Crain's Detroit Business, Jan. 17, 2022 issue

THE CONVERSATION

TECH: Angel investing groups around the state bullish heading into 2022. PAGE 3

Beaumont’s Dr. Nick Gilpin, on life during and after the pandemic.

PAGE 18 CRAINSDETROIT.COM I JANUARY 17, 2022

BOTTLENECK

Congestion in rehab pipeline leaves patients with nowhere to go next BY DUSTIN WALSH Last week, case managers at Sparrow Specialty Hospital in Lansing finalized the transfer of a patient. She had contracted COVID-19 nearly three months earlier and required a tracheotomy, a common practice in critically ill patients on ventilators.

She was ready to leave Sparrow Specialty’s care many weeks earlier but staffing, transportation and beds are in short supply. Sparrow Specialty’s case managers sent 60 transfer requests for the patient before a room opened up at Mary Free Bed only one floor above.

The average stay at the 30-bed specialty care hospital in Lansing — which handles post-intensive care for critical patients for everything from COVID-19 recovery to car crash victims — before the pandemic was 25 days. Now Sparrow Specialty has patients that have been trapped in the unit for as long as 83 days.

See HOSPITAL on Page 17

A health care worker makes a patient comfortable in Critical Care at Sparrow’s Specialty Hospital on Jan. 12 in Lansing. | DALE G. YOUNG FOR CRAIN’S DETROIT BUSINESS

‘Behind-the-scenes work is done’ Ford labors to put sprawling Michigan Central Station back together

BY CHAD LIVENGOOD

Cast iron and resin rosettes are pictured during a media tour at Michigan Central Station in Detroit on Jan. 11. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

NEWSPAPER

VOL. 38, NO. 2 l COPYRIGHT 2022 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

The top three floors of Ford Motor Co.’s Michigan Central Station will be dedicated to a luxury hotel and restaurants when a massive fiveyear renovation project is complete by mid-2023.

The sprawling 100,000 square feet on the ground floor of the one-time cross-continental gateway to Detroit will be a combination of public gathering space, a

MUSEUMS TO SEEK MILLAGE Two institutions to enter talks with leaders in Wayne and Oakland counties. PAGE 6

coffee shop, food court and events space large enough to seat 1,000 people.

In between, there will be 10 floors of office space in the train station tower for employees of Ford and its partners in the mobility and autonomous vehicle sector — and possibly other automakers.

The vision Ford company leaders had in 2018 when it bought the shell of a building that was long thought to be a bullseye for a wrecking ball is

starting to come together.

During a media tour Tuesday of the old depot, Ford’s construction managers showed off the progress hundreds of skilled trades workers have been making in the more than three years since the Dearborn-based automaker paid the Moroun family $90 million for the hulking train station and adjacent properties.

See STATION on Page 16

NEED TO KNOW

GAMES OF CHANCE

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT  SUPREME COURT STRIKES DOWN OSHA VAX RULE

uled for Sept. 16 and public days will run Sept. 17-25.

THE NEWS: The U.S. Supreme Court on Thursday blocked the centerpiece of President Joe Biden’s push to get more people vaccinated amid a COVID-19 surge, rejecting an Occupational Safety and Health Administration rule that would have required 80 million workers to get shots or periodic tests. The court allowed a separate rule to take effect requiring vaccines for workers in nursing homes, hospitals and other facilities that receive Medicare and Medicaid payments from the federal government.

WHY IT MATTERS: Employers nationwide had been awaiting the ruling on the regulations that would have required them to institute a vaccination mandate or testing regimen.

 DETROIT AUTO SHOW SETS SEPTEMBER DATES THE NEWS: The head of the North American International Auto Show on Tuesday said the 2022 show will take place Sept. 14-25 in downtown Detroit. Rod Alberts, executive director of the Detroit Auto Dealers Association and the NAIAS, confirmed the dates during the 2022 North American Car, Truck and Utility Vehicle of the Year awards presentation.

Media/tech days will take place Sept.

14-15, the Charity Preview is sched-

as a key measure in Michigan efforts to lure a new $2.5 billion General Motors Co. electric vehicle battery plant near Lansing. Ford Motor Co.’s announcement in September about a massive electric vehicle investment in Kentucky and Tennessee spurred the legislation.

 MSU COACH’S CONTRACT DRAWS SCRUTINY WHY IT MATTERS: The dates would mark a return of the show, which last took place in January 2019, in a long-awaited new format including an interactive outdoor component outside the walls of Huntington Place convention center, formerly known as TCF Center.

 OFFICIALS OK SETUP FOR $1B BIZ-ATTRACTION FUND THE NEWS: Michigan economic development officials on Tuesday approved a pair of programs that will tap into a $1 billion fund created by the state to attract large projects. The Michigan Economic Development Corp. will use the money as incentives for projects that qualify under its Critical Industry and Strategic Site Readiness programs, which were approved by the Michigan Strategic Fund board.

WHY IT MATTERS: The new fund is seen

2022

THE NEWS: A senior House Democrat is expanding his inquiry into whether the compensation packages for college football coaches run afoul of laws for tax-exempt organizations, seeking details about contracts from Michigan State University and other universities. Rep. Bill Pascrell, a New Jersey Democrat who chairs a Ways and Means Committee oversight panel, sent letters seeking information about the $89 million contract for University of Miami’s Mario Cristobal and the $95 million package for MSU’s Mel Tucker.

Detroit casinos see betting bounce back  Detroit’s three casinos more than doubled their revenue in 2021 after recording a historic drop in earnings the previous year.

MGM Grand Detroit, MotorCity Casino and Greektown Casino reported $1.29 billion in total revenue for last year, up from $639 million in 2020, according to a news release announcing annual earnings.

The casinos were closed for months during the first year of the COVID-19 pandemic, and then they reopened with mandated capacity limits to help stop the spread of the virus. It was the steepest tumble their earnings have ever taken — even more than during the Great Recession.

Even with the growth this past year, revenue is still down from 2019’s record-setting high of $1.45 billion.

Of the casinos’ 2021 earnings, 77 percent came from slot machines, 21 percent from table games and 2 percent — or $27 million — from the new industry of retail sports betting. Sports betting, in which customers put down wagers on professional, collegiate or international sporting events, was legalized in Michigan in March 2020.

MGM Grand Detroit led the three casinos in market share. | MGM

WHY IT MATTERS: Pascrell said in separate letters to Miami and MSU that the pay for coaches is “a stark contrast” to the benefits received by student-athletes. He also said he has concerns that the multimillion-dollar contracts run afoul of their tax-exempt status and questioned whether those compensation packages benefit the school’s educational mission and its students.

GRAND DETROIT CASINO

S

IN CORPORATE COUNSEL

WANTED: LEGAL ROCKSTARS MAKING BIG STRIDES ON

CORPORATE COUNSEL TEAMS IN MICHIGAN In an April 18 special section, Crain’s will honor distinguished attorneys achieving excellence on in-house legal teams at organizations throughout the state.

NOMINATIONS

Visit crainsdetroit.com/corporate-counsel today to nominate and learn more.

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WORKFORCE

FINANCE

Workplace safety complaints against UWM pile up

GETTY IMAGES/ISTOCKPHOTO

BY NICK MANES

Angel investors bullish heading into 2022 Groups say they are having success bringing in new financiers

BY NICK MANES

“THERE HAS BEEN SUCH PENT-UP ENERGY FOR INVESTING.” — Dale Grogan, managing partner, Michigan Capital Network

Amid resurgent investor interest and general tumult in traditional investment markets, angel investing groups around the state say they’re having success bringing new financiers into the fold.

Those running angel groups — which often provide the necessary back office support for cohorts of high-net-worth individuals to pool money and invest in emerging tech startups — tout the diminishing options for many as pandemic-induced challenges continue to throw a wrench into many investment theses.

Moreover, some investors highlight the social aspect of angel investing.

Still, the interest ultimately boils

down to fundamentals, and angel funds around the state are raising multi-million dollar rounds to invest in startup technology companies, many of which are growing right in their investors’ backyards.

With $65 million in assets under management and 170 members across five angel groups around the state, the 2022 outlook is bright, according to Dale Grogan, managing partner with the Grand Rapids-based Michigan Capital Network. The group manages operations for Grand Angels, Ka-Zoo Angels, Woodward Angels, Flint Angels and the Blue Water Angels.

If 2021 serves as an indicator, with $7 million in capital invested in 18 deals for MCN, Grogan said he’s bull-

ish for at least the first half of 2022.

“There has been such pent-up energy for investing,” he said. “2019 and 2020 were stagnant. In 2021, it felt like the dam broke for sure.”

New capital abounds Through September, investors had committed $2.7 billion to angel endeavors, according to a November report in the Wall Street Journal, citing data from Pitchbook.

For all of 2020, angel groups affiliated with the Angel Capital Association invested a total of $650 million, according to an annual report from the ACA trade group.

See INVESTORS on Page 16

Pontiac-based mortgage lender United Wholesale Mortgage Corp. has been the target of at least 189 employee safety complaints to the Michigan Occupational Safety and Health Administration since the start of the COVID-19 pandemic, including more than 85 since Nov. 1.

The company has received an outsize share of the complaints in its industry, accounting for 28 percent of all complaints among financial and insurance companies since March 2020, MIOSHA said.

MIOSHA said it has an open investigation of the complaints against UWM and two other investigations in appeal. The agency declined to comment on the nature of the complaints.

“UWM is not currently under investigation by MIOSHA for any COVID-19 issues,” UWM said in a statement sent to Crain’s. “MIOSHA has an obligation to investigate concerns and complaints issued against any Michigan company for any reason. UWM meets all state guidelines and mandates and in many cases goes above and beyond, and we will continue to do so.”

Experts said complaints don’t necessarily mean the company has done anything wrong.

However, the number of complaints against UWM “do sound like there’s some smoke there, but is there fire?” said Brett Miller, a shareholder in the Detroit office of the Butzel Long law firm and chair of the firm’s Employment Practices Liability Insurance Sub-Practice.

Miller cautioned that the complaints against UWM are allegations at this point.

The agency “currently has one open investigation (into UWM) and other investigations that are currently progressing through the appeals See SAFETY on Page 16

REAL ESTATE

Commercial mortgage delinquency highest since Great Recession

BY KIRK PINHO

Commercial mortgage-backed securities delinquency rates in Metro Detroit haven’t been this high for this long since the Great Recession.

Still, experts say, the COVID-19-induced increase in borrowers who are behind on commercial real estate loans could have been far worse were it not for flexible lenders willing to extend an olive branch through short-term modifications and other measures during the worst public health crisis in a century.

Debt issuance has been at high levels, showing that lenders aren’t skittish about risk levels on many asset types, including industrial, multifamily, self storage and others.

The delinquency rate on CMBS debt has been above 4 percent for the last 16 months, the longest it has been that high since August 2009 when it remained at that rate for more than eight years, according to data from Trepp LLC, a New York City-based firm that tracks the CMBS market.

During the delinquency increase since September 2020, the outstanding delinquent balance has remained above $200 million every month other than the last, Trepp data show.

And since October 2019, there has been less than $500 billion in CMBS debt on the books in the region, the first time its fallen below that number in the last 17 years after being at $1 trillion between 2005 and the early

CMBS delinquency rate part of 2013, according to Trepp.

Still, said Dennis Bernard, founder of Southfield-based Bernard Finan- CMBS delinquency rates were below 1 percent for six months prior to and in the cial Group, commercial real estate early months of the COVID-19 pandemic, but for more than a year have been more has performed remarkably well than 4 percent. during the pandemic, with the ex10% 10 ception of a few asset classes, in particular hotels and some retail.

8% “Each month, the amount of loans 8 in special servicing has been going down and primarily the ones that are 6 6% staying in special servicing are the conference center hotels across the 4% 4 country for obvious reasons, because it’s not just room rates but food and 2% beverage that drove their original 2 loan amounts, and large big box and mall retail,” he said.

0 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21

See MORTGAGE on Page 15

SOURCE: TREPP LLC

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REAL ESTATE INSIDER

Pharmacy owner puts east riverfont portfolio up for sale Several years ago, the co-owner of a Birmingham pharmacy began very quietly assembling a slew of east Detroit riverfront properties.

Kirk Using a Bad iPhone Password of PINHO a company name, 1111 LLC, Hany Boutros accumulated buildings and land on Franklin, Chene, East Jefferson, Guoin and Jos. Campau in 201516, in addition to properties downtown and near Brush Park.

During that time period, I reached out to Boutros several times but never heard back for an on-the-record conversation about what he was doing with his flurry of spending in the area, particularly along the water. He did not immediately respond to a request for comment Tuesday.

But a source who had interacted with him at the time described Boutros, the Mills Pharmacy + Apothecary owner and brother of local Birmingham pol Pierre Boutros (the former mayor and current mayor pro tem), as someone who seemed like “a buy, hold and flip guy.”

Turns out the source was right.

Boutros has listed much of his Detroit riverfront portfolio for sale for $16.115 million, right after Dan Gilbert bought some of the most wellknown property on the east riverfront last year, including Stroh River Place and the former UAW-GM Center for Human Resources, totaling nearly 1 million square feet of office space, more than 25 acres of land and

This property consisting of 2130 Franklin St. and several others on the east Detroit riverfront is for sale for $6.95 million by a Birmingham pharmacy owner who quietly bought a slew of properties in the area between 2015-16. That property is among a portfolio he is listing for more than $22 million. | COSTAR GROUP INC.

1,600 parking spots — including properties that immediately abut Boutros’.

Timing is important in real estate, after all.

Detroit-based O’Connor Real Estate, which has the listing, says there are 12 properties and 4.5 acres in the portfolio.

“I believe Hany was very smart with his purchases along the Detroit riverfront,” James Tumey, his broker with O’Connor, said in an email.

“They include some truly incredible sites, large and small, with great Detroit history ... The ‘buying’ process of real estate development is extremely critical, and this is a great example of a curated selection of well planned acquisitions in an up-and-coming neighborhood yet to see any big developments. The plans may have never come to reality, but it was and still is a solid investment for both sides, if you have the vision to pull it off. The portfolio includes some of

the neighborhood’s best properties, and are large enough for a developer to come in and re-develop a neighborhood, rather than just one single development. We see this happening in neighborhoods in New York, Chicago and L.A.” Here are the properties up for sale:  2130 Franklin, 2100 Guoin, 2014 Guoin and 2108 Guoin: Five industrial buildings and vacant land with a total size of 112,400 square feet. Asking price is $6.95 million. The precise

purchase price is not known but Boutros paid at least $4.1 million for it.  211 Jos. Campau: 10,300 square feet across a one-story building and two-story building constructed in the 1880s. Asking price is $1.5 million; Boutros paid $525,000 for it in May 2015.  241 Chene and 249 Chene: A 27,800-square-foot former manufacturing plant built in the 1880s. Asking price is $2.5 million; Boutros paid $1.057 million for it in the summer 2015.  240 Chene: A vacant 39,600-squarefoot building. Asking price is $3.565 million; Boutros paid $850,000 in March 2015, according to city land records.  261 Saint Aubin: A 12,500-squarefoot building. Asking price is $1.6 million; it’s not known how much Boutros paid for it.  1959 E. Jefferson Ave.: The former Detroit Saturday Night building, totaling 90,000 square feet built in the early 1930s. Boutros paid $1.75 million for it and is now asking $6.8 million.

In all, between the Rivertown portfolio and the Detroit Saturday Night building, the asking price is $21.315 million for properties Boutros paid $8.282 million for in 2015-16.

I’ve found no records of building permits issued or notices of commencement indicating that any serious construction has taken place on any of the properties under Boutros’ ownership.

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

REAL ESTATE

KeyBank gives $10 million to aid affordable housing in Detroit

BY ARIELLE KASS

A $10 million donation to Detroit’s Housing for the Future Fund is expected to help the city reach its goal of developing 2,000 affordable housing units and preserving 10,000 units of existing affordable housing.

The donation, announced by KeyBank Wednesday, puts the fund at $65.5 million raised of its $75 million goal. Since 2018, nearly 1,300 new affordable housing units have broken ground or come online in Detroit, while another 5,700 have had their affordable rents extended for at least 15 years, or are in the pipeline to be extended, according to information from the city. The Detroit Housing for the Future Fund was formed in the fall of 2020; Mayor Mike Duggan has said affordable housing is among his top priorities.

Calling KeyBank’s donation an “extraordinary contribution,” Duggan said he took pride in the fact that Detroit had not lost any affordable housing as a result of expiring tax credits in eight years.

“Nobody is going to be pushed out of this city because of our recovery,” he said. “We want to keep everybody here.”

As a whole, the fund represents the largest single private commitment to affordable housing in Detroit’s history, the city said.

So far, six projects have been aided by the fund. The latest, The Weber, will create 44 housing units at a cost of $4.4 million. Money from the fund

The historic Weber Apartments, at 655 Hazelwood, will receive a $4.4 million renovation. All 44 of its apartments will be offered as affordable housing thanks to the Detroit Housing for the Future Fund. | DETROIT HOUSING FOR THE FUTURE FUND

helps close financing gaps for such projects.

All told, those projects have received $12.7 million from the fund, which is expected to provide financing through 2024. The total investment for development is about $40.7 million.

Demand for affordable housing continues to rise, Duggan said. He urged developers to work in the city, saying, “Funding is available in Detroit.”

“If you have experience building rental properties, affordable housing properties, Detroit is the place you want to be,” Duggan said.

Derek Reed, vice president of KeyBank CDLI, said the fund was transformational for the city. In a statement, he said the bank’s investment is key to helping Detroit “with their shared goal of creating and preserving affordable housing, and to making sure that no one is left behind as Detroit continues its latest renaissance.”

Since 2017, KeyBank has invested more than $152 million in Michigan through its National Community Benefits Plan. Those dollars include $17.4 million in financing for the Selinon Park Apartments in Portage, a 75-unit affordable housing complex

for people with special needs or those experiencing or at risk of homelessness.

The bank’s $10 million “will go a long way in helping us to make a more equitable Detroit and provide quality affordable housing for Detroiters,” Tahirih Ziegler said in a statement. Ziegler, the Midwest program vice president for the Local Initiatives Support Corporation, said the city’s shortage of affordable housing is one of the biggest issues it faces.

Still, she said, the $65.5 million the city has so far raised “doesn’t quite have the same value it did in 2018 when we started this work.” As such, she called for more investors to contribute to the fund.

They’ll help pay for work in projects like the Weber, a vacant apartment building at 655 Hazelwood St. in the Piety Hill neighborhood. The 1927 building will be completely renovated.

Developer Hazelwood Partners LLC received a $2.9 million loan from the fund for the $4.4 million project.

Renovations should be finished late this summer.

Of the 44 units, six will be available for 50 percent or below the area median income, while the rest will be at or below 80 percent of the area median income. For a one-bedroom unit, rents will be between $750 and $1,200 a month.

The city has often come under fire for what it considers affordable housing. While federal measures look at

the region to determine the median income — and affordability is determined as a percentage of that median — Detroit’s incomes are far lower than the metro as a whole. For a family of four, 60 percent of the area median income is $48,000; for an individual, it’s $33,600. The median income for city residents in 2019 was $30,894, according to Census data.

The city said it primarily uses the fund to finance projects that are at or below 60 percent of the area median income, and it prioritizes those that serve residents who make less than that.

Ziegler said in an email that she understands the criticism, but is confident the fund is on track to help address housing needs in the city.

Through the fund, she said, the city hopes to “address deeper affordability” for residents who make between 30 and 60 percent of the area median income to “create high quality, safe, equitable housing spaces for residents.”

Julie Schneider, director of Detroit’s Housing & Revitalization Department, said in a statement that the fund is key to tackling inequality in the city.

“Housing is a foundation for stability in a person’s life, and ensuring that Detroiters have access to housing that is quality, safe and affordable is one of our department’s biggest goals,” she said.

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

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REAL ESTATE

Downtown Detroit’s Under Armour store to close permanently Closure of three-story retailer leaves hole in lower Woodward corridor’s street-level scene

BY KIRK PINHO

Downtown Detroit’s Under Armour Inc. store is permanently closing.

An Under Armour spokesperson said in a Wednesday afternoon statement confirming the closure, which is effective Jan. 15, that it was “not an easy decision” but that it “consistently (evaluates its) store footprint and (makes) decisions according to our retail strategy.”

The Under Armour Brand House closure will put a hole in the lower Woodward Avenue corridor’s street-level retail scene, which has attracted big names like Nike Inc. — its main competitor — Lululemon, Warby Parker, H&M, Madewell and others in recent years.

Under Armour opened in about 17,000 square feet in the basement, first and second floors of Dan Gilbert’s former Kresge building at 1201 Woodward Ave. in spring 2017, across from what is now the under-construction mixed-use development on the former site of the J.L. Hudson’s department store.

The closure comes as some retailers have been battered by the COVID-19 pandemic and the continued rise of online shopping.

The company recently said its new business strategy involves pulling its products out of some 2,000 or 3,000

The three-level Under Armour Detroit Brand House at 1201 Woodward Ave. opened in 2017. | CRAIN’S DETROIT BUSINESS

wholesalers, revenue from which has been declining, and instead focusing on direct-to-consumer sales, which has been increasing.

“Following a detailed evaluation of our multi-year direct-to-consumer strategy, we determined that this location no longer aligns with our longterm plans,” the company’s statement Wednesday says.

The company has also shuttered or scrapped plans for stores in recent years in Philadelphia, New York City and elsewhere.

Crain’s has asked for additional

details about the Detroit closure.

Gilbert, whose Bedrock LLC real estate company owns the building, and Kevin Plank, Under Armour’s executive chairman and brand chief, first publicly floated the idea of an Under Armour store in Detroit at a Detroit Homecoming event in September 2015.

The store was announced in November 2016.

Plank founded Under Armour in 1996 before moving the company from Washington, D.C., to Baltimore.

Under Armour’s Brand House in downtown Detroit offered sports clothing, athletic apparel, running and training shoes and accessories. | CRAIN’S DETROIT BUSINESS

Notable Women in Banking Honorees As we reflect on the new year, we want to take the opportunity to once again acknowledge women in banking…especially those who received this distinguished award in December.

Heather Brolick

Patti Judson

Jeanne Richter

ChoiceOne Bank

Bank of Ann Arbor

Farmers State Bank of Munith

Mishelle Comstock

Stefanie Kimball

Helda Saad

Shelby State Bank

Independent Bank

First Independence Bank

Beth Correa

Cindy Kole

Kelly Walters

Flagstar Bank

First National Bank of Michigan

First State Bank

Anita Fox

Jenny Meier

Elizabeth Zuchelkowski

Michigan Department of Insurance & Financial Services

Mi BANK

First Independence Bank

Joanne Rau Chelsea State Bank

cbofm.org 517-336-4430

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NONPROFITS

Detroit Historical, Wright museums to seek operating millage Cultural institutions would be third and fourth to secure voter-approved funding if successful

BY SHERRI WELCH

The Detroit Historical Museum and Charles H. Wright Museum of African American History are moving forward with a plan to pursue an operating millage in two Southeast Michigan counties.

If they secure it, they’d be the third and fourth cultural institutions to secure an operating millage since 2008.

Pending the outcome of enabling legislation now before the Senate, the museums plan to enter talks with leaders in Wayne and Oakland counties in a bid to put the operating millage on the August ballot.

Introduced by Sen. Marshall Bullock last fall, SB653 would allow history museum authorities to capture up to 0.4 mills in counties with 1 million or more residents for up to 20 years.

The two Detroit museums are working to put a 10-year, 0.4 millage on the August ballot in Wayne and Oakland counties, but terms could change based on negotiations with county leaders, officials said.

In exchange, residents of the counties would see expanded education programming and likely get free admission to the two museums, mirroring the agreement the Detroit Institute of Arts forged with Wayne, Oakland and Macomb counties as part of its millage, said Elana Rugh, president and CEO of the Detroit Historical Society.

The millage would enable the museums, both historically underfunded, to support maintenance and operations while also building permanent endowment that would help put them on stable financial ground well into the future.

As planned, the Wright would receive 60 percent or a projected $22 million-$24 million each year through a 0.4 millage, and the Detroit Historical Museum would receive the remainder, or about $17 million.

The Historical Museum’s budget also funds operations at Dossin Great Lakes Museum on Belle Isle.

“Neither of us have significant endowments like some of the other institutions do,” Rugh said. “Not only would a millage help us with creating more exceptional exhibits, programming, education opportunities and expansions, it also would ensure our institutions would be here 100 years from now.”

The enabling legislation could go before the full Senate as soon as this week before moving to the House, she said.

“We’re just hoping the legislators will do their part in authorizing the counties to let the voters decide, in the same manner they supported the DIA and the zoo, (and) by March, it’s on the governor’s desk.”

The two museums are feeling optimistic based on pre-pandemic and recent polling and discussions with leadership from both counties, Rugh said.

“We believe the residents of metro Detroit appreciate and want to protect culture. We are the people’s museums,” she said. “We’re looking to people to help support us and ensure we are here ... to keep telling the important stories of our region.”

The museums are working on the millage plan with Compass Strategies and Clark Hill PLC in Detroit and Lansing-based Government Consultant Services Inc.

The Charles H. Wright Museum of African American History rotunda. | CHARLES H. WRIGHT MUSEUM OF AFRICAN AMERICAN HISTORY

Rugh

Inside the Detroit Historical Museum’s Allesee Gallery of Culture. | DETROIT HISTORICAL SOCIETY

Why not Macomb?

Unlike the Detroit Zoo and Detroit Institute of Arts, which have secured operating millages from tri-county voters during the past 13 years, the

Detroit Historical Museum and Wright Museum do not initially plan to take the millage to voters in Macomb County.

“It was a practical decision looking at the realities of the legislature and

Barclay

where we thought we had the most support based on museum visitors,” Rugh said.

Wright Museum President and CEO Neil Barclay echoed that, noting about a third of the Wright’s visitors come from Oakland and twothirds from Detroit, Wayne County and other places.

“If we just look at who we are serving now, people who know us and appreciate us, that’s where they are: those two counties,” he said.

It’s less costly to run a two-county campaign for the two resource-constrained museums, Barclay added.

“We also think if we can get it done in those two counties, it’s sufficient to stabilize the museums and to create long-term sustainability models for both,” he said.

The Detroit Historical Museum is operating on a $3.8 million budget, down from about $5 million annually before the pandemic.

The pandemic “cemented even more for us the need to have a complete game changer,” Rugh said.

“We tell Detroit’s stories and why they matter for the whole region.

We’ve really been limited in the way we are able to do that because of the limited size of the budget, which has been exacerbated by COVID.” Both museums need a more stable source of income, Barclay said.

For its part, the Wright was undersourced from the moment it was created, he said.

“With that and the fact that we’re dependent on funding from the city, which has had its own issues, the museum has been destabilized financially frequently in its history,” he said.

A 10-year, 0.4 millage in the two counties would help stabilize the Wright’s finances, providing stable revenue to maintain and operate the museum on an annual budget of about $8 million-$9 million and create a $160 million-$180 million permanent endowment to help fund it in perpetuity, Barclay said.

The guaranteed revenue stream would enable the Wright to address an estimated $24 million in deferred capital projects and to increase education, particularly to children, in Wayne and Oakland counties, he said.

The Wright is building back up to a $7.5 million budget this year after dropping as low as $4.5 million during the pandemic, Barclay said.

That’s thanks to “vigorous fundraising” by staff and trustees to make up for the loss of earned revenue from admissions and rentals during the pandemic.

But that level of fundraising is not sustainable, he said.

“We can’t go out and raise $5 million to $6 million each year ... there’s not enough donors around that can give that amount of money every year,” he said. “So you do need some kind of endowment to backstop that.”

About a third of the Wright’s budget typically comes from philanthropy, Barclay said, with another third, or about $1.9 million, from the city of Detroit and another third from earned revenue.

The Wright Museum’s reputation nationally and internationally is huge, Barclay said, noting the museum was among 20 BIPOC organizations the New York-based Ford Foundation identified as integral to the country’s cultural landscape. It has also hosted memorials for iconic civil rights leaders including Rosa Parks.

“It’s important to have an institution like the Wright in our region. It gives us a lot of information about each other and it helps us to understand our shared history, not just of one people but of all of us,” Barclay said.

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

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NONPROFITS

RETAIL

Corned beef titan Grobbel plans grocery store, deli in Eastern Market

BY JAY DAVIS

MCREST plans to open the shelter in this Mt. Clemens building.

MCREST to open fixed emergency shelter for Macomb County homeless

BY SHERRI WELCH

Macomb County Rotating Emergency Shelter Team, which has coordinated shelter for the homeless in area churches for 34 years, will open a fixed emergency homeless shelter in Mt. Clemens before the end of the first quarter.

Located in the building at 215 N. Main St., acquired from nonprofit Turning Point in 2015, the new shelter will more than double the number of homeless individuals MCREST can assist. It will house up to 45 women and children when it opens.

Homeless men in the county will continue to be served through the rotating shelter.

All clients receive hot meals and case management to help get them to stable Fidler ground.

The extra space is needed, especially with the increased number of people coming for help and the fact that not all churches and elderly parishioners are participating at this point, Executive Director April Fidler said.

“Our typical family is a mom with three children who may have lost her job or be dealing with an addiction or family issues, Fidler said.

Children and families need a more stable environment than the communal living setting provided by churches, she said. The new shelter will provide that.

MCREST paid Turning Point $90,000 for the three-story building which previously was a domestic violence shelter.

Renovations began before the pandemic, with plans for cosmetic fixes to the building but were slowed by water damage and the subsequent discovery of mold, asbestos and lead-based paint that all needed to be remediated.

MCREST raised over $300,000 to do a full renovation after being forced to gut the building, Fidler said.

It added a baby play room and common area, renovated seven bedrooms that will accommodate up to six people each, and expanded the kitchen to include three stoves and cooking stations for healthy cooking classes and a place for moms and kids to make birthday

cupcakes for school parties and Christmas cookies.

MCREST, which is operating on a $1.2 million budget, fundraised the entire cost of the building and the renovations and will open the shelter with no debt on the building or renovations.

The fixed shelter will provide a more stable environment for children and families in the county, Fidler said.

“We wanted to make a more homelike feeling for our guests,” with more of a family setting rather than a communal living setting in a church, sleeping on a mat, she said.

Gardner-White partnered is helping furnish the new shelter, with seating for the front lobby, a sectional, table, reading chairs and pillows in the common areas. BedGear donated 100 bed pillows.

Beyond the emergency shelter, MCREST last year stepped in to fill a gap for the county’s chronically homeless. It began housing up to 60 people, who typically suffer from mental illness and addictions, two to a room at a Fraser hotel. A $500,000 Emergency Solutions Grant from the county is supporting the “warming center” at the hotel, which includes three meals a day and case management services to try and get them off the streets permanently and into a stable living situation, Fidler said.

With rising need, it plans to add beds for another 100 people for the hoteling program through April 3, she said. It is operating on a $1.2 million budget this year. “Come March, our COVID money dries up for hotels.”

The warming center/hoteling is temporary, Fidler said, and only meant to fill a gap left by the Macomb County Warming Center’s inability to house the chronically homeless through the rotating shelter model it also employs.

“We’re not sure if we’re going to make it a permanent,” Fidler said.

“I know the churches aren’t back in rotation ... ours are hit or miss.”

In October, Lighthouse, which has long operated a rotating shelter in Oakland County with churches there, said it would convert an apartment building into an emergency shelter amid increased demand for assistance in the county.

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

A fifth-generation, family-owned business with a more than 130-year history in the city of Detroit is making a major investment in Eastern Market.

E.W. Grobbel Sons Inc. plans to open Grobbel’s Gourmet Fresh Neighborhood Market and a Sy Ginsberg-branded Jewish-style deli later this year at 2456 Market St. — the former home of Eastern Market Seafood Co., according to a Thursday news release.

The new businesses will operate in a 4,000-square-foot, mixed-use space that stretches from Market Street to Riopelle Street, with each having its own entrance. The grocery store’s entrance will be on Market Street, next to DeVries & Co. shop and Vivio’s restaurant, while the deli will be accessible from Riopelle, joining Eastern Market Brewing Co. and Detroit City Distillery on that street.

Grobbel and FIRM Detroit real estate company are partnering on the venture in a 50/50 deal for the ownership of the real estate, according to the release. The space is being designed by Birmingham-based Studio H2G and Studio Detroit is the architect.

Financial details were not disclosed.

Grobbel President Jason Grobbel in a statement said the company’s plan with the project is to make high-quality food accessible to Detroit residents.

“The Grobbel team is committed to our hometown, the city of Detroit,

E.W. Grobbel plans a grocery store and deli in Eastern Market in Detroit. | E.W. GROBBEL

by serving its residents and visitors with the best possible food offerings and experiences they could receive,” Grobbel said.

Grobbel, established in Detroit in 1883, plans to work with urban farmers and other local farms to bring fresh food and produce to the grocery store. The market will offer products from local businesses including as Topor’s Pickles, Corridor Sausage as well as Grobbel’s Gourmet meats — including its hallmark corned beef — and a full line of premium sliced pre-packaged deli products. The store will also feature typical grocery items such as bread, seafood and grab-and-go ingredients.

Grobbel plans to hire local residents for the project, which will create between 20 and 30 full- and parttime positions. About 70 percent of the company’s current staff comprises Detroit residents, the release states.

The announcement comes after Grobbel last year announced plans to invest $33 million into a food warehousing building in the Eastern Market.

In 2017, Grobbel acquired fellow Detroit corned beef company United Meat and Deli Inc., founded by Sy Ginsberg, for an undisclosed amount.

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

GET A HEALTHIER OUTLOOK ON CHILDHOOD Tune in to WJR 760 AM for Caring for Kids, a monthly radio program highlighting issues and efforts locally, regionally and nationally, that impact the health and wellness of children.

LISTEN TO WJR AM LIVE Wednesday, Jan. 19 at 7 p.m.

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YourChildrensFoundation.org/caring-for-kids JANUARY 17, 17, 2022 2022 || CRAIN’S CRAIN’S DETROIT DETROIT BUSINESS BUSINESS || 77 JANUARY

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COMMENTARY

LETTER TO THE EDITOR

Bill would help student literacy, the key to future TO THE EDITOR:

No-fault care providers new legislation is their last hope

M

ichelle and Trista Kalous, the mother-and-daughter owners of a Livonia-based home health care agency, haven’t taken home a paycheck since August.

A 45 percent cut in pay to medical providers that care for severely injured car accident victims since July 1 has pushed the attendant care business Michelle Kalous spent 23 years building to the edge of insolvency.

“We are barely making payroll,” said Kalous, co-owner of Alastor Home Care LLC in Livonia.

A long-awaited Republican-authored plan to provide relief from some of the 2019 cuts to medical providers that treat patients with auto insurance was expected to be introduced last week in the Michigan House but has not yet emerged.

Advocates say IT’S NOT CLEAR changes are needed to bring some stabiliWHETHER ty to the post-acutecare industry.

HOUSE AND A draft version of SENATE Republican Rep. Phil Green’s bill obtained REPUBLICAN

by Crain’s showed it LEADERS WILL would replace the 55 percent cap on paySUPPORT THE ments to home care CHANGES IN THE providers and brain injury rehabilitation LAW. clinics with a fee schedule equal to 150 percent of the rates the Veterans Administration pays for treating injured veterans.

The proposed legislation also would double the number of hours friends and family members can get paid to care for an injured motorist (from 56 hours to 112) and lock in payment rates for hospitals that treat injured

Chad

LIVENGOOD

motorists at 200 percent of Medicare’s rates.

Advocates for auto accident victims gathered last week to be at the Capitol lobbying for the legislation.

It’s not clear whether House and Senate Republican leaders will support the changes in the law.

It also remains to be seen whether GOP leaders can muscle past the insurance industry lobbyists who have been able to convince lawmakers that the 2019 reform law is working, despite all of the evidence that it’s not working well for catastrophically injured motorists who depend on expensive round-theclock care to remain alive.

While the 2019 law didn’t reduce their benefits per se, it has reduced their access to care through deep cuts in payments to providers, some of whom have spurned clients covered by auto insurance, discharged longtime patients, reduced services, spent months chasing bills to insurance carriers or already gone out of business.

Medical providers like Michelle Kalous are watching closely after spending the last six months of 2021 trying to adapt to lower and often inconsistent payments from insurance companies, many of which have interpreted the new law differently.

“This is our last hope,” Kalous told Crain’s.

“If this bill doesn’t pass in January, we’re going to close.” It’s not an idle threat — and Kalous is not alone.

See LIVENGOOD on Page 9

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.

PROPOSED LEGISLATION IN THE MICHIGAN SENATE HELPS THE EDUCATIONAL COMMUNITY GET CLOSER TO OUR GOAL OF ACHIEVING LITERACY FOR EVERYONE. Higher literacy rates beget improved outcomes for Michigan, from standardized test scores to increased college enrollment to building a talent base able to move our state’s economy forward. We, like the authors noted above, urge our leaders to act now to support every school district with the “funding and resources to achieve.”

As a state, we can’t afford to make our students wait.

Pamela Good Co-founder and CEO Beyond Basics

MORE ON WJR  Crain’s Executive Editor Kelley Root and Managing Editor Michael Lee talk about the week’s stories every Monday morning at 6:15 a.m. Mondays on WJR 760 AM’s Paul W. Smith Show.

DANIEL SAAD FOR CRAIN’S DETROIT BUSINESS

Larry Treece (right), owner of Home Care Associates in Grand Rapids, talks with House Speaker Jason Wentworth (left), R-Farwell, on Dec. 14 in a hallway at the state Capitol. Treece is part of a cadre of small business owners in the post-accute care industry that have spent months lobbying lawmakers to undo the 45 percent cut in their charges for treating catastrophically injured motorists. The cost containment measures were tied to a 2019 reducing auto insurance premiums in Michigan. | CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

We applaud the recent commentary authored by Jametta Lilly, CEO, Detroit Parent Network; Monique Marks, CEO, Franklin-Wright Settlements Inc., and Alice Thompson, chair of the NAACP-Detroit Branch Education Committee, in which they shine a light on school funding gaps that result in poor literacy outcomes, primarily for minority students. We are proud to partner with Detroit Parent Network to recruit tutors from within the communities served by DPN; these tutors are currently actively working with Beyond Basics students in Detroit area high schools to provide intensive literacy intervention to help them advance in reading.

Our society bears a moral obligation to identify and support students who need to master reading skills. This is true in Detroit, and it’s true for every student, and the earlier the better, so that they may take advantage of the education to which they are entitled. Literacy sends more students to college and into the workforce, building a better future for Michigan.

Currently, proposed legislation in the Michigan Senate helps the educational community get closer to our goal of achieving literacy for everyone. As the Legislature reconvened Jan. 12, the passage of a bill sponsored

by Sen. Jeff Irwin should be a top priority for lawmakers.

The bill would prescreen public school students for the “characteristics of dyslexia and underlying factors that place pupils at risk for difficulties in learning to decode accurately and efficiently, and the secondary consequences such as problems in reading comprehension” and impeded vocabulary.

The bill calls for evidence-based interventions grounded in the principles of struc-

tured language and literacy and cognitive science.

At Beyond Basics, this is what we do every day. Our one-on-one, multisensory, structured literacy interventions help students accelerate their reading growth in an average of six weeks. Our program works for students with a variety of reading challenges, including dyslexia. We are fortunate to do this work in Detroit area schools, thanks to public and private funding with partners who understand the urgency of solving the epidemic of illiteracy.

Sound off: 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.

8 | CRAIN’S DETROIT BUSINESS | JANUARY 17, 2022

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LIVENGOOD

If the Green bill doesn’t see quick action, the owners of 1st Call Home Healthcare in Clinton Township say they plan to send discharge notices to 50 home-bound patients Feb. 1 informing them that the company is going under by March 1.

“Everybody I’ve talked to is going to do the same thing,” said Bob Mlynarek, co-owner of 1st Call Home Healthcare.

“We can’t wait any more. Feb. 1 is D-Day.” Because the 45 percent rate cut went so deep, home health care companies that once charged their highest rates to care for auto accident victims have essentially been operating at a loss and burning cash for the past six months.

To preserve cash, Larry Treece, owner of Home Care Associates in Grand Rapids, said his family-owned business is no longer filling every shift, leaning on families to fill in the gaps of care for their loved ones in the event Green’s legislation sputters out at the Capitol.

“If we don’t have movement or interest in Rep. Green’s bill, we’ll begin to fill less and less shifts, and the families will have to look for other options” by Feb. 15, Treece told Crain’s. “I can’t go on forever like this.”

Treece and Mlynarek are among a cadre of business owners in the home care sector who have been spending at least one day a week at the Capitol for months trying to convince lawmakers to reconsider the cuts they made just before Memorial Day 2019.

Mlynarek said he expects the Green bill’s proposed fee schedule will be the starting point for negotiations and, if the bill gains traction, it won’t be as generous as 150 percent of VA’s fee schedule.

But it won’t be as draconian as the 45 percent government price control that Gov. Gretchen Whitmer signed into law during her first year in office.

Whitmer has said she supports changes to the fee schedule that was passed with broad bipartisan support. Members of both parties broadly agree that the fee schedule is among the parts of the law that need fixing.

The Veterans Administration pays home-care agencies $30 per hour to staff a home care aide for wounded veterans.

The impending legislation would pay $45 per hour for that aide. Under the 2019 law, if an agency charged $30 per hour charge for a home care aide, a typical rate, its payment was slashed to $16.50 per hour.

Within that $16.50, the home care agency has to pay the direct care worker, their taxes, liability insurance and other overhead — nearly impossible math to reconcile, especially in this labor market where $15 an hour has become the de facto minimum hourly wage.

Some home health care companies have leaned on their privately paying customers to keep the auto insurance side of their business afloat. Others have taken out lines of credit. Many have turned away new auto insurance clients.

1st Call Home Healthcare limped along in November and December after winning a couple of lawsuit judgments and getting back payments from insurers, Mlynarek said.

Mlynarek is not sure where his company’s 50 patients across the state would go if his business goes under.

Most paralyzed quadriplegics can’t simply move into a nursing home or get 24-hour care from family members.

“It’s going to be anarchy,” he said.

Michelle Kalous and her daughter

CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS

From Page 8

are running out of options — and cash flow to pay their employees who care for eight individuals with severe brain and spinal cord injuries who require round-the-clock care.

In addition to not getting paid for four months, Michelle Kalous defaulted on the company’s monthly office rent payment with three years remaining on the lease to hold onto cash.

“Paying my staff is way more important,” she said.

To try to get around the 45 percent cut, Kalous created new limited liability corporations, hoping to exploit a loophole in the law that applied the provider rate cut only to companies that had an established rate structure on Jan. 1, 2019.

“Some of (the insurers) are paying full price like they used to, some are paying 55 percent, some are paying nothing,” Michelle Kalous said.

“There’s no rhyme or reason what’s going on in the industry. ... I figured (the loophole) was worth a try.”

But a new company would have problems maintaining the same line of credit Kalous needs to make payroll each month.

“You can’t run a business without a line of credit,” she said.

Kalous has another problem: Nurses can practically name their prices and dictate their hours in the pandemic-battered health care industry now.

It’s hard to retain nurses, Kalous said, amid all of the uncertainty facing home care agencies that care for injured motorists with auto insurance.

“Nobody wants to take a job in this industry because of all of the problems,” she said.

Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

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HEALTH CARE

GETTY IMAGES/ISTOCKPHOTO

WAIT-AND-SEE APPROACH Doctors, insurers question Alzheimer’s drug’s safety, effectiveness BY JAY GREENE Alzheimer’s disease patients and their

families were given some hope in June when federal regulators approved Aduhelm, the first new drug in 18 years for use on patients with mild to severe cases of memory loss and thinking problems.

But that hope began to fade somewhat when health insurers, hospital systems, the Veterans Administration and other health care companies began to question the effectiveness and warned of dangerous potential side effects of Biogen’s new medication.

Up to 41 percent of Aduhelm’s late-stage clinical trial participants receiving high-dose intraveneous infusions of 10 milligrams or more experienced brain swelling or bleeding, according to a secondary analysis of trial data in the Nov. 22 issue of JAMA Neurology. Some participants had headaches, dizziness or nausea, while others were asymptomatic, said the study.

“WHEN WE LOOKED AT THE DATA, WE SAID IT DOESN’T WORK VERY WELL AND IT’S DANGEROUS BECAUSE IT CAUSES BRAIN SWELLING, STROKES, AND MAYBE EVEN MORE.” — Dr. Gregory Barkley, chief of neurology, Henry Ford Health System

“It was a promising idea but the primary outcome marker wasn’t met in the trial,” said Dr. Gregory Barkley, chief of neurology at Henry Ford Health System in Detroit.

“Then (the company) tried to slice and dice the data and came up with a subgroup with mild cognitive impairment (where) it had some benefit.”

The FDA approved the drug in June with no restrictions despite a recommendation from its own in-

dependent advisory committee recommending the agency reject it, a decision Barkley called “inexplicable.”

Facing criticism from its own researchers and outside experts, the FDA in July backtracked and decided Aduhelm should be used only for mild symptoms. The future of the drug could depend on confirmatory trials the FDA has required Biogen to conduct as part of its accelerated approval process.

Aduhelm, which is a monoclonal antibody therapy dosed every four weeks, is designed to break down a buildup of a protein called beta-amyloid that forms plaques in the brain. The plaques are believed to block communication between the nerve cells in the brain, leading to Alzheimer’s disease.

“When we looked at the data, we said it doesn’t work very well and it’s dangerous because it causes brain swelling, strokes, and maybe even more,” said Barkley, who is in charge of the pharmacy committee for Henry Ford. “We decided this wasn’t something we were ready to use.”

Based on limited benefits and the risks involved, major health care companies in Michigan, including Blue Cross Blue Shield of Michigan, the University of See ADUHELM on Page 11

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FOCUS | HEALTH CARE

ADUHELM

From Page 10

Michigan (Michigan Medicine) and Henry Ford told Crain’s that they are not endorsing Aduhelm.

“The only patients that I know who have been treated at other major medical centers were under the clinical trials,” said Barkley, adding that some of Henry Ford’s patients and families have asked about the drug.

Patient receives Aduhelm In Michigan, one of the first patients to receive Aduhelm was treated at Grand Rapids-based Infusion Associates at its Grandville clinic, said Dr. Khan Nedd, the practice’s chief medical officer.

Nedd said the patient, who was referred to the clinic by a neurologist, received three intravenous infusion treatments and “well-tolerated” the new drug without any of the major side effects.

“What we do is make sure patients are properly selected, the treatment is appropriate and ensure it is administered properly for the best outcomes,” Nedd said. “This patient is in the early treatment regimen (with low doses). Over time, (patients receive) escalating dosing.”

For example, the first and second infusions contain 1 milligram of Aduhelm dose per kilogram of body weight, going up to 3 milligrams of Aduhelm per kilogram for doses three and four. By infusion seven, patients receive 10 milligrams of the drug per kilogram. Researchers said it is the higher doses that can create significant side effects on patients.

Crain’s asked to interview the neurologist who referred the patient to Infusion Associates, but officials said the doctor declined.

However, the wife of the first Aduhelm patient, whose name is Edward, was excited for him to receive the treatment, according to a press release by Infusion Associates, an outpatient ambulatory infusion center with five locations in Michigan.

“We’ve waited a long time for this treatment to be approved as another option for Edward’s journey with Alzheimer’s,” the patient’s wife said in the release. “We’re grateful to be among the first families to try Aduhelm, and excited for the opportunity to slow the progression of the disease.”

A spokesperson for Infusion Associates said Edward’s family members declined further comment.

Nedd said several other patients and doctors have inquired about Aduhelm treatments, but none so far has met the treatment criteria.

Bruno Giordani, associate director of the Michigan Alzheimer’s Center and chief psychologist with the University of Michigan’s psychiatry department, said patients who receive the drug require careful monitoring with MRI scans to monitor for side effects.

“The company has been presenting some very interesting data in persons with the highest dose that suggest slowing of cognitive and even perhaps behavioral symptoms of Alzheimer’s disease,” Giordani said.

But Giordani said the data so far wasn’t convincing enough for the University of Michigan to offer the treatment.

Blue Cross said in a statement that it is encouraged that progress has been made to address incurable conditions such as Alzheimer’s.

The Biogen Inc., headquarters in Cambridge, Mass. | STEVEN SENNE|AP

Giordani

Nedd

“Given the information available on Aduhelm at this time, we join other leading health organizations that feel strongly that the current evidence highlights safety risks and uncertain clinical benefits, so we are not covering Aduhelm for our commercial or Medicare members at this time,” said Atheer Kaddis, the Michigan Blue’s vice president of pharmacy services, in an email.

On Tuesday, the Centers for Medicare and Medicaid Services proposed to let Medicare cover Aduhelm when used in clinical trials. The trials must seek to answer research questions about whether the use of monoclonal antibodies used for Alzheimer's treatment make a meaningful different in disease progression and what adverse events are associated with its use.

A final decision on the coverage for the controversial drug is expected in April.

Dominick Pallone, executive director with the Michigan Association of Health Plans, said he hasn’t heard of any managed care plans in Michigan that are covering Aduhelm.

“Current evidence appears to be insufficient to know whether or not this specific drug actually slows the loss of cognition,” Pallone said in an email. “In addition to that, there is considerable concern over the announced list price for the drug.”

For example, the Institute for Clinical and Economic Review concluded that Aduhelm had not demonstrated net health benefit for patients. ICER benchmarked the list price as being justified somewhere between $3,000 to $8,400 per year.

In mid-December, Biogen cut its list price of $56,000 in half to $28,200 after finding that providers weren’t offering patients the drug at the rate the company had wanted, according to CEO Michel Vounatsos in a news release. Only about 100 patients were taking Aduhelm as of September.

“Too many patients are not being offered the choice of Aduhelm due to financial considerations and are thus progressing beyond the point of benefiting from the first treatment to address an underlying pathology of Alzheimer’s disease” Vounatsos said in a press release. “We recognize that this challenge must be addressed in a way that is perceived to be sustainable for the U.S. health care system.”

In July, Biogen defended the drug’s effectiveness and approval process in an “open letter” press release.

“The approval of Aduhelm by the (FDA) came after an extensive development, testing and review process,” Alfred Sandrock, Biogen’s R&D chief, said in the release. “Over more than a decade, we at Biogen engaged in rigorous and science-driven research and development that assessed whether Aduhelm could help patients worldwide who suffer from Alzheimer’s disease.”

Barkley said new drugs come out all the time and sometimes they make a great difference in patient outcomes.

Despite Aduhelm being the first approved treatment to attack the disease process of Alzheimer’s instead of just addressing dementia symptoms, many Alzheimer’s experts have said there is not solid evidence that reducing amyloid levels has any effect on people’s cognitive problems.

“If this were the only chance it might be worth (the risks), but there are other (drugs) in the pipeline that may work better” for Alzheimer’s patients “that maybe are more likely to be effective and less dangerous,” Barkley said.

Despite the risks, patient advocacy groups lobbied hard for approval

because there are so few treatments available. Similar drugs to Aduhelm are in clinical trials, but they are three or four years away from potential approval.

Colin Ford, public policy director with the Alzheimer’s Association of Michigan in Southfield, said the national association supported the FDA’s approval. He said the number of patients with Alzheimer’s in Michigan has been steadily growing the past two decades.

Growth, COVID-19 impact Nationally, more than 6 million people live with Alzheimer’s, including 190,000 in Michigan, a number projected to grow by 16 percent to 220,000 by 2025, according to a recent report by the state Department of Health and Human Services.

The FDA’s reversal is likely to reduce the approximate number of Americans who are eligible for the treatment to about 1.5 million nationally, and about 50,000 in Michigan.

“The numbers of people living with Alzheimer’s are massive and growing because we have an aging population and our ability and willingness to diagnose the disease is increasing,” Ford said.

For Medicare patients, Alzheimer’s also is three times costlier to treat than the average per capita cost of other seniors. In 2021, Alzheimer’s and dementia costs were estimated at $355 billion. Unpaid caregiving costs were estimated at an additional $257 billion.

To get an idea how quickly the disease is growing, experts say a person develops Alzheimer’s once every 72 seconds. It kills more than 120,000 annually, making it the nation’s fifth-leading cause of death in those 65 or older, said the Centers for Disease Control and Prevention.

The COVID-19 pandemic has complicated their care.

“The pandemic really exposed the way people live their lives and how

The Food and Drug Administration approved Aduhelm in June. | BIOGEN

close you are to family members,” said Ford. “An entire network of people evaporated for those who needed assistance” at nursing homes and living alone.

Because of the COVID-19 pandemic, there were 1,554 more deaths from Alzheimer’s in Michigan than expected in 2020, an 18.5 percent increase, according to a new report from the Alzheimer’s Association. In 2019, 4,467 people died of Alzheimer’s in Michigan, a 171 percent increase since 2000.

“The excess mortality numbers are really alarming,” Ford said. “We know more people died because of social isolation. It is very hard for people to go a long time without seeing family members.”

Barkley said the people with Alzheimer’s who fare the best have families who coordinate care. Others have fared worse, he said.

“Those people living alone where a son or daughter was driving by once or twice a week, now COVID hits, and it is once a month. Their quality of life has declined, even if their physical health hasn’t gotten worse,” Barkley said.

“We’ve certainly seen that kind of a story and resolve where a family has decided it is not an inconvenience for us to have to have somebody going over every day to check and drop off groceries,” he said.

“They’ll call on neighbors and organize visits. It’s done the old-fashioned way of forming this little small network of trusted relatives and friends.”

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HEALTH CARE

Online betting’s rapid growth comes with a price for some Addiction treatment options expand as compulsive gambling issues expected to increase

BY JAY GREENE

and that number is growing. Michigan has an estimated 150,000 compulsive gamblers, according to a study by David Hartmann, a sociology professor at Western Michigan University.

“Online is easy. It’s anonymous. You can hide it,” said Michael Burke, executive director with the Michigan Association on Problem Gambling. “All you need is a computer or phone and you can do it 24 hours a day, at work, at home. The pandemic made it worse for many because it was a relief.”

Burke said 90 percent of people can go to a casino, gamble, have fun and not develop a problem.

“They establish an amount of money they’re going to lose and not more,” said Burke, a recovered compulsive gambler and former attorney who was disbarred in 2001 for using client funds to pay for his addiction. “We are talking about a small percentage of people who end up with “PLENTY OF PEOPLE CAN DO a gambling problem.”

IT JUST FOR But those with problems ENTERTAINMENT, BUT experience THERE’S OTHER FOLKS THAT can severe consequences. ProbIT’S RUINING THEIR LIFE.” lem gambling — Steve Crepeau, recovering gambler can lead to lying, stealing, broken at yourself and figure out if your life families, divorce, bankruptcy, foreclosures, theft, jail and suicide. would be better without that.”

“Problem gamblers have the highest Gambling problems in Michigan have increased significantly since 1996, suicide rate of all addictions,” Burke shortly after voters authorized three ca- said. Various studies, including one in sinos in Detroit. Tribal casinos were al- Sweden, found that about 20 percent of lowed in 1987 by a U.S. Supreme Court people with gambling disorders attempted suicide with nearly 1 percent decision.

Before Michigan went down the le- successful.

“The compulsive gambler will degalized gambling road, Gov. John Engler created the Blue Ribbon Commis- stroy his family. He’s going to destroy sion on Michigan Gaming to study his entire work career,” Burke said. “I’ve gambling in 17 states. In 1995, the com- worked with thousands of gamblers mission’s report found that casinos are across the United States. A high perbig revenue producers for state and lo- centage of them also have substance cal governments, but there would be abuse issues. You see a lot of crimes, as more crime and social problems, and two out of three compulsive gamblers more people were likely to develop ad- will commit an illegal act to get money with which to gamble.” dictions.

Allowing online gambling activity As interest in offshore gambling grew, the state in March 2020 allowed has had a negative effect on addicts, casino operators to take sports bets. Burke said. The problem is made worse Since Jan. 22, when legalized online by the constant drumbeat of betting insports betting began in Michigan, ad- formation from sports radio, advertisediction experts told Crain’s there has ments by online companies and elsebeen a dramatic increase in the num- where, he said.

“You’ll notice ... there has been an ber of people, including teenagers and those ages 18-35, with gambling prob- increase in sports betting advertising on TV,” Burke said. “That’s because that lems.

Experts say 2 percent to 6 percent of first phase of compulsive gambling is gamblers develop serious problems, called winning. Companies give you

GETTY IMAGES/ISTOCKPHOTO

As longtime athlete Steve Crepeau saw his college and recreational sports career slowly coming to an end, he turned to sports gambling to satisfy his competitive urges.

That move cost him a marriage and six-figure financial losses over 15 years.

Now that legal betting is no further away than a gamblers’ phone and laptop, and television is littered with sales pitches for free bets from gambling companies looking for a piece of the action, experts say problem gambling has spiked, and the long-term consequences are only starting to become clear.

Now 42 years old and nearly five years into recovery, Crepeau has a message for those unable to stop sports or other forms of gambling that include such casino table games as poker, roulette, electronic gaming, horse racing and lotteries: “If you feel like you have an issue, if you question it at all, try a meeting (Gamblers Anonymous),” said Crepeau, who has remarried, has a 7-month-old child and now works for GM OnStar as an accounts manager. “If the meeting works, great, if not, you can go back and gamble anytime. It’s your choice.”

However, Crepeau said the free Gamblers Anonymous meetings have been extremely important for him to keep his addiction in check.

“So many people who come to meetings are desperate. Plenty of people can do it just for entertainment, but there’s other folks that it’s ruining their life,” he said. “I am not telling anyone to stop.

But you have to be honest with yourself, and if you think you’ve gambled for too long or gambled with money that you didn’t intend on gambling with, then you got to take a take a deep, deep look

has generated $698.5 million in adjusted gross receipts, the Michigan Gaming Control Board said. At the current pace, it is projected there will be more than $1 billion in sports bets placed.

An additional $60.5 million in aggregate internet sports betting adjusted gross receipts have been collected so far this year. In 2021 through September, internet sports betting has contributed $4.38 million in taxes and payments to the state. Of those taxes collected, the Compulsive Gaming Prevention Fund gets about $1 million annually.

money and a chance for a big win. For people predisposed to the problem, that draws them in.”

Gamblers can get sports betting information everywhere. “You can’t watch a sporting event without being inundated with what the spread is, who’s favored and stuff like that,” Crepeau said.

Crepeau likened online sports betting to drug dealing because to hook people companies offer “free money” in the form of cash deposits when people register. Then they tout “risk-free betting.”

“They give you upfront money, just to get started. They guarantee winning, and then when you start losing you are down that road and are chasing losses,” said Crepeau, who was into offshore sports betting before it became legal in Michigan.

But Crepeau said companies make it very difficult to withdraw money once you place money in an online betting account.

“You try to cash out, and they make you wait like three to five days to get your money. As a compulsive gambler, you’re not going to wait that long. So what would happen is, you bet it,” Crepeau said. “It’s super simple and super easy. For the compulsive person, that’s going to be a huge issue.”

Burke said the adrenaline rush a gambler gets from placing bets and winning is similar to doing drugs.

“If the gambler wins, he will put it back in. If he loses, he will chase it and he’ll try and find sources that have more money so that he can continue,” Burke said. “In all of these years of working with families, I never met one who said ‘I had this wonderful night at the casino and stopped.’ It’s never enough.”

Anticipating problem gambling, Michigan gambling laws allow people to ban themselves from Detroit casinos as well as through what is called the Disassociated Persons List by filing an application with the Michigan Gaming Control Board. It does not apply to tribal casinos, but some voluntarily offer similar programs.

The state’s online gambling law requires internet gaming operators or platforms to allow people to self-exclude “for all internet games offered and the ability for authorized participants to establish their own periodic deposit and internet wagering limits and maximum playing times.”

More than 4,000 people have signed up for the casino self-ban list, but only a

handful so far have signed up to exclude themselves from establishing an internet casino gaming account.

Increase in calls for help

Younger people attracted While online sports betting is allowed only for anyone over age 21, Burke said the addiction counselors have seen an increase in teenagers with problems. State health officials are concerned that sports wagering among youths will lead to increases in longterm gambling problems.

“I remember when online sports betting first came up and there was concern about younger people using their computers and phones,” Burke said. “The response was, ‘No, don’t worry, we will make sure that they can’t get in on their computers.’ My response was, ‘Well, you’ve never had a 15- or 16-year-old child living in your home.

They’ll be in that site in 2 minutes.’”

A new report shows that more than 75 percent of students have gambled with more than 13 percent of teenagers betting on sports teams, the National Council on Problem Gambling found.

“We’ve opened Pandora’s box. And we’re going to see in the next few years where that’s going to take us. It is really terrifying to me,” Burke said.

Nearly half of American adults have bet on a sporting event, with 45 percent of sports wagering now taking place through the internet, according to a report from the National Council on Problem Gambling.

Studies in Michigan and other states with legalized gambling have shown that any increase in gambling activities “is going to cause an increase in people who have gambling disorders,” Burke said. “It’s pretty simple and was predicted,” by Engler’s report and another commissioned by the Michigan Department of Community Health, he said.

This year, the state’s Problem Gam- Treatment options increase bling Hotline has received a 33 percent increase in calls for help through SepThe state has partnered with 37 adtember to 9,317 compared with 7,006 diction counselors who specialize in for the same period in 2020, according gambling disorders to offer up to 12 free to the Michigan Department of Health outpatient therapy sessions per person, and Human Services.

Lucas said. In 2020, the team provided Online sports gambling calls in- services to 312 people, 538 others were creased 248 percent in September to referred for treatment outside the net394 compared with 113 in the same work and 226 received “in-the-momonth in 2020. Additionally, 398 peo- ment crisis intervention,” according to ple were referred to treatment, a 28 per- the Gambling Disorder Services annual cent increase from 312 in 2020, the state report. said.

Lucas said more clinicians are needDespite the increases, Alia Lucus, ed and are being trained. manager of the Michigan Gambling In 2019, the state began a gambling Disorder Program, said it is “WE’VE OPENED PANDORA’S too early to conclude that there BOX. AND WE’RE GOING TO has been a “sub- SEE IN THE NEXT FEW YEARS stantial” increase in gam- WHERE THAT’S GOING TO bling. She said TAKE US. IT IS REALLY more data is TERRIFYING TO ME.” needed.

“There was — Michael Burke, executive director , Michigan anticipation that Association on Problem Gambling increased accessibility to gambling may exacerbate the disorder residential treatment pilot at number of gambling disorder,” Lucas the Mariners Inn, a Detroit-based said. “Over time, there will be increased homeless and treatment center. numbers of individuals that are finding “The onset of COVID made it virtualthat their problematic gambling activity ly impossible (for admissions), so now (is resulting in) a gambling disorder.” we are (admitting) them and they’ll Lucas said the COVID-19 pandemic, have 30 days of residential treatment the need for entertainment and the ad- and then follow with support services to dition of online options can make it help them sustain recovery,” said Lucas. harder for people to curb problem “Every aspect of their life is impacted gambling. by this disorder,” she said. “We want to Still, gambling revenue is lucrative give them the tools that help them feel for the state. more confident to take control of their This year, aggregate internet gaming lives and move forward.”

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COMMERCE

Fifth generation takes over Ypsilanti-based beer distributor Four new officers purchase company from parents, hope to facilitate more growth

BY JAY DAVIS

Leadership roles at a nearly 90-year-old Ypsilanti-based beer distributor will remain within the family that has run the company for five generations.

O&W Inc., an independent beer distributor established in 1933, is now led by 47-year-old Kit Wanty following the retirement of her father, Jim, and uncle, Doug.

Kit Wanty took over as president after 22 years with the company, effective Dec. 28.

Kit’s sister, 41-year-old Jamie, is now the company’s vice president of marketing. Isabel and Cooper Wanty, twin 32-year-old children of Doug, are now vice president of human resources and vice president of finance, respectively.

The four new officers purchased the company outright from Jim and Doug, according to Kit Wanty, who did not disclose the purchase price.

The brothers took over the family business in 1990 from their parents, Hugh and Marilyn Wanty. Jim Wanty, who started with O&W in 1972, has taken an advisory role with the company’s board of directors. Doug Wanty, with the company since 1983, has retired.

The transition began close to two years ago, Kit Wanty said.

“We all almost had deal fatigue,” she said. “There are so many things, loose ends to tie up, especially in a family business. It’s like when you move from one house to another: Every door you open, you find something new. Part of me thought that, since things were taking so long, if I could do (the job). I had kind of mixed emotions. I wanted our family to come out stronger than ever, and I wanted to make our dads proud.”

O&W, which operates out of a 100,000-square-foot facility, passed $110 million in gross revenue in 2021. The company, which distributes beers from brands such as MolsonCoors, Griffin Claw and New Belgium, sold 5.25 million cases of

O&W Inc., a nearly 90-year-old Ypsilanti-based beer distributor, sold more than 5.25 million cases of beer in 2021. | O&W INC.

Ypsilanti-based beer distrbutor O & W Inc. in 2021 grossed $110 million in revenue. | O & W INC.

beer and nonalcoholic beverages last year to retailers across seven Michigan counties. The company works with 2,400 licensed retailers.

“Our last big acquisition came in 2016, when we hovered around (selling) 5 million cases a year,”

Wanty said. “Then the whole landscape of the beer industry changed with imports growing and seltzers becoming so popular. What that’s done for our business is take the average case of beer from $15 or $16 to double that, which is good for us.”

Jim Wanty, leaving a company with a workforce of 170 employees, said in a statement that keeping the business in the family has been a priority.

Kit Wanty “Kit, Jamie, Isabel and Cooper have been raised in the warehouse and have the knowledge and knowhow to move this company forward well into the future,” he said. “The beer business has been in our blood for decades and I am happy to see our children

step in and take the reins of O&W Inc. I have no doubt they will do great things and continue the legacy we have built over the years.”

The next generation plans to facilitate more growth and hopes to keep O&W strong for future generations.

“My dad always says, ‘It’s better to be the shark than the bait’,” Kit Wanty said. “We’re always looking to grow not only our footprint, but attract new brands to the state of Michigan, or even do swaps with other wholesalers. We’re excited for the growth.”

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

REAL ESTATE

As December home sales slow, Ferndale is getting buzz Sales down 13.1 percent year over year, while prices rose 12.1 percent in metro Detroit

BY ARIELLE KASS

Could it be metro Detroit homebuyers finally remembered that the market traditionally slows down in winter?

Between the holidays, snow and the contagious omicron variant of COVID-19, something in December caused buyers to return to a seasonal norm after months of big sales, said Jeanette Schneider, president of RE/ MAX of Southeastern Michigan.

Home sales were down from the previous December, as well as from November, though prices continued to rise.

“There’s a little more seasonality back in the market,” Schneider said of the company’s December numbers. “We haven’t seen normal the past couple of years.”

“There’s a little more seasonality back in the market,” Jeanette Schneider, president of RE/MAX of Southeastern Michigan, said of December home sales numbers. | DAVID RYDER / BLOOMBERG

Home sales were down 13.1 percent year over year in December, though prices rose 12.1 percent for a median sales price of $264,375 in December, up from $235,750 the year prior. The number of days a house is

on the market fell to 33 days, from 34 in December 2020. Pending sales are up 0.4 percent.

The trend — sales down, prices up — was consistent for Wayne, Oakland, Macomb and Livingston coun-

ties, as well as the city of Detroit.

“People took a step back,” Schneider said. “We don’t anticipate this being forever.”

But anticipation of rising interest rates could push some back into the market earlier than they might otherwise choose. Schneider said for those who have thought about selling, but were on the fence, the message is clear: “You can still sell your home relatively quickly and at a good price.”

“There are plenty of buyers out there,” she said.

Ferndale, in particular, might become more popular after Realtor. com named it a best place for firsttime homebuyers to purchase this year. The Oakland County suburb ranked ninth among best places; suburbs of Salt Lake City, Omaha and

Greenville, S.C., were at the top of the list.

The Realtor.com survey looked at the number of homes for sale, the age of residents, the food and drink options, commute times, job access, affordability and the strength of the area’s housing market in making its picks. Ferndale, it said, has recently seen an influx of buyers from Ohio and Illinois.

Schneider said the city is one that “sings to” not only first-time buyers, but also those with young families. She expects more people will look at Ferndale, now that it has been recognized nationally as a good place to buy.

“It’s a self-fulfilling prophecy,” she said.

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

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PEOPLE ON THE MOVE

Advertising Section To place your listing, visit crainsdetroit.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

ARCHITECTURE / ENGINEERING

ARCHITECTURE / ENGINEERING

FINANCIAL SERVICES

LAW

PROFESSIONAL SERVICES

Anderson, Eckstein & Westrick, Inc.

Anderson, Eckstein & Westrick, Inc.

JPMorgan Chase

Brooks Kushman

City Shield Security Services

Anderson, Eckstein & Westrick, Inc. is pleased to announce that Sydney Kanan, PE, has become a shareholder in the firm.

Ms. Kanan is a project manager focusing on both municipal and private client projects. She specializes in residential developments, is proficient with Pavement Surface and Evaluation Rating (PASER), and helping communities assemble infrastructure capital improvement plans. She holds a B.S. in Civil Engineering from Wayne State University and earned her PE License in 2018.

Anderson, Eckstein & Westrick, Inc. is pleased to announce that Jeffrey Miller has become a shareholder in the firm. Mr. Miller is the firm’s GIS Manager with over 17 years of experience as a GIS Specialist. He holds professional memberships in Improving Michigan’s Access to Geographic Information Networks (IMAGIN), American Association of Geographers (AAG), and Michigan Counties Association of Mapping Professionals (IMCAMP). He holds a B.S. in Geography from Central Michigan University.

JPMorgan Chase welcomes Pierre Batton as Corporate Responsibility Lead for Detroit. He will manage the firm’s investment in Detroit to address key drivers of economic opportunity, from creating and preserving affordable housing to boosting minority-owned small business and supporting job training for the future of work.

He’ll also lead efforts to deploy philanthropy, impact investing and community engagement across the state. Batton joins from Detroit Economic Growth Corp where he led the City of Detroit’s small business development and Detroit Means Business Initiative. He also led Motor City Match & Motor City Re-Store, oversaw the City of Detroit Neighborhood Opportunity Fund and worked for ProsperUS Detroit and the State of Michigan.

Brooks Kushman is pleased to announce the appointment of Robyn Lederman to the firm’s Executive Committee. Lederman will work in a leadership role to govern the firm. Lederman has served as Co-Chair of Brooks Kushman’s trademark department since 2018 and has been instrumental in growing the firm’s trademark practice while continuing to excel in client service. As Co-Chair, she helps drive a robust training and mentoring mentality within the department, working to foster a strong business focus.

Joe Piersante, a heavily decorated 46-year law enforcement veteran, has been promoted from Senior Director to Vice President, Special Operations and Soft Target Programs at City Shield Security Services, a Detroit-based provider of transformational security solutions. Joe Piersante served with the University of Michigan Police Department since May 1991, ascending to Director of University Security Services in 2014. His early law enforcement career included 20 years with the Detroit Police Department. He is a graduate of the FBI National Academy and that agency’s Police Executive Development School. He served as Director of Special Operations at City Shield since 2020.

ARCHITECTURE / ENGINEERING

ARCHITECTURE / ENGINEERING

Anderson, Eckstein & Westrick, Inc.

Anderson, Eckstein & Westrick, Inc.

Anderson, Eckstein & Westrick, Inc. is pleased to announce that Stefania Mastracco has become a shareholder in the firm. Ms. Mastracco joined AEW in 2016 as the IT Network Administrator and was promoted to IT Manager in 2017. She holds a B.S. in Information Technology with a minor in Information Security from Baker College. Her training included an internship program where she worked full-time as a technician for an IT Managed Service provider as part of their first response help desk team.

Anderson, Eckstein & Westrick, Inc. is pleased to announce that Ross Wilberding, PE, has become a shareholder in the firm.

Mr. Wilberding is a project manager whose current work focus includes general civil engineering in the communities of Fraser, Grosse Pointe Woods, Roseville, and Livonia. He earned his PE License in 2019 and is a member of the American Water Works Association (AWWA). He holds a B.S. in Civil Engineering from the University of Michigan.

NONPROFIT

Angels’ Place Tom Szczepanski has been named Chief Executive Officer of Angels’ Place, a nonprofit organization providing homes and services for persons with intellectual and developmental disabilities. Prior to Angels’ Place he served as the COO at Detroit Public Television, was an assistant vice president to development at the University of Michigan, and served in other executive roles in the advertising agency business. He is a graduate of St. Mary’s Preparatory and the University of Detroit Mercy.

LAW

Bush Seyferth PLLC BSP Law is excited to announce that Lena Gonzalez has taken on the newly created role of Professional Development and Diversity Director. In this role, Lena will be leading the firm’s recruiting, training, and diversity initiatives, including assisting attorneys with business and career development. She will also be expanding our Summer Associate Program to provide a stimulating and dynamic experience for law students.

Lena received her J.D. from Wayne State University Law School in 2016.

PROFESSIONAL SERVICES

Feature your milestones, launches, partnerships, awards and more in CRAIN’S

For more information contact Debora Stein at dstein@crain.com or submit directly to

CRAINSDETROIT.COM/COMPANYMOVES

14 | CRAIN’S DETROIT BUSINESS | JANUARY 17, 2022

City Shield Security Services Anthony Topp has been named Director of Operations for City Shield Security Services, a Detroitbased provider of transformational security solutions. Topp is a former Detroit Police Department Captain with 26 years of law enforcement and private sector security management experience. He most recently served as Director of Security for Southfield Public Schools where he mentored youth and acted as a security resource for administrators and community members.

SERVICES

Fetch! Pet Care Fetch! Pet Care, America’s largest professional dog walking and pet sitting franchise, has promoted Michael Shinabarger Shinabarger to Vice President of Franchise Administration. Shinabarger oversees Fetch’s human resources, accounting, legal, and finance departments. Also, he is responsible for management and creation of territories, franchise developer Poynter communications, and franchise agreements.

Erica Poynter has been promoted to Vice President of Franchise Development for Fetch! Pet Care. A key driver of sales, Poynter educates franchise candidates about the brand’s business model. With more than ten years of experience with various franchised companies, she is well positioned to network, build, and maintain relationships with franchise consultants.

MORTGAGE

From Page 3

Even so, there has been high levels of CMBS debt issuance, he said.

There was about $282.7 billion in new CMBS debt through 2021 as of December, according to the Securities Industry and Financial Markets Association, up 31 percent from the previous year.

“Everybody’s surprised by how well real estate has held up during COVID, except for those few asset classes,” Bernard said.

Delinquent CMBS debt balance The delinquent CMBS debt balance has creeped up north of $100 million in the region as the number of delinquent loans has increased during the pandemic. $1.2B

The hotel and office industries are experiencing the most turbulence in general as a result of the pandemic, which for nearly two years in Michigan has caused people to consider something they perhaps hadn’t prior to March 2020: Whether it’s safe, from a health perspective, to go to a business conference, on vacation or to the office.

CBRE Inc., the Dallas-based commercial real estate giant, says that national vacancy rates are at their highest in three decades and that rents are expected to remain lower.

But for the time being, office landlords have been able to collect rents from their tenants even if their employees have been working from home, meaning that property owners locally haven’t gotten behind on their CMBS loans, Bernard said.

Because CMBS loans typically have 10-year terms and there weren’t many in 2012 or 2013, there is not a lot of debt maturation on the books this year or next that needs to be refinanced. But 2024 is on the horizon.

“There is time to work through COVID in office and to have butts back in the seats,” Bernard said. “When those loans roll over, when there are no butts in the seats, CMBS does not count that” for occupancy, which impacts how much lenders will lend against the value of the building.

Integra Realty Resources, a Denver-based appraisal firm with an office

Uncertainty remains

reason for optimism, IRR’s report says.

“Fifteen metros have evolved from a Recession classification to Recovery,” it says. “Some may be surprises, others not. Improvements in market fundamentals have bolstered a number of Midwest cities: Columbus, Indianapolis and Detroit among them.”

Those fundamentals include things like decreasing vacancy rates and negative or low rental growth rate.

Although that is a glimmer of hope marketwide, individual properties have had it rough recently.

Four retail properties — including those housing Walgreens stores in Eastpointe, Southfield and Taylor, plus the Country Corners Shopping Center in Howell — are more than 90 days delinquent on outstanding CMBS balances of $16.7 million-plus.

And a pair of regional malls, The Mall at Partridge Creek in Clinton Township and Fairlane Town Center in Dearborn, have fallen under new management and face a sale after their owner, Miami Beach, Fla.-based Starwood Capital Group, defaulted on its loans.

Partridge Creek fell into default on a $725 million CMBS debt, which is secured by it and three other malls. It owes $681 million. In June, Crain’s reported that those four malls have a combined value of just $210.6 million, compared with $1.074 billion when they were bought in 2014.

Fairlane Town Center and two other malls in Virginia and Texas make up a three-mall portfolio owned by Starwood that defaulted on a $161 million CMBS loan, on which it owes $127.2 million. Those three malls are now valued at just $89 million, compared with $345.2 million when Starwood paid what was then Taubman Centers Inc. (now Taubman Co. LLC) $1.4 billion for them, Trepp data this summer showed.

With new ownership appearing all but certain at some point in time in the not too distant future, the two malls face an uncertain fate.

Although retail’s challenges in Detroit and elsewhere remain, there is

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

Hotels troubled

$1B $800M $600M $400M $200M

Factoring in remote work

ly. If, on the other hand, we find COVID-19 deaths increasing from today’s 807,000 to 1 million or more during 2022, expect white-collar workers to be slow to return to their offices.”

’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21

Outstanding CMBS debt balance There has been less than $500 billion in CMBS debt outstanding in the region since the fall 2019. $2T $1.5T $1T $500B

’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 SOURCE: TREPP LLC

in Birmingham, says in its 2022 forecast that the remote work will continue to be a part of work life into the future, but perhaps rather than a binary choice of working from home or working from the office — an “either/or” equation — it will instead be a “both/ and” situation, where both are acceptable as are other forms of working.

“Two key factors still evolving are the presumed shift from pandemic to ‘endemic’ COVID-19, and the impacts of competition on businesses weighing in-person work over Zoom work, or vice versa. For workers with options, we should not underestimate the de-

gree to which anxiety over health risk will shape the pace of office utilization, as well as the way that businesses and real estate property managers will need to adapt to office workers’ expectations,” the company says in its 2022 report.

“Let’s be clear about the radical change that COVID-19 has brought. It is the workers who are in the driver’s seat, not employers and not governments. Most office workers are both pragmatic and fairly evidence-based. If vaccinations continue to make inroads on illness, anxiety will abate and the ‘new normal’ will emerge more quick-

But locally, loans backed by hotel and retail properties have been particularly distressed.

Suburban hotels like the Delta Hotels by Marriott-Detroit Metro Airport, Marriott-Livonia at Laurel Park, Holiday Inn Express & Suites Detroit Novi and Hampton Inn Southgate are all more than 90 days delinquent on their debt, with $52.3 million outstanding.

That doesn’t include the $77 million in CMBS debt that was only recently resolved for the 453-room Westin Book Cadillac hotel in downtown Detroit, which came into new ownership last month, after a joint venture between Chicago-based hotel developer Oxford Capital Group LLC and New York City-based hedge fund Taconic Capital Advisors LP assumed the debt. The team is now planning $16.5 million in renovations.

According to STR, a hotel-industry analytics firm with its North American headquarters in Tennessee, hotels in the region are still performing well below how they were immediately prior to the pandemic’s onset.

Early this month, the region’s hotels had an occupancy rate of 41.5 percent and average daily rate of $91.90 per night, with RevPAR — industry shorthand for revenue per available room — at $38.10. But two years ago, the market had an occupancy rate of 50.5 percent, average daily rate of $94.28 and RevPAR of $47.56.

Today’s rates are far better than the lows in the early days of the pandemic.

For example, in the first week of April 2020, the market had an occupancy rate of just 22.7 percent, rates of $64.36 per day and RevPAR of just $14.59.

MERGERS & ACQUISITIONS

Gongos acquired by Belgium-based firm

BY KURT NAGL

Royal Oak-based market research company Gongos Inc. has been acquired by InSites Consulting, a Belgian company with similar services that is looking to strengthen its U.S. presence.

The purchase, finalized in late December, gives InSites another 125 employees and a book of Nicita business that includes Fortune 500 companies such as General Motors Co., Kellogg Co., Coca-Cola and U.S. Bank, and accounted for $26.3 million in revenue last year.

Gongos and InSites provide business services related to analytics, marketing strategy, insights and customer experience. The combined company has more than 800 employees across 20 locations, with $114 million in revenue, according to a Tuesday news release.

Terms of the transaction were not disclosed.

The company was sold by Camille Nicita, the sole owner and president and CEO of Gongos, who will continue

Advertising Section

CLASSIFIEDS To place your listing, contact Suzanne Janik at 313-446-0455 / sjanik@crain.com

REAL ESTATE LAND

Gongos moved into a 20,000-square-foot office in Royal Oak in 2018.| GONGOS

to oversee InSites’ local operations as managing director, North America.

“Gongos’ customer-centric mission is to empower brands to build reciprocal value exchange with consumers, ultimately driving profitability and growth for corporations through the fulfillment of customer needs,” Nicita said in the release. “We can now take that ambition to a global scale, and our clients will greatly benefit from this cross-fertilization.”

The acquisition will not impact Gongos employees in Royal Oak, spokeswoman Susan Scarlet said. Due to the rise of remote working amid the

COVID-19 pandemic, the company is considering subletting some of its space in downtown Royal Oak, where in 2018 the company signed a 10-year lease for 20,000 square feet.

“There is so much to be excited about as we are joining forces with Gongos,” Kristof De Wulf, co-founder and CEO of InSites, said in the release. “As we aim to be a truly global agency supporting brands all around the world, having a solid presence in the U.S. market is a necessary condition for success.”

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



NONPROFIT

SUBMIT YOUR AD TODAY JANUARY 17, 2022 | CRAIN’S DETROIT BUSINESS | 15

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SAFETY

From Page 3

process,” according to a statement sent to Crain’s on Jan. 6 by MIOSHA Director Bart Pickelman, who declined to elaborate on the specifics of the investigation, citing its ongoing nature.

UWM — the nation’s largest wholesale mortgage lender, which employs about 9,000 people in two buildings on its Pontiac campus — told Crain’s that the complaints are not from a lack of COVID-19 safety protocols. A UWM spokesperson noted that the company offers masks at its office, as well as onsite COVID-19 testing and vaccines.

The state investigation of the company was first reported on Jan. 4 by Fox 2.

Workers’ complaints are becoming more common because of the omicron wave, according to labor attorneys.

While state-mandated workplace restrictions, such as capacity limits and mask requirements, have been lifted since last summer, Miller with the Butzel law firm noted that employers do still have state laws to follow related to COVID workplace safety.

“Employers do not realize that the Michigan COVID-19 Employment Rights Act has essentially codified whatever CDC guidance is in effect and prohibits companies in many industries from firing employees for COVID-related issues or refusing to follow CDC quarantine protocols,” Miller said.

The October 2020 state law prohibits employers from firing or retaliating against workers who contract the coronavirus and are not able to work. It also prohibits employees from reporting to work while still infected with COVID-19.

The Oakland County Health Division has also been contacted by “several” employees of UWM who have sought

INVESTORS

From Page 3

More locally, angel groups around the state are ramping up fundraising efforts, as well as working to bolster their membership.

Doron York and David Weaver, the CEO and chief investment officer, respectively, of Birmingham-based City Side Ventures, have recently launched the new $10 million Great Lakes Angel Fund, which is geared toward early-stage startup investing.

The nascent fund stands in addition to their active Birmingham Angels group, which has about 25 members.

Additionally, the Ann Arbor-based Michigan Angel Fund is in the process of raising its fifth fund, according to Skip Simms, the fund’s managing partner. Simms said the key goal is more about bringing in new members rather than hitting a specific dollar amount.

“It’s in line with … getting more people in the asset class, and learning by doing.” Simms said.

Michigan Angel Fund has raised upward of $10 million over its five funds, according to Simms.

Getting more high-net-worth people involved in angel investing stands as a key theme for many sources.

York with City Side Ventures, as well the Birmingham and Great Lakes angel funds, said getting that message across to would-be investors has gotten increasingly easier, particularly with ongoing economic tumult during pandemic times. That’s because more traditional investments like the stock market or commercial real estate are increasingly volatile, according to York.

“So I think it’s more attractive to wealthy individuals right now, because there’s not too many alternatives.”

“to share their concerns over their working conditions as they relate to COVID-19,” Bill Mullan, an Oakland County spokesperson, told Crain’s on Jan. 6.

Mullan added that the county’s Communicable Disease Unit sent an email message to UWM just before Christmas “informing them about the concerns expressed by employees and reminding them of the best practices to limit the spread of the virus in an office environment.

“Those measures include, but are not limited to, getting vaccinated, wearing masks, social distancing, staying home when symptomatic or having been exposed, among others,” Mullan wrote in the email to Crain’s. “The Health Division has not independently corroborated the concerns of the UWM employees.”

This is not the first time UWM has found itself facing questions regarding its handling of the pandemic and workplace safety.

In August 2020, Oakland County announced that more than 50 cases of COVID-19 were tied to the company’s headquarters, and the county’s health director said at the time that UWM was in “direct violation” of an executive order by Gov. Gretchen Whitmer “that requires masks to be worn over the mouth and nose when in an indoor space.”

Those orders are no longer in force.

UWM does not presently allow remote work for its employees. CEO Mat Ishbia told Crain’s last month in an interview that all employees were working from the company’s two buildings on both sides of South Boulevard.

Masks and vaccines are the tools that can protect the company’s employees, Ishbia said at the time.

Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes The idea of diversifying beyond the stock market was appealing to Zeno Windley, a member of the Birmingham Angels investor group since late 2019 who has invested Simms in around 15 companies. But the social aspect, and the opportunity to learn about new technologies and companies, is something that has “energized and “mentally stimulated” the 75-year-old investor said.

“I was just looking for something rather than just continue to put money in the stock market,” Windley said.

Lyle Wolberg, the CEO and senior financial life adviser at Southfield-based financial advisory firm Telemus Capital LLC, said he takes a “vintage” approach when advising clients.

“Just like stocks have a cycle, we think the private markets have a cycle as well,” Wolberg said. “So you allocate a percentage of money to private investments over three to five years. You might not find the one diamond, but at the same time, your chances (are greater) over five years.”

Grogan with Michigan Capital Network said he’s anticipating some sort of slowdown in angel activity to occur at some point. Like most, though, he remains unsure when that will happen.

For now, conditions are ripe.

“So long as the exit market is active — and it’s certainly (right now) frothy, feverish, record-setting, all of those adjectives,” Grogan said. “As long as that remains strong, that gives us confidence to invest.”

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

Hundreds of skilled trades workers have been working on the Michigan Central Station for more than three years since Ford paid the Moroun family $90 million for the hulking station and adjacent properties. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

STATION

From Page 1

The train station, which shuttered in 1988, was the symbol of Detroit’s late 20th Century decline. Like many of the city’s abandoned buildings, the old depot had been stripped bare of its precious metals.

Rain, ice, sleet and snow deteriorated the plaster and terracotta tile over time — parts of the original building that are slowly being restored with painstaking detail, said Rich Bardelli, Ford’s construction manager for the Michigan Central Station project.

After Ford took ownership of the train station in mid-2018, the company’s construction contractors spent a year stopping the leaks and building an HVAC system to dry out the water-logged structure.

Aside from a service elevator and some roof improvements the Morouns did during their final years of ownership, Ford bought a 650,000-square-foot mid-rise tower constructed in 1912 and 1913 missing everything imaginable, Bardelli said.

In three years time, Bardelli said, construction workers have installed:  300 miles of electric wire  20 miles of heating and cooling duct work and piping  Six miles of plumbing pipes  8.6 miles of grout in between 29,000 terracotta tiles along the arching ceiling of the front waiting room “All of the really behind-thescenes work is done,” Bardelli said.

More than 1,700 of the Guastavino terracotta ceiling tiles had to be replaced, said Ron Staley, senior vice president of Southeast Michigan operations for Christman Co., a Lansing-based general contractor on the project. Together with co-contractor Detroit-based L.S. Brinker Co., they are rehabbing the structure through a joint-venture called Christman Brinker.

And to get to those ceiling tiles some 65 feet in the air, workers constructed 252 tons of scaffolding inside the Beaux-Arts landmark, Staley said.

Construction crews recently revealed three fully restored large front windows facing Roosevelt Park.

The street view doesn’t do justice to the work that went into restoring each window.

Inside the building, the windows were originally decorated in ornate floral rosettes and leafs made of cast iron — all ripped out by scrappers over the years.

A worker welds the interior at Michigan Central Station in Detroit on Jan. 11. | NIC ANTAYA/SPECIAL TO CRAIN’S DETROIT

But after Ford bought the building, some of the rosettes starting getting dropped off at the train station by individuals who came into possession of the original pieces.

Ford engineers in its additive manufacturing unit used the original cast iron rosettes to reproduce them using 3D printers and resin.

Some 560 new lightweight rosettes made by 3D printers now border each interior window frame.

Piecing it back together At the outset, Ford said it would cost $740 million to restore the train station and the former Book Depository building to the east of the old depot. The project remains within that budget, Bardelli said.

The total cost of Ford’s investment in the Corktown campus has risen to $950 million to include outside improvements, like a plaza and mobility testing site on the backside of the building where trains once departed and arrived around the clock. That area will continue to be called “the platform,” Bardelli said.

Christman Brinker and its scores of subcontractors have pegged the end of the second quarter in 2023 as their construction complete deadline.

Ford has committed to having 2,500 of its employees in autonomous and electric vehicle development working at the train station and surrounding buildings. The automaker is making space for another 2,500 workers from suppliers and partners in the mobility sector to be occupying space in there as well as in the Book Depository building and a third office building in the

planning stages.

Ford is already in talks with potential retail, hospitality and hotel vendors, Bardelli said.

They could be announced by the end of this year, he said.

Bardelli said there would be dining options throughout building: The top floors of the tower; the former carriage house on the west end of the building along Vernor Highway; and a food court in the concourse, where workers have completed the installation of a new all-window roof that faces south toward the river.

Over the next 18 months, carpenters will focus on the more ornate details to restore the building to its historical grandeur: wood wainscoting panels, crown molding, marble borders and laying wood floors in the one-time waiting rooms designated for women and men on the eastern and western ends of the building, respectively.

“We’re in the midst right now of just starting to put all of that back,” Bardelli said.

Walls have been reconstructed to separate the waiting rooms from the front entrance so they can be used for events space. Bardelli said Ford is already getting inquiries from couples who want to get married at Michigan Central Station.

Washington D.C.-based Quinn Evans Architects is the lead architectural firm on the project.

Detroit-based Ideal Contracting and Ideal Steel were steel construction sub-contractors on the train station project.

Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

16 | CRAIN’S DETROIT BUSINESS | JANUARY 17, 2022

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1/14/2022 3:05:46 PM

HOSPITAL

From Page 1

“The bottleneck is the SARs (subacute rehabs),” said Tina Gross, president and chief nursing officer of Sparrow Specialty Hospital.

“They don’t have the staff to even answer the phone a lot of times. If we can’t get a patient out, then Sparrow main can’t get a patient out and they can’t take more patients. We have five patients right now that could be discharged, which would open up five beds at Sparrow main. Instead they are waiting. We’re waiting.”

It’s a bottleneck plaguing facilities all along the transitional care pipeline in Michigan. When beds in patient rehab facilities remain full, so do hospital beds that could otherwise be freed up to allow for more admissions.

All 30 beds at Sparrow Specialty are filled and have been for months as patient transfers to rehabilitation facilities, such as nursing homes or traditional rehabilitation hospitals, remain at a standstill. There’s are not enough workers to staff beds throughout the health care supply chain or enough ambulance drivers to transport patients between facilities or enough space to house everyone in need.

The industry has ground to a near-standstill with no relief on the horizon as the more contagious omicron variant brings more patients in the door.

Phlebotomist Melissa Andrews wheels her cart down the hallway at Critical Care in Sparrow’s Specialty Hospital on Jan 12, in Lansing. | PHOTOS BY DALE G. YOUNG FOR CRAIN’S DETROIT BUSINESS

No cavalry to call on There are presently more than 8,000 job openings at long-term-care facilities across the state, said Melissa Samuel, president and CEO of Lansing-based long-term care industry group Health Care Association of Michigan.

One out of every seven jobs, or about 15 percent of what would be a full workforce, in the sector is unfilled currently.

“The challenge is so great (for staffing) that they are not taking admissions,” Samuel said. “The entire industry is walking a tight rope, and this has been getting worse for two years now.”

Crain’s contacted nearly a dozen long-term-care facilities in Southeast Michigan and received no callbacks, and the Health Care Association received no interested parties after it put out a call to its members to be interviewed.

Gross said staffing is so low at many facilities that case workers can’t get anyone to answer the phones to even discuss transferring a patient.

“We have great relationships with the post-acute care facilities, and we don’t blame them, but sometimes the phone just rings and no one is there to answer,” Gross said.

The Health Care Association has suggested Gov. Gretchen Whitmer call in the Michigan National Guard to supplement long-term care facilities’ dwindling staff to allow for more patients.

But the state has no intention of using general National Guard members to provide medical support, said Elizabeth Hertel, director of the Michigan Department of Health and Human Services.

“We have had the National Guard on a mission since February 2020 and we haven’t ended that mission,” Hertel said. “The National Guard members that are qualified to do that are medical providers in their private

Tina Gross, top, and Dennis Jones talk about the logistical difficulties workers face in moving patients out of Critical Care in Sparrow’s Specialty Hospital.

life. We would just be pulling providers from one place to another. It’s a zero-sum game.”

There are roughly 11,000 Michigan National Guard personnel but only 125 on mission from the state to assist in COVID-19.

Those National Guard members are assisting at testing and vaccine sites, Hertel said.

In December, Whitmer signed an executive order to establish the Michigan Nursing Home Workforce Stabilization Council to develop and recommend policies that could improve staffing at long-term care facilities.

Samuel commends the governor’s office for looking to address that matter but notes those policy suggestions may come too late amid omicron.

“I just think all tools need to be at the ready,” Samuel said. “We’re getting closer to the point where we don’t have the staff to care for the residents we already have. That has to be the tipping point. Look at the numbers.”

Also on the horizon, auditors plan to release a review of nursing home and long-term care facility deaths related to the coronavirus next week, with preliminary estimates showing

Kristy Beckholt checks the dry board for information on patients on the floor at Critical Care in Sparrow’s Specialty Hospital.

42 more deaths than previously reported.

In a rare step, the Michigan Department of Health and Human Services director sought to publicly preempt it by questioning how the data was compiled.

Too many holes to fill Michigan is breaking new records almost daily as the omicron variant spreads rapidly throughout the state.

The rolling seven-day average of cases reached 16,239 Wednesday after MDHHS reported receiving positive test results for 28,458 new cases from Monday and Tuesday.

Last week alone, MDHHS reported 72,982 new cases of COVID-19 — 73 percent more than all of the cases recorded during the entire month of September 2021 (42,207) when the delta variant of COVID was spreading across the state.

Hospitalizations for COVID-positive adults dipped Wednesday from a record-setting 4,580 on Monday to 4,517. About 59 percent of hospitalizations for COVID remain in Southeast Michigan hospitals, a Crain’s analysis of state data shows.

The spread has crippled staff in all

health care settings. Hospital systems across the state reported thousands of employees were stuck in quarantine, exacerbating the staffing issue when nearly 34 percent of all hospitals in the state are at or above 85 percent capacity. A hospital is considered at capacity when 85 percent of beds are in use.

The long-term care industry has been plagued by staffing shortages even greater than hospitals. Those facilities were the early epicenter of the COVID-19 outbreak in the spring and summer of 2020. The added risk and historically low wages in the sector caused a mass exodus throughout the pandemic.

The U.S. long-term care industry remains down nearly 425,000 jobs since its peak in December 2019 with 3.4 million workers. In Michigan, skilled nursing facilities are down to just 34,400 workers down from 43,500 in 2019.

Less than perfect solutions The bottleneck has case workers shipping patients across the state, sometimes hundreds of miles from their hometown, Gross said.

“They may be discharged to Grayling when they live near the Indiana

border,” Gross said.

Sparrow Specialty, while short staffed itself, has taken over some of the post-acute patient needs just to move them out of the hospital, said Dennis Jones, the case manager supervisor for Sparrow Specialty.

Recently, Sparrow Specialty rented a ramp from a medical supply company to be installed at a patient’s home because there were no contractors available to build one. The hospital covered the expense so it could open a bed to a new patient at Sparrow’s main hospital.

Sparrow Specialty is also working harder at discharging patients on ventilators who are stable enough to be cared for at home, Jones said. The practice wasn’t necessarily uncommon prior to the pandemic, but due to a shortage of home health care workers, largely in part to auto insurance reform alongside COVID-19, the hospital has to train family members to handle the patient and ventilator at home.

“We are exploring every option for getting this or that patient out,” Gross said. “Maybe we have to change therapies or discharge them to a family member who can handle the postacute care. All options are on the table right now.”

JANUARY 17, 2022 | CRAIN’S DETROIT BUSINESS | 17

THE CONVERSATION

Beaumont’s Dr. Nick Gilpin, on life during and after the pandemic In early 2021, Crain’s Detroit gave Nick Gilpin, system director of infection prevention at Beaumont Health, the designation of COVID-19 explainer-in-chief. When the pandemic hit in 2020, Gilpin was quickly launched from a background player at the eight-hospital system to its public face. Gilpin led and still leads Beaumont’s media calls and public service announcements about the pandemic. He was the first Beaumont employee to receive the COVID-19 vaccine, and did so publicly, in late 2020.

He’s worked tirelessly for nearly two years pleading and pushing the metro Detroit public to do the right thing in prevention, protection and treatment for the deadly coronavirus. His latest efforts are to help the public understand just how fragile the hospital system is during this record-smashing wave of the omicron variant. Beaumont recently took out full-page ads in area newspapers to say the system is at a “breaking point” and urging residents to get vaccinated and boosted, doubling down on Gilpin’s efforts. | BY DUSTIN WALSH This pandemic is nearly two years old. How has your life changed since COVID-19 hit metro Detroit?

In the pre-pandemic days, infection prevention was a very behind-the-scenes job. If we’re doing our job well, you won’t even know we exist. But since COVID, it’s all day, every day. Right now, with the surge, I’ll spend a small time seeing patients, many of whom have COVID, then it’s putting out fires around the hospital. The biggest fires right now are staff and bed shortages. We have to be nimble and shuffle some things around.

Such as open units and expand parts of the hospital where we typically don’t have COVID patients. We have to flex to accommodate the volumes we’re seeing.

That means my time at the hospital has increased. I might spend 50 to 60 hours a week at the hospital. It certainly can and has been more than that.  What are your current frustrations around the pandemic and treating patients?

One my biggest frustrations is the treatments we currently have for COVID just aren’t that good. I appreciate that scientists are racing to find newer and better options. That’s why I am so vocal about prevention. Right now, prevention is best and vaccination is your best bet at this moment. But I don’t know if that message is working. One of my jobs in this role has been to be this public facing person trying to get the word out in prevention of COVID. But I find that when I do these press conferences … we’re really talking to the people who are already on our side. We’re preaching to the choir.

Everyone that is watching these press conferences and PSAs are largely those who have gotten vaccinated and boosted and wear masks when out in public. I am not reaching the people who need to hear that message. So, yeah, I’m frustrated by that and we’re all trying to find ways to get that message into those people’s hands.

What do you think can be done to get the message across to those people?

We’ve joked around a little bit about making the message more pointed, more angry at times, frankly. Let people appreciate how frayed our rope is as health care providers right now. I am speaking as an ambassador of our system, but you’ll get both barrels if you talk to an ICU nurse who has been dealing with COVID for two years. They have absolutely had it. The frustration is real. I am isolated from that, right, but maybe we need to let them tell their stories more.  The unvaccinated appear dug in and are using breakthrough infections as evidence that the vaccine doesn’t work. How do you even respond to that?

That’s really a bad faith argument. If you look at the real data, the real science here tells us that vaccination is a total no brainer. Once you get vaccinated, your chance of dying from COVID is incredibly low. A vaccine-related side effect or dying from COVID once vaccinated is like one in hundreds of thousands. If you don’t get vaccinated, it’s much closer to one in 100.

I think just looking at it as superficially as there are breakthroughs tells a story.

Yes, get vaccinated. Yes, you can still get COVID and that’s unfortunate. But more than likely it’s a major inconvenience.

You’re not getting hospitalized, not ending on a ventilator and not dying from COVID. It’s unfortunate that the people don’t really see the value and the virtue in that message.

Omicron doesn’t appear to be doing as much damage among the vaccinated, so we’re not facing an existential crisis. It’s an excruciating inconvenience at best and a painful public health nuisance at worst.

As more of us get infected and protected with the vaccine, I expect these peaks to get shorter and shorter. At least that was the thinking before omicron. What this variant has said to me is that we need to hurry up and get more people vaccinated as soon as possible. I am talking globally.

We need to get as many people vaccinated around the word as fast as possible so something much worse doesn’t happen.  What does a post-COVID world look like? For you, for all of us?

I don’t know how long we’re going to live in this space with COVID, but it’s possible that COVID could have a seasonality and we could be dealing with small flare ups for years to come. What changes,

though, is I think we have found in our own hospitals and clinics that wearing masks around respiratory virus season is a very effective strategy. I would not be surprised if such a thing exists, that some semblance of continued masking during heavy virus months continues to be a thing for a long time to come and I’m completely on board with that. I also think a lot of us were excited about the roaring 20s economy. When the pandemic settles down and we can all get back to the things we did in the pre-pandemic days. I used to travel internationally to incredible places. I am certain we can do that again when things get less sketchy. When that happens I am planning a nice long trip somewhere relaxing with my wife. How about Italy?

Nick Gilpin, system director of infection prevention, Beaumont Health

18 | CRAIN’S DETROIT BUSINESS | JANUARY 17, 2022

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Gilbert backs new record label in Detroit led by producer Che Pope

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MOTOWN HAS A NEW RECORD LABEL, this one with the backing of billionaire businessman Dan Gilbert.

The mortgage mogul and real estate developer has teamed up with music industry veteran Che Pope, 51, to launch WRKSHP (Workshop), a new Detroit-based “music-based lifestyle company” focused on finding emerging talent in Michigan and beyond, and serving as something of a one-stop shop to help them grow their brand in a varieties of ways, such as influencing on social media and in fashion.

Gilbert, who’s credited as a co-founder of the new company

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Joining Gilbert in the investment round were Peter Boyce of New York City VC firm Stellation Capital and KKFarm, a Taiwanese music technology company.

Other investors include former Detroit Lions star Ndamukong Suh, as well as Greg Schwartz, the COO of StockX, and Sean McCaffrey, the CEO of Gas Station TV, both companies within the portfolio of companies in which Gilbert has an interest.

Pope, a 25-year veteran of the music industry, has done production and songwriting work for the likes of Aretha Franklin, Kanye West and Lauryn Hill. During that time, Pope

said, the record label structure has changed little and emerging artists tend to wind up in royalty deals that are less than beneficial to them.

“And we just want to change the nature of that,” Pope told Crain’s during an interview Tuesday. “So part of the idea of Workshop is to work with emerging artists and build them up to a position where if they do want to sign to a major label, they have leverage. So they have leverage to get themselves a much more progressive deal. And then our arrangements will be much more progressive.”

Pope added: “I’m not anti-major label. I’m anti-bad deal.”

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