the incident occurred while police were already on site that day.”

Immediately after the shooting, Forvia brought in licensed mental health professionals through Troybased employee assistance provider Ulliance Inc., where business is, not coincidentally, booming. e company grew 20 percent in 2022 over the previous year, President and CEO Kent Sharkey said. More than half of its client base is in manufacturing.

e growth is the result of an unprecedented number of problems in the workplace, he said. Emotional and psychological issues are the

most common, followed by job-related issues and relationship problems.

“We have seen increased levels of anxiety, depression, stress, relationship problems and suicidal employees over the last three years,” Sharkey said.

In the two weeks following the incident at Forvia, UAW Health & Safety coordinators deployed resources at the plant, including counseling and mentoring, Halty said.

“ ey had life coaches go around the lines, seeing if anybody wanted to have conversations, making sure there was no residual problems, trying to get ahead of anything that might come down the pipe,” he said.

Raymar Jones, 22, has worked quality inspection at the plant for nearly a year. He said he likes the work and the people, but the hours are unreliable and making ends meet is a constant worry. He said he doesn’t see a future for himself in manufacturing.

“I’ll probably give this job another few months,” Jones said outside the plant before clocking in for second shift. “I want something more that I know is reliable for me because I just had a daughter.”

Since the incident at Forvia, other

automotive companies including Yanfeng Automotive Interiors across the street and Bridgewater Interiors have reached out for help handling employee issues, Halty said.

Other suppliers, including Southeld-based Lear Corp., are trying to take a more proactive approach to mental health, both for o ce and plant workers.

“It’s a very, very real issue, and it’s at the top of my mind,” CEO Ray Scott told Crain’s in an interview last week. “When I grew up in the automotive sector, you had to be tough, you had to work 14 hours a day … if you had mental health issues, there’s something wrong with you … We all have issues, and it’s OK to have issues.”

At the end of 2021, the auto supplier launched a pilot program in the United Kingdom, training 70 employees to support the mental well-being of peers by meeting and talking with them. e program was eagerly received and has expanded to six sites covering 250 employees.

Lear is planning to roll out a similar program at manufacturing plants in Michigan and across the U.S. this year, Scott said. Additionally, it is working to expand mobile health screenings to U.S. plants, which will include mental health checks. e company already o ers free and con dential mental health counseling support to hourly and salaried workers in the U.S., and it regularly hosts speakers, such as local clinical psychologist Gretchen Marsh, to engage employees.

Scott said the most important thing he can do is set the tone from the top that it is OK to talk about mental health problems.

“Realizing it’s a real issue, and it’s not something you can just gloss over and say ‘toughen up, it is what it is,’” Scott said. “ ose are not the right answers anymore.”

Addressing mental health could pay o for employers more than just avoiding potential tragedy in the workplace, said Worthams, with the MMA. Companies with strong mental wellness bene ts have reported lower absenteeism rates and better productivity.

“If they want to have a resilient workplace, they need to craft bene t packages to make sure that there are mental health supporting tools available,” he said.

Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

Homes for sale in Detroit and elsewhere in the region are sitting on the market longer than a year or two ago. The home above on Glynn Court in Detroit has been on the market for about 75 days. | NICK MANES/CRAIN’S DETROIT BUSINESS

Raymar Jones, who works quality inspection at the Forvia plant in Highland Park, said he likes the work and the people there, but the hours are unreliable and making ends meet is a constant worry. | KURT NAGL/CRAIN’S DETROIT BUSINESS

Worthams

Scott

Gazelle Sports CEO talks growth and battling back from the pandemic

BY | JAY DAVIS

 You were named Gazelle’s rst CEO during a turbulent time for the company. How prepared were you to take the role in July 2020?

I’m not sure I could’ve ever felt prepared stepping into my role during the pandemic. The circumstances gave me an opportunity to lean in to vulnerability because we were all facing new and di erent circumstances every day that our company and communities had never faced before. I felt more comfortable leaning in and saying, “I’m not sure,” and getting feedback to do the best we could during a really uncertain time. We were able to build trust among our team and learned that we could handle di cult and stressful situations together quickly.

 What types of changes — structural, product-wise, etc. — have you made over your nearly three years as Gazelle CEO?

Our product mix has really remained the same with the core of our business still focused on running and walking footwear. During the pandemic we saw more folks incorporating health in their lives, and we were honored to have the privilege of supporting their journey. In terms of our structure, we’ve moved to a regional model with the management of our brick-and-mortar business. We’ve divided the state into three regions: metro Detroit, greater Grand Rapids and Southwest Michigan. We promoted three of our store managers to newly created regional roles. Each of our stores have their own uniqueness that comes from their teams and communities, and moving to this regional model has helped us to better connect and collaborate between stores within a region, especially as we’ve continued to add additional doors.

 How bad was the sales drought for Gazelle early in the pandemic?

The doors to our ve locations were closed for 76 days. Our overall sales dropped roughly 60 percent from March to May 2020. We were fortunate to have a fairly strong e-commerce business so we saw our customers turn to our website to nd their shoes and apparel during the pandemic.

 There was a lot of talk during the pandemic about more people opting to do things outside, which is much of what Gazelle o ers. Was there any shock within the company when sales took a dip in 2020?

I don’t know that there was shock that our sales dipped during that time. We had lost the opportunity to connect with customers through our in-store experience and through community events, and for us that’s what makes Gazelle Sports special. When we were able to reopen our doors we were pleasantly surprised to see an increase in new customers who had turned

to walking and running during the pandemic come through our doors. We ended 2020 down about 13 percent over the previous year. To be down just 13 percent after being closed during two of our busiest months felt like a huge win.

 Are there plans for expansion?

We’re kicking o another project this month. Gazelle has owned and operated a New Balance Store in Grandville for the last 20 years. This spring we will be transforming that space into our seventh Gazelle Sports location.

 What lessons would you share with other people in leadership positions on how to set up their companies for sustained success?

First, stay true to your core values and gut check decisions against them daily. Does this align? If not, it’s an easy pass. Second, know what makes your business special and lean in hard. For Gazelle, it’s our in-store experience and our team. Customers can buy most products anywhere and have it arrive the next day to their doorstep but what they can’t nd everywhere is caring and knowledgeable people who truly listen and care about why they walked through our doors.

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RUMBLINGS

LT. GOV. GARLIN GILCHRIST II said he is considering a run to succeed Democratic U.S. Sen. Debbie Stabenow, who announced last week she will not seek re-election in 2024 and will leave the seat to a “new generation” of leaders.

Gilchrist, a 40-year-old Democrat from Detroit, said at the Detroit Policy Conference Tuesday that he and his wife will discuss the possibility of him entering the race. His goal, he said, is to succeed in the job to which he was re-elected in November.

But when pressed, he talked about the barrier-breaking role he might play as the rst Black senator from Michigan. He also is seen as a potential 2026 gubernatorial candidate or future Detroit mayoral candidate.

ird-term Democratic U.S. Rep. Elissa Slotkin, 46, of Lansing, is eyeing a Senate bid after winning a tossup district by more than 5 percent-



A Crain’s report said Gazelle did not expect to turn a pro t in 2020. Has the company turned a pro t since then? How have sales rebounded since the summer of 2020?

We’ve seen a pretty signi cant increase in our overall sales the last two years. In 2021, we were up more than 39 percent over 2020. Last year, we were up 13.5 percent over 2021. The growth can be attributed to a few di erent factors: People went back to shopping at brick-and-mortar stores. We’ve seen a continued increase in e-commerce sales and sales through third-party sites like Amazon. The opening of our second Grand Rapids store in May helps, too.

People crave connection, care and want to support their local communities more than ever. Lastly, be willing to let things go that no longer work post-pandemic. We have had a few of these and while they are things we always did before the pandemic they no longer met the needs of our business or our customers. They were di cult to let go and we sometimes nd ourselves gravitating back toward the behavior. We do our best to reset and look toward the things that make us stronger that we’ve learned over the last three years since the pandemic started.

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Gilchrist considering a run for U.S. Senate

age points in the fall.

Other top Democrats, such as Gov. Gretchen Whitmer, have said they will not run to ll the seat open-

You’ve obviously had a long relationship with Gazelle. Are you super active?



Active living is a core value of the company. That means something di erent to everyone. I’m active with my family, and nd value in moving my body regularly by running, walking and strength training.

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ing after the 72-year-old Stabenow's surprising decision to not seek a fth term. Secretary of State Jocelyn Benson, another possible 2026 gubernatorial contender, has said she is focused on administering the 2024 election — not running in it — but she has not de nitively ruled out a Senate run.

Republicans mentioned as possible candidates include Republican National Committee Chair Ronna McDaniel, former Secretary of State Ruth Johnson, former one-term Rep. Peter Meijer, rst-term Rep. John James and ex-state Attorney General Mike Cox.

Former Rep. Fred Upton, who left Congress last week after serving for 36 years, said Tuesday he probably will not run.

Gazelle Sports CEO Jennifer Brummitt took her position at an interesting time. The 40-year-old, who has worked with Gazelle in various capacities since 2003, became the Kalamazoo-based company’s rst CEO in July 2020. The daughter of Gazelle Sports co-owner Jean Sequite was charged with helping right the ship following a sales drought caused by the COVID-19 pandemic. Gazelle has two locations in Grand Rapids, along with stores in Northville, Birmingham, Kalamazoo and Holland. Brummitt talked with Crain’s about the athletic wear company’s resurgence since the start of the pandemic.

Lt. Gov. Garlin Gilchrist II

Jennifer Brummitt is CEO of Kalamazoo-based Gazelle Sports.