BEYOND LIKES: Quiana Broden on making a business into a social media star. PAGE 10
NEW VENTURE:
Josh, Ethan Linkner launch new VC fund. PAGE 3
CRAINSDETROIT.COM I JANUARY 24, 2022
BEYOND COVID TESTING
RapidBio flourishes during pandemic, looks to what’s next
Andrea Lobsinger, molecular technologist at RapidBio, prepares the reagents that will later go through the PCR machine.
Trading blame in no-fault care A paralyzed mid-Michigan woman’s decision last weekend to check herself into a Lansing hospital was the culmination of a monthslong dispute with her auto insurance company over how much homebased nurses and aides should be paid to sustain her life. Kelley Miller, who was paralyzed from the neck down in a 2011 car crash, had a nurse call for an ambulance the morning of Jan. 16 to
transport her to Sparrow Hospital after the owners of a home care agency refused to accept what they described as money-losing reimbursement rates from Auto-Owners Insurance Co. Auto-Owners offered to pay the home care agency $40 per hour for registered nurses, an amount that has to account for taxes, insurance and other normal overhead costs for the business. The owners of RN Plus Staffing drew a line in the sand and said
See RAPIDBIO on Page 20
Landlord finds right mix through acquisitions BY KIRK PINHO Registered nurse Michele Bice gives Kelley Miller a sip of water. Miller has been a quadriplegic since 2011. | DALE G. YOUNG/SPECIAL TO CRAIN’S DETROIT BUSINESS
their minimum hourly rate would be $67 per hour for RNs. An executive at Auto-Owners contends the Lansing-based insurance company’s hands are tied by See AUTO-OWNERS on Page 17
VOL. 38, NO. 3 l COPYRIGHT 2022 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED
@YMCADetroit NEWSPAPER
The signs read “Animal Holding” and “Necropsy.” The former Pfizer facility at Commerce and Beck roads in Plymouth Township used to house mice used in pharmaceutical research and development. Esperion, via Pfizer, brought its popular cholesterol-lowering drug Lipitor to market from inside the building. Now John Cunningham, a 6-foot, 10-inch serial entrepreneur specializing in biosciences, races through the dark hallways filled with buzzing fluorescent light, ducking under industrial doors. The CEO of COVID-19 testing lab startup RapidBio works out of the former mouse cage washroom. It now houses Alexander Hamilton and Ringo Starr — two playfully named robotic machines used to separate and mix human respiratory fluid samples with reagents into cold plates for testing.
COVID retail reckoning offers Agree opportunity
Insurer, care firm battle; ‘my patient is a pawn’
BY CHAD LIVENGOOD
CYDNI ELLEDGE FOR CRAIN’S DETROIT BUSINESS
BY DUSTIN WALSH
ymcadetroit.org
At the onset of the COVID-19 pandemic, a Bloomfield Hills-based real estate investment trust felt it was poised to capitalize on the upheaval the global health crisis had brought to retail real estate. Turns out Agree Realty Corp. (NYSE: ADC) was right. The company, run by President and CEO Joey Agree, has more than doubled its portfolio size and outgrown a headquarters it expanded less than three years ago, last week announcing
it would redevelop a former Art Van Furniture Inc. store into its new base of operations across 50,000 square feet. Focusing on retail properties leased to investment-grade tenants, Agree Realty has spent the last decade-plus growing and reconfiguring its portfolio with the second generation of the Agree family at the helm. The company has done that by rapidly buying up properties with a diverse mix of tenants that have strength in all facets of the retail game, in stores, See AGREE on Page 21
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NEED TO KNOW
MADE IN DETROIT
THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT UM FIRES PRESIDENT SCHLISSEL OVER RELATIONSHIP
bon neutral by 2050 to confront climate change, a draft of a state plan says. Gov. Gretchen Whitmer committed Michigan to the 2050 goal in 2020 and formed the Council on Climate Solutions in the Michigan Department of Environment, Great Lakes, and Energy — or EGLE — to create and oversee implementation of the MI Healthy Climate Plan.
THE NEWS: The University of Michigan Board of Regents removed Mark Schlissel as president after an investigation revealed he had been involved in “an inappropriate relationship with a university employee” and used university email to communicate with that person, according to a statement from the school. WHY IT MATTERS: The dismissal came following the university’s adoption of more stringent rules on employee relationships instituted after UM fired its provost for an inappropriate relationship. UM also finalized a $490 million settlement last week over the sexual abuse of the late athletic doctor Robert Anderson.
FEDERAL MONEY TARGETS SOO LOCKS, INVASIVE CARP THE NEWS: A project that will boost Great Lakes shipping in a crucial bottleneck and another intended to protect the lakes from invasive carp will get big funding increases under the Biden administration’s infrastructure package, officials said Thursday. The U.S. Army Corps of Engineers said it would pump $479 million into construction of a new navigational lock at Sault Ste. Marie, Michigan, expanding a complex that enables vessels to haul bulk cargo between Lake
Superior and the other Great Lakes. Additionally, the Corps will devote $226 million to the Brandon Road Lock and Dam near Joliet, Illinois, where plans call for the installation of obstacles to stop invasive carp. WHY IT MATTERS: The projects have been top priorities for members of Congress from the eight states that border the Great Lakes. The infrastructure measure, which also includes $1 billion to improve water quality, makes “the single largest investment ever in the Great Lakes,” Sens. Debbie Stabenow and Gary Peters of Michigan said in a statement.
PLAN WOULD MAKE STATE CARBON-NEUTRAL BY 2050 THE NEWS: Michigan will build clean energy infrastructure and invest in green programs over the next 30 years with the goal of becoming car-
WHY IT MATTERS: The plan aims to get Michigan to 50 percent clean, renewable energy by 2030 and phase out coal-fired power plants by 2035. Consumers Energy and DTE Energy have said they plan to phase out coal before that year.
Detroit Bikes gets new owner Detroit Bikes LLC, founded in 2011 with the ambition of bringing bicycle manufacturing to the Motor City, was acquired by Arkansas-based Cardinal Cycling Group. Cardinal Cycling, led by an industry veteran and a semi-professional cyclist, purchased the Detroit-based company’s brand, inventory and 50,000-square-foot production facility on the city’s west side, the company announced Thursday. Terms of the deal were not disclosed. Detroit Bikes will maintain operations as normal, according to a news release, and founder Zak Pashak will remain in a factory management and business development role. Under new ownership, Detroit Bikes plans to expand its product range, including in the e-bike category, which has become wildly popular around the world. The company specializes in commuter bikes, made with U.S. chromoly steel, starting at $529. Detroit Bikes LLC, based in a 50,000-squarefoot facility on Detroit’s west side, specializes in making commuter bikes starting at $529. | ARA
STELLANTIS READIES FOR JEFFERSON NORTH RETOOLING THE NEWS: Stellantis NV is preparing for a $900 million retooling of its Jefferson North Assembly plant in Detroit, where it plans to build the Dodge Durango and next generation Jeep Grand Cherokee this spring. The investment, announced by the automaker in 2019 with the $1.6 billion construction of Mack Assembly a few blocks north, will include a modernized general assembly plant, body shop, test track, validation center and paint shop addition. WHY IT MATTERS: The promise of 1,100 new jobs is another boost for the city’s east side. However, the reboot
HOWRANI
at the 3 million-square-foot plant has also raised concern among some environmentalists and residents after state regulators hit the automaker
with air emissions violations this fall following the rapid construction of Mack Assembly and retooling at Warren Truck Assembly.
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2 | CRAIN’S DETROIT BUSINESS | JANUARY 24, 2022
WORKFORCE
MANUFACTURING
Slow progress in naming women to boards at public firms Pandemic may have had an impact BY SHERRI WELCH
Michigan’s public companies have continued to make modest progress over the past two years in the appointment of women to board and executive seats, but progress has been slow overall during the past two decades. Just under a quarter, or 24 percent, of board seats at Michigan’s public companies are now held by women, with the appointment of women to 47 public company board seats since 2020, according to the 10th annuBarclay al Michigan Women’s Leadership Report, a biennial review conducted by Inforum and the Mike Ilitch School of Business at Wayne State University. That’s up from 21 percent in 2020 and 9.3 percent in 2003 when Inforum first launched the study. Women of color hold just 2.6 percent of the 536 board seats at Michigan public companies, according to the 2022 report. And just five of the state’s 82 largest public companies are currently led by women CEOs, the same number as in 2020. “Women continue to be promoted to manager at far lower rates than men, and women of color lose ground at every level from entry to C-suite,” Inforum President and CEO Terry Barclay said. Of equal concern is the impact the pandemic could have on talent pipelines, she said. “In the early stages, the ‘great resignation’ was concentrated in frontline jobs, but we’re seeing its impact more broadly in corporate America.” See WOMEN on Page 19
CHARGING AHEAD Founder and CEO Mujeeb Ijaz in Our Next Energy’s lab in Novi. | OUR NEXT ENERGY
EV battery startup Our Next Energy scaling up, to open new HQ in Novi BY KURT NAGL
Electric vehicle battery startup Our Next Energy Inc. plans to quadruple the size of its footprint and double headcount as it prepares for production and another round of fundraising. The Novi-based company is scaling up quickly after securing $25 million in Series A funding last fall from an investor group including Jeff Bezos and Bill Gates that is betting on its vision of long-range car batteries. The company is poised to launch a Series B round after its prototype battery took a Tesla Model S on a 752-mile trip on a single charge. The test drive, completed last month in Michigan, added to the buzz of a company that has caught the type of attention more common in Silicon Valley.
Our Next Energy says its Aries battery system yields higher system-level energy density than leading competitors. | OUR NEXT ENERGY
That’s where founder and CEO Mujeeb Ijaz, 54, launched it a year-and-a-half ago after leaving his role of senior director, energy storage, at Apple Inc. As Ijaz sees it, the West Coast may be full of big ideas for mobility, but the real work bringing them to life
happens in Michigan. “Actually, the honeymoon of a product is design, but the marriage is the manufacturing,” said Ijaz, who first moved to Michigan in 1992 and worked on battery technology for a combined two decades at Ford Motor Co. and A123
Systems LLC. “What I need is manufacturing. I need supply chain. I need, basically, the work product of a manufacturing system that then creates batteries that are going to go into vehicles.” Last March, Ijaz moved the company’s base to a 19,000-square-foot office in Novi, where a staff of 10 has grown to 71 and is expected to hit 150 by the end of the year. Next month, the company plans to move into an 80,000-squarefoot space at 45145 W. 12 Mile Road near Twelve Oaks Mall. It will serve as the company’s new headquarters with office space and an expanded research and development lab to include cell test equipment, cell research facilities and pack factory equipment. See EV BATTERY on Page 18
FINANCE
VC vet Josh Linkner launches $40M fund with younger brother BY NICK MANES
With a focus on early-stage software companies, a new Southeast Michigan investment fund brings together two brothers, each with years of experience in venture capital and entrepreneurial endeavors. Josh Linkner, who was a co-founder of Detroit Venture Partners with Dan Gilbert and Brian Hermelin in 2010 before stepping down as CEO in 2014 to pursue a career as an author, is getting back into the early-stage investing game. Linkner, along with his younger brother Ethan Linkner, stand in the process of raising $40 million, and
Josh Linkner
Ethan Linker
earlier this month officially opened Mudita Venture Partners. The Bingham Farms-based venture capital fund aims to focus on four areas: the future of learning, the future of work, the future of sustainability, and the future of security, said Josh Linkner,
51. He said the brothers have considerable expertise in those areas. “We just see an opportunity to not only make money, but also create impact,” Josh Linkner told Crain’s in an interview, saying that the fund plans to be intentional about the types of investments it will pursue. “Like I don’t care how good the technology would be in a new french fry technology that helps obese kids get more obese. The answer would be ‘no,’” said Josh Linkner. “We’re only investing in opportunities that we believe can positively impact the world and provide strong economic return.” Prior to running DVP, Josh Linkner
founded Pleasant Ridge-based online promotions company ePrize LLC, which in 2012 was acquired by a private equity firm. Josh Linkner was a member of the Crain’s 40 under 40 class in 2003. Ethan Linkner, 38, was a co-founder of Chicago-based corporate training software company LearnCore, which achieved a $50 million exit in 2018. Since then, he’s served on the boards of a handful of startups and recently moved his family to Ann Arbor. Of the nascent fund’s investing strategy, Ethan Linkner said it’s an opportunity for investors to “vote with their dollars.” The fund’s name, ‘Mudita,’ (Moo-
deet-ah) is a Sanskrit word that means “deriving joy and meaning from other people’s success,” according to the Linkner brothers. The fund so far has made two portfolio investments, both in Chicago-area companies of which Ethan Linkner had previously served on the boards of each. While the early investments have been familiar companies in Chicago, Josh Linkner said the fund will have a wider geographic focus as time passes, with a particular emphasis on markets such as Michigan and other regions, largely beyond the coasts. See LINKNER on Page 18 JANUARY 24, 2022 | CRAIN’S DETROIT BUSINESS | 3
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BEATING CANCER IS IN OUR BLOOD.
REAL ESTATE INSIDER
The Leukemia & Lymphoma Society (LLS) challenged Michigan leaders and young professionals to raise $5,000 or more. Together, they raised over $268,000 to help LLS fund life-saving research and provide support to blood cancer patients and their families.
Richard Garber
Matt O'Bryan
Garber Automotive
Mark Wilmot
KLA Laboratories
Colette Smiley, West Michigan Board Jeff Jewell, DT Midstream Jon Rumley, Accenture Melissa Schiller, Mission Maude
PWC
Meredith Gremel, Community Volunteer Olivia Jackson, Accenture Raj Paul, Microsoft James Honeycutt, KLA Laboratories
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A scrim around the former Northland Center in Southfield gives passersby a glimpse of the vision for the 120-acre property, 97 acres of which were bought by a developer for $11.1 million. | KIRK PINHO/CRAIN’S DETROIT BUSINESS
Emagine, Costco concept revived as potential Northland site users Sometimes a second bite at the apple doesn’t hurt. After a failed effort several years ago to lure the state’s first Costco Business Center Kirk location to the PINHO Northland Center site as well as an Emagine Entertainment Inc. movie theater, Southfield’s mayor says there may still be reason for hope. The Costco Wholesale Corp. (NYSE: COST) concept geared toward small businesses and restaurants as well as the Troy-based theater chain have renewed talks to take space there as part of the site’s redevelopment, Mayor Kenson Siver told me last week after some interesting language on a marketing brochure sparked my intrigue. First, a bit of background: Siver told me in November 2020 that the Issaquah, Wash.-based warehouse-style shopping giant’s concept was just one of the possible reuses for the site which had sat fallow for years prior to its $11.1 million purchase by Bloomfield Hills-based Contour Companies LLC, which plans an ambitious reuse of 97 of its 120 acres. Another was Emagine. Yet those users flamed out, Siver said more than a year ago when plans for the shuttered mall, built in 1954 and enclosed two decades later, were first revealed. Which leads me to last week, when I noticed that on a Farmington Hillsbased Friedman Real Estate brochure marketing the site to users, one of the bullet points says “Come join Emagine Theater.” Siver confirmed that “they were in discussions” as recently as “two or three months ago” with Emagine, which led me to ask whether Costco might also have renewed talks. Siver confirmed there are discussions about Costco Business Center after I asked about the store but declined additional comment. Alan Stern, senior vice president of brokerage services for Friedman Real Estate, said last week “we are having discussions” with Emagine but also said he was “not aware” of any negotiations regarding Costco Business
Center, which has also looked in Troy as a possible location for its first Michigan outpost, I’m told by someone familiar with the matter. Emails and a voicemail to Paul Glantz, Emagine’s founder and chairman, were not returned. The voicemail box for the office of David Dedvukaj, COO of Contour Companies, was full. Costco, through a spokesperson, said in an email Tuesday afternoon that it does “not comment regarding future Costco warehouses or Business Centers until we are ready to share details about the new location (usually 2-3 months in advance).” There are currently only about 15 Costco Business Centers around the country, with the nearest being in suburban Chicago. They are open to all Costco members and typically open earlier in the day and, according to Costco’s web-
THERE ARE CURRENTLY ONLY ABOUT 15 COSTCO BUSINESS CENTERS AROUND THE COUNTRY, WITH THE NEAREST BEING IN SUBURBAN CHICAGO. site, more than 70 percent of the merchandise is not found in a Costco Wholesale warehouse store. They typically sit on 10 to 12 acres vs. 14 to 16 acres and are about two-thirds the size, coming in at about 115,000 square feet compared to 150,000 square feet for a normal Costco. Contour’s ambitious vision for the Northland site was to bring 2,885 apartments, lofts and townhouses across three different components, plus converting the old Hudson’s store into 337,000 square feet of food, home furnishing and entertainment space akin to Ponce City Market in a former Sears Corp. catalog facility in Atlanta. Northland Center was the largest shopping mall in the world when it opened in 1954 at what the Detroit Historical Society says was a cost of about $30 million. It was enclosed two decades later. Its mix of other amenities, including things like auditoriums, art, fountains and landscaping, were models for malls across the country, the historical society says.
More District Detroit land sold Public records show that a few more slivers of land can be added to the list of those assembled in recent months in the District Detroit. Parcels at 204, 212 and 220 West Adams sold according to a deed dated Nov. 9 to an entity called 204 Adams LLC, which I wrote about two weeks ago in this space. The estimated purchase price for those properties, which total 0.306 acres, was $3.466 million. Several other pieces of land on the block bounded by Elizabeth Street to the north, West Adams to the south, Cass Avenue to the west and Clifford Street to the east sold. Property records show deeds dated Nov. 5 for properties at 228 W. Adams, 248 W. Adams and 223 W. Elizabeth totaling 0.206 acres and selling for an estimated $2.33 million. Assuming, as I do, that 204 Adams LLC is controlled by the Ilitch family, that gives them ownership of that entire block through a series of transactions dating back to last year. All told? The land set them back $5.796 million for a little over half an acre. Yowsers. I emailed a spokesperson for the Ilitch family’s Olympia Development of Michigan seeking comment Tuesday morning.
James Burgess Book Jr. mansion hits market for $3.5 million Also in this space back in late October, I told you about the woes the owner of the James Burgess Book Jr. mansion on East Jefferson at Burns was facing. Namely, foreclosure on the stately property after falling behind on a $1.245 million mortgage from Birmingham-based Soaring Pine Capital Real Estate and Debt Fund II, which foreclosed and was the highest bidder at a July sheriff ’s auction for $937,006. Last week, the 1911 Louis Kamper-designed property popped up on Zillow for sale. The asking price: $3.5 million. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB
4 | CRAIN’S DETROIT BUSINESS | JANUARY 24, 2022
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SPONSORED CONTENT
CARING FOR KIDS Advocating for children’s mental and physical health across the state
Advocating for the health & wellness of children and families
About this report: On this monthly radio program, The Children’s Foundation President and CEO Larry Burns talks to the community, government and business leaders about issues related to children’s health and wellness. This hour-long show typically airs at 7 p.m. the fourth Tuesday of each month on WJR 760AM. Here’s a summary of the show that aired January 19th; listen to the entire episode, and archived episodes, at yourchildrensfoundation.org/caring-for-kids
Dr. Matt LaCasse, Child and Adolescent Psychiatrist, Children’s Hospital of Michigan
Anne Perry, Michigan Area Director, American Foundation for Suicide Prevention
Larry Burns: What got you interested in substance abuse for adolescents and youngsters?
Larry Burns: Tell us about the American Foundation for Suicide Prevention.
Matt LaCasse: It’s pretty much always been an interest. I decided to focus on psychiatry in medical school. I quickly became interested in substance abuse — specifically, adolescent substance abuse.
Anne Perry: I lost my friend to suicide in 2007. I found the Out of the Darkness Walk at Kensington Metro Park and with it, a community of people that understood what it was like to suffer that particular type of loss. I continued attending that walk and began volunteering. I ended up chairing the Metro Detroit walk and joined the board of directors. I stepped into the staff role almost three years ago. This is not just work for me; this is everything. I fully believe in what we’re doing and that we can bring hope to people who have been affected by suicide. We have chapters in all 50 states. I am proud to be a part of the work that we’re doing at the Michigan chapter.
Burns: Can you explain a little bit about your role at Children’s Hospital of Michigan? LaCasse: I’m a staff psychiatrist and my role is to help out kids that are medically hospitalized. We also do a lot of work out of the Emergency Department, helping kids in crisis. Burns: Have you been surprised by anything you’ve seen because of COVID? LaCasse: It’s been a very difficult couple of years. In general, people have struggles that need to be addressed professionally. The trend has been that kids are using more services. Burns: The Children’s Foundation and several of our donors will be working with you in the near future. Tell us about that. LaCasse: The substance abuse arena right now, particularly for adolescents and young adults, is a very difficult spot to be in because there’s not a lot of services. What’s absolutely necessary is a clinic that provides access to kids. Philanthropic money would allow us to not turn any kids away based on their insurance or based on their ability to self pay. We’ll offer medication, treatment, as well as general mental health treatment. The clinic will be online sometime this year and serving Metro Detroit. Burns: Will this be a clinic that would be for people in crisis? LaCasse: Essentially our doors will be open for anybody that calls and says, “I am struggling.” It’s going to be tailored to the adolescent population. Burns: What other care providers will be part of this? LaCasse: Therapists and case managers will be doing a lot of the individual therapy, family therapy. The physicians will be providing psychiatric workups, medication reviews, providing medications and sort of overseeing the operations of the clinic. Burns: Is family therapy part of the process? LaCasse: Substance abuse rarely stands alone; there’s often some unresolved conflict with parents or other mental health issues within the family. If we turn a blind eye, then it would be tough to expect the problems to really change. But if we’re able to address those things and deal with the family as a whole and as a unit, outcomes seem to be better.
Burns: What are some of your goals for 2022? Perry: In 2018, we transitioned into a statewide chapter. We’re able to expand our reach and bring our resources and our programming to communities throughout the state, including the Upper Peninsula. This year, we are looking forward to building on relationships and strengthening our chapter. Burns: What would be an example of a program that you might have in a community? Perry: Our main program that we deliver the most is called Talk Saves Lives. It’s a one-hour program with basic information on suicide prevention, like warning signs, risk factors and current data. We also have specific programming around teen suicide and mental health. We have different modules of Talk Saves Lives, including an LGBTQ model and a seniors model. We don’t have any direct services. We provide training for support group facilitators, but we don’t run those support groups. We also don’t have a crisis line, but we advocate for better funding for those crisis lines. If we all are able to work together, then we can hopefully reduce the suicide rate. Burns: You recently received a grant from The Children’s Foundation. Tell us about that. Perry: We are looking to educate 75 new trainers to be able to deliver our programs. We’re going to be hosting five different conferences throughout the state. Burns: How can people support AFSP? How do they reach out if they’re worried about a loved one? Perry: Visit afsp.org/michigan. If you are concerned about yourself or someone close to you, call 1-800-273-TALK or text 741741. If there is an immediate crisis, please call 911.
Host Larry Burns, President and CEO, The Children’s Foundation
Luanne Thomas Ewald, Chief Operating Officer, University of Michigan Health System’s C.S. Mott Children’s Hospital & Von Voigtlander Women’s Hospital Matt Friedman, Co-Founder, Tanner Friedman Strategic Communications Larry Burns: Matt, what are some of the highlights of your time with The Children’s Foundation? Matt Friedman: We wanted to be – and it seemed audacious at the time – the first foundation in the country to spin off a children’s hospital, become independent, and make a real difference in the community. We did that. Now our community, our state, has a foundation that any community in the country would want. If we didn’t have it, we’d have to invent it. It’s a foundation that helps kids and families be healthy and stay healthy across a wide range of partnerships all over the state. Who wouldn’t want that? Burns: Luanne, how are things at Mott Children’s and Von Voigtlander Women’s Hospital? Luanne Thomas Ewald: We are seeing the increased numbers of children with mental health needs so that continues to be a focus at C.S. Mott Children’s Hospital. We’re seeing an increase with kids having COVID, which we did not see last year. We are continuing to try to address the health needs of kids in the state. Burns: Matt, what do you see your role being as a trustee? Friedman: The need continues in our community to increase resources and raise money to help kids’ health. We’re learning a lot more about mental health. We’re learning a lot more about substance use disorders. I want to be a part of finding solutions. I’m going to stay involved in The Foundation as long as my colleagues and the board will have me. I think there’s a lot of work left to do. Burns: Luanne, do you have any specific goals for 2022? Thomas Ewald: I want to continue the wonderful work and the footprint that Matt has established over many years. We’re seeing the effects of the pandemic. We’re seeing the effects of kids being isolated. We’re seeing the effects of mental health and suicide. My goal is to continue the tremendous work that this foundation has set forward. Friedman: We have become the connective tissue behind these organizations that had previously been working separately on kids’ health issues around the state. We’re bringing them together. We’re helping them do what they do just a little bit better.
JANUARY 24, 2022 | CRAIN’S DETROIT BUSINESS | 5
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REAL ESTATE
Hundreds of Afghan refugees in Detroit hotel as city seeks housing BY ARIELLE KASS
By the end of February, more than 1,600 Afghan refugees are expected to call Michigan home. For more than 200 who have already made it here, home is, for now, a Detroit hotel. “We’re pretty darn close to taking up the whole hotel,” said Kelli Dobner, the chief advancement officer for Samaritas, who didn’t give the location of the hotel because some refugees have ongoing concerns about their safety from the Taliban. But, she said, “The kids have loved the pool.” With help from the city of Detroit, Samaritas and other agencies are looking for more permanent places for the new residents to live. Late last month, the city put out a call seeking landlords who had rental units available for the “hundreds of Afghan individuals and families who served alongside the U.S. military in support of our country and who need a place to call home.” Landlords who can pass a home safety evaluation or who already have a certificate of compliance from the city can get 12 months of guaranteed rent from coronavirus relief funds and, the city said, build loyalty with a potential long-term renter. Even if their location doesn’t work for refugees, the city’s announcement said, it can connect potential landlords with other people displaced by the pandemic who could benefit from housing help. The same funds are available. The call went out, Dobner said, because affordable housing in the city has been hard to come by. Omar Tucktuck, the director of refugee resettlement for Catholic Charities of Southeast Michigan, has about three dozen people in the same hotel Samaritas is using. He said he expects about 50 Afghan refugees to start out in the hotel for roughly 45 days each. “We try to get them out as fast as we can,” he said. Tucktuck expects his first relocation from the hotel in the next few weeks, pending government funding.
Refugees from Afghanistan walk through Washington Dulles International Airport in Dulles, Virginia, U.S., on Aug. 31, 2021. | BLOOMBERG
“THEY’RE GOING ABOVE AND BEYOND TO BE AS SUPPORTIVE AS POSSIBLE.” — Kelli Dobner, chief advancement officer, Samaritas
The low inventory that has plagued the region over the duration of the coronavirus pandemic has made housing the refugees “especially challenging,” Dobner said. And their particular needs — areas that are walkable, that have access to familiar foods, that are near other refugee communities — have made it hard to find enough options for the influx of people who continue to arrive. The city’s request focused on Warrendale and Campau/Banglatown, where Dobner said a lot of those needs can be met. She also wants to find people homes they can afford to live in a year from now, once the city’s funding is no longer available.
So for now, about 80 percent of the 320 people Samaritas expects to help in the region are at the hotel, as are refugees being aided by other organizations. There, they’re getting halal food, medical and employment help and building relationships in a new community. People have gathered in spare rooms and the hotel lobby, where Dobner said kids race around and play. “The smiles said it all,” she said of the experience of the new arrivals. In Lansing, about 60 people are currently in a hotel while St. Vincent Catholic Charities looks for more permanent abodes, said Judi Harris, that organization’s director of refugee services. St. Vincent Catholic Charities expects 280 people and has received 206 so far. It has been able to move people out of the hotel relatively quickly; it’s important, Harris said, because the refugees have already been displaced for many months. “They just want a permanent
place of their own,” she said. Harris’ organization is paying deposits and the first month’s rent, and helping new residents find employment so they can cover their own costs going forward. She said normally, St. Vincent Catholic Charities is able to set up housing in advance of refugees arriving, but the situation for Afghan refugees changed quickly. That’s also the case for Bethany Christian Services, said Kristine Van Noord, that organization’s program director for refugee, adult and family programs. Van Noord said she’s placed about 120 people in Airbnbs or extended stay hotels in the Grand Rapids area while looking for more permanent options. Some refugees have already started to work, she said, and she hopes the paychecks will help them qualify for apartments. Bethany pays the security deposit and first month’s rent on rentals, and can help with a second month if necessary. The Airbnbs are sometimes donated, and
monetary donations help pay for them otherwise. The Detroit arrivals Samaritas is working with range from individuals to 11-member families, and the city is looking for one- to five-bedroom apartments or houses — particularly multifamily options that have several available units in the same building. They want, Dobner said, a welcoming community for refugees. Some communities that have large concentrations of refugees from other communities have been a haven for the latest set of newcomers, she said. And some of the first landlords to step forward were immigrants themselves. Having experienced what it’s like to be new in the country, Dobner said, they’ve wanted to help. Dobner said everyone her agency has worked with in city government has been “overwhelmingly excited” about the new residents. One of Detroit Mayor Mike Duggan’s primary goals has been to grow the city’s population, and the new residents are a “great opportunity to be able to do that in a welcoming way,” Dobner said. “They’re going above and beyond to be as supportive as possible,” she said. Across the state, Kalamazoo, Grand Rapids, Traverse City and Flint are the other hubs where new Afghan refugees are being concentrated. In Kalamazoo, Dobner said, 70 percent have already found their way out of hotels into permanent supportive housing. Other areas that have little supply of affordable housing are facing the same challenges as Detroit. In metro Detroit, Dobner said, some people who planned to sell their home or who have more than one abode have offered theirs for refugee resettlement. Others are considering buying houses and apartments to make them available, and to collect the guaranteed rent. Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB
WORKFORCE
Michigan lags in education, labor participation, BLM report says BY CHAD LIVENGOOD
Where Michigan ranks
A Top Ten state Michigan is not. But the Great Lakes State has made strides over the past three years in educational attainment, improving the perception of its business climate and lowering the rate of poverty, according to Business Leaders for Michigan’s annual benchmarking report. BLM’s report ranks Michigan 15th in business climate perception with growth in that metric ranking second among all 50 states over the past three years. In educational attainment, Michigan’s three-year growth ranked 20th, while its new national ranking of 35th remains in the bottom half of all states. Nationally, Michigan has seen one of the highest declines in poverty, ranking eighth nationally in the three-year change in its poverty rate. Still, the state ranks 34th nationally in poverty.
How Michigan ranks in a number of measures of economic health, according to a report by Business Leaders for Michigan. Metric
Current rank
3-year growth rank
Labor force participation
41
44
Educational attainment
35
20
Net talent migration*
19
19
Net business creation*
20
20
Business climate perception
15
2
Poverty
34
8
GDP per capita
36
37
Median household income
35
40
*SAME METRIC USED FOR CURRENT RANK AND 3-YEAR PERCENT GROWTH RANK DUE TO HIGH YEAR-TO-YEAR VOLATILITY SOURCE: BUSINESS LEADERS FOR MICHIGAN
Where Michigan continues to struggle is labor force participation (41st), GDP per capita (36th) and median household income (35th),
according to the BLM rankings. In all three of those categories, the state’s three-year growth rankings were closer to the Bottom Ten states.
Michigan’s growth in labor force participation over the past three years ranked 44th in BLM’s benchmarking report. Taken together, Michigan ranks 29th nationally overall using BLM’s benchmarks, which include net business creation (20th) and net talent migration (19th). The Top Ten states in BLM’s rankings are: Utah, Washington, Colorado, Texas, Massachusetts, Virginia, California, Oregon, Florida and Arizona. “If you look at where we started a dozen years ago, we’ve gone from the bottom to the middle of the pack,” BLM CEO Jeff Donofrio said. “We’ve made big progress — 49th to 29th is nothing to sneeze at.” Donofrio said Michigan faces “headwinds” in inching closer to that long-desired goal among business leaders of being a Top Ten state. “Growing from the middle to the top is going to be a lot harder than the
last 12 years,” Donofrio said. “It’s going to take that persistence toward defining strategies and executing on them for years.” To be a Top Ten state, for example, Michigan would need to see an $11,631 increase in annual income per household, according to BLM’s report. Donofrio said the biggest impediments to Michigan’s economic health are labor force participation and educational attainment. Those metrics shape the poverty rate, median household income and the GDP per capita, he said. “Those two drive so much of economic health and if we can remove barriers to work, if we can upskill individuals and help get more degrees and credentials in population, we can go toe-to-toe with any other state,” Donofrio said. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood
6 | CRAIN’S DETROIT BUSINESS | JANUARY 24, 2022
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COMMENTARY
Registered nurse Michele Bice checks Kelley Miller’s vital signs inside Miller’s Eaton County home in late April. Miller became a center of attention this week in the continuing debate over the effects of no-fault auto insurance reform.
EDITORIAL
Auto insurance reform needs reforming S
ometimes well-intentioned laws for all come with terrible consequences for a few. That’s the case for a growing number of catastrophically injured motorists in Michigan whose care has been upended as a result of auto insurance reform. It’s time for the state Legislature to address this literal life-and-death problem. Crain’s Detroit last week reported on the case of Kelley Miller, a 54-year-old quadriplegic from mid-Michigan who requires round-the-clock care as the result of an auto accident in 2011. The home health care agency that has cared for Miller says it can no longer afford to do so under rate cuts that came with the state’s overhaul of the auto insurance rate structure. Miller’s insurer, Auto-Owners, says its hands are tied by the Michigan THE SAVINGS Catastrophic Claims THAT ARE Association (MCCA), COMING BACK TO the Livonia-based entity that manages STATE Michigan’s $23 billion trust fund set up RESIDENTS to ensure lifetime SHOULDN’T care to badly injured motorists like Miller. COME AT THE Miller’s caregivers EXPENSE OF THE formed a new company in an attempt to MOST exploit a loophole in VULNERABLE. the law that they hoped would exempt them from the cuts. Auto-Owners resisted – and the result is Miller, who is otherwise healthy and says she is “not nursing home material,” was taken to Sparrow Hospital in Lansing after inviting reporters and camera crews from Fox 17 and Michigan Radio to cover her departure. Her case is extreme but not unheard of.
There are nearly 18,000 other injured Michigan motorists whose lifetime medical care is supposed to be paid for by the injured drivers fund, though only a fraction of them require round-the-clock care. But those who do matter. The effect on their care is devastating, and it deserves a quick and compassionate solution. A fix has been proposed that could bring some stability to the post-acute care industry, but it’s languishing — much like Miller. A long-awaited Republican-authored bill is in a holding pattern in the House awaiting introduction. It would replace the 55 percent cap on payments to home care providers and brain injury rehabilitation clinics with a fee schedule equal to 150 percent of the rates the Veterans Administration pays for treating injured veterans, according to a draft copy of the legislation obtained by Crain’s. The proposed legislation, from Rep. Phil Green, 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 motorists at 200 percent of Medicare’s rates. It’s not clear whether these changes would be enough to keep health providers in the business of caring for the catastrophically injured, especially during an acute labor shortage. But it’s a start. And it deserves debate now. Michigan’s exceptionally high auto insurance rates needed reform, and the overall goal of that effort was laudable. But the savings that are coming back to state residents shouldn’t come at the expense of the most vulnerable. Kelley Miller could die in the hospital while she waits to go home. Her doctor says she’s become a pawn in a political chess game. State lawmakers — it’s your move.
I
n 1994, the year following the House Fiscal Agency scandal in Lansing in which employees used an internal fund as a personal piggy bank, lawmakers were trying to clean up their public image. Under shared power in the Michigan House that year, lawmakers eliminated officeholder expense funds that allowed corporations, unions, lobbyists and private citizens to donate money to a designated account that they could use for dining, travel and entertainment expenses that were loosely linked to their jobs. Officeholder expense funds had been publicly disclosed accounts since the late 1970s and subject to the same individual donor limits as regular campaign committees, ensuring some level of transparency when a legislator treated himself to a big steak dinner or bought Detroit Pistons season tickets. Bob LaBrant, the longtime general counsel of the Michigan Chamber of Commerce, went before the House oversight and ethics committee in 1994 and warned lawmakers that simply eliminating the accounts would not make their noses cleaner. “You folks are going to make a great mistake if you abolish officeholder expense funds,” LaBrant, who is now retired, recalled telling the committee. “Because what you’re going to see is there will be a rush to establish administrative funds under Section 527 of the IRS code and 501(c)4 social welfare organizations and perhaps even 501(c)3’s, some sort of charity.” LaBrant’s prophecy came true. The proliferation of 501(c)4 social welfare organizations set up by legislators or their allies to hide dining, travel and entertainment expenses has become widespread in the ensuing three decades. Businesses, labor unions and industry trade groups can give limitless amounts of money to these funds — and use other 501(c)4 groups to conceal the identity of their donations, which only have to be disclosed to the IRS if they exceed $5,000. Under the IRS code, 501(c)4 nonprofits differ from 501(c)3 charities in that they can be
Chad
LIVENGOOD
used for educating voters on public policy issues and be used to criticize the voting record of a politician. A new scandal brewing in Lansing could bring new attention to the 501(c)4 organizations and their role in Lansing politics, potentially putting new scrutiny on the corporations and wealthy donors that have largely financed the era of dark money in Lansing. Rebekah Chatfield’s allegations that her brother-in-law, former House Speaker Lee Chatfield, sexually assaulted her over a period of a decade starting when she was a teenager and he was her teacher have rocked Lansing. Through a criminal BUSINESSES, defense attorney, Chatfield has denied LABOR UNIONS he raped Rebekah AND INDUSTRY and said they had a years-long consensu- TRADE GROUPS al extramarital affair CAN GIVE — one of multiple affairs the one-time ris- LIMITLESS ing star in RepubliAMOUNTS OF can politics has admitted to having. MONEY TO THESE Part of this story, reported in great de- FUNDS. tail by Bridge Michigan, entails claims by Chatfield’s younger brother Aaron (Rebekah’s husband) that the speaker of the House was living like a king while in office, making trips to the Legends strip club in downtown Detroit and staying at the pricey Shinola Hotel there (Aaron was paid by Lansing-based GOP consulting firm Grand River Strategies to be his brother’s personal driver, Bridge reported). See LIVENGOOD on Page 18
CHAD LIVENGOOD/CRAIN’S DETROIT BUSINESS
DALE G. YOUNG FOR CRAIN’S DETROIT BUSINESS
Dark money on collision course with Chatfield scandal
Rep. Lee Chatfield, R-Levering, served three two-year terms in the Michigan House from 2015 until the end of 2020, including a stint as speaker in 2019-20.
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.
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 24, 2022
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RESTAURANT ROUNDUP
Empire Kitchen plans re-opening, Statler Market open, and more BY JAY DAVIS
A roundup of local food, drink and restaurant news:
Empire Kitchen & Cocktails plans spring re-opening A Detroit restaurant that closed its doors early in the pandemic plans to re-open this spring. Empire Kitchen & Cocktails, established in 2018 at 3148 Woodward Ave. in Brush Park, remains on an extended pause and plans to re-open this spring, according to operating partner and chef Aaron Lowen. Lowen on Thursday did not give a specific date for the re-opening, but said the 3,100 square foot restaurant, which offers seafood, steaks, pizza, sandwiches and signature cocktails, would undergo renovations and a concept change.
Empire Kitchen & Cocktails, located in Detroit’s Brush Park neighborhood, plans to re-open this spring following an extended pandemic-related hiatus. | FACEBOOK/EMPIRE KITCHEN & COCKTAILS
Detroit-based American Coney Island for the sale of Coney kits for Super Bowl parties. A $100 kit includes 12 Dearborn brand hot dogs, 12 buns, onions and Keros family Detroit chili sauce. A $150 kit includes the hot dogs, buns and toppings, and a special edition “Made in Detroit” T-shirt that features a Coney dog. Variety for February has an in-person event planned that will feature cuisine from some popular area restaurants. A “Cocktails and Cuisine” event is set for 6-9 p.m. Feb. 17 at The Townsend Hotel in Birmingham. The fundraiser will feature food from Andiamo, Birmingham Pub, Crispelli’s, Detroit Wing Company,
Rugby Grille and Tania’s. The event will also include beverages, raffles and a DJ. Tickets range from $95 to $175. Four sponsorship opportunities, ranging from $1,000 to $10,000, are also available.
fered 10 a.m.-3 p.m. Saturday and Sunday, features hash, four types of French toast, power bowls and customer burgers. Five brunch cocktails, including bloody marys and mimosas, are available, along with craft cocktails, mocktails and wine.
Public House Ferndale adds brunch to the menu
Send us your tips and news
Less than a month after re-opening, Public House & Garden is adding to its offering. The Ferndale eatery, located at 241 W. 9 Mile Road, has added brunch to its menu following its Dec. 21, 2021, opening. The weekend brunch, of-
Tell us about restaurant and bar openings and closings, new product lines, new owners and chefs, bakeries, markets, suppliers and more. If you have something to share about the local food and drink scene, email jason. davis@crain.com and/or bvalone@ crain.com.
RECOGNIZE SOMEONE EXCEPTIONAL IN CRAIN'S
Statler Market now open The second piece of a project from the Joe Vicari Restaurant Group is now open on the site of the former Statler Hotel. The Statler Market, sharing ground floor space with Vicari’s Statler French-American Bistro, operates at 313 Park Ave. in Detroit and offers onthe-go grocery and meal items, and coffee. Fresh-brewed coffee, cappuccino and lattes, along with freshly baked croissants, pastries and breakfast sandwiches will be offered. Prepared sandwiches, salads and soups will be available daily. The market, a neighbor to the bistro that opened in December, also features Andiamo sauces, pasta, cheese, energy bars, bottled and canned drinks, and beer and wine. The Statler Market operates 7 a.m.-6 p.m. Monday through Friday and 10 a.m.-5 p.m. Saturday.
New distillery open in Clawson Sabbath Coffee partner Dennis Weiss has a new venture that’s on the other end of the spectrum. Weiss on Jan. 15 celebrated the opening of Weiss Distilling Co., located at 34 E. 14 Mile in Clawson. The distillery, originally slated to open last summer, features a bar, retail shop and speakeasy lounge. The distillery, inside a 5,300-square-foot space with seating for 40 guests, features Weiss Distilling Co.’s line of spirits, including gin, vodka, rum, absinthe and moonshine. Weiss has invested $2 million in the project. Once fully staffed, Weiss plans to have 20 employees in fulland part-time positions. The distillery currently operates 5 p.m.-midnight Thursday through Sunday.
Philanthropic organization planning fundraisers Some metro Detroit restaurants are teaming up with a local charitable group to raise funds for children in need. Variety Children’s Charity of Detroit over the next month has two fundraisers planned. Variety, established in 1932 and now providing vital medical and therapeutic services, essential support, and recreational and educational opportunities to children with unique, and special needs, has partnered with
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NOMINATIONS CLOSE FEB. 25 Saluting business leaders supporting the EV industry by adopting, advocating for and implementing electric vehicles and EV platforms, fleet conversion, research and more.
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For information on all 2022 award programs, visit crainsdetroit.com/nominations
JANUARY 24, 2022 | CRAIN’S DETROIT BUSINESS | 9
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SMALL BUSINESS SPOTLIGHT
Marketing through social media pays dividends for small businesses
SO
From
Cha
GETTING THE WORD OUT Cooking with Que owner and chef Quiana Borden said 80 to 90 percent of the marketing for her business is done via social media. The Detroit native is one of a growing number of small business owners who use free social media platforms to market their products and services. THE BEE AGENCY
Jay
DAVIS
Quiana Broden is perplexed when she comes across business owners who don’t utilize social media. “Social media allows you to be in more spaces,” the 43-year-old owner of Cooking with Que in Detroit’s New Center area said. “I think it’s leveled the playing field for business owners.” Broden opened Cooking with Que in 2015, specializing in preparing plant-based meals. The Kitchen by Cooking with Que followed in 2019, a 22-seat restaurant and space in Midtown for cooking classes, Broden said she has used social media for the majority of her marketing and believes she’s saved $15,000-$20,000 a month by using platforms that include Facebook, Instagram, Twitter, LinkedIn and TikTok. The U.S. Small Business Administration recommends small businesses allocate 2 percent-3 percent of gross revenue toward marketing.
Most companies spend on traditional forms of marketing such as billboards, email newsletters and TV spots. Utilizing social media allows small business owners the flexibility to shift those funds elsewhere. While using social media can have its pitfalls, the platforms can also easily broaden a business’ footprint. “If I do a Facebook Live (video) and let the viewers know about a cooking class coming up, that class will sell out almost instantly,” said Broden, a Detroit native who conducts classes once a month that cost $60-$75. “Sending out information in a newsletter, there’s much less likelihood the classes would sell out at all, let alone that fast.” The mostly-free social services are widely accessible, giving small businesses an opportunity to attract clientèle they wouldn’t have dreamed of even 10 years ago.
Companies can build their brand and community, plug products, promote special deals and share information like updated hours. Some platforms such as LinkedIn also serve as hiring tools. Businesses can use “organic” posts without cost while paid social posts can boost reach and build followers. A 2020 Visual Objects survey of 500 small business owners found that eight in 10 planned to invest in social media in 2021, with an emphasis on marketing. Nearly three-quarters of respondents said they engaged at least weekly on social media accounts. Nikki Little, vice president of Detroit-based integrated communications agency Franco, called the COVID-19 pandemic a major catalyst in encouraging small business owners to turn to social media to connect with customers as well as to sell products and services.
SOCIAL STRATEGY
“WHEN USED STRATEGICALLY AND WITH THE RIGHT COMBINATION OF INFORMATIVE, CREATIVE/ HELPFUL, ENTERTAINING CONTENT ..., SOCIAL MEDIA CAN ABSOLUTELY WIDEN A COMPANY’S FOOTPRINT.”
Tips to successfully use social platforms: Be selective: Focus on one or two platforms where your audience spends most of its time.
—Nikki Little, vice president, Franco
“... as social media channels have matured, particularly in their advertising offerings and adoption across all age groups, more small business owners have seen the value in investing in social media programs — both with organic and paid content,” said Little, who previously worked as a social media specialist and director with Identity
public relations firm in Birmingham. “When used strategically and with the right combination of informative, creative/helpful, entertaining content that’s tailored to the company’s core audience, social media can absolutely widen a company’s footprint.” See SOCIAL on Page 11
Have a plan: Map out how your goals in using social media align with your overall business goals, including the tone of your content, posting frequency and what you want to gain from using the medium, such as driving traffic to your website and increasing subscriptions to a newsletter. More tips, Page 11
LISTEN ONLINE
Podcast: Cooking with Que owner Quiana Broden on how she has used social media platforms to grow her business and community at crainsdetroit.com
READ ALL OF CRAIN’S SBS PROFILES AT CRAINSDETROIT.COM/SMALLBUSINESSSPOTLIGHT 10 | CRAIN’S DETROIT BUSINESS | JANUARY 24, 2022
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FOCUS | SMALL BUSINESS SPOTLIGHT
SOCIAL
SOCIAL TOOLS
From Page 10
Facebook offers a 360-degree video option and a chatbot that allows business owners to push products. Its tools cater to the business that wants to form a genuine relationship with its audience. Small businesses can create and distribute quality content, such as “how-to” videos.
Changing with the times An increasing number of consumers spend an increasing amount of time on the various platforms. For example, Facebook had 2.91 billion monthly active users as of Sept. 30, with the average user spending about 33 minutes per day on the site as of early this year, according to Statistica. George Nikollaj, 49-year-old co-owner of 6 Salon locations in Detroit, Royal Oak and Birmingham, began using social media in 2016. A change in clients’ habits helped spur the move. “We started using social media for marketing when I noticed clients staying on social media sites during their services, and noticed they spent more time doing that than they were flipping through magazines,” said Nikollaj, who established 6 Salon in 2003 with his brother, Johnny, and cousin, Tomy Lulgjuraj. “Everything we do is geared toward social media.” 6 Salon, which has more than 4,500 Facebook followers and 10,500 on Instagram, highlights stylists’ work, showcases “before and after” photos and posts job openings. Appointments can be made through the company’s Facebook page. Nikollaj also encourages clients to “tag” stylists and the salon in social media posts as a way to increase reach and draw new customers. “It’s a good way to help the salon itself and our stylists,” he said. “Our people do really good work, and the fastest way to show that to a large number of people is through social media.” Gazelle Sports, an active lifestyle sports company established in 1985 in Kalamazoo, began using various social media platforms in 2016, according to Director of Brand Cara Cross. Gazelle found social media gave it an opportunity to market itself and build a community around its brand, said Cross, 37, who stepped into her role in July 2020 following three years as community engagement and events manager. “Community is priceless, and that’s the greatest benefit to leveraging our organic social media presence,” she said. “A raving fan of Gazelle Sports isn’t something we can put a price on, and if they’re willing to share their experience with others through their own social media accounts, and engage with ours, that’s not really quantifiable.”
Diversification is key While it may be a large piece, social media should be just one slice of the integrated communications pie, Little said. She recommends clients invest in paid, earned, shared and owned marketing efforts to see the most value and return on investment. “I recognize that’s not always possible for a small business with a limited budget, so for those who can’t put marketing dollars into multiple channels, they should choose the social platforms where their audiences spend time,” Little said. “There’s no point in being on TikTok, even though it’s the social media darling right now, if you’re selling a product or service to an audience that doesn’t spend time there.” While the majority of promotion through social media is free, there
Instagram is the visual medium. Using strong photos to promote products can push consumers to purchase. The use of hashtags is key, as well, with each hashtag going out to a different set of consumers. A new “shop” tab takes followers to a page that lists items by category, along with listing businesses you follow and others you may be interested in. There is also an option to purchase items directly from Instagram accounts. Twitter users should make it clear you’re marketing your business. That means including your company name in your handle and including a logo or branded image in your header and profile picture. Use the bio to include your business’ mission statement or information on what you offer. Beneath the profile picture, you can include a direct link to drive traffic to your website. Twitter “Spaces” allows conversations with consumers. LinkedIn posts with hashtags can help draw a new audience. LinkedIn’s algorithm supports external links to blogs and other websites. If content you post has value and is relevant to your audience, you’ll find success posting other people’s content on the platform. Keep your post publishing schedule consistent.
Return on investment
TikTok’s short-video platform consumers are looking for authenticity and community. Ads should be more creative and a little less “commercial.” SOURCE: HUBSPOT
Gazelle Sports Director of Brand Cara Cross and her company utilize Facebook and Instagram to market the store. | PUBLICCITY PR
MORE TIPS Customer service is vital: Social media is a relationship-building tool just as much as it’s a tool to drive sales and conversions. It helps to respond to customer inquiries and comments in a timely fashion. Use all aspects: Don’t be afraid to experiment. Try different features each platform offers, such as live video and polls.
Gazelle Sports Visual Display Coordinator Jeff Brown and Sales Associate Rebecca Wilkins work to produce content for the company’s social media channels. The company for the last five years has used social media as part of its marketing plan. |
are some paid options that can get a business’ products and services in front of more eyes. Facebook offers “per click” advertising that averages about 97 cents per click, according to digital marketing agency WebFX. Instagram’s per click cost ranges from 20 cents to $2. A promoted Tweet, sent out on Twitter to accounts that do not follow a particular business, costs between 50 cents and $2. LinkedIn is a bit pricier at $5.26 per click. “The good thing is a small budget can go a long way on platforms like Facebook and Instagram,” Little said. “Others, like LinkedIn, require a larger investment to see results.”
Standing out in a crowd With thousands of businesses vying for attention on social media, companies must offer something unique to grow followers and clientèle. The social media savvy Broden
Be authentic: When communicating with what amounts to strangers, it can be easy to over-analyze what you say and post. Use social media to reflect and communicate your brand, and what makes you unique and interesting. SOURCE: FRANCO
PUBLICCITY PR
believes authenticity has helped with the success of Cooking with Que, which brought in $775,000 in revenue in 2021 and expects to surpass $1 million this year. “I didn’t want to be like anybody else. I wasn’t trying to re-create the wheel, though. People go for what they like and what they feel a company gives them in terms of a good product and customer service,” she said. “I wasn’t going to give anyone anything I didn’t try myself. You get some people who project one image to sell a product but who’d never actually use that product in their daily lives. I just wanted to show people what I knew and it’s worked out so far.” Companies use the different social media platforms for different purposes and to reach different followers. Marketers will find about 75 percent of U.S. Instagram users are 18-44 years old, versus 62 percent of Facebook users in the same demographic. Sixty-nine percent of Twit-
best brand forward, then determine how that shows up in email, social media, our website, and other platforms.” Not every post should focus on selling a product, as consumers want to be engaged and even get to know a business owner. Broden plans each post. Each week, she posts a recipe, a “Que” tip that focuses on food prep and preservation and a “Day in the Life” post that gives followers a look at how her business operates and a bit of her personal life. “You don’t want to post every day because people may get tired of you, but you have to post frequently so your customers and potential customers know you’re out there,” Broden said. “If you don’t post, the algorithm the sites use can see that and kick you off a lot of feeds, so users of the platform could forget about you.”
ter users are 18-49 years old while teens make up the largest group on TikTok’s short-video platform. “I use Facebook for the Live feature,” Broden said. “People on Facebook love to interact with you. They want to feel like they’re your family. For me, they want a recipe easily, and right in front of them. On Instagram, they more so want to see images and for those images to tell a story.” Broden also pushes social media followers to her website where they can buy weekly meal plans, find recipes and make reservations for The Kitchen. Gazelle uses Instagram’s “stories” feature to showcase products with links to purchase. A “shop” tab on its Facebook page features a handful of hot items that with one click can be viewed and purchased on the Gazelle website. “We have full strategies built out for every platform we utilize,” Gazelle’s Cross said. “We lead with our
It’s difficult to track exactly how much revenue a small business brings in via social media marketing, though using the formula of profit/ investment x 100 helps determine return on investment. For Gazelle, with locations in Birmingham, Northville, Holland, Grand Rapids and Kalamazoo, increasing its social media presence helped the company financially and environmentally, too. “We used to rely much more heavily on physical mailers, which represented thousands of dollars of our marketing budget,” Cross said. “While we still do those once in a while, we’ve reduced our environmental impact and built efficiencies in communicating with our audience.” Gazelle uses measures such as click-through, engagement and follower growth to track the success of its social campaigns, Cross said. She did not disclose revenue.
Helping hands Social media managers can help guide a business’ strategy or take on the role for the company. The average salary for a Michigan-based social media manager is a little more than $46,000, according to ZipRecruiter. Franco’s Little said the salary is justified. “I know from being on the front lines that (handling a company’s social media) is not easy work,” Little said. “When social media is done well, unique content is created for each channel. That means tailored copy and images across multiple channels, not copying and pasting the same post across multiple channels. “Community management, particularly for a brand that has a very engaged community, is easily a fulltime job. Many brands, especially small businesses that may not have receptionists or a customer service center, use social media as a customer service tool. People expect companies to be responsive and helpful through social media channels. Companies can easily lose customers if they don’t respond to a message, or if someone managing those channels is rude or unhelpful. A social media manager’s job is time-intensive and definitely outside of the 9-5 ‘norm.’” Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981
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RESTAURANTS
What’s the future of vegan restaurants in metro Detroit? Vegan restaurant Aratham Gourmet to Go opens in Detroit as others close BY JAY DAVIS
A vegan restaurant is ready to plant its roots in Detroit and hopes to succeed despite similar offerings dying on the vine. Aratham Gourmet to Go, established in 2019 by chef Gabriel Vera and his wife, Tiffanie, will open a downtown Detroit location on Jan. 24 inside the Chrysler House at 719 Griswold St. The opening gives Aratham, which specializes in plant-based and organic foods to support holistic lifestyles, three locations to go along with businesses in Troy and Westland. The business is a “labor of love,” according to the co-owners. Love, quality, health and creativity in plant-based cooking is the essence of Aratham, they said in a statement. Aratham’s Detroit location will operate 10 a.m.-6 p.m. Monday through Saturday. The couple put $300,000 into getting the Detroit location up and running, according to Gabriel Vera. “We truly care about our customers, our community and the health of the planet,” the Veras said in a statement. “It’s because of this love that we developed a menu that is gourmet in quality, plant-based and lower in price. Food can heal and fortify, and we fully believe organic, gourmet cuisine and other natural products for the home and body should be affordable for all.” Vera will employ two staffers in the 500-square-foot space; Aratham has 15 employees between its three locations. Gabriel Vera served as director of food and beverage, and executive chef at the MGM Grand, along with stints at Joe Vicari Restaurant Group properties and Mackinac Island’s Mission Point. Tiffanie Vera is a trained birth and postpartum doula. A rotating takeaway menu will feature Aratham items such as its popular plant-based crab cakes, “Lobster” po boys, soups, salads, fresh juices and Aratham’s own elderberry syrups.
Is there a market? The announcement of Aratham’s opening comes days after news about
Vegan and vegetarian restaurant Aratham Gourmet to Go will open a Detroit location on Jan. 24 inside the Chrysler House at 719 Griswold St. The Detroit space is the company’s third location, joining eateries in Troy and Westland. | BEDROCK
Gabriel Vera
the closure of one of Detroit’s more popular vegan spots. Detroit Vegan Soul closed at the end of the year after a decade in business, citing issues brought forth by the ongoing coro-
navirus pandemic. Nosh Pit Detroit, a vegan restaurant in business for seven years between spaces in Hamtramck and Royal Oak, announced its permanent closure last month. Nosh Pit co-owner Karen Kahn in December told Crain’s she believes the vegan food industry is in trouble. Ferndale’s Greenspace Cafe closed in early 2020. Om Cafe, also located in Ferndale, closed in 2018 after 34 years in business. Detroit Vegan Soul, established in 2012, billed itself as Detroit’s first restaurant offering 100 percent plantbased foods upon opening at 8029 Ag-
nes St. in the city’s West Village neighborhood. Detroit Vegan Soul Co-owner and General Manager Kirsten Ussery, who established the business with co-owner and executive chef Erika Boyd, said staffing issues led to the closure. Ussery said the restaurant closed last week. A Facebook post says Dec. 31 was the last day of operations. “We’ve been trying to add staff for two years,” Ussery told Crain’s on Jan. 18. “It became financially impossible to continue holding the space without it generating revenue and not having reliable staff.” Prior to the pandemic, the Agnes Street location had eight to 10 employees. The west side location, at 19614 Grand River Ave., will remain open, Ussery said. That location is on a winter hiatus, but is to reopen in April. Ussery said the Grand River location, opened in 2017, has been able to survive with more stable staffing. Early in the pandemic, following the layoff of staff, Detroit Vegan Soul
launched a GoFundMe campaign to help those displaced staffers. Ussery said revenue has been cut in half since the start of the pandemic, though she declined to provide specific numbers. “(The pandemic) has made it impossible for us to recruit and retain staff,” Ussery said, “and as a result forced us to reduce our hours of operation to what can be maintained by a small staff, or at times one person working alone.” Ussery said she believes a labor shortage has more severely affected vegan restaurants, echoing the sentiments of Nosh Pit Detroit owner Kahn. “I think there’s a need and demand for vegan restaurants,” said Ussery, who for two years prior to opening Detroit Vegan Soul served as city of Detroit director of communications. “But even pre-pandemic it was difficult to find reliable staff to work in plant-based kitchens.” Kahn in December said she believes specialized food as a whole is in
trouble, as more restaurants begin to offer vegan options. “Right now, a lot of my friends are closing restaurants,” Kahn said. “I see a lot of restaurants that are surviving, but nobody is having fun.” Gabriel Vera agrees with Ussery, but believes his company is set up for long-term success. “Nosh Pit and (Detroit) Vegan Soul were great additions to the city and the vegan community and we’re very saddened to see them go,” Vera told Crain’s on Thursday. “However, our concept is unique...in comparison to those restaurants. It allows us to maintain low overhead, while producing exceptional and high-quality products our clientele enjoys. “Our concept is also directed not only to vegans, but to anyone who wants to enjoy clean and healthy meals, juices, and desserts made with whole foods and organic ingredients that are designed to nurture our bodies. ...our weekly rotating menu keeps the clientele enjoying a great variety of nutritional, flavorful products week after week without getting bored of the same items.” Ussery plans to stay in the restaurant game and said the focus is on ensuring the Grand River location remains sustainable. She didn’t rule out the possibility of opening another east side location down the line. Potential for revenue, community support and the ability to staff with reliable employees are all factors, she said. Closing is tough, Ussery admitted, but she said she’ll always have fond memories of what was her first business venture, including the restaurant’s grand opening. “Our goal was to open to 100 people, but our grand opening attracted hundreds, forming a line down the block and round the corner,” she said. “... we hosted a plethora of celebrity guests: President Bill Clinton, Stevie Wonder, Jaden Smith, John Conyers, Michael Beckwith, The Wu Tang Clan, Catherine Bigelow. Just seeing our dream come to fruition in that spot means a lot.” Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981
EDUCATION
Cranbrook Academy of Art names new director after eight month search BY SHERRI WELCH
After an eight-month-long, national search, Cranbrook Educational Community has named Paul Sacaridiz, top executive of Haystack Mountain School of Crafts in Maine, as the next leader of the Cranbrook Academy of Art. Sacaridiz, who has served as executive director of Haystack since 2015, will join Cranbrook Academy of Art with the title of Maxine and Stuart Frankel Director, effective in May. He will succeed COO Rod Spearin, who has served as interim director since May 2021, when former director Susan Ewing retired after leading the academy for two years. Sacaridiz, 51, brings 25 years of experience in art making, teaching, administration, and leadership in higher education and the nonprofit
sector. Under his direction, Haystack increased its endowment to more than $24 million from $9 million when he joined the organization, to supSacaridiz port the craft school’s programs, scholarships, operations and campus preservation. Cranbrook said earlier this month that it plans to focus on meaningful growth of its endowment or permanent or board-designated and directed reserves. Haystack’s annual fund has also seen unprecedented growth under Sacaridiz, setting records for the amount raised for five consecutive years, Cranbrook said in a release. During his tenure at Haystack,
Sacaridiz also led development of a strategic plan and long-range campus planning process and during the pandemic, developed free online programs with more than 4,000 views from participants from 38 countries. Under his leadership, Haystack created 50 new fellowships to support BIPOC students and completed major studio and infrastructure upgrades to the historic campus. Sacaridiz brings a long history of successful collaborations, partnerships and inclusive practices to Cranbrook, Aimeclaire Roche, president of the Cranbrook Educational Community, said in a release. “The future of arts education requires leaders who are willing to take risks and find new ways to bring additional voices into the studio. This is the only way the arts can continue to be a true reflection of our
shared experience. and we are grateful that he will bring these talents to the Academy.” Prior to Haystack, Sacaridiz was professor and chair of the Department of Art at the University of Wisconsin-Madison, and earlier in his career, associate director of the Wonsook Kim School of Art at Illinois State University. He was a fellow with the National Council of Arts Administrators and has extensive experience serving on nonprofit boards including the National Council on Education for the Ceramic Arts and the Craft Emergency Relief Fund. Through his work at Haystack, Sacaridiz has proven to be a passionate leader in initiatives surrounding cultural equity, Jennifer Gilbert, chair of the Cranbrook Academy of Art and Art Museum board of governors, said in the release.
“We have full confidence that he can chart a new course for the Academy as we reexamine the way we teach art, architecture, and design,” she said. An accomplished sculptor and ceramicist, Sacaridiz holds a master of fine arts from the School of the Art Institute of Chicago and bachelor of fine arts from the New York State College of Ceramics at Alfred University. He is also an alumnus of the School for American Crafts at the Rochester Institute of Technology and has produced multiple large-scale projects for the Philadelphia Museum of Art, the Denver Art Museum and the Houston Center for Contemporary Craft, among other institutions. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch
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EDUCATION
Cradle-to-career plan for Marygrove campus secures $57.3 million Financing from PNC Bank to support conversion of liberal arts, Immaculata buildings BY SHERRI WELCH
The cradle-to-career plan on the former Marygrove campus is moving forward with more than $57 million in financing from PNC Bank. The financing to the Marygrove Conservancy will support the ongoing conversion of the liberal arts and Immaculata buildings on the 53-acre northwest Detroit campus into K-12 facilities for the School at Marygrove. It includes a $50 million loan and a $7.3 million historic tax credit toward the renovation of the 1927 liberal arts building. The PNC loan is coming to the conservancy because of the $75 million commitment Kresge has made to the campus project, Marygrove Conservancy CEO Tom Lewand said. The conservancy will use the grants it receives from Kresge, along with revenue generated from leases, event rentals and other sources to pay back the loan. In addition to the financing, the PNC Foundation has made a $40,000 grant to the Marygrove Conservancy
to support the Marygrove Early Education Center, which opened for 144 children in September. Additionally, PNC said it will bring its mobile branch truck to the Marygrove campus every other week to provide access to financial services for the surrounding community. “Over the years, PNC and the Kresge Foundation have collaborated on a number of significant efforts to benefit Detroit and Wayne County residents, including $2.5 million in joint grants to support improvements in early childhood education facilities in Detroit in collaboration with the W.K. Kellogg Foundation,” Ric DeVore, PNC regional president for Detroit and Southeast Michigan, said in a news release. The Marygrove project “will play a significant role in revitalizing and providing critical resources to the Livernois-McNichols community,” he said. The PNC financing builds on $22 million in financing provided toward the early education center costs last year.
The Marygrove Liberal Arts building in the foreground with the Marygrove Early Education Center and the Immaculata Building to the left.
In 2019, the year of the conservancy’s most recent available 990 filing, it reported nearly $6.07 million in total revenue, $3.8 million in total expenses and net assets/ fund balances totaling $5.8 million. Kresge spurred creation of the Marygrove Conservancy in 2018 to keep the campus from going dark and the P-20 plan with partners including the conservancy, Starfish Family Services, Detroit Public Schools Community District and the University of Michigan School of Education. The campus is being designed in collaboration with the surrounding Livernois-McNichols community as an educational, economic and
civic anchor in its revitalization. It is gradually bringing a full educational continuum online, including prenatal to pre-K education in the Marygrove Early Education Center, operated by Starfish Family Services; K-12 in the School at Marygrove under Detroit Public Schools Community District in collaboration with the University of Michigan School of Education; post-secondary graduate education; and wrap-around services and community engagement programs. Renovations on the first phase of the liberal arts building are complete, and that space is occupied by the high school, Lewand said, with
the 12th grade coming in last fall. The second phase of improvements there, which will house the middle school and a health and dental clinic, are ongoing. Renovations of the Immaculata building, which will house the elementary school, also continue, Lewand said. The first phase of that work is expected to wrap up by fall when grades K-2 will come in. At full capacity, the campus is expected to serve roughly 1,000 Detroit children and their families, most from the surrounding neighborhoods. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch
NONPROFITS
#BettyWhiteChallenge brings in tens of thousands of dollars for shelters BY SHERRI WELCH
A social media push dubbed the #BettyWhiteChallenge has yielded tens of thousands of dollars in unexpected donations for local animal welfare groups. White, who died on New Year’s Eve, just weeks before her 100th birthday, was a well-known advocate for animals. She supported American Humane, an animal-welfare organization, for more than 60 years, according to The Chronicle of Philanthropy. As news of the actress’s death spread on social media, her fans began asking for donations to local animal shelters and rescues in her memory. They poured in to animal shelters around the country, many on Monday in honor of White’s birthday. The Michigan Humane Society took in over $42,000 in donations, said Tom Varitek, vice president of communications. That’s more than it raised for the whole month of January last year ($34,230) and more than three times the amount it raised during the first two weeks of this January, he said. The unexpected donations will support programs and services for the organization which is operating on a $24.8 million budget this year. The Bingham Farms-based nonprofit posted a single post a day earlier on Jan. 16 to encourage people to donate to any animal-related charity. “We honestly didn’t know what to expect,” Varitek said.
GRIT: STORIES OF GREATNESS FROM THE STREETS TO THE SUITES SPECIAL GUEST
Wyandotte Animal Shelter thanked supporters on Facebook for donations in honor of Betty White’s birthday. | FACEBOOK
“We were just coming off of a record breaking holiday giving season and preparing ourselves for our Day of Giving Telethon on February 10.” The Humane Society of Huron Valley also saw a big uptick in donations: $24,000 in one day, said director of communications Wendy Welch. The donations will help care for the homeless, injured and abused animals that come through the organization’s doors and go toward $9 million in annual operating costs, she said. Detroit Dog Rescue hit its goal to raise $10,000 through its Betty White appeal.
“Our new Detroit Dog Rescue (opening this spring) will be home to a hallway affectionately named: Betty White Adoption Avenue,” it said in an e-newsletter. The Wyandotte Animal Shelter took in over $7,000 and donations were still coming in Tuesday, it said on its Facebook page. “We are in awe of the outpouring of love and generosity we saw (Monday) in honor of the legendary Betty White,” the shelter said in a Facebook post Tuesday. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch
Watch for the latest episode of Grit coming Jan. 31 on Apple Podcast and Spotify.
Mark Baughman, Senior Vice President and Chief Information Officer at Delta Dental, 2021 Michigan CIO of the Year ORBIE Award “Enterprise” winner
HOST
Margaret Trimer, Vice President of Strategic Partnerships at Delta Dental
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TECHNOLOGY
Grand Circus, Amazon partner on coding boot camp Course to focus on Java programming, include opportunity to interview for job in Detroit BY NICK MANES
Yet another big tech giant is helping to boost software programming training and potential job creation efforts in Detroit. E-commerce behemoth Amazon. com Inc. said Tuesday it’s providing funding for a cohort of up-and-coming programmers at Grand Circus, a technology training boot camp in downtown Detroit that is among the portfolio of companies tied to billionaire businessman Dan Gilbert. Graduates of the free 28-week program, which will focus on Java programming, will have the opportunity to interview for entry-level developer roles at Amazon’s downtown Detroit office, which employs nearly 500 people, according to a news release. “Working with Amazon on this initiative is an exciting opportunity for everyone involved, especially prospective students,” Damien Rocchi, founder and CEO of Grand Circus, said in the release. “Our mission since inception has been to bridge the talent gap that exists between Detroiters and the growing technical job opportunities in the city. We are proud to have helped hundreds of people advance their careers and we’re excited to ensure more people in metro Detroit will be able to gain the critical skills they need to succeed in their careers.”
Detroit training academy Grand Circus is partnering with Amazon as the two organizations ramp up tech job efforts in the city. | CRAIN’S DETROIT BUSINESS
Financial terms of the arrangement between Amazon and Grand Circus were not disclosed. Seattle-based Amazon has a total market valuation of more than $1.6 trillion.
The programming will take place virtually beginning March 28 and run through late September. Those interested can apply at grandcircus.co/ amazon. In 2017, social networking compa-
ny Facebook announced a partnership with Grand Circus, funding the training of 3,000 Michigan workers for digital jobs. As proof of the need for such a program, Grand Circus and Amazon of-
` Sunvera Group LLC, Bingham Farms, a management services organization providing support services to ophthalmology practices, has formed two new partnerships in the Metro Detroit market with Advanced Ophthalmology Associates PLC, Clawson, and Clavenna Vision Institute, Birmingham. Websites: sunveragroup.com, aoaeyes.com, cvi2020.com
commercial banking institutions. First Independence received equity investments from Citi, New York, N.Y., Old National Bancorp, Evansville, Ind., and U.S. Bank, Minneapolis, Minn. Website: firstindependence.com
quired Holiday Park I and Holiday Park II, Stevens Point, Wis. This expands the company’s manufactured home portfolio to 12 communities in Wisconsin and brings the company’s total of manufactured home communities to 301 nationwide. Website: rhp.com
ficials point to the dearth of internet access in Detroit, often called the “digital divide.” The issue of better connecting Detroit residents with reliable internet access has drawn millions of dollars in support from a long list of corporate philanthropy organizations for years, as Crain’s has reported. “Technical skills are more important than ever for candidates applying to roles at Amazon and beyond right now,” Garret Gaw, a Detroit-based director for software development, said in the news release. “Grand Circus is a results-oriented, trusted organization, and we are proud to be the latest local employer to help them expand their reach to prepare even more interested students for exciting, well-paying, and in-demand technical roles.” Other tech giants have also made inroads in Detroit’s expanding technology sector. Late last year, for example, Michigan State University and iPhone maker Apple Inc. opened a joint developer academy in downtown Detroit focused on preparing “students for jobs in the thriving iOS app economy,” as well as teaching the fundamentals of coding and other aspects of software development. Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes
DEALS&DETAILS ` CONTRACTS ` Roncelli Inc., Sterling Heights, a construction management firm, was awarded the Ford Motor Company Engineering Lab project in Dearborn. The project consists of the renovation and restoration of the historic lab to an updated, technologically advanced facility. Website: roncelli-inc.com ` Electric Last Mile Solutions Inc., Troy, provider of electric and intelligent mobility solutions for commercial vehicle customers, has a contract with Glovis America Inc., Irvine, Calif., a supply chain and logistics provider, for ELMS Urban Delivery. Glovis plans to use ELMS commercial vehicles to support its industrial operations for materials movement and shuttling personnel on campus. Websites: electriclastmile.com ` Altair, Troy, a software company, signed a multi-year agreement with Hewlett Packard Enterprise, Houston, Texas, a technology company, to offer Altair’s high performance computing suite for job scheduling and management. The suite includes Altair PBS Professional, a workload manager. Website: altair. com ` Midwest Vision Partners LLC, Chicago, an eye care platform, has a partnership with Retina Consultants of Michigan, Southfield, an eye care practice. This is Midwest Vision Partners’ 18th partnership, bringing its network to over 125 providers and 60 locations and approximately 1,400 staff across Michigan and Ohio. Websites: retinas.com, midwestvision.com
` MERGERS & ACQUISITIONS ` Stoneridge Inc., Novi, designer and manufacturer of electrical and electronic vehicle systems, is selling its minority interest in Minda Stoneridge Instruments Ltd., Kurali, India, an electronics manufacturer, which represents 49 percent of the total outstanding equity of MSIL, to Minda Corp. Limited. The purchase price of the MSIL equity shares is $21.5 million. The parties expect to close the transaction by Dec. 30. Website: Stoneridge.com. ` Gantry Business Solutions LLC, Grand Rapids, a consulting firm. has acquired Amicus Management Inc., with offices in Detroit and Grand Rapids, a turnaround legal services firm. Websites: gantrybs.com, amicusmanagement.com ` The Care Team, Farmington Hills, a hospice and home health provider, acquired Arcadia Hospice of SEPA, Allentown, Pa., a hospice provider. Terms of the transaction were not disclosed. Website: tctcares.com ` Detroit-based First Independence Corp., parent company of First Independence Bank, a minority depository institution, closed equity capital investments with three
` Loc Performance Inc., Plymouth, a manufacturer, acquired a facility in St. Marys, Ohio, from manufacturer Continental. The facility manufactures rubber track products for agricultural, construction and defense industries. Established in 1940, the 800,000+-square-foot facility sits on 108 acres and employs approximately 450 highly skilled employees. Website: locperformance.com ` Detroit-based private equity firm Huron Capital Partners’ Aquamar Holdings, Rancho Cucamonga, Calif., and Carteret, N.J., a manufacturer of surimi seafood, acquired Shining Ocean Inc., Sumner, Wash., a seafood wholesaler. Website: huroncapital.com ` Camping World Holdings Inc., Lincolnshire, Ill., a recreational vehicle dealer, acquired the Lloyd Bridges Traveland RV dealerships, Chelsea. Website: CampingWorld.com ` A consortium of investors led by Rubicon Founders, Nashville, Tenn., a venture capital fund, has acquired a majority stake in U.S. Medical Management, Troy, a medical group. Centene Corp., St. Louis, Mo., a managed care company, will retain a minority stake in the company. Website: usmmllc.com ` RHP Properties, Farmington Hills, private owner and operator of manufactured home communities, ac-
` O2 Investment Partners, Bloomfield Hills, a private equity firm, sold its portfolio company, Mantis Innovation Group, Houston, Texas, a tech services provider, to Gemspring Capital, Westport, Conn., a private equity firm. Website: o2investment.com, ` Novi-based chassis supplier DexKo Global Inc.’s wholly-owned subsidiary Dexter Axle Company, Elkhart, Ind., manufacturer of trailer axles and trailer brakes, acquired The Expediter LLC, West Palm Beach, Fla., provider of wholesale trailer parts, braking systems, towing solutions, suspensions and trailer electrical parts. Website: dexko.com ` Southfield-based Clarience Technologies, parent company to Truck-Lite, DAVCO filtration systems and Road Ready advanced telematics, acquired Fleetilla LLC, Ann Arbor, a telematics provider that serves commercial trucking and transportation. Websites: clariencetechnologies.com, fleetilla.com ` Atar Capital, Los Angeles, a private investment firm, completed the carve-out acquisition of BorgWarner’s North American Controls business, a wholly owned and operated division of automotive supplier BorgWarner, Auburn Hills. With manufacturing located in Water Valley, Miss., the business is a supplier of transmission sole-
noids, engine solenoids, stop-start accumulators and hydraulic control modules. Website: borgwarner. com
` EXPANSIONS ` Farbman Group, Southfield, a commercial real estate company, created Apex Mechanical Solutions, a heating and cooling company, to service the heating and cooling needs of Farbman Group properties under management. Websites: farbman.com ` Crunch Franchise, New York, N.Y., a gym franchise, is opening Crunch Southgate, 14255 Eureka Road, a $4 million, 30,000-square-foot fitness facility, in January. Phone: 734-2587366. Website: crunch.com/locations/southgate
` NAME CHANGES ` SyBridge Technologies, Southfield, a tooling and mold companies platform, renamed its subsidiary companies to SyBridge Technologies. Website: sybridgetech.com ` Sun RV Resorts, Southfield, owner and operator of more than 175 resorts and campgrounds across the United States and Canada, has changed its name to Sun Outdoors. Website: sunoutdoors.com
` NEW SERVICES ` White Glove, Birmingham, a fintech marketing company specializing in client acquisition services for financial advisers, launched White Glove One, a marketing platform f or financial advisers. Website: whiteglove.com
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REAL ESTATE
Home listings in Detroit are up as landlords decide to sell Across rest of metro area number homes on the market continues to fall BY ARIELLE KASS
Across metro Detroit, the number of homes on the market continues to fall. It’s down more than 32 percent in Washtenaw County since last December and 25 percent in Oakland County, according to data from the multiple listing service Realcomp. In Livingston County, there were more than 24 percent fewer homes listed in December 2021 than in 2020. In Macomb County, that figure was nearly 13 percent. Wayne County saw almost a 2 percent dip. Why so much smaller than the rest? Because in the city of Detroit, people are listing houses. In fact, according to Redfin data, Detroit is the only city of the 88 metros it tracks where the number of seasonally adjusted listings was up in December. The 1,611 houses that were on the market in Detroit in December mark a 24.2 percent increase in listings from the year before, according to Realcomp data. The city is a clear outlier in the metro area, where listings across the board have been down. At the same time, sales in the city fell, as prices continue to rise. Darralyn Bowers, a broker with Bowers Realty & Investments, said the primary sellers are landlords who have decided to get out of the business here. Many suffered through the eviction moratorium and had to float expenses for their properties while they waited to get paid. Those that were able to get coronavirus relief money often didn’t get the full amount available because the city only disbursed full funds to those who had a certificate of compliance. And others were frustrated that courts were more sympathetic to renters than to owners, Bowers said. “Some investors, landlords, have decided not to be landlords in the city of Detroit,” she said. “Landlords are just being ripped every way.” Carol Trowell, a broker with DuPont & Associates who focuses on Detroit, agreed that many of the new listings are one-time rental properties. Landlords who didn’t get paid for months don’t want to pay for certificates of compliance or to test for lead in their units, she said, expensive propositions that can sometimes eat up the money they are receiving. “If you’re a slum landlord, it’s going to cost you,” she said. David Bell, director of Detroit’s Building, Safety Engineering and Environmental Department, said in a statement that city council modified its compliance rules late last year to make it easier for landlords. Now, landlords who work to control lead paint in their units will be able to conduct risk assessments every three years, as opposed to annually. Those who have abated all lead can get a certificate of compliance that’s good for seven years.
And units that are inspected for federal compliance can now count that for the city, instead of duplicating inspections. At the same time, fines will be higher for landlords that don’t comply with the regulations — up to $2,500 if a child tests positive for elevated lead levels and a landlord hasn’t done anything to address lead on the property. The changes make it easier for landlords to be compliant, but ensure that the city remains strict about lead compliance, Bell said. “In many cases landlords that are having a hard time doing the work necessary to make their rentals safe have deferred maintenance for many years and are now being held accountable as they would in any community,” he wrote. Trowell said others are trying to sell off some properties in order to be able to maintain those they have left. But she said sales are down, even as more listings are coming on the market, because many homes don’t have updated kitchens or bathrooms, and sometimes haven’t been well maintained. Bowers said the city’s efforts to improve the housing stock may instead mean fewer options for renters going forward. “They’re running the landlords away,” she said. Bell said he wasn’t surprised that some landlords were choosing to leave the city rather than comply. But he said the city’s goal in enforcing the certificate of compliance rules is to protect families, not landlords’ profits. “We expect that the new owners of many of these properties will know at the outset what the expectations are and will work within the new ordinance to come into compliance,” he wrote. “Others may become owner occupied homes, which would likely represent an increase in home ownership among Detroiters, and that’s also a good thing.” Other owners, Bowers said, are “bailing” because they haven’t seen these prices in the city for quite some time. While Realcomp shows Detroit’s median sales price is up 16.5 percent, to $83,500, Bowers said some parts of the city are going for far more — $80,000 homes that are now going for $120,000 or higher. “People are seizing an opportunity they haven’t seen in Detroit,” she said. “A lot of people are saying, ‘This is the time for me to go.’” The 2021 metro housing market as a whole ended similarly to how it started, said Karen Kage, Realcomp’s CEO — except that there was “far less inventory.” On the whole, the areas the service tracks experienced a 15.6 percent drop in listed homes year over year. “Obviously, we need some inventory,” she said. How home sales fared in December by county:
For sale signs hang outside homes on the west side of Detroit. | FABRIZIO COSTANTINI/BLOOMBERG NEWS
` Wayne County: Home sales decreased 7.6 percent, falling to 1,825 from 1,975 in December 2020, and median sale prices rose 12.5 percent from $155,500 to $175,000 as inventory dropped 1.8 percent year-overyear from 2,900 to 2,848 homes on market. Days on market fell 12.5 percent from 32 to 28. ` Oakland County: Home sales decreased 16.9 percent, falling to 1,627 from 1,959 in December 2020, and median sale prices rose 11.4 percent from $273,750 to $305,000 as inventory dropped 25.5 percent year-overyear from 2,228 to 1,660 homes on
market. Days on market fell 12.5 percent from 32 to 28. ` Macomb County: Home sales decreased 8.9 percent, falling to 1,244 from 1,365 in December 2020, and median sale prices rose 11.4 percent from $193,000 to $215,000 as inventory dropped 12.9 percent year-overyear from 1,229 to 1,071 homes on market. Days on market fell 10.3 percent from 29 to 26. ` Livingston County: Home sales decreased 16.8 percent, falling to 227 from 273 in December 2020, and median sale prices rose 13.9 percent from $296,000 to $337,000 as inven-
tory dropped 24.1 percent year-overyear from 307 to 233 homes on market. Days on market fell 31.3 percent from 48 to 33. ` Washtenaw County: Home sales decreased 10.2 percent, falling to 362 from 403 in December 2020, and median sale prices rose 7.6 percent from $297,500 to $319,995 as inventory dropped 32.3 percent year-overyear from 817 to 553 homes on market. Days on market fell 17.6 percent from 34 to 28. Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB
In Fond Memory of Joe Sgroi 1979 – 2022
JANUARY 24, 2022 | CRAIN’S DETROIT BUSINESS | 15
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REAL ESTATE
Troubled Jeffersonian Houze to be auctioned in foreclosure Fannie Mae forecloses on Detroit riverfront high-rise, after requesting a receiver in April BY KIRK PINHO
The saga of the troubled Jeffersonian Houze high-rise on the east Detroit riverfront has entered its next chapter. Fannie Mae, the lender on the 30-story apartment tower, has foreclosed on the building and scheduled a sheriff’s auction of its mortgage for Feb. 17, according to a notice filed in the U.S. District Court of Eastern Michigan in Detroit on Wednesday. The 410-unit building at 9000 E. Jefferson Ave. has been under the oversight of Ronald Glass of B. Riley Financial Inc. since the summer after Fannie Mae requested a receiver in April. A six-month redemption period will begin following the auction, according to the filing. Glass would continue to oversee the property during the redemption period, the filing says. Through a spokesperson, Fannie Mae declined comment. An attorney for real estate investor and developer Joe Barbat, one of the building’s owners along with fellow investor and developer Arie Leibovitz, said in an emailed statement Thursday that the ownership group “cares deeply about its residents and have poured millions of dollars into improving the property.” “Unfortunately, as a result of COVID and the inability to collect rents through the court system, the ownership and its lender are trying to find the best solution to maintain the asset for its residents,” Michael Jacobson, partner with Southfield-based law firm Jaffe Raitt Heuer & Weiss PC, said. “We remain hopeful ownership and lender will come to terms on an agreement that is best for all involved.” Barbat and Leibovitz bought the building in late 2017 through River Houze LLC’s ownership structure, paying $30.2 million for it and planning $10.2 million in renovations. Ambler, Pa.-based Berkadia Commercial Lending LLC originated a $35.919 million, 15-year Fannie Mae loan at 3.84 percent to River Houze.
The troubled Jeffersonian Houze apartment high-rise on the Detroit River is heading to a foreclosure auction next month. | COSTAR GROUP INC.
But in a February 2021 complaint in Wayne County Circuit Court, Leibovitz alleged mismanagement, self-dealing — which is not a crime but a breach of fiduciary trust — and accounting and financial reporting failures by Barbat since buying it. That case was settled last year, although terms of the business “divorce” settlement have not been disclosed. Glass has wide-ranging powers and is responsible for the management, maintenance and financial performance of the property until it is sold, foreclosed or redeemed. The foreclosure comes just a few days after Mid-American Gunite Inc., a subcontractor for Akins Construction Inc., filed a motion in court to intervene in the case, saying it was owed $160,423 for work done on the building’s parking garage in 2020 for which it was never paid. It filed a construction lien in Feb-
ruary 2021, the filing says, and would lose its right to foreclose on the property next month. Court filings say Mid-American Gunite requested payment from Fannie Mae through B. Riley although Fannie Mae has not provided for that payment.
‘Failed operations’ Fannie Mae, which does not issue home loans but does issue debt on commercial real estate, said in late April that Leibovitz’s February 2021 lawsuit “has laid bare the severe mismanagement and failed operations of the property, including an obvious dispute between borrower’s members as how to properly and effectively manage and operate the property.” Barbat, for his part, has denied mismanagement and said Jeffersonian Houze was well managed and current on its loan payments to Fan-
nie Mae. But Fannie Mae also said the ownership group “failed to timely notify” it of Leibovitz’s legal action, which would be a default event. The county court complaint also “may materially impair Fannie Mae’s lien and security interest,” which constitutes another default, Fannie Mae says in its receivership request. The high rise has had a series of property managers under its current ownership: Southfield-based Village Green Cos., from December 2017 to February 2019; Essential Property Management LLC, from February 2019 to February 2020; JS Dean, from February 2020 to July 2020; Barbat’s Houze Living, from July 2020 to August; and Southfield-based Hayman Co., from August to the present. The property management firm musical chairs has left the building’s financial records in disarray as all the firms used different software and
Houze Living was not equipped to handle the transitions properly, the lawsuit claims. That means a cohesive and comprehensive set of financial records does not exist, the lawsuit says. The Leibovitz lawsuit also says Barbat has paid himself $323,324 in management fees. Fannie Mae says that the allegations in Wayne County Circuit Court, if proven true, would be additional default events. Other default events include liens for unpaid construction work, the complaint said. “The allegations in the State Court Complaint are significant and concerning to Fannie Mae,” the federal complaint says. For his part, Barbat, through an attorney, Birmingham-based Scott Yaldo, issued a statement in February 2021 denying the allegations leveled in the Leibovitz lawsuit. “These allegations are absolutely false, hypocritical and are merely an attempt by Arie Leibovitz to seek to change the terms of an agreed upon operating agreement that he signed ... and which does not allow him the controls he so desires, and which he clearly cannot honor or fulfill,” the statement reads. It continues: “We are disappointed in the recent false and unwarranted claims that Arie Leibovitz has filed against his own company, and maintain that the allegations are entirely baseless, frivolous, and frankly, delusional. At minimum, they arise out of Mr. Leibovitz’s misunderstanding of the operations involved, all of which are well documented by the management team, and which wholly and unequivocally disprove Mr. Leibovitz’s allegations.” In Fannie Mae’s motion seeking the receivership, it says Barbat alleges Leibovitz entered into $1.5 million worth of unauthorized construction contracts for the Jeffersonian resulting in liens against the property. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB
REAL ESTATE
Fisher Building buyer to be selected in the coming days BY KIRK PINHO
A new potential owner of the Fisher Building is expected to be selected in the coming days. During an interview recently with Crain’s reporters, Peter Cummings, executive chairman and CEO of Detroit-based The Platform LLC, said his company and other members of the iconic New Center area high-rise’s ownership group have been interviewing prospective buyers the past two weeks and expect to finalize which one moves forward to put the property under contract and enter due diligence. Cummings didn’t disclose any of the bidders, but said some were local and some came from outside Michigan. “We think we are zeroing in on the right purchaser for this asset,” Cummings said. “It’s not like other sales processes, from my standpoint. Frequently you can have a real estate asset and sell it
Detroit’s Fisher Building is an icon on the Detroit skyline. | COSTAR GROUP INC.
and not necessarily care all that much about who you’ve sold it to. But
in the case of the Fisher Building, we view ownership of the Fisher Building as kind of a stewardship. It’s an important asset for the city. It’s iconic and we want to make sure that as our era of stewardship comes to a close, the successor/owner values its importance in the community as we have valued it.” In addition to the Fisher Building, Cummings discussed the state of the residential market, his company’s ups and downs since its inception, and the state of Opportunity Zone financing, among other issues. The Fisher Building, plus a slew of parking across a pair of decks and surface lots, hit the market in August. The Platform is a minority owner of the building, while New York Citybased HFZ Capital Group is the majority owner. New York City-based RHEAL Capital Management is also a minority owner. In an interview in August, Cum-
HEAR THE INTERVIEW ` Crain’s interview with Peter Cummings is available to listen to at crainsdetroit.com/podcasts, under the “Crain’s Conversations” podcast listing. mings said HFZ has 65 percent ownership of the building, while The Platform has two-thirds of the remaining 35 percent and Rheal Capital Management, run by Detroit native John Rhea, has the remainder. A joint venture between HFZ, The Platform, Rheal Capital Management and Southfield-based Redico LLC bought the Fisher Building, the nearby Albert Kahn Building and the parking assets in an online auction in July 2015 for $12.2 million. The Albert Kahn Building later sold to a joint venture between Adam Lutz and
Matthew Sosin for $9.5 million and the building has been converted into apartments and commercial space. Cummings has said close to $30 million has been spent upgrading the Fisher since buying it. He told Crain’s in August that the building is close to 70 percent leased, up from less than 40 percent, and rents are $22-$23 per square foot per year, more than $5 per square foot more than when it was purchased. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB
16 | CRAIN’S DETROIT BUSINESS | JANUARY 24, 2022
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LIVENGOOD
From Page 8
In his time in Lansing, Chatfield, now 33, was a prolific fundraiser for himself — he had not one, but four political action committees — and fellow Republicans. During his two years as speaker, Chatfield raised nearly $3 million, using the four PACs to let donors break up their contributions in chunks, state campaign finance records show. Fundraising at that level in politics entails a lot of travel. The problem of lax disclosure that PACs like those suffer from is amplified by politically connected 501(c)4 nonprofits. One of those is the Peninsula Fund, a social welfare organization with numerous ties to Chatfield that was run by Anne Minard, the wife of Chatfield’s chief of staff, Rob Minard, neither of whom returned messages seeking comment. The Minards held senior positions in the Republican-run House while also operating a political consulting firm, Victor Strategies, that was paid nearly $1.1 million by Republican legislators’ campaigns and connected PACs during Chatfield’s six years in office, according to the Michigan Campaign Finance Network. From 2018 through 2020, the Peninsula Fund reported raising $1.8 million from anonymous donors, including $1.3 million while Chatfield was speaker, according to annual reports filed with the Internal Revenue Service. In 2020, Chatfield’s last year in office due to legislative term limits, the Peninsula Fund reported spending $288,815 on travel (36 percent of its total expenses), and an additional $142,266 on travel and entertainment expenses that benefited public officials (18 percent), The Detroit News reported. All told, the fund spent $454,337 in 2020 on travel, dining and entertainment, The News reported in December, noting the fund’s travel and entertainment expenses alone were “36 times more money than lobbyists reported spending on lawmakers for trips.” That’s all 148 state legislators. Combined. This level of wining and dining comes out to nearly $38,000 per month — in a year when Lansing’s usual nightlife ground to a halt for at least two months at the beginning of the pandemic. The Peninsula Fund was dissolved in October. The fund’s board consisted of at least one relative of Anne Minard and Cameron Cavitt, a Cheboygan real estate agent and the Cheboygan County drain commissioner. Cavitt said he was recruited in 2017 by “Speaker Chatfield’s team” to serve on the board of Peninsula Fund, but was never provided any financial information. “In fact, prior to receiving dissolution paperwork, I was given no reason to believe this fund was even being used,” Cavitt said in an email to Crain’s. Peninsula Fund’s other board members could not be reached for comment. Asked whether Chatfield got his expenses paid for by Peninsula Fund, fundraised for the fund or directed the Minards on how to
spend the money, Chatfield attorney Mary Chartier replied in an email to Crain’s, “Mr. Chatfield believes that the fund has met all its legal obligations.” The lack of public reporting means that many dots can’t be connected here, including Chatfield’s degree of involvement in the fund, and what kind of travel and entertainment that fund paid for — and for whom. But the extraordinary pace of spending by the fund during a pandemic period when not much travel and entertainment were going on — combined with the allegations of extravagant spending by Chatfield’s own brother — certainly do raise questions. Attention from the IRS or other investigators could open a Pandora’s box for other lawmakers who have these funds, as well as expose their donors to scrutiny. Because there’s no database of these organizations, it’s hard to track them down in IRS records without knowing the names. And even plugging the names of these groups into the IRS database sometimes turns up nothing. Citizens for Energizing Michigan’s Economy, a 501(c)4 group funded by Consumers Energy Co., disclosed a $20,000 donation in 2019 to Peninsula Fund, according to an IRS filing. The Detroit News’ Craig Mauger reported that the Jackson-based energy company’s social welfare group donated another $50,000 to Peninsula Fund in 2020. A spokesman for Citizens for Energizing Michigan’s Economy declined to comment on the group’s giving to social welfare groups affiliated with politicians. Consumers Energy spokeswoman Katie Carey said the utility views its support of the 501(c)4 group as part of its normal participation in the “political process to support pragmatic policies that are focused on safe, reliable, and affordable energy and economic policy for Michigan.” “We support organizations that provide education and advocacy related to such policies,” Carey said in a statement. “Any contributions to Citizens for Energizing Michigan’s Economy came from the company in the form of non-customer, shareholder dollars. In other words, funds driven from our shareholders — people buying stock — and not from customer bills.” Some 30 years ago, Consumers could have made a donation of less than $500 to a legislator’s officeholder expense fund and everyone would have known it through public disclosures. Eliminating those funds just “drove this stuff underground,” LaBrant said. “With officeholder expense funds, besides paying for incidentals of holding public office, the real abuse was buying athletic tickets,” LaBrant said. “And so we’ve seen how that evolved now into the Peninsula Fund.” Savvy corporate lobbyists and consultants know the money they dump into these funds can be spent freely by legislators and their staffs with almost no oversight or accountability. It’s part of the influencing business in Lansing. One that’s ripe for more scrutiny — and sunshine. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood
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Our Next Energy engineers retrofitted a Tesla Model S with the company’s Gemini battery for a 752-mile trip on a single charge. The test drive, completed last month in Michigan, added to the buzz of a company that has caught the type of attention more common in Silicon Valley. | OUR NEXT ENERGFY
EV BATTERY
From Page 3
The company is negotiating final terms on a 10-year lease and declined to say how much money will be invested in build-out. While years in the making, the electrification of the automotive industry is now moving at a rapid pace with automakers expected to spend more than $300 billion on the shift to EVs over the next five years, according to experts. When that shift takes hold ultimately depends on how quickly consumers latch on to EVs. Range anxiety and fear of battery fires are among the main barriers to adoption. Ijaz said his company is closing in on a solution with two types of batteries: the Aries, for daily commutes, and the Gemini 001, for long-distance driving. Together, they would create the ideal power source for most any EV. So far, the company seems to have cracked half the code. Its Aries battery, designed for delivery trucks and buses, is on track for production in November. It is composed of lithium iron phosphate, with no cobalt or nickel — an important differentiation from other EV batteries that rely on such chemicals that are prone to fire and in short supply. The battery’s range of 350 miles per charge is better than most in the market, according to the company.
LINKNER
From Page 3
Investments, he said, will primarily fit into three buckets: pre-revenue companies; those just starting to bring in sales but prior to a Series A fundraising round; and “opportunistic” investments in companies that Josh Linkner referred to as firms that are not “broken,” but may need “some operational adjustments.” Josh Linkner particularly highlighted the first bucket, saying those pre-revenue companies will be part of the fund’s “venture studio” model, an emerging trend in which venture firms launch early-stage companies themselves, as opposed to seeking out deals. The emergence of Mudita Ventures comes at one of the frothiest times on record for the venture capital sector.
Ijaz said he has landed four customers for its commercial vehicle battery business. He declined to name them or disclose the value of the deals but said, “It is worthy of large factories to be able to produce the amount of business that we’ve done.” The company is contracting with an undisclosed tier-one automotive supplier in Southeast Michigan to set up a factory line where its Aries battery will be brought out of the R&D lab and into mass production. “We want to leverage other peoples’ deeper skills in running a factory,” Ijaz said. “We’re a startup. We want to effectively launch with quality systems in place.” Its long-range Gemini battery is still in the R&D stages. The prototype battery doubled the range of a normal Tesla in its test drive last month, but it contained cobalt, which Ijaz has pledged to avoid in the name of sustainability. “We have three principals: double range of electric vehicles; doing it without nickel and cobalt to avoid risks on supply chain and safety; grow a North American raw materials supply chain,” he said. The next step in bringing its Gemini battery to market is linking up with an OEM in a joint venture, which Ijaz intends to do this year. He is aiming for a full supply deal within a year or two after that. In the meantime, the company is
looking for another capital uplift to help it launch production of its commercial vehicle battery, launching a Series B round unusually soon after closing its Series A. “The commercial truck business is a fairly rapid path to market,” Ijaz said. “The needs of the company to scale and expand facilities are now accelerating the normal timeline.” Ijaz declined to say what the fundraising goal is or who are the target investors. In addition to the wellknown billionaires, other participants in the first round included BMW i Ventures, Volta Energy Technologies, Flex Ltd. and Assembly Ventures. Ijaz said he is the majority owner of the company and that an unspecified amount of equity was sold in the Series A round. Developing sustainable energy solutions, he said, is more important than a lucrative exit. “I did not start Our Next Energy with the idea to try to sell the company as quickly as possible,” he said. “We came back to Michigan with a very deep purpose of growing the manufacturing, core technology development and the infrastructure and ecosystem of our company in Michigan because that actually is the nerve center, going back 100 years, of automotive.”
“Venture capital dealmaking, exit and fundraising values all broke records in 2021 by stunning amounts,” states a January news release from industry trade publication PitchBook and the National Venture Capital Association, a Washington, D.C.-based industry group. The U.S. VC industry last year invested a total of $329.9 billion into 17,000 deals, and VC funds raised $128.3 billion, an “unprecedented” amount according to the joint quarterly report from the two organizations. “By all metrics, 2021 was a banner year for the U.S. VC ecosystem,” John Gabbert, founder and CEO of PitchBook, said in a statement. “A fair portion of the new investment records can be attributed to the record levels of capital washing through the system. VC dry powder is at an all-time high and a rapidly growing number of crossover investors are participat-
ing in, or even leading, VC deals. With VC returns outpacing every other private capital asset class, we expect LPs to continue to allocate capital toward venture at unprecedented rates in the coming year.” The strategy that Mudita seeks to take, by coming in early, will allow the fund to avoid some of the likely downside when the venture-capital climate changes, Josh Linkner said. “In other words, we think that valuations have gone nutty. We’re not going to overpay,” he said. “We like this notion of right in the middle, like post-revenue. Companies that have proven they can actually get a customer and deliver a real need. But they haven’t yet hit a growth spurt, so we become the first institutional investor. (That way) we’re not overpaying for equity.”
Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh
Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes
18 | CRAIN’S DETROIT BUSINESS | JANUARY 24, 2022
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REAL ESTATE
Walbridge to build massive Ford project in Tennessee BY KIRK PINHO
Detroit-based construction giant The Walbridge Group has been hired to build Ford Motor Co.’s Blue Oval City development in Tennessee. The project in Stanton, northeast of Memphis, is expected to cost $5.6 billion and produce electric F-Series trucks and batteries, the Dearborn-based automaker announced in the fall. It is expected to be one of the larg-
A rendering of Blue Oval City in Tennessee. | FORD MOTOR COMPANY
est project’s in Ford’s history, spread across some 3,600 acres in a town that has fewer than 500 people, Crain’s Detroit Business sister publication Automotive News reported. The effort will “require some 11,000 direct construction jobs and several thousand more related personnel” to build the factory, which is expected to ultimately employ about 5,700. “Ford and Walbridge are both committed to hiring a diverse work-
NONPROFITS
Best-Managed Nonprofit leaders say intentionality, conversation key to DEI
BY SHERRI WELCH
Intentionality and continued open conversations are crucial stepping stones for any company, nonprofit or otherwise, that wants to make a concerted effort to promote diversity, equity and inclusion in the workplace, says the leader of Crain’s 2021 Best-Managed Nonprofit. “We have to continue to look at what the numbers, our data is telling us,” whether we’re talking about COVID disparities, voting rights or hiring practices, Darienne Hudson, president and CEO of United Way for Southeastern Michigan, said during a webinar on “Lessons from the Best-Managed Nonprofits.” “None of us are immune. And there’s a lot of hard work that we’re all having to make.” During the Wednesday webinar, leaders from United Way and four other nonprofit finalist organizations shared how they approach DEI, offering practical takeaways for nonprofits and for-profits alike and the business case for doing so. “The data is clear that having a more diverse team and more equitable, inclusive practices, leads to better results,” said Ned Staebler, president and CEO of finalist TechTown Detroit. Even the smallest nonprofits, with competing pressures and few resources, can work on DEI by prioritizing it, he said, likening DEI to an investment. “You put the intentionality in upfront and if you start doing it, (you) begin to reap the benefits, which will allow you to have greater ability and more resources to expand that work,” Staebler said. People want to come to an organization that they believe is mission-driven and whose focus aligns with their personal values, Hudson said. “Because we are a nonprofit, it’s also important for our volunteers and our donors to know that this is something that’s critical.”
Approaching DEI “One of the things that we all have to do to make things better, whether it’s socially in our communities or in the organizations that we represent is to first acknowledge that people are diverse, and all the things that make us different ... should be understood and embraced and celebrated,” said Mike Rafferty, president and CEO of finalist New Detroit Inc., which has spurred development of industry-specific programs to help address bias.
Darienne Hudson, president and CEO of United Way for Southeastern Michigan, speaking during a webinar recognizing Crain’s 2021 Best-Managed Nonprofit. | CRAIN’S DETROIT BUSINESS
“We also have to acknowledge that we all have biases that create this discomfort when exposed to people who aren’t like us,” and those biases get multiplied, leaving groups of people disassociated from the benefits enjoyed by those of privilege, he said. Efforts can’t be top down, leaders said, noting conversations with employees and clients are critical to understanding and addressing issues. GreenPath Financial Services, another finalist, updated its systems to begin collecting data on race to help customize its services and provided empathy training for staff to help them broach those conversations with clients. Understanding that many in the Black community have a greater mistrust of financial institutions led GreenPath to adapt its financial counseling with that in mind and to work to intentionally build trust with
“THE DATA IS CLEAR THAT HAVING A MORE DIVERSE TEAM AND MORE EQUITABLE, INCLUSIVE PRACTICES, LEADS TO BETTER RESULTS.” — Ned Staebler, president and CEO, TechTown Detroit.
Black clients by using trusted community-based media and teaming up with diverse organizations, said Kristen Holt, president and CEO of GreenPath Financial Services. “I really think all nonprofits need to understand the impact that they’re having and look at it by these different dimensions. And businesses also can understand how their services could be improved or the products could be improved by understanding the data behind it,” Holt said.
Judson Center President and CEO Lenora Hardy-Foster says her organization, didn’t talk enough about and celebrate its diversity. Among other moves, the organization used data to look at BIPOC representation on its board and among its employees, and it put in place a mentoring and coaching program to help cultivate new leaders from within. “One thing that we do know is the success of an organization is far greater when you can promote.,” Hardy-Foster said.
Recognizing the best In addition to other efforts, United Way incorporated a framework developed by Detroit Future City to ensure it is equitable and community-centric in its grantmaking, Hudson said. The nonprofit shared its efforts with corporate and foundation partners, and fostered critical thinking and personal action among people in the community through its “21-Day Challenge,” a virtual town hall series hosted last year. Accountability is important, Hudson said. United Way has brought together a regional taskforce of groups like Detroit Future City to help it focus on racial equity, to design a racial equity fund that’s making grants to grassroots groups focused on DEI in their communities and to hold it and its grantees accountable for implementing DEI strategies, she said. Stay tuned, Hudson said. “I just think throughout 2022, you’re going to start seeing much more evidence of intentional work, really grounded ... that’s focused on implementing diversity, equity and inclusion strategy.” Contact: swelch@crain.com (313) 446-1694; @SherriWelch
force to build Blue Oval City,” a statement from Ford sent Thursday says. “Together, we will host several subcontractor events in the Memphis area to provide an overview of the construction opportunities at the site. These events will help ensure that Tennesseans and a diverse local workforce will be part of creating a new era of advanced manufacturing for this country.” An email was sent to Walbridge Group seeking comment.
Combined, Blue Oval City and another project that would create a pair of battery plants in Kentucky are anticipated to employ about 11,000 people Ford’s investment is $7 billion and battery manufacturer SK Innovation’s is $4.4 billion, creating an $11.4 billion investment total for the complex.
WOMEN
Women in power
“That is an issue we need to keep our eye on,” Barclay said.
Women on corporate boards and executive roles at Michigan publicly traded companies, by the numbers.
From Page 3
Limited progress The 2022 Michigan Women’s Leadership Report analyzed Michigan public company filings with the U.S. Securities and Exchange Commission and other publicly available data. It found, among other things: ` Nine companies still don’t have a single woman director, and 23 still have no women executive officers. ` Women now hold 14 percent of C-suite positions at the state’s public companies, up from 12 percent two years ago and 7.1 percent in 2003. ` Twenty percent of all executive positions at the companies are currently held by women. ` Racial and ethnic diversity is growing faster on boards than in executive seats, the report found. “We believe that is because more attention has been paid to that at public companies with a variety of carrots and sticks,” Barclay said. Board composition at public companies is tracked, regulated and incentivized by government and institutional investors including Black Rock and Goldman Sachs. And last August, the SEC approved a NASDAQ proposal requiring public companies to have at least one woman on the board and at least one racially diverse or LBGTQ board member, along with the requirement that companies disclose the race and gender demographics for their boards, Barclay said. That’s spurred board diversity nationally, according to the study, which pointed to Spencer Stuart Board Index findings that the latest class of S&P directors was 47 percent BIPOC, up from 22 percent in 2020. Here in Michigan, women of color hold just 2.6 percent of board seats at public companies, Barclay said. “We are seeing momentum, but we have a long way to go,” she said. The talent pipeline needs serious attention, Barclay said.
Minding the gaps The 2021 Women in the Workplace report released by LeanIn.org and McKinsey & Co. noted that women hired into entry-level positions begin to lose ground at the very first promotion, she said. There’s gender parity at the entry level, but with the first promotion, the gap begins to widen. There are fewer and fewer moving up at each stage “to the point where we have only 5 women CEOs” here in Michigan, Barclay said. “That’s where I think the pandemic comes in...the pandemic’s impact is
Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB
24% ` Share of director seats occupied by women
2.6% ` Share of director seats occupied by women of color
9 ` Michigan public companies with no women directors
14% ` Percentage of top-five executive officers who are women
2.2% ` Percentage of top-five executive officers who are women of color
44 ` Number of Michigan public companies with no women among their five highest-compensated executive officers
hollowing out the talent pipeline.” The Women in the Workplace report found that women in corporate America are more burned out in 2021 than they were in 2020 and increasingly more so than men in corporate America, Barclay said. “That is part of what is contributing to the ‘great resignation.’” What gets measured gets addressed, Barclay said. “Those that are monitoring their metrics are really better equipped to address them.” Companies are looking for ways to keep talent engaged at work, she said, including providing the flexibility that families and women, in particular, need to respond to shifting education and child care needs, as well as the “hunting and gathering challenges of survival” needed to provision households during the pandemic. Companies that have continued to invest in staff development and learning are seeing good results in retention, Barclay said. “If employees can see and feel in measurable ways that they are valued...it gives them a sense not only that they are valued but that the company has confidence in their ability to progress.” Contact: swelch@crain.com; (313) 446-1694; @SherriWelch
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RAPIDBIO
From Page 1
The building may be old, but everything Cunningham has put into it — from the machinery to his experience running a lab during the pandemic — is new. “COVID-19 is a black swan event,” he said. “There was opportunity in the uncertainty.” Thus far, Cunningham has capitalized on that opportunity. RapidBio generated more than $11.5 million last year from its drive-through COVID-19 test site around the corner at the USA Hockey Arena on Beck Road and through its contracts with 60 independent pharmacies in Southeast Michigan. The startup performed 156,000 tests in 2021 and about 15,000 tests last week. That’s down from 20,000 the week prior in response to the swift rise of the highly contagious omicron variant. With hopes the pandemic shifts to a more predictable endemic in the coming months, Cunningham not only wants to keep the lab and his startup alive after COVID-19 is gone, but for RapidBio to thrive using the new technologies created to detect and monitor the pandemic. Cunningham is investing returns into new uses for the company’s polymerase chain reaction or PCR testing capabilities to detect sexually transmitted diseases, urinary tract infections and antibiotic resistant infections.
RapidBio CEO John Cunningham works in the company’s lab. | PHOTOS BY CYDNI ELLEDGE/SPECIAL TO CRAIN’S DETROIT BUSINESS
Testing a new market Cunningham quit his job as COO of TechTown resident Functional Fluidics in April 2020 to launch RapidBio — a gamble on his ability to raise capital and launch a lab as the pandemic engulfed Southeast Michigan. “When COVID hit, everything was shut down, including our company,” Cunningham said. “I was depressed for a week then I realized I had the time to start a high-capacity clinical lab.” Thanks to federal response to the pandemic, Cunningham was able to secure an Emergency Use Authorization license to operate a testing lab in 10 days in April 2020. It usually takes at least six months, he said. An experienced fundraiser, Cunningham quickly raised $1 million from friends and family and another $1.5 million from a group of investors led by Windsor doctor and diagnostic radiology practice owner Manish Chadda. He then secured space at the Michigan Life Science and Innovation Center, which began life as an R&D facility for Unilever soap maker Diversey Lever Inc. The firm built the building at Commerce and Beck roads in Plymouth Township 30 years ago. Pfizer acquired the building in 2000 before it abandoned operations across the state. The Michigan Economic Development Corp. reopened the facility in 2008 as the life sciences incubator it is today. More than 60 companies have “graduated” from the incubator, including Algal Scientific, which grows algae for human and animal nutrition, water filtration firm Digestive Organics and bone tissue regeneration firm Tissue Regenerative Systems. Cunningham moved RapidBio into the building in June 2020 and spent the next six months validating his testing procedures. “Our quality process manual is
Andrea Lobsinger, molecular technologist at RapidBio, prepares the reagents that will later go through the PCR machine.
“I WAS DEPRESSED FOR A WEEK, THEN I REALIZED I HAD THE TIME TO START A HIGH-CAPACITY CLINICAL LAB.” — John Cunningham, RapidBio CEO
about four feet wide,” Cunningham said. By November 2020, RapidBio began testing, signing a contract with USA Hockey to test youth players to restart training and games at the arena. The arena then became a popular testing site for high school athletes who required weekly testing during sports seasons for part of last year. It’s also open to the general public, and the company has been increasing its capacity through contracts with independent pharmacies.
So many swabs COVID testing has turned into a financial windfall for test kit makers, testers, labs and hospitals.
Abbott Laboratories‚ maker of the popular at-home COVID-19 test BinaxNow, recorded revenue of $1.9 billion in the third quarter of 2021, up 48 percent from the same period in 2020. The BinaxNow test kits alone accounted for $1.6 billion of those sales. Quidel, which makes the QuickVue at-home test, reported revenue of $406 million from its home kits in the third quarter of 2021. The windfall is now going to extend to Kroger, Walmart and other retailers as their agreement with the Biden administration to sell test kits at cost for 100 days expired this month. Prices are already rising. This month, the White House issued an order requiring insurers to cover COVID-19 diagnostic testing, though most already were. That’s beneficial to PCR test-takers like RapidBio, which largely doesn’t charge consumers for tests. Tests are paid for by private health insurers and from money from the $2.2 trillion federal Coronavirus Aid, Relief, and Economic Security or CARES Act. Cunningham said private insurers cover about 90 percent of all tests
given at its sites, though they are now asking testing sites to distinguish between diagnostic testing for active infection versus screening testing for people who wish to travel or gather in large groups. Diagnostic testing is typically prescribed by a physician. RapidBio is updating its website registration to be able to distinguish between the reasons an individual wants to get tested. Last year, RapidBio averaged about $73.72 per test administered out of its 156,000 total administered tests. At that price, RapidBio should generate more than $1 million in revenue this month alone. But much of its sales is eaten up by medical products, such as swabs and test tubes for specimen collection. RapidBio carries about $500,000 in plastics in its storage room — syringes, swabs, masks and pipette tips from floor to ceiling.
From COVID to convalescence Cunnginham has hired Shruti Bagla, a former research scientist and genomics consultant at Children’s Hospital of Michigan in Detroit, to lead RapidBio’s product development and expand the company’s reach beyond COVID-19 testing. In recent months, the company has expanded to 65 employees and is attempting to ramp up to 130 in the first quarter of this year. Bagla is performing R&D with the company’s PCR machines — which are able to find five genomic copies of the coronavirus among hundreds of thousands of cells — to find alternative uses for different infection testing. PCR machines can sequence the samples in only a matter of days, compared to the traditional validation methods that take upwards of two weeks. This presents the ability to find genetic mutations in cells and identify diseases in fetuses earlier, among other uses. For now, though, the company is
signing contracts with physicians’ offices and nursing homes to identify STDs and urinary tract infections, a surprisingly lucrative business due to the aging population. Competitor Orchard Laboratories in West Bloomfield Township, which performs COVID testing for the Oakland County Health Department among others, also expanded into the same area. Its non-COVID-related growth has also been exponential. For example, in the first quarter of 2021, COVID infections fell after the fall and winter surge in 2020, and testing needs plummeted. But Orchard managed to have the best first quarter in its eight years in business, Crain’s reported in September. “We always segregate the COVID numbers out of our planning,” said Faisal Ahmad, vice president of Orchard Laboratories. “We know that’s not sustainable, but we continue to use it as a way to leverage relationships.” The company is now looking toward major expansion efforts, including a direct-to-consumer product similar to the genetic testing for 23andMe, but for medical conditions such as high cholesterol or other common lab tests. RapidBio expects to stay in the diagnostic testing lane, Cunningham said. “We want to be a precision diagnostics company and grow it much, much larger,” Cunningham said. Those new molecular tests could shorten the time it takes to grow bacterial cultures, which could, for example, help long-term care facilities more precisely treat infections like UTIs and avoid antibiotic resistance. “We can help physicians diagnose what the disease is and what the bug is and what antibiotic will work and what won’t work, Cunningham said. “That has a huge impact on reproductive health.” Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh
20 | CRAIN’S DETROIT BUSINESS | JANUARY 24, 2022
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REDEVELOPMENT
Detroit’s Lee Plaza to get new life as affordable senior housing BY ARIELLE KASS
Plaster-covered horse hair hung from the ceiling of what had once been the grand ballroom of the Lee Plaza hotel. Graffiti marred the walls and outdoor patio heaters warmed the room, set up with a makeshift stage. It’s a scene usually reserved for a groundbreaking, but David Di Rita didn’t want to wait. Last week, members of Detroit’s city council earmarked $7 million to restore the 15-story building to its former grandeur, and that was cause to celebrate. “It’s a preview to coming attractions,” said Di Rita, a founder and principal of the Roxbury Group, who will redevelop the building. He, Mayor Mike Duggan, members of his administration and others wanted to show off the “before” in the before-and-after pictures to come, despite the frigid temperatures. Lee Plaza, built in 1927, has been abandoned for decades. But in the coming years, it will be restored. The hotel, meant as a residence for the wealthy, will be made into 117 units of senior affordable housing, plus some market-rate housing, as well. It’s a “significant milestone in Detroit’s remarkable story of rebirth,” Di Rita said. Duggan said the building, which was identified as Detroit’s last abandoned high-rise, had been slated for demolition when he took office. The city spent $1 million to secure it, he said, in the hopes of quelling the damage wrought by people and the elements and keeping it from further degradation. The building once had gold leaf ac-
The soon-to-be renovated Lee Plaza Hotel. | ARIELLE KASS/ CRAIN’S DETROIT BUSINESS
A before and after of the entryway at Lee Plaza. | ARIELLE KASS/ CRAIN’S DETROIT BUSINESS
AGREE
From Page 1
spaces in between. “COVID-19 has reaffirmed our belief that the strongest retailers with the largest balance sheets are going to get even stronger,” Agree said in an interview. “Their omni-channel, including buy-online, pick-up-in-store, click-and-collect and fulfillment initiatives, helped get consumers essential goods and services during the days of the lockdown. Now as we emerge from this pandemic, hopefully sooner rather than later, retailers’ focus today is truly on omni-channel execution.” The company’s portfolio of properties has ballooned to 1,404 across 47 states totaling a little over 29 million square feet, growing from the 660 properties and 11.5 million square feet it had less than three years ago and the 860 properties and 16.3 million square feet it had less than two years ago. The growth is expected to continue in 2022, as the company’s current estimation is an acquisition volume of $1.1 billion to $1.3 billion, although those estimations can change over the course of the year. The company will announce its fourth quarter and full-year 2021 financials Feb. 22 Its core funds from operations for the third quarter were $64 million, up 44 percent from $44.5 million in the third quarter 2020, the company said in November. For the first three quarters of 2021, core FFO was $175.9 million, up 43.2 percent from $122.9 million from the same period in 2020.
A rendering of what the Agree headquarters will look like. | BIDDISON ARCHITECTURE + DESIGN
Although today it has an enterprise value of about $6.7 billion and is in growth mode, the company ran into some bumps more than a decade ago as its revenue was tied to the fate of some ultimately doomed tenants.
Beyond Borders
Agree
Richard Agree, Joey Agree’s father who remains executive chairman of the board, started the company’s predecessor, Agree Development Corp., in 1971 and developed more than 40 shopping centers in the Midwest and Southeast over the course of two-plus decades. Then in 1994, Agree Realty Corp. went public as a real estate investment trust with an IPO of 2.5 million shares. But in the years that followed, some of its key tenants suffered mightily. Up until its 2010 acquisition and diversification strategy, Borders, the former Ann Arbor bookseller that filed for bankruptcy protection in
2011 and later liquidated its assets and closed its stores; and Kmart, the troubled Illinois-based subsidiary of Sears Holdings Corp., were two of Agree Realty’s top sources of tenant income. At the beginning of 2010, 29 percent of Agree Realty’s rental revenue came from Borders, and 71 percent total combined came from Borders, Walgreens and Kmart. Today, Borders is no more and Kmart, formerly based in Troy, is no longer a portfolio tenant.
Many eggs, many baskets These days, according to an investor presentation this month, Agree’s portfolio is far more diversified. Walmart Inc. is its largest tenant, accounting for 6.7 percent of annualized base rent. That’s followed by Tractor Supply Co. (3.9 percent), Dollar General Corp. (3.8 percent), Best Buy Co. Inc. (3.3 percent);
cents, intricate designs on the walls, delicate rosettes on the ceiling and sweeping archways. Now, a main staircase has crumbled and there are holes in the walls and ceiling. Piles of rubble fill up the building’s corners and interior windows are broken. The Lee’s bones are still there, but they are visible. Some funding is yet to be secured, but Di Rita said he expects construction to restore the building to begin in about a year, and for it to take 18 to 24 months for residents to once again call the Lee home. Councilman Coleman A. Young II said Thursday that he considers it a blessing that the Lee — which over the years was a haven for drug use and homelessness — now represents “the promise and prosperity” of affordable senior housing. And Kimberly Rogers,
principal of the next-door Collegiate Preparatory Academy at Northwestern, said rehabilitating the Lee will make the school and the neighborhood safer. “We look forward to a bright future at Lee Plaza and a safer route to school,” she said. Julie Schneider, director of Detroit’s Housing and Revitalization Department, said she hopes the project will be a catalyst for other investment in the neighborhood. But keeping the Lee itself — especially as affordable housing — is an accomplishment, she said. “It’s a really unique place for people to live,” Schneider said. “People don’t build things like this anymore.”
O’Reilly Auto Parts (3.3 percent); TJX Companies Inc. (3.2 percent); Kroger Co. (3.1 percent); and Hobby Lobby Stores Inc. (3 percent). “So it’s the largest operators in the world who have the capital to continue to invest in price, labor and an omni-channel future,” Agree said. And the industries its tenants operate in are also more diversified, with grocery accounting for 10.6 percent of annualized base rents, followed by home improvement at 9.4 percent — both retail sectors that have stayed strong in part as a result of state requirements instituted early in the pandemic to stop the spread of the coronavirus. “In many ways, a lot of the retail that Agree invested in, whether it is auto stores or quick-service restaurants or Sherwin-Williams, or on the bigger side, Michael’s, Big Lots, most of the product that they invest in was either deemed essential or grew as a result of the smaller businesses being closed,” said Steven Silverman, a retail real estate expert who is senior vice president of investment advisory services for Farmington Hills-based Friedman Real Estate. Agree also managed to avoid tenants that have been highly affected by the COVID-19 pandemic, namely health and fitness centers (2 percent of annualized base rent), movie theaters (1.1 percent of annualized base rent) and entertainment retail like Dave & Buster’s (0.7 percent of annualized base rent). In some ways slowly and in other ways rapidly, retail will continue to evolve. “When I talk to investors and sellside, I tell them that when my children,
who are 8 and 10 years old today, go to college, they won’t know if Walmart started as a brick-and-mortar retailer or an online retailer and with Amazon, the same but vice versa,” Agree said. “Omni-channel initiatives by legacy brick-and-mortar retailers and brickand-mortar initiatives by legacy online or digitally native brands, are all converging faster than anyone anticipated due to the pandemic.”
Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB
A new home base Beginning next year, the company will start observing the retail industry and investing in its real estate from its new digs along Woodward Avenue north of Normandy Road. Agree declined to disclose how much is being spent on the Art Van build-out, but described it as a “significant renovation that will convert a former retail furniture store into a 21st century modern workspace” adding things like training and development areas, a gym and locker rooms and other amenities for employees. The building gives Agree Realty “significant capacity to grow on a single floorplate in one building,” Agree said, also noting the property’s centralized location in the region. “We had a preference to stay within a five-mile radius of our existing headquarters,” Agree said. “The opportunity here is extremely unique, to find a 50,000-square-foot floorplate on Woodward Avenue with covered parking in a tremendous location was compelling.” Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB
JANUARY 24, 2022 | CRAIN’S DETROIT BUSINESS | 21
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THE CONVERSATION
Steve Goldberg on Stage Deli’s appeal, challenges over 60 years Stage Deli President Steve Goldberg has been a big part of the company’s history. Goldberg, son of Stage Deli founders Jack and Harriet Goldberg, was 7 years old when the popular deli opened in 1962 in Oak Park. The deli moved to its current location at 6873 Orchard Lake Road in West Bloomfield Township in 1982. Now 66, Goldberg has run the business since 1994. Prior to taking over, he worked as a business attorney for 15 years in California. As Stage Deli closes in on 60 years in business, Goldberg talked with Crain’s about the company’s past, present and future. | BY JAY DAVIS ` You reopened for in-person dining (after pandemic shutdowns) on Feb. 1, 2021. How has business gone this last year? Every day is a new day. We’ve actually executed it very successfully. We have a great staff, some really motivated, great hospitality people. Our guests have lot of confidence in us, partly because they trust us to provide a clean, safe environment and great food. We’ve also implemented a state-of-the-art air filtration system to add an extra layer of safety. We’re operating at 100-percent capacity. We have very robust carryout business, even more so through the pandemic. But there are many shifts where the dining room is full and there’s an hour wait. It’s gratifying. ` How are your staffing levels right now? That’s still a major topic of conversation among small business professionals. We’re fully staffed right now. We have 45 people on staff, which is about where we were before the pandemic. But we’re operating with much higher costs across the board. Everything’s gone up. We’re starting staff at just shy of $15 an hour. In this market, to attract good people, we had to raise our wages substantially. ` Stage Deli turns 60 years old in 2022. What comes to mind when you think about that? It’s humbling and gratifying at the same time. I love this business. What’s on my mind each day is doing as well as we can, being creative and creating experiences that uplift guests. That’s fulfilling. To look back and say we’d be open 60 years, I’d be very pleased with that accomplishment, even more so with my two kids (Jolie and Ian) getting involved. Hopefully we’re able to transition into a successful third generation. ` So there are some potential successors lined up? Two of my children are actively involved
in the business. They have a passion for it. It makes me happy. One is a front-ofthe-house manager, one’s a back-ofthe-house manager. Every day here is another course in restaurant university. There are lots of learning opportunities. I love to teach.
Steve Goldberg is president of Stage Deli.
` Why has the deli been so beloved for so long? I think there’s two things: one is the promise we make, two is our ability to deliver. We promise a great, quality delicatessen with innovative American cuisine, served in a great atmosphere with uplifting hospitality providers. That’s helped us evolve into a cornerstone of community. We don’t take lightly our role of being an institution in the community that people rely on life celebrations, memorials, and everyday activities. It’s our pleasure to be that. ` Any fond memories come to mind when you think about the business? So many. I remember with fondness opening in West Bloomfield in 1982, moving from Oak Park with great trepidation, not knowing what would happen. We had a soft opening, and within an hour, there was an hour wait and we were off to the races. That swiftness, enthusiasm, and being embraced in the community is my fondest memory.
There’s been a lot of interesting changes. One is people in general don’t like to cook a lot now. Whereas 30 years ago most of our carryout service would be in bulk meats, today 90 percent is pre-made sandwiches. People don’t want to put them together at home. That fascinates me. We’ve gone through several remodels over the years, the last being 10 years ago now where we gutted the restaurant and gave it a new look. We’re in the process of creating a new look. You’ve got to keep it fresh. Our menu has evolved. It evolves all the time. Our core delicatessen menu is the same as it was in 1962. Around that, we add, subtract items in keeping with contemporary sensibilities. January is national soup month. We have a matzo ball ramen on the menu. It’s beautifully presented. Next we’re going to do a brisket pho. ` What do you see as the state of the restaurant industry going forward? It’s challenging. Staffing was one of the more challenging issues before COVID. We take care of what we can control, treat employees well, provide a good living so they can support their families. We think that if we do that, people will come and people will stay. It’s different than 20 years ago for sure.
` With the popularity and success of the deli, has your family at any point discussed expansion? Right now we have just the one location. We love diving deep into our West Bloomfield location. But we’re always open for new opportunities. (Expansion) is a way to keep great management personnel and add opportunities. Right now we’re not in need of other opportunities. It’s not “grow or die” for us.
` Why is that? If an employee were to leave or lose their job for not performing well, there’d be two or three people on their heels to take that position. That’s not the case today. The labor pool is small. As employers, we need to really think about our employees’ complete wellbeing. Not just their pocketbook, but family obligations and other things to help them create a life that’s livable.
` How has the business changed over the years?
RUMBLINGS
StockX ties NFTs to sneakers for new type of trading
Detroit-based StockX on Tuesday launched Vault NFTs, which uses non-fungible tokens tied to physical products that sneaker traders can buy and sell instantly using blockchain technology to ensure authenticity. | STOCKX
“To date, unlike traditional stock exchanges, the millions of orders executed on StockX involve physical products moving from sellers to StockX for authentication, and then ultimately to buyers to be worn, collected, resold, or simply held as an alternative investment,” StockX CEO Scott Cutler said in a statement. “We’ve always known that this was just the beginning.” Alternative asset marketplaces for everything from sports collectibles to fine art are facing new competition from digital upstarts that use tokens for trading tangible goods. In sneakers, fully digital items are starting to attract interest too. In Decem-
REPORTERS
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SNEAKER RESALE MARKETPLACE StockX LLC is starting a service that allows users to trade sneakers without ever taking possession of them. The service, unveiled Tuesday under the name Vault NFTs, uses non-fungible tokens tied to physical products that sneaker traders can buy and sell instantly using blockchain technology to ensure authenticity. Buyers will own the token and the corresponding sneakers and may have them delivered at any time. All the products will be warehoused in one place until final delivery, eliminating intermediary shipping costs and transit times that would otherwise delay transactions for several days.
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ber, Adidas AG sold millions of dollars in NFTs, and Nike Inc. acquired virtual sneaker maker RTFKT for an undisclosed sum. StockX made a limited selection of sneakers available to trade with the new method, with plans to expand offerings in the coming months. Detroit-based StockX’s digital push comes as it works with banks and intends to go public in the first half of 2022. In April, the company backed by billionaire Detroit businessman Dan Gilbert said it was valued at $3.8 billion after a secondary tender offering. — Bloomberg News
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THE INSIDE STORY
FROM THE DEALMAKERS THEMSELVES
MARCH 3 | 1-2PM FREE WEBCAST Join us as we dive into the biggest deals of 2021 with those who made them happen, forecast the deal-making outlook for 2022 and much more. This virtual event is a follow-up to the annual Biggest Deals report in the Feb. 21 issue.
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2021 NEWSMAKER OF THE YEAR KEYNOTE Wright Lassiter III
The top 10 Michigan figures who made news and headlines in 2021 will be recognized at our dynamic, high-powered luncheon where decision-makers connect, celebrate and make new headlines.
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