CRAINSDETROIT.COM I JANUARY 29, 2024
Belle Isle Conservancy in a bind
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Grand Prix’s move to Detroit leaves hole in nonprofit’s budget By Sherri Welch
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The Belle Isle Conservancy operates the Belle Isle Aquarium and supports other aspects of the island park. | BELLE ISLE CONSERVANCY
The conservancy counted on proceeds from the event for most of its existence, with the race taking place on the island each summer from 2012 until 2020 when it was canceled due to the COVID-19 pandemic. It returned, along with the Grand Prixmiere fundraising event, in 2021 and 2022 before being moved to the streets of downtown Detroit last year. See GRAND PRIX on Page 17
Lions capitalize on historic season PHOTOS BY NIC ANTAYA, BRYAN ESLER PHOTO OR PROVIDED
Grand Rapids
The Belle Isle Conservancy is stepping up its fundraising game following the loss of hundreds of thousands of dollars tied to the Grand Prix’s departure from the island last year. After missing revenue targets in 2023, the conservancy made cuts in December and now is shifting its strategy to fund a $2 million budget, which supports the Belle Isle Aquarium and various other park operations. “It’s an organizational pivot moment,” said Maud Lyon, a conservancy board member who was named interim executive director in October when founding president and CEO Michele Hodges left to lead Habitat for Humanity of Oakland County.
What the playoff run has meant for the team By Jay Davis
The Detroit Lions’ historic playoff run thrust the team into the national spotlight, allowing the organization to reap the benefits brought by its newfound — and some might say improbable — success. The Lions, led by a character in head coach Dan Campbell, a steady quarterback in Jared Goff and a host of talented young players, look to be set up for long-term success, which would only add to the team’s cachet.
Bob Dorfman, a sports marketing analyst for Pinnacle Advertising, told Crain’s that the Lions have done well in capitalizing on their postseason run. “Considering how far the team has come, it’s been a surprise. I think they’ve done well,” said Dorfman, who is based in San Francisco. “They’ve certainly done a good job of becoming the darlings of the playoffs, whether that’s intentional or it just sort of happened. See LIONS on Page 15
ECONOMICS Michigan loses ground on personal income, report says.
REAL ESTATE Legendary Harpos concert hall in Detroit goes up for sale.
CONVERSATION Byna Elliott is focused on making a global impact.
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WDET’s new programming to focus on Detroit’s culture By Anna Fifelski
As part of its 75th anniversary, public radio station WDET is introducing five new radio hosts and new programming to focus on the history and culture of Detroit. The programming will include three new Monday-Friday daytime programs and six new Monday-Saturday evening shows beginning Feb. 5. WDET 101.9 FM is owned and operated by Wayne State University and is a National Public Radio member station. Last summer, more than 1,200 WDET listeners responded to a survey about their preferences and listening habits. Program Director Adam Fox told Crain’s that the survey guided the majority of the station’s changes. For example, 32% of respondents said they would prefer programming changes that include more locally hosted music shows. “Detroit is a world-class music city and WDET has a proud history of reflecting the city’s music, but we felt we could do better than we have,” Fox said. “We’ve got great programs now, but we needed to add more programs that reflected the city and reflected music of the city.” Fox said the station took into
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WDET is bringing on new shows and hosts, including “Alternate Take with Liz Warner” (top left), “The Blvd with Waajeed” (bottom center) and Hamtramck-based drummer and electronic music producer Shigeto, (bottom right), host of the “Saturday New Music Show.” Don Was (top center) will continue his Friday-night show. Also pictured are Program Director Adam Fox (top right) and Station Manager Mary Zatina (bottom left). | WDET
consideration what other local and national media organizations provided to their listeners to make WDET distinct as well as reflective of the city of Detroit. New shows include “The Blvd with Waajeed,” “Alternate Take with Liz Warner,” “Visions with Kaleigh Wilder” and more. Liz Warner, formerly Liz Copeland, hosted “Alternate Take” on WDET airwaves from 1995 until 2007.
“From a news, arts and culture perspective, I’m really excited about the new program that Stephen Henderson will be hosting called ‘Created Equal’,” Fox said. “Some of the themes and conversations about race, equality, progress, all those things, those bigger picture topics will give him a little more range to talk about topics that are of a national concern, but really reflect Detroit, that are from
a uniquely Detroit perspective, and also reflect the lessons that I think the rest of the country can learn from what we are experiencing in Detroit every day.” Station Manager Mary Zatina said more than 150,000 people tune in to at least one WDET program per week, whether it be on the radio, through the app or on the station’s website. “This is not a rebranding. We’re
not changing anything about our name, our call letters, our taglines,” Zatina said. “We are bringing our brand to life with these changes. These additions, and you know, it’s not a coincidence that DET is in our call letters and our nickname. We’ve always been about Detroit and for Detroit and this is really declaring our brand position bigger and bolder than we have in the past.” Earlier this month, Michigan Radio rebranded to Michigan Public to better emphasize the organization’s commitment to its digital platforms. Fox and Zatina declined to share which national programs have been removed from WDET programming but said the results of the survey are available on the station’s website. “We asked our listeners what they love in the national programming and the things they love most are staying exactly where they’ve been,” Zatina said. Existing music shows include “Ann Delisi’s Essential Music,” “Jon Moshier’s Modern Music,” “Chris Campbell’s The Progressive Underground” and more. The 75th anniversary of WDET’s first broadcast is Feb. 13 and will be celebrated with a members-only reception at Jam Handy in Detroit.
Workers at General Motors Co.’s Lansing Assembly Plant | BLOOMBERG
Michigan losing ground economically State is now 39th in personal income, report says | By David Eggert LANSING — Michigan continues to lose ground economically, and the largest contributing factor is slow growth in high-wage, knowledge-economy industries — not the weak growth in wages in auto manufacturing, according to a report released Jan. 22. Michigan Future Inc., a non-
profit focused on making the state prosperous, published an updated version of an analysis it first did in 2004, when it said that manufacturing would not drive economic growth. That prediction has borne out. Michigan is now structurally one of the country’s poorest states,
the report states. Michigan had the 16th-highest per-capita personal income in 1999. As of 2022, it ranked 39th, having fallen 23 spots lower. States overtaking Michigan include neighbors Ohio, Wisconsin and Indiana. The odds are strong, Michigan
EV battery startup acts to right ship Our Next Energy has secured financial runway through the end of the year after a failed Series C fundraising round prompted the EV battery startup to cut a quarter of its staff and replace its CEO. The Novi-based company closed on a round of bridge financing from existing investors Jan. 22, its top leaders told Crain’s in an interview at ONE’s Novi headquarters. The funding was raised through a convertible note offering to the startup’s top financial supporters, including the Bill Gates-backed Breakthrough Energy Ventures, which led its Series A, and BMW i Ventures, which led the Series B.
Revised business plan The company declined to provide a dollar figure for the bridge financing, citing the board’s de-
sire to keep it confidential. “We were clearly strapped for cash,” said Paul Humphries, who took over the CEO role late last year from founder Mujeeb Ijaz. “That’s why we went out and revised the business plan and made it sufficiently attractive for the exiting investors to come in and give us a bridge round that gets us ideally to the end of this year, potentially beyond that.” The company also disclosed that its assembly line at Piston Automotive, where it makes batteries for commercial vehicles, was shut down indefinitely. While battery cell validation continues at One Circle in Van Buren Township, where the company said it would invest $1.6 billion, build-out of the factory has been suspended. The problem for the lithium iron phosphate battery maker is not customer interest. In fact, interest has never been greater, Humphries said. What put the
high-prosperity again . . . to be concentrated in high-wage, knowledge-economy industries and, along with that, to be a place where 25- to 34-year-olds with bachelor’s degrees are concentrated.” Donald Grimes, a University of Michigan economist, co-authored the report with Glazer. See MICHIGAN on Page 17
Victims of trafficking are Vista Maria focus By Sherri Welch
Company gets a round of bridge financing By Kurt Nagl
Future President Lou Glazer said, that the state will fall to 41st behind Georgia and Idaho when the 2023 data comes out. “Michigan cannot be a high-prosperity state again, which we were for most of the 20th century, unless we become a leader in the high-wage knowledge economy,” he said during a media roundtable. “That is the only way that Michigan becomes
Our Next Energy CEO Paul Humphries has made a career managing highgrowth companies and financial turnarounds. | OUR NEXT ENERGY
battery startup in a bind was a lack of firm offtake agreements from existing customers, an excessive cash burn rate and failure to secure a purchase order from a major automaker — the top priority of the company. All of those factors led to London-based venture capital firm Just Climate pulling out as a lead investor of the Series C round. Just Climate declined to comment for this report. “You have to fix the reasons that you failed,” Ijaz said. “We went to work on that.” See OUR NEXT on Page 16
Leaders behind the Michigan Abolitionist Project are working to spin off the human trafficking awareness and advocacy program, two years after Dearborn Heightsbased Vista Maria took it on. Vista Maria said it will cease operating the MAP program at month’s end to refocus on its core mission of serving survivors of trafficking. The sole remaining employee for the program under Vista Maria, Executive Director Dawn Ames, will depart at month’s end. The former executive director of MAP, Kathy Maitland, who led its merger into Vista Maria in December 2021, and four others on a MAP subcommittee to Vista Maria’s board have registered a new Shelby Township-based nonprofit corporation with the state called the Michigan Anti-Trafficking Project and filed for 501(c)(3) nonprofit status with the Internal Revenue Service. They will take on operation of the effort as an
independent nonprofit effective Feb. 1. MAP’s new leadership group plans to take back the Michigan Abolitionist Project once Vista Maria gets approval from the state to release the name, said Maitland, who is serving as treasurer of the soon-to-be-independent MAP’s board. “We are still working on our strategy and plan . . . but our group plans to look at all of the work we have done in the past and how we might move forward,” she said.
Vista Maria said it will cease operating the MAP program at month’s end. Vista Maria believes it is most impactful focusing on treatment of human trafficking survivors along with broader residential care and mental health treatment for at-risk girls, said Mary Vogt, director marketing and fund development at Vista Maria. See VISTA MARIA on Page 17 JANUARY 29, 2024 | CRAIN’S DETROIT BUSINESS | 3
REAL ESTATE INSIDER
EV charging company EcoG plans to house its North American headquarters in the renovated Book Depository building in Corktown. | JASON KEEN
EV charging firm plans Corktown HQ By Nick Manes
The Harpos Concert Theatre, 14328 Harper at Chalmers just off I-94 on Detroit’s east side, is up for sale. | KIRK PINHO
Harpos concert hall in Detroit goes up for sale
T
Ruzvelt Stevanovski, he legendary Harthe Harpos owner, plans pos Concert Theatre to use proceeds from any on Detroit’s east potential sale to improve side is for sale for an unthe 2,000-seat venue and disclosed price. continue operating it. Designed by Charles After showing movies Agree — who also dewhen it first opened, the signed the Grande and theater was converted Vanity ballrooms, as well Kirk Pinho into a dance hall and as the Whittier Hotel — in then, more than four de1939, the former Harper Theater, 14328 Harper at Chalm- cades ago, a concert hall, said ers just off I-94, has had a special Brad Margolis, the broker for place in the hearts of heavy metal, Southfield-based Farbman Group rap and hip hop lovers around handling the marketing of the property. metro Detroit for decades. “The owner is looking to stay But fear not, metalheads.
NOTICE OF AUCTION AND SALE OF RECEIVERSHIP PROPERTY - CANNABIS Gene R. Kohut of Trust Street Advisors, LLC in his capacity as court-appointed receiver (the “Receiver”) of Comco, LLC (“Comco”) is conducting an auction for the sale of substantially all business assets of Comco. Comco is in the business of cultivating, producing, processing, and distributing medicinal and recreational cannabis and cannabis related products. Comco operates several cannabis provisioning centers located in Jonesville, Michigan and Hanover, Michigan. Pursuant to an order entered by the Jackson County Circuit Court on January 12, 2024 (the “Approval Order”), an auction for the sale of Comco’s assets has been scheduled for February 26, 2024, at 12:00 p.m. (Eastern Time). Any and all parties desiring to participate in the auction must make a qualified bid consistent with the procedures established by the Approval Order no later than February 16, 2024. The Approval Order authorizes the Receiver to conduct an auction, sets forth the bidding procedures for the Receiver to sell Comco’s assets free and clear of all liens, interests and encumbrances, and approves a proposed form of a purchase agreement (the “Stalking Horse Purchase Agreement”). A complete copy of the Approval Order, the Stalking Horse Purchase Agreement, the Bidding Procedures, and all related materials can be obtained by request from the Receiver’s counsel identified below. Those interested in submitting a bid for consideration should contact the Receiver’s counsel, David Dragich or Amanda Vintevoghel-Backer, at The Dragich Law Firm PLLC, (313) 886-4550, comcoauction@outlook.com.
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and continue running it,” Margolis said. “He’s looking for some money to inject into renovations and upgrades to do more shows, looking for Harpos to continue the legacy it has, remain a concert hall and kind of revitalize it. If someone came in and wanted to change the use, he’s not interested in that.” An email was sent to the venue on Jan. 23. Over the years, it has hosted countless artists ranging from Motörhead to Snoop Dogg, Megadeth to Outkast. The pandemic shut Harpos, as well as venues across the state, down for over a year but my colleague Kurt Nagl reported it would reopen June 11, 2021, with a show by Corey Taylor, lead singer of the band Slipknot. It’s been more than two decades since I’ve seen a concert there as a teenager, perhaps as a junior or senior in high school. I still occasionally reference the show — which included creepy clown costume clad nu-metal band Slipknot, and others. In particular, I usually remark about how I somehow made it out of the mosh pits mostly unscathed, in spite of the bulky, shirtless, very serious-looking grown men in them with tattoos of the seven deadly sins inked in the Old English D font across their shoulder blades. The next show I see there, whenever that is, I’ll take it much easier on my early 40s self, hang in the back and bob my head. I’ll let you know if Harpos changes hands.
Yet another electric vehicle charging company is targeting Southeast Michigan for operations. German EV charging company EcoG GMBH plans to invest $14.4 million and create a North American headquarters in Detroit’s Corktown neighborhood, adjacent to Ford Motor Co.’s roughly $800 million Michigan Central project, according to a briefing memo from the Michigan Economic Development Corp. EcoG would be headquartered in the renovated Book Depository building, now called Newlab. The Michigan Strategic Fund board on Jan. 23 approved a $1.5 million Michigan Business Development Program grant as part of the capital stack to make the EcoG development economically viable, according to a memo from the MEDC to the MSF board. The memo says the company also considered facilities in Georgia and Ohio for its investment. “This project aligns with the MEDC’s strategic focus area of supporting a business in the target industry of mobility and builds on the state’s work to position itself as the global leader in the future of mobility and vehicle electrification,” according to the memo. “The proposed project will also impact the local region with high wages from an emerging EV technology provider.” The planned project would result in up to 45 new jobs paying $2,777 per week plus benefits, according to the memo. Founded in 2017 in Munich, Germany, EcoG has 42 employees and a 15% market share in the European Union EV charging market. EcoG has partnerships with about 30 car manufacturing companies, including each of the Big 3 automakers headquartered in metro Detroit, according to the memo. The company raised nearly $6.3 million in a Series A venture capital funding in late 2022, according to PitchBook, a data provider for the startup and venture capital sector. “Right now there is unprecedented momentum behind the
EV transition in the U.S.,” EcoG CEO Joerg Heuer said in a news release. “EcoG’s solutions are acting as the catalyst for manufacturers in the U.S., making it simple to introduce American-built products into the EV charging market and transforming the EV charging landscape across the country. We’re excited to contribute to this next phase from our new office in Detroit. We admire Michigan’s strong drive to transform the mobility industry and are excited to collaborate with other innovation leaders out of Michigan Central. Together we make sustainable transportation in North America a reality.” In choosing to locate its proposed North American headquarters in Corktown, the project is a further testament to the plan of Ford and its Michigan Central project in being a catalyst for tech startup growth in Detroit. “We’ve already got over 25 companies located here and we’re just getting started,” Joshua Sirefman, CEO of Michigan Central, told Crain’s last year when the renovated Book Depository building opened as part of Ford’s overall Corktown development. “Over half of those are literally from around the country and around the world.” Since April, the number of startups operating at Newlab has grown to more than 80, Dan Aus-
The planned project would result in up to 45 new jobs paying $2,777 per week. tin, a spokesman for Michigan Central, told Crain’s on Jan. 23. EcoG would be far from alone as the only EV charging company making moves in Detroit. Detroit Manufacturing Systems is working on diversifying its business beyond supplying instrument panels for Ford F-150 and F-150 Lightning pickups, as Crain’s reported earlier this month. And Detroit-based Drive Technologies Inc. — which does business as Treehouse and focuses on streamlining the EV charging installation process — last summer raised $10 million in VC funding.
Ferndale site for sale, but Gage Cannabis to stay By Dustin Walsh
The property housing Gage Cannabis’ flagship store in Ferndale is for sale. The more than 46,000-squarefoot building on 1.52 acres at 1523 Academy Drive St. is on the market for $7.06 million, according to marketing from the property brokers Chicago-based Northmarq. The sale of the property does not impact Gage’s operations there as its lease will remain intact, Keith Stauffer, CFO of TerrAscend Corp., the Canadian owners of Gage, told Crain’s in an email. “Gage Cannabis has no intention of closing its Ferndale location,” the company said in an emailed statement to Crain’s. “We are in a long lease with the property owner and look forward to serving the Ferndale community for many years.” The property has a triple net lease, which means Gage would
remain responsible for the property taxes, insurance and maintenance of the building, according to a property advertisement. The rent on the lease also increases 2.33% annually. BJ Feller, managing director and senior vice president of Northmarq, said the property is being marketed as an investment as Gage’s lease is secured. “Frankly many investors are viewing the (cannabis) real estate as more secure than traditional retailers, and also offering above market capitalization rates and returns,” Feller wrote in an email. Northmarq is also marketing the Gage properties in Kalamazoo, branded as Cookies, and Traverse City, as well as two properties containing Lume Cannabis Co. dispensaries in Holly and Birch Run. Gage’s Battle Creek location is also on the market. The Battle Creek location is listed for $1.7 million, the Traverse
City location for $2.55 million and Kalamazoo location for $2.9 million. The Ferndale and Kalamazoo properties are owned by Troybased Spartan Partners Properties. The Traverse City property is owned by Strategic Koach Properties LLC and the Battle Creek property is owned by an entity called Battle Creek Downtown Central LLC, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. None of those entities were immediately available to respond to requests for information. Weed has been a hot real estate commodity for years. Investing in the property allows investors to play in the marijuana market without having to walk the line of federal drug regulations — marijuana is still a Schedule I narcotic in the purview of the federal government. The hotness of the market, how-
Toronto-based TerrAscend Corp. acquired Gage Growth Corp. in March 2022. | TERRASCEND
ever, is extremely segmented. How high the real estate prices go is largely based on how saturated the local municipality is with competition. A meager 2,400-square-foot building in Pontiac, which still hasn’t got its recreational-use market off the ground, was for sale for $3.5 million in 2022 ahead of Pontiac opening up its market to recreational weed. Battle Creek is heavily saturated
with dispensaries, which may dictate the $1.7 million price tag, compared to the more sparely populated Traverse City market, which is dictating $2.55 million for a similar building. The state’s overall marijuana market, though, has yet to peak. Last year, operators sold $3.06 billion of product, compared with $2.3 billion in 2022. — Crain’s Senior Reporter Kirk Pinho contributed to this report.
Life Remodeled COO taking on new role By Sherri Welch
SAPA Transmission’s Shelby Township location was completed in 2020. | SAPA TRANSMISSION
Defense contractor scales back Macomb County plan By Kirk Pinho
A Spanish defense contractor has scaled back its plans for a large Shelby Township facility. Sapa Transmission Inc., a division of Madrid-based Sapa Placencia SL, is creating less than one-quarter of the jobs it said it would in 2018 when the Michigan Strategic Fund awarded it a nearly $2.7 million Michigan Business Development Program grant. The MSF board signed off Jan. 23 on a reduction of that grant to just $600,000 as Sapa, which makes transmissions and other parts for U.S. Army armored vehicles, says it is creating just 50 of the promised 223 new jobs. Five were created by the April 30, 2020, deadline, and the state disbursed $60,000 of the 2018 grant money. An additional 45 were sup-
posed to be created by April 30, 2023, but the memo says Sapa was in default until the MSF board modified the terms of the agreement. The company is now expected to create those by a new deadline, Oct. 30. Jeremy Webb, managing director for the Michigan Economic Development Corp., said there was a cure period after the April 30, 2023, deadline and it became clear Sapa would not be able to meet its job creation requirements within the cure period. An email sent to Sapa on Jan. 23 was returned as undelivered. Attempts to reach representatives for Sapa over the phone were not successful. In February 2020, the company announced that it had completed initial construction of its U.S. plant and headquarters and that
it would spend the following 12 months working on retrofitting the 110,000-square-foot building. Sapa said in the February 2020 release that it picked Shelby Township "for the region’s versatile workforce and for its proximity to the U.S. Army’s Ground Vehicle Systems Center and Tank Automotive Command and major customers such as BAE Systems and General Dynamics." An MSF board briefing memo attributed the project reduction to “delays in defense-related contracts.” The company is at 51901 Shelby Parkway, in the Cherry Creek Corporate Park, according to its website. Its 2018 grant was to lease about 50,000 square feet and build a new 100,000-square-foot facility, Crain's reported at the time.
Life Remodeled, a Detroit nonprofit converting vacant schools into centers serving surrounding communities, has created a new president role and named its COO Diallo Smith to fill it. Life Remodeled created the new leadership position in response to its current and future growth plans, founder and CEO Chris Lambert said in an emailed statement. Smith, 48, will take on additional oversight of government and corporate affairs and support fundraising efforts as president and COO. He’ll also oversee the nonprofit’s employees and play a lead role in developing the nonprofit’s second community hub, Anchor Detroit, on the city’s east side. After Life Remodeled bought a former elementary and middle school in central Detroit from Detroit Public Schools Community District six years ago for $1, members of the community expressed anger that they didn’t get the same opportunity and weren’t asked what they needed as the nonprofit created its first community hub there. With help from former executive turned board member Dwan Dandridge, a Black nonprofit leader, Life Remodeled changed its approach, committing to a “community first mindset” that incorporates transparent conversations with the leaders of communities in which it is working. For the approach and community response, Life Remodeled was named a Crain’s 2023 Best-Managed Nonprofit finalist. In the newly created role, Smith will oversee the work with commu-
Diallo Smith will take on additional oversight of government and corporate affairs for Life Remodeled and support fundraising efforts as president and COO.
nity partners to develop equitable and inclusive technology programs at the new site Life Remodeled is developing. Its first “opportunity hub” will recruit nonprofits providing youth programs, workforce development and human services to help the surrounding community thrive. “Diallo’s determination to ensure Life Remodeled meets and achieves our goals relating to growth and impact is matched by his absolute dedication to the city of Detroit and providing opportunity to its residents,” Lambert said in a news release. “ Before joining Life Remodeled in 2021, Smith was project planner at Goodwill Industries of Greater Detroit briefly after founding Drive Table Tennis Social Club in Detroit and operating it for six years. Prior to that, he spent 8.5 years as executive pastor and chief administrative officer for Awakenings Inc. in Houston and held corporate finance roles for a total of nine years at ExxonMobil and BP Amoco Marketers Association. JANUARY 29, 2024 | CRAIN’S DETROIT BUSINESS | 5
EDITORIAL
State needs to grow high-wage jobs W
hen it comes to personal income, Michigan is going backward. That was the message of a report issued in recent days by Michigan Future Inc., a nonpartisan nonprofit focused on making the state more prosperous. Michigan’s per-capita income ranked 39th in the country in 2022, compared to 16th in 1999. This significant drop, the report found according to reporting by Crain’s senior reporter David Eggert, had two main causes: slow growth in high-wage, high-education industries and a drop in earnings in manufacturing related to motor vehicles, machinery and fabricated metal. While the report was issued recently, it was really just an update on a study Michigan Future Inc. produced in 2004. Yes, 20 years ago. “The evidence in this report strongly suggests that knowledge-based industries and young professionals will be the most important drivers of future economic growth,” the study summarized in 2004, only to be reiterated again this month. “Communities with high concentrations of both are quite likely to be more prosperous. It seems that the best use of policymakers’ time and attention with respect to the economy might come from developing a new agenda on how best to grow a knowledge-based economy in Michigan.” We can’t say we weren’t warned. It’s worth noting that over the past 20 years, Michigan has had Democrats and Republicans in charge of both the gover-
Newlab (left), next to Ford Motor Co.’s Michigan Central in Corktown, has more than 80 startups operating under its roof, with more coming, including German EV charging company EcoG GMBH. | KURT NAGL
nor’s mansion and the Legislature. Increasing the per-capita income of Michigan residents is clearly an issue that transcends party politics. There are signs of hope. Ford Motor Co.’s renovation of the Michigan Central Station in Corktown, which will be a hub of innovation, is expected to be completed in the coming months. Newlab, located in the nearby Book Depository building that reopened last year, now has more than 80 startups operating under its roof. German EV
charging company EcoG GMBH, it was announced last week, plans to put its North American headquarters in the building. Meanwhile, in December, the University of Michigan broke ground on its Center for Innovation, which holds the promise of drawing more young, educated professionals to Detroit. This strengthened connection between Ann Arbor and the state’s biggest city will be vital for future growth. Michigan Central and the UM Center
for Innovation are magnificent, marquee projects that help lead the way in the right direction. But more needs to be done throughout metro Detroit and Michigan. Education is key. As Michigan Future Inc. notes, high-income growth jobs are those found in the knowledge economy. “Michigan cannot be a high-prosperity state again, which we were for most of the 20th century, unless we become a leader in the high-wage knowledge economy,” Michigan Future Inc. President Lou Glazer told reporters last week. “That is the only way that Michigan becomes high-prosperity again … to be concentrated in high-wage, knowledge economy industries and, along with that, to be a place where 25- to 34-year-olds with bachelor’s degrees are concentrated.” Donald Grimes, a University of Michigan economist who co-authored the report with Glazer, said Michigan must learn from its past to chart a new future course. “The story is we used to get rich based upon having these industrial factory jobs. Michigan prospered during that time,” Grimes said. “It’s not true anymore. It wasn’t true in 2004. I fear that we haven’t learned that lesson.” Manufacturing jobs are important for the state. But we must embrace educational attainment and labor-force participation if Michigan is going to once again attract the jobs and the workers it needs to grow personal incomes more rapidly statewide. Otherwise, we’ll be repeating this story in 2044.
COMMENTARY
Now’s the time for action to support knowledge-economy jobs
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omy, and spur innovation. Michow more than ever, busiigan lags other states in income ness and community leadgrowth and knowledge economy ers, legislators, and policyjobs. In her State of the State admakers must come together to dress, Governor Gretchen Whitensure Michigan can compete mer rightly pushed for action and win no matter the obstacles that would incentivize research we face. It’s time for action. and development, start-andThe results from our recent scale up new businesses, and CEO survey indicate a more cautious economic outlook for the Jeff Donofrio boost high-wage jobs. While these tools aren’t a restate compared to the broader is president placement for long-term ecoU.S. Three primary concerns and CEO of nomic development strategy, emerged as potential threats to a Business they put Michigan on a more thriving Michigan economy: ris- Leaders for even playing field with other ing costs and wages, ripple effects Michigan, the from recent labor strikes, and the state’s business states. Today, Michigan is one of only impacts of state policy. roundtable. eight states without a payroll inWhile the Federal Reserve centive for new job creation and works to curb inflation, and as the impact of the strikes continue to unfold, one of only 13 states — and the only one in there is an immediate opportunity to ad- the Midwest — without a tool to support dress the third threat: shaping public poli- research and development activities. This puts Michigan at a clear disadvantage for cy to strengthen Michigan. Sitting before the state Legislature right attracting and retaining businesses, espenow are economic development propos- cially those in the knowledge economy. als that can increase business investment, Neighboring states like Ohio are investing create high-wage jobs, diversify our econ- hundreds of millions of dollars in support-
ing entrepreneurs. We urge lawmakers to expand our economic development toolbox by passing these bills expeditiously.
Need to boost competitiveness There is a great deal of uncertainty in the world, ranging from global conflicts to the upcoming presidential election to industry disruptions. Despite this unpredictability, businesses continue to operate, households continue to function, and individuals and families persist in navigating daily life. CEOs and entrepreneurs understand the complexity and inherent tension between decisions and actions we take today and how those impact and shape tomorrow. They know how to strike a balance between managing the present, creating the future, and challenging the past. Much has been said about the 54-54 split in the Michigan House of Representatives. Political control is a Lansing concern. Michiganders are focused on their
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. 6 | CRAIN’S DETROIT BUSINESS | JANUARY 29, 2024
families, their jobs, and the bottom line for their businesses. This is a unique opportunity to collaborate and build consensus around solutions that matter most for our future. We need to shift the focus away from winning the next election or news cycle to doing what it takes to make Michigan more competitive. Lansing has a short window of time to get meaningful work done before attention turns to state and national elections. This includes immedi-
Proposals in the Legislature can increase business investment, create high-wage jobs, diversify our economy and spur innovation. ate passage of sound economic development proposals with bipartisan support, and a genuine start to the heavy lifting on long-term initiatives like systemic education reform. Michiganders need and deserve action.
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.
UAW’s Fain to political leaders: Support us or no endorsement By Audrey LaForest, Automotive News
WASHINGTON — UAW President Shawn Fain had a message last week for political leaders: “Support our cause or you will not get our endorsement.” Fain delivered those remarks Jan. 22 to an applauding audience of members attending the union’s national political conference, which took place last week in the nation’s capital. On Jan. 24 at the conference, the UAW endorsed President Joe Biden for a second term. The UAW gathering — which Fain described as a “strategy session,” “war room” and “refuge” — comes after a costly six-week strike by UAW members last year that targeted key operations at Ford Motor Co., General Motors Co. and Stellantis and ended with lucrative new labor contracts between the union and the Detroit 3 automakers. Even before UAW members finished voting to ratify the record contracts, Fain promised to deliver more gains for workers in the next round of talks in 2028. The effort would require organizing the likes of Tesla and Toyota — an ambitious endeavor supported by Biden. The UAW launched an organizing campaign in late November that covers 13 automakers: BMW, Honda, Hyundai, Lucid, Mazda, Mercedes-Benz, Nissan, Rivian, Subaru, Tesla, Toyota, Volkswagen and Volvo. If successful, it would roughly double the number of active autoworkers the union represents.
2024 election Of the upcoming election, Fain said Jan. 22 that it was “critical,” a view echoed by UAW Regional 8 Director Tim Smith. “The 2024 elections are vital to all of us,” said Smith, whose region covers Washington, D.C., and 11 states. “Maintaining the White House, holding the Senate and regaining the House is necessary if we’re going to protect American working families — and that’s us.” In September, Biden became the first sitting U.S. president in modern history to join a picket line when he stood with striking workers at a GM parts depot in metro Detroit — an extraordinary show of support for the union’s demands for higher wages, better benefits and job security amid an industry shift toward electric vehicles. Biden, who has called himself the most pro-worker and prounion president in American history, told the striking workers that the automakers had been doing incredibly well and that “you should be doing incredibly well, too.” Biden’s focus on fighting climate change — supported in part by efforts to reduce vehicle
emissions and jump-start the U.S. EV market — has at times collided with his labor-friendly agenda. The UAW has cautioned the administration that moving too fast on EVs could hurt union autoworkers. The union has been calling for a “just transition” with strong labor standards and high pay for workers. Former President Donald Trump, the front-runner to receive the Republican presidential nomination, has previously urged the UAW to endorse him for the 2024
election. Speaking from a nonunion auto supplier in Macomb County — a day after Biden joined the GM picket line — Trump said Biden’s EV push would “spell the death of the U.S. auto industry.” The UAW has not been supportive of Trump, however, arguing the former president is unfriendly to labor. Automotive News reporters Michael Martinez, Vince Bond Jr. and Lindsay VanHulle and Reuters contributed to this report.
UAW President Shawn Fain delivers a keynote address Jan. 22 during the union’s national Community Action Program conference held in Washington. | UAW VIA FACEBOOK LIVE
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Duggan: Neighborhood property values are up By Nick Manes
Property values in the city of Detroit continue to rise, helping pave the way for more market-driven home sales. Mayor Mike Duggan’s administration announced Jan. 22 that property values rose in every neighborhood in the city, an average of 23%, and grew more than $1.7 billion in total value yearover-year from 2022 to 2023. Last year was the eighth consecutive year that property values rose, per the Duggan administration. The news comes as city homeowners will be getting notices in the mail this month informing them of their increased assessments. In a news conference Jan. 22, Duggan was quick to note that the state’s Proposal A law limits property tax increases to either the rate of inflation or 5%, whichever is lower. Criticism has been levied for years that much of the economic growth in Detroit has been limited to a handful of more affluent neighborhoods such as Palmer Woods, Corktown and Grandmont-Rosedale. That is changing, Duggan said. “We are now seeing the neighborhoods that had lagged before are now climbing the fastest,” Duggan told reporters. “You can just drive down the streets of the city and people fixing up houses (is) now spreading to neighborhoods that four or five years ago you would not have seen any work being done. That’s because the property values are going up.” City data shows that neighborhoods with some of the fastest rising property values — 30% or higher — include Fox Creek on the lower east side near the Grosse Pointe border, Dexter-Linwood in the north-central part of the city and Boynton in Southwest Detroit. Two neighborhoods — the Riverfront Towers area on the west riverfront and Victoria Gardens on the east side near Jefferson Chalmers — saw the lowest increases in value, rising less than 1% yearover-year. In total, 67% of Detroit’s 209 neighborhoods saw an increase of 15%-29% in overall property value appreciation, and another 23% appreciated 30%-49%, according to the city’s data. Since 2017, the total value of all residential property in the city has soared more than 200%, from $2.8 billion to $8.7 billion, according to city data. Such figures represent one of the better investments in America, Duggan touted. They also brighten the day for the city’s chief accountant. “The increased home value in every neighborhood is significant as it provides greater stability not only for neighborhoods but also for the City’s financial outlook,” Detroit CFO Jay Rising said in a news release. City officials are also urging Detroiters to take advantage of the appeals process to ensure they are being taxed properly and under8 | CRAIN’S DETROIT BUSINESS | JANUARY 29, 2024
While touting higher home values in the city, Detroit Mayor Mike Duggan pointed out that the state’s Proposal A law limits property tax increases to the rate of inflation or 5%, whichever is lower. | CITY OF DETROIT FLICKR
Since 2017, the total value of all residential property in the city has soared more than 200%, according to city data. | NICK MANES
stand just what are their taxes. Duggan earlier this month said the U.S. Census Bureau is expected to announce shortly that the city’s population is also growing, a key goal of his since first becoming mayor in 2014, and something he’s likely to tout should he throw his hat in the ring to run for governor, as many expect. “There’s no doubt population’s growing in Detroit,” Duggan said following the recent Detroit Policy Conference. “But I’m very optimistic very shortly the Census Bureau is going to officially declare population is growing in Detroit.” In general, the residential real estate market over the last several years has become much of just
that: a market. A report last summer by Detroit Future City found that in general, the balance of home sales over the last decade has shifted from largely “distressed” sales — typically cash sales for properties in tax foreclosure — to more market-driven sales with mortgages becoming more common. “The increase in home purchases over the last 10 years is a real testament to the cross-sector collaboration to create a healthy housing market. With the housing market strengthening in Detroit, we must leverage targeted investments that create stronger and more equitable homebuying opportunities,” Anika Goss, Detroit Future City
nities the foundation to build generational wealth,” said Fraid Durhal, a member of Detroit City Council representing much of the city’s west side. “One of the key components to building generational wealth is owning your own land or owning property. But that means nothing if the value of the property is not where it is supposed to be and will not allow you to have equity in your home that helps you build that generational wealth.” Throughout much of last year, when home sales were on the decline in much of the country and more locally in Southeast Michigan, the city of Detroit was something of a bright spot. Still, the city lags far behind in overall value. In December last year, the median-priced home sale in the city was $85,000, compared to $235,000 in the overall metro Detroit area, according to figures from Realcomp II Ltd., a Farmington Hills-based multiple listing service and provider of real estate data. Taken together, Duggan said that the overall real estate market in the city and the increasing property values now means that surrounding suburbs don’t necessarily offer a better value proposition.
president and CEO, said in a statement at the time the report was released. “These investments should be prioritized to develop greater diversity in housing prices, allowing the city to capture homebuyers with broader ranges of income who have accessible opportunities to attain a — Detroit Mayor Mike Duggan mortgage.” Detroit politicians “There’s no doubt about it,” Dugsay the push toward a more market-driven real estate market gan said. “We are competing with should have benefits for future the surrounding communities every day over quality of life, and there are generations. “This is important because it really good communities around us helps us establish in our commu- that you have choices on.”
“We are now seeing the neighborhoods that had lagged before are now climbing the fastest.”
FUTURE OF DOWNTOWNS
Just days before the COVID-19 pandemic forced dramatic changes to doing business in 2020, Alley Cat Café owner Danny Martinez had expanded his Pontiac coffee shop into a restaurant and event space. Many cities are trying, post-pandemic, to build back momentum for their downtowns by encouraging a series of events and activities. | NIC ANTAYA
For downtowns large and small, a new reality is taking shape By Kirk Pinho
Things were turning a corner for Danny Martinez. It was early March 2020. A small coffee shop he started in the basement of a charming, historic downtown Pontiac building — three stories with a turret at North Saginaw as Lawrence Street slopes up to the east — had done well enough in its few years in business. So with the business equivalent of baling wire and duct tape — liquor license grants, façade grants, sweat equity and lots of patience — he opened a restaurant on the main level, serving food and alco-
hol, offering banquet and event space. “There was always just little fun events and we were starting to develop a schedule of things like most downtowns try to do so there were activities throughout the warm weather,” said Martinez, who is also a member of the Main Street Pontiac board. But the momentum Martinez built with Alley Cat Café, which he credited in part with drawing patrons from that string of smaller events like the Pontiac Arts Crawl and others, came to a halt within 48 hours of opening when his was one of thousands of Michigan restaurants and bars whose dining rooms
and rails were ordered closed to stop the spread of coronavirus. Cities across the board saw something like an 80% drop in trips early in the pandemic, according to one study. Today, while COVID-19 may be a reduced concern compared to three and four years ago, its tentacles are long, their grip persistent. Some consumers remain wary of large downtowns and big crowds. Central business districts of all sizes continue to contend with the reality of the office market and the reduced daytime activity more workers at home brings. See DOWNTOWNS on Page 10
Traverse City’s men’s shopping night | PROVIDED PHOTO
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FUTURE OF DOWNTOWNS
DOWNTOWNS From Page 9
With feet on the streets still struggling to return to pre-pandemic levels in some areas, downtowns are amping up efforts to bring in other foot traffic. But not just visitors for visitors’ sake, experts in downtowns and outside observers said. It’s more small-scale programming that downtowns are eyeing to help attract more people more often. “With big events, you get people to come once,” said Tim Kelly, president and CEO of Downtown Grand Rapids Inc. “If you get people to come back continuously, they’re exploring more of the neighborhood and maybe down the road thinking about moving, working or investing there.” In short: Think less NFL Draft, more yoga in the park.
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Aiming for steady traffic While big events — think the annual Arts, Beats & Eats festival in Royal Oak in summer’s waning days, or the aforementioned NFL Draft in downtown Detroit this spring — certainly can bring a major economic jolt, there are tradeoffs: Reduced business at downtown shops from regular customers looking to avoid the chaos. Difficulty finding parking. Big event attendees don’t tend to purchase retail goods (although they do eat and drink in large numbers). General commotion. All those can be big turnoffs for downtown businesses, experts said. “The art fair day is the worst day for business for retailers,” said Robert Gibbs, an urban planning expert who is founder of Birmingham-based Gibbs Planning Group and has taught an urban retail course at Harvard University for years. But with more targeted events and experiences — a group dog walk along the river, a small pottery demonstration, a reading in a park, a free trolley in the winter — central business districts large and small lure visitors who not only make downtowns more vibrant, but contribute to their economic viability. “We can’t expect people to just come and shop,” said Angela Thomas, a cofounder of AERES Real Estate, a brokerage firm focusing on retail and office space in downtowns, including Birmingham and Detroit. “You have to give them a reason to, and these communities are really trying,” Thomas said. Making them destinations not just for visitors, but also new residents, office users and other businesses is key to their success moving forward, said Chris Jackson, a longtime Detroit developer who served as chair of the Neighborhood Advisory Council for the District Detroit area, where the Ilitch family and billionaire developer Stephen Ross are proposing more than $1.5 billion in new construction and renovated buildings. “They have to be places where people live, work and play,” Jack10 | CRAIN’S DETROIT BUSINESS | JANUARY 29, 2024
Grand Rapids’ Return to the River is an annual art and music festival on the Grand River. | BRYAN ESLER PHOTO
Las Canchas are Grand Rapids’ community futsal courts that opened in fall 2022 — they are open to the public and host various events, leagues and pick-up games. | SHAFI SUBHAN/AVES FILMS
Oxford Township and Lake Orion offer a free trolley Fridays and Saturdays. | PROVIDED PHOTOS
son said. “You don’t leave. That’s anywhere in the country — that’s L.A., that’s New York. If people are commuting out and leaving after their 9-5 and you’re not retaining them to use the nightlife or live, work there or play there ... then the downtowns won’t survive.”
Sharing innovative ideas So downtowns are getting creative, collaborating and putting together new initiatives aimed at bringing more people. For example in Oxford Township, its Downtown Development Authority and the Lake Orion DDA to the south have teamed up to bring a free trolley on Fridays and Saturdays connecting the two central business districts, which are separated by about 3 ½ miles of heavily traveled state highway. Although it stopped running in late
Traverse City’s Men’s Night | PROVIDED PHOTO
December for repairs and a brief respite, it will return in February. Kelly Westbrook, executive director of the Oxford DDA, said businesses in the two downtowns are following the DDA leads. “Now they’re starting to do it (collaborate) with other businesses, whether next door or across the district, so we’ve seen retail partnering with restaurants,” on various initiatives,
Westbrook said. In Traverse City, there are dedicated “ladies’ night” and “men’s night” events in December encouraging women and men to shop at Front Street and other downtown businesses in advance of the holiday season. Want to get a little boozy while shopping for stockings? Bring your IDs and you can at various businesses like the M22 ap-
parel store and Cherry Republic. In Grosse Pointe, one Thursday a month, businesses all stay open a little later than usual, said Cindy Wilcock, executive director of Main Street Grosse Pointe. Over the course of the pandemic, businesses in that downtown became more collaborative, working together on partnerships and building relationships more robustly, and that’s been a benefit, Wilcock said. “They uniquely felt how each other felt,” Wilcock said of small business owners downtown. “They were in the same boat and they understood it in a way that I think opened them up to looking beyond their front doors. … That’s one of the bright things that happened with the pandemic. It allowed a little bit of that time (for business owners) to get to interact and have those conversations.” Social districts — locally designated areas allowed under state law where alcoholic beverages can be consumed outdoors — have be-
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FUTURE OF DOWNTOWNS
In South Lyon in summer 2023, businesses were invited to apply to be part of the social district the Sidecar, where they can sell alcoholic beverages in special branded cups for patrons to enjoy outside in the common area. | PROVIDED PHOTO
come popular, with more than 30 in the five-county Southeast Michigan region, eight in Kent County and over 110 across the state, according to a December tally. South Lyon became one of the most recent to adopt one, called The Sidecar, last fall. Grand Rapids has added several courts for “futsal” — think indoor soccer with smaller teams than a traditional soccer 11-person squad — after the game began gaining steam. “They’ve been a huge draw, for pickup games and leagues have also sprung up,” said Tim Kelly, president and CEO of Downtown Grand Rapids Inc. DGRI has also started “leaning in” more to its annual World of Winter festival, which has grown during the pandemic. Several, such as Royal Oak and Ferndale, have downtown-specific gift cards that are good for use at participating businesses in their CBDs. Royal Oak’s came about in 2020 in response to the pandemic. “What started out as a way to bolster the bottom line for businesses has turned into kind of a staple of the programs we do, offering the ability for these businesses to take part in a collaborative gift card space where they don’t have to worry about getting their own gift card system,” said Daniel Solomon, executive director of the Royal Oak DDA.
A place to experience Making downtown shopping easier and more experience-based can help retailers draw customers as they compete against the e-commerce headwind that rose to record spending levels early in the pandemic, although has since moderated. Shoppers continue to prefer buying goods in person (45%) over online (31%), according to data compiled by Capital One Shopping Research. But e-commerce continues to nip at the heels of in-person shopping, with e-commerce sales of $284.1 billion representing an estimated See DOWNTOWNS on Page 12
Grand Rapids’ Relax at Rosa (above) is a free weekly lunchtime series at Rosa Parks Circle featuring live music and food trucks. An outdoor summer concert in downtown Oxford (below, from left), Birmingham’s outdoor movie night, downtown Ferndale and The Ferndale Patio Zone social district. | PHOTOS BY BRYAN ESLER PHOTO, CHRIS COOK OR PROVIDED
4 ways cities are striving for something new After the COVID pandemic drastically altered business models, plans, patronage and health, cities large and small — and downtown districts in particular — are carving their way in the new reality. That path includes some creativity, a lot of collaboration and a bit of risk. | By Kirk Pinho
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Large events can bring lots of foot traffic to downtowns, but they can be a big hassle for longtime ground-floor businesses as well as residents and regulars. Therefore, it’s the meat-and-potatoes type of programming and events — yoga in the park, a small 5K, a coordinated group dog walk, as examples — that are in their sights.
The increase in underutilized and vacant office buildings in downtowns has led to additional efforts to turn some of them into other uses, such as apartments, condominiums, hotels or other types of space. Federal COVID-19 relief dollars, through the state, have been doled out for some of those projects, and federal legislation has been introduced to provide added incentive. However, redevelopment is a long process and not many conversions have been completed locally so far.
Making a shopping experience more convenient is never a bad thing. Downtowns like Royal Oak and Ferndale have started programs for gift cards that are valid at a variety of downtown businesses. They also spare individual businesses the hassle of running their own gift card systems.
A 2020 state law allows people to drink alcohol outdoors in designated areas of a given city, and more than 110 communities in Michigan have taken advantage of that so far, by designating so-called “social districts.” More than 30 have been instituted in Wayne, Oakland, Macomb, Washtenaw and Livingston counties in southeast Michigan, and Kent County encompassing Grand Rapids has eight participating communities.
DOWNTOWN EXPERIENCES
150,000 Cities with 150,000 or fewer workers have largely returned to where they were in terms of foot traffic prior to the pandemic, according to research from Georgetown University and University of Chicago economists.
OFFICE TO . . . SOMETHING ELSE
6% Downtown Birmingham has been an office anomaly of the pandemic, with its vacancy rate falling from 10.4% in the first quarter of 2020 at the start of the pandemic to just 6% as of second-quarter 2023.
DOWNTOWN GIFT CARDS
15.6% Brick-and-mortar retailers like those in central business districts continue to grapple with e-commerce spending, which in the third quarter last year represented 15.6% of the $1.82 trillion in retail sales during that time period, up from 14.8% in third-quarter 2022, according to U.S. Census Bureau data.
SOCIAL DISTRICTS
$8,000 Downtown Ann Arbor parking meter revenue in April 2020, down from more than $500,000 two months prior.
JANUARY 29, 2024 | CRAIN’S DETROIT BUSINESS | 11
FUTURE OF DOWNTOWNS | COMMENTARY
Downtown centers can find renewal by looking to the past
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become bustling downtown shops suburban shopping centers ping districts that reflect the recent continue losing consumers urban retail movement. due to internet shopping Birmingham’s 300 upscale speand changing lifestyle preferences, cialty stores, restaurants, offices a generational opportunity for new and luxury hotels, combined with retail is emerging for towns and cittheir dozens of blue chip national ies. Millennials, families and sebrands, has established itself as niors are seeking to live, work and one of the country’s most sought shop in walkable urban centers. after downtowns. The city’s proFor those who seek more social gressive policies and its Shopping experiences as opposed to the enclosed mall experience of their Robert Gibbs District’s initiatives are largely responsible for making Birmingham youth, Main Street experiences in is president of their towns and cities are the per- Gibbs Planning a top destination for dining, fashion and home furnishings. fect fit for their way of life. While Group in Birmingham’s retailers are rethe larger portion of their income Birmingham. portedly among their chain’s most will go to experiences such as travel or outdoor adventures, closer to home visits successful. Top national brands including to a local brewpub or coffee shop in their Allen Edmonds, Anthropologie, Crate & Barrel, Elm Street, Ethan Allen and Lulutown center makes perfect sense. Medium-sized cities such as Ann Arbor, lemon line its downtown streets, with WarGrand Rapids, Kalamazoo, Marquette and by Parker and RH home and others opening Traverse City are especially growing from soon. These brand retailers attract thouthis trend. Detroit’s 2000s shopping resur- sands of shoppers and complement Birgence with Nike, H&M, Shinola, Whole mingham’s many fine specialty shops and Foods and others was a pioneering urban restaurants such as Petite Cabane, Caruso bellwether. East Lansing’s small newer Tar- Caruso, Dick O’Dow’s, Roots, Sundance, get store serves as a prototype for the return Tender and Streetside. Birmingham’s approach to welcoming of downtown department stores. Resort towns such as Harbor Springs, Pe- popular brands is unique. When a national toskey and Saugatuck are booming while store brand relocates from a shopping censmall walkable towns and cities with ter to downtown, it may initially receive a well-managed business districts, conve- cold shoulder from city leaders and the nient parking and architectural design stan- community, who fear popular brands will dards, such as Brighton, Birmingham, end up ruining their beloved Main Street’s Grosse Pointe, Holland and Northville, have unique charm. Unfortunately, many cities
The Birmingham Shopping District | CHRIS COOK
artificially suppress their demand for name brand stores, turning their main streets into recreational theme parks and driving retail spending to shopping malls. Looking back at history, though, this thinking is misguided. During the peak commercial era of American cities, commonly acknowledged as the 1950s and 1960s, banks, cinemas, department stores, supermarkets and even automobile dealerships thrived as anchors in central business districts with national chains such as JC Penney, SS Kresge, Sears and Woolworth filling downtowns. The luxury store Sak’s Fifth Avenue even once had boutique stores in Ann Arbor and Petoskey. For scale, Detroit’s beloved 10-story historic JL Hudson department store would equate to 10 modern Walmart superstores. City halls, courthouses, libraries and post offices served as noncommercial anchors for communities, bringing considerable pedestrian and vehicular traffic downtown. Public and private anchors continue to be as essential to urban shopping districts as they are to new mixed-use centers.
DOWNTOWNS From Page 11
15.6% of $1.82 trillion in retail sales in the third quarter, up from 14.8% in the third quarter 2022. That was on $264.1 billion in online sales vs. $1.79 billion in total retail sales, U.S. Census data show. Data from the National Retail Federation compiled by Capital One shows that millennials and Gen Z are much less wedded to in-person shopping, with Gen Z (37%) and millennials (38%) saying in-person shopping is their preferred method, compared to 51% for Gen X and 60% for Baby Boomers. The two younger generations are more likely to prefer a blend of in-person and e-commerce, at 36% (Gen X) and 30% (millennials). “What’s really struggled in downtowns is the goods side of it,” said Luke Bonner, CEO of Ann Arbor-based Bonner Advisory Group who is also an intermittent lecturer of urban and regional planning at the University of Michigan as well as senior economic development adviser to the city of Sterling Heights. But there is cause for optimism, said Gibbs, the Birmingham urban planning expert. Downtowns are 12 | CRAIN’S DETROIT BUSINESS | JANUARY 29, 2024
Steven Childs, president of the board for Main Street Pontiac, says that even before the pandemic hit, Pontiac’s downtown area struggled. | NIC ANTAYA
not malls. “There’s still resistance to the experience of being in a shopping center vs. being in a real place,” Gibbs said.
Making up ground Central business districts, in many cases, have rebounded from the early days of the pandemic — but it varies. Roundly, however, they were all in a bad place early. In April 2020, for example, average daily visitors in downtown Detroit was 7% of what it was the year
prior, while average daily workers was 14%. In Grand Rapids, there was a 48% decrease in foot traffic and hotel occupancy plunged by 79%. In downtown Ann Arbor, parking meter revenue was just $8,000 in April 2020, compared to north of $500,000 just two months prior. Today, however, American cities where the central business district houses at least 1.5 million workers — think New York City, Chicago, San Francisco — have stabilized at 60% of downtown trips compared to pre-pandemic levels, while those cities with 150,000 or fewer workers
During the most successful commercial period for cities, people were drawn downtown for a variety of reasons, such as to pick up packages at the post office and then purchase groceries for the evening. Churches, courthouses and government office buildings created a demand for retailers, offices and hotels. As an alternative to downtowns, new town centers are opening as walkable mixed-use communities. These new towns cluster residential, office, civic, restaurants and stores around new main streets and parks. The Village of Rochester, built on the site of a former shopping mall, was Michigan’s first new main street. The city of Warren is designing a new town center near city hall and others are planned in Novi and Commerce. As we look to the future, all signs point to the re-emergence of Main Street as the place people will want to do their retail shopping and dining. For local and regional sustainability, downtowns should offer the brands, goods and services both desired and needed by their communities. Downtown shopping is back.
have largely returned to where they were in 2019. That’s according to research by Georgetown University economists Ferdinando Monte and Charly Porcher and Esteban Rossi-Hansberg of the University of Chicago published in July by the National Bureau of Economic Research in Cambridge, Mass. Not all downtowns have seen the large drop off in office usage like others have. For example, Kelly of Downtown Grand Rapids Inc. said the daily workforce is back to about 85% of what is was pre-pandemic. “Each downtown has its own challenges,” said Erica Dunlap, a cofounder along with Thomas, of AERES Real Estate. And of course, long-struggling downtowns like Pontiac continued to struggle. “It was a bunch of storefronts that were staged to look like something,” said Martinez, the Alley Cat owner, of the years leading up to the pandemic. “It was like one of those Western movie sets they built to make a movie. It looks like there’s a bunch of businesses but there wasn’t anything.” “The pandemic hit, we were already kind of in a bad place,” said Steven Childs, president of the board of Main Street Pontiac, a
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But what about offices? Existential questions remain. In particular, what to do with the troves of underutilized or vacant office buildings in city centers that have long depended on the workers they bring to bolster ground-level stores and restaurants. Smaller downtowns like Royal Oak and Birmingham, for example, have peeled off some office users from other communities with the draw of things like coffee shops, restaurants for lunch, bars for after-hours socializing. But there just aren’t enough tenants to fill up the millions of square feet of empty space, so building owners need to determine how best to repurpose it. In particular, what to do with the troves of underutilized or vacant office buildings in city centers that have long depended on the workers they bring to bolster ground-level stores and restaurants. One key target has been multifamily housing, although not every vacant office tower can be converted into much-needed apartments. Leaders in Detroit have pushed for 10,000 units, nearly double the current 5,700 or so.
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COMMENTARY | FUTURE OF DOWNTOWNS
residents keep these communities n the ever-evolving landscape fresh and unique. of metropolitan Detroit, down5. Hybrid downtowns’ resiltown areas are experiencing ience: Hybrid downtowns, exemdistinct trajectories shaped by plified by Ann Arbor, Royal Oak their unique characteristics and and Birmingham, showcase resilresponses to post-COVID chalience through a robust local job lenges. base and strong resident support. A Examining the three archetypes combination of workforce in— bedroom community downcomes, resident incomes, and towns, industry-centric hubs and Luke Bonner strong day and night populations hybrid counterparts — reveals a is CEO of the support these communities from nuanced narrative of resilience, Bonner adaptation and the imperative Advisory Group morning to night. The student population in Ann Arbor is an outlier to need for sustained creativity. in Ann Arbor. its success compared to other simi1. The dichotomy of downtowns: Downtowns in the metro Detroit lar downtowns. 6. Business-friendly practices and region can be classified into three archetypes — the bedroom community (e.g., post-COVID strategies: At the onset of Plymouth, Northville), the industry hub the pandemic, proactive measures by local (e.g., Detroit) and the hybrid model (e.g., governments, downtown development auAnn Arbor, Birmingham, Royal Oak). Each thorities, and associations played a pivotal faces a different set of challenges and op- role in supporting local businesses. Examportunities in the wake of the COVID-19 ining the impact of these practices, such as street closures for outdoor seating and expandemic. 2. Struggles of office-reliant down- tended business hours, is important for towns: Downtowns heavily dependent on communities to extend these practices. 7. Challenges in sustaining creative office workers have witnessed setbacks in their hard goods and consumer goods retail solutions: Despite successful initiatives, sectors. A prime example is Detroit, where challenges arise when enforcement disconretail closures and project cancellations tinues business-friendly practices due to concerns about public safety. Closing have been notable. 3. Nightlife and service sector woes: streets for extended outdoor seating opWhile nightlife remains resilient, hinging on tions, pick-up only parking spaces for curbmajor events, the service sector workforce’s side delivery and extended hours are all weakened state has impacted restaurant wildly successful and incredibly popular; however, certain communities have abanoperations, leading to limited hours. 4. Bedroom communities’ triumph: doned these policies. 8. The crucial role of downtown supContrastingly, bedroom community downtowns thrive on high-income residents, port organizations: A strong commitment cleanliness, and easy accessibility. A strong from downtown business support organizalocal income base, high education levels, tions remains paramount. Exploring the and desire for opening businesses by local role of these organizations in fostering cre-
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ativity, conducting regular meetings with businesses, and adapting strategies in response to red flags or opportunities is essential. 9. The ever-changing real estate landscape: Downtown real estate, subject to market trends, has undergone significant transformations from dormancy in the 1970s to a resurgence in the late 1990s. Examining historical trends, market conditions and recent developments can provide insights into the evolving real estate landscape and help predict future trends and proactive approaches to maintaining vitality. 10. Residential imperative for economic growth: Residential living emerges as a linchpin for long-term economic growth and resilience. To support local business incomes and population are essential. Today communities are juxtaposing rental residential real estate with owner-oc-
cupied residential real estate. There is a demand for both, but certain communities still view rentals as a bad word and are creating major roadblocks for their approval. Without a mixture of incomes and demographics the downtown retail business mix can become stagnant. 11. Tailoring solutions to community needs: Recognizing the diversity among communities, it is crucial to tailor downtown development strategies according to their unique preferences and outlooks. Understanding the factors influencing these preferences requires on-going community surveys, interviews, and dialogues with residents and business alike. The post-COVID era challenges downtowns to navigate a complex web of factors. Analyzing specific data points and delving into the intricacies of each archetype can offer a road map for revitalization, ensuring downtowns not only survive but thrive in the years to come.
Policy and culture changes can attract tenants, boost profits COSTAR GROUP
Oak-
the cant that orklev-
BLOOMBERG
Downtowns of the future have several options I
Stretch the definition of ‘downtown’
T
residential elements. There are he definition of “Downtown many opportunities to re-develDetroit” needs to be redeop other iconic assets downtown fined. that will continue to add more Many international cities don’t density, which will encourage classify a portion of the city as more retail. “downtown.” “City Core” or “CenSuccess is also seen in our new ter City” are more appropriate demixed-use residential developscriptions of an area that is the ment. Woodward West proves that hub for arts and entertainment, there is a lot of excitement from the seat of government and the people who want to live in the City heart of commerce. Core. Living in the City Core proThe Cass Corridor, Brush Park Christopher vides you a unique experience. and Corktown neighborhoods have Jackson is a The lifestyle is not monolithic. become vibrant and distinctive partner at City Core living gives you access communities and an extension of Queen Lillian to houses of faith, arts and culture, what we traditionally called “down- Development varieties of cuisine options, and town.” The Detroit City Core has be- in Detroit. the most vibrant nightlife in the come a place to live, work and play. The Book Building is a perfect example state all nestled in one neighborhood. I see of how a city can take existing inventory a continuation of the trend of people movand repurpose it for a modern day dynam- ing from the more expensive coasts, West ic. The Book Building is a historic redevel- and East, to the Detroit City Core continuopment that includes commercial and ing to expand.
P
more green space, a olicy, culture and sports court or recrethe bottom line: ational areas, outdoor How can all three patios, etc., encouragof these concepts iming employees to get pact real estate develoutside? Implementing opment? that as part of building Real estate developdesign is increasingly ers and owners are becoming a priority. looking to better posiZoning guidelines are tion their assets by atin place to account for a tracting the right tenwell-planned developants. They do so by Angela Thomas and Erica cultivating a positive Dunlap are co-founders of AERES ment landscape, but at times any deviation culture, which ultimate- Real Estate, specializing in from the code can lead ly leads to profitability. commercial spaces. to a cumbersome proAs companies are looking to relocate or downsize, they are cess. Policies should be in place to attract brainstorming how to bring employees sophisticated tenants that will lead to back to the office. Factors such as ameni- rent growth. The more “friendly” the govties, walkability and social experiences all erning policies and the incentives for both use/zoning changes and redevelopfactor into locational decisions. Policy: Many of these concepts require ment, the better the climate is for landmunicipal input or approval. For exam- lords to invest more capital into their ple, how do we repurpose an enormous properties, thus the more tenants will pay parking lot servicing office tenants into a to be there. This will lead to bettering the hybrid work structure attracting retail de- culture for the building and the people at velopment which will bring people to the the property, and ultimately the commuarea and obtain more density? There are nity at large. Bottom line: The municipalities that parking ratios and development guidelines in place that at times dictate wheth- are proactive with policy change, enabling positive development, will be the er this is feasible. Culture: Similarly, how can we repur- most prosperous and have the best botpose existing site areas to account for tom line for everyone involved. JANUARY 29, 2024 | CRAIN’S DETROIT BUSINESS | 13
To place your listing, visit crainsdetroit.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com CONSULTING
ENGINEERING / DESIGN
ENGINEERING / DESIGN
Public Sector Consultants
OHM Advisors
OHM Advisors
Maggie Pallone was recently named shareholder and senior vice president of Public Sector Consultants. A highly regarded authority on Michigan environmental issues and soughtafter advisor in navigating complex public policy challenges, Pallone has worked with state government, nonprofits, and Fortune 500 companies. Most recently, she was a primary leader of the PSC team that staffed the governor’s Growing Michigan Together Council.
A senior project manager for community advancement firm OHM Advisors’ Transportation Group, Kirk Cox, PE, was elected as partner at the architecture, engineering, and planning firm. With an engineering career spanning 30 years, including roadway, drainage, utility, and maintenance of traffic design and project management experience, Kirk is known for astute management of MDOT and local agency transportation work. He earned a Bachelor of Science degree in Civil Engineering from Wayne State University.
Newly elected as partner, Marcus McNamara also serves as principal in charge for several Michigan municipalities at architecture, engineering and planning firm OHM Advisors. Leading the community advancement firm’s Ann Arbor office, he employs a deep understanding of the issues communities face today. Marcus earned a Bachelor of Science (Engineering) from the University of Michigan, and a Master of Science (Civil/Environmental Engineering) from Wayne State University.
ENGINEERING / DESIGN
ENGINEERING / DESIGN
LAW
OHM Advisors
OHM Advisors
Honigman LLP
With nearly 20 years at community advancement firm OHM Advisors, Rich Hobgood, PE, was elected to partner. A strong, widely respected project manager on large, complicated, multi-discipline projects, Rich has delivered all types of municipal projects, including roadway, streetscape, pathway, water main, sanitary sewer, and community branding initiatives. He earned a Bachelor of Science in Civil Engineering from Wayne State University, and is active in the American Water Works Association.
Elected to partner at community advancement firm OHM Advisors, Andrew Schripsema, PE, PS, is the Survey Group Manager for the architecture, engineering and planning firm’s Michigan Operations. Simultaneously leading dozens of complicated survey projects in Michigan, he skillfully guides engineers and clients through complex surveying issues by focusing on the big picture. Andrew holds Bachelor of Science degrees in Civil Engineering and Land Surveying from Michigan Technological University.
LEGAL
Schenk & Bruetsch, PLC Detroit-based law firm Schenk & Bruetsch PLC is pleased to announce that attorney Lindsey R. Johnson has been named a partner in the firm. Ms. Johnson is an experienced litigator, counselor and advocate who is starting her 20th year practicing law. Ms. Johnson leads Schenk & Bruetsch’s employment law practice and also has extensive municipal law experience, with clients including Oakland County, the City of Inkster, and the City of Hamtramck. 14 | CRAIN’S DETROIT BUSINESS | JANUARY 29, 2024
HONORS / AWARDS
HEADQUARTERS / NEW OFFICES
Quinn Evans quinnevans.com
LynxDx lynxdx.com
The American Institute of Architects (AIA) has announced that Quinn Evans is the recipient of the Architecture Firm Award for 2024. We are honored to be recognized by AIA for our leadership and impact on the architectural profession. With a people-oriented and future-focused practice, we are dedicated to confronting the urgent challenges of climate change and social inequity. This accolade underscores our commitment to stewardship through the transformation of existing places. We are humbled to be counted among the leading firms of our time. We thank all our team members for their dedication to strengthening the fabric of our communities and guiding the future of our profession. Learn more at www.quinnevans.com
Stay Ahead of What’s Next in Industry News
NONPROFIT
Debora Stein dstein@crain.com
Kevin’s Song
CrainsDetroit.com/COTM
REAL ESTATE
Colliers International Colliers International welcomes Dan Morse as Senior VP, bringing 22+ years of commercial real estate experience. Specializing in diverse portfolio representation, he assists companies in leasing, acquiring, and divesting properties across both local and global markets. Morse collaborates with developers, investors, and institutions, showcasing expertise in office & industrial property leasing & sales globally, including the United States, Canada, Mexico, Brazil & other global markets.
LynxDx, an Ann Arborbased genomics startup and developer of MyProstateScore 2.0, has established a new headquarters, enabling the next phase of growth, commercialization and innovation in prostate cancer risk assessment. LynxDx purchased a 21,667 square-foot building in the State Street Executive Park, a mix of office and wet lab space with increased capacity for testing and developing new applications for its pioneering technology. The relocation was completed in November.
MILESTONES
Goodman Venegas Insurance Agency goodmanvenegas.com Goodman Venegas Insurance Agency is excited to announce its membership with the Women’s Business Enterprise National Council (WBENC) after recently becoming a women-owned business.
MAKE AN ANNOUNCEMENT
Jennifer Fair Margraf, MBA, CFRE, has been named Executive Director of Kevin’s Song, a nonprofit dedicated to empowering communities to prevent suicide and offer hope and healing to survivors. Her appointment ensures Kevin’s Song’s sustained impact in the field of mental health. In her role, she is responsible for overseeing the administration, programs, and strategic plan of the organization. Margraf has over two decades of nonprofit leadership experience and holds an MBA from Oakland University.
ADVERTISING SECTION
To place your listing, visit www.detroitbusiness.com/companymoves or contact Debora Stein at 917.226.5470 / dstein@crain.com
Co-founder Regina JessupGoodman became the President and sole owner of the Troy, Michigan-based insurance agency in 2023. Since 1997, Goodman Venegas Insurance Agency has been a trusted partner in the region’s insurance brokerage industry, offering both Business Insurance and Employee Benefit services.
NEW GIG?
Preserve your career change for years to come. PRODUCTS
Honigman LLP welcomes Colleen P. Clarkson to its Regulatory Department as a partner in the firm’s Insurance Practice Group. Based in Honigman’s Bloomfield Hills office, Clarkson joins the firm from one of the largest nongovernmental purchasers of healthcare in the United States, where she served as Assistant General Counsel & Compliance Officer. Clarkson specializes in contract negotiation and helps clients navigate complex issues and mitigate legal risks in highly regulated industries.
COMPANIES ON THE MOVE
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Laura Picariello Reprints Sales Manager lpicariello@crain.com (732) 723-0569
LIONS
businesses in metro Detroit. The economic impact of the Jan. 21 divisional round game on the city of Detroit was estimated at around $50 million. That’s after an estimated $20 million was pumped into the local economy the weekend of the Jan. 14 Wild Card game.
From Page 1
(Campbell) is out in front of all of that. They’ve gotten everybody to like them and that’s a cool thing.” That new support can be easily quantified. National social media polls via X (formerly Twitter) show most of America is pulling for the Lions. The Lions divisional round playoff game against Tampa Bay on Jan. 21 on NBC drew 40.4 million viewers, the most for the network since the 1994 NFL playoffs. That came a week after the Lions’ Wild Card win over the Los Angeles Rams and former Detroit quarterback Matthew Stafford on NBC and Peacock averaged 35.8 million viewers across all platforms — with 31.9 million viewers on NBC affiliates — ranking as TV’s mostwatched primetime show since the 2023 Super Bowl. The popularity doesn’t stop there. After the divisional round, Lions standout defensive lineman Aidan Hutchinson — a hometown boy who played for the Jim Harbaugh-led Michigan Wolverines — had the 10th-most sold jersey in the NFL, behind the likes of Kansas City Chiefs quarterback Patrick Mahomes and San Francisco 49ers running back Christian McCaffrey but ahead of the likely MVP, Baltimore Ravens quarterback Lamar Jackson. Football reigns supreme in the U.S., with 93 of last year’s 100 top-rated TV shows being NFL games. The Lions being as popular as they’ve become, though, is a bit of a surprise to Dorfman. “It’s been an interesting story. They’ve captured the imagination of the whole country. They’ve been a downtrodden franchise for a long time. Everybody’s happy to see them succeed,” Dorfman said. “It’s not really a team of stars, which is what a lot of fans and casual viewers get attached to. “Campbell is the face of the team. (Goff) is a great quarterback but he’s not a star. Everybody loves seeing him on camera. He fits the Lions persona with the working-class qualities they have, which is very Detroit.” Some accolades may come with the success. Campbell is a finalist for the 2023 Associated Press Coach of the Year award. Running back Jahmyr Gibbs and tight end Sam LaPorta are finalists for the 2023 Associated Press Offensive Rookie of the Year award. Two Lions coaches previously won Coach of the Year — George Wilson in 1957, when the team won the NFL Championship, and Wayne Fontes in 1991 after leading Detroit to the NFC Championship game. The Lions have seen five players take home Offensive Rookie of the Year, most notably Billy Sims in 1980 and Barry Sanders in 1989. On Jan. 25, General Manager Brad Holmes was named 2023 NFL Executive of the Year by the Pro Football Writers of America. Holmes drafted many of the players currently starring for the Lions, including Gibbs and LaPorta.
Detroit showing up The hometown fans remain at
Forward down the field
Fans always stay true to the Detroit Lions, even in down times, but the team’s playoff run has seen fans from all over the country jump on the bandwagon. | KURT NAGL
Detroit Lions fans hold up signs for quarterback Jared Goff prior to the team’s NFL divisional round game against the Tampa Bay Buccaneers. | AP
the head of the table. Tickets for a Ford Field watch party for the Jan. 28 NFC Championship game in Santa Clara sold out within a couple of hours of being released to the general public. Tickets, originally sold for $10$20, are asking $35-$350 resale on Ticketmaster as of late last week. Lions officials did not respond to a request for the number of tickets made available. The atmosphere at the Lions’ two home playoff games was electric, and the team brought in plenty of celebrities, former players and others to take it up a notch. Lions legends Barry Sanders and Calvin Johnson were seen on the field posing for photos with hometown rappers Eminem and Big Sean. Local actor Jeff Daniels was spotted chatting with rock legend Bob Seger. Both Eminem and Daniels recorded hype videos for the big games. Still, capitalizing on added local popularity can be more vital than gaining national notoriety, according to Nikki Little, senior vice president at Franco public relations firm in Detroit. Little said the Lions have done a great job balancing gaining new fans while staying true to diehards who have stuck it out with the team for decades. “Bringing in Eminem as a celebrity ambassador of sorts was a good move because it allowed (the Lions) to market to the masses while staying true to their original fan base, which Eminem is part of,” Little said. “Then choosing a word like ‘grit’ to emblazon onto every wall, piece of merchandise and player was brilliant because it was something that resonates with
any Detroiter and had been part of Campbell’s lexicon since the start.”
Local businesses getting in on the action The team itself isn’t the only entity getting in on the marketing action. A variety of local businesses have offered new Lions-themed gear and discounts. After the Lions’ win Jan. 21, apparel brand Detroit Vs Everybody raffled off a one-of-a-kind Lions-themed area rug. Women’s online apparel brand Kiloh + Co. has a line of Lions-themed shirts and hoodies it can’t keep in stock. Even Suttons Bay-based Mawby Vineyards and Winery is taking advantage of the hoopla, offering a 20% discount on bottles of its “Detroit” sparkling wine through January. Kiloh + Co. owner Amanda Adamcheck said the company has seen a huge uptick in sales in its Detroit apparel in January. Sales are up 100% over January 2023, she said. And traffic to its website spiked for a few hours after each playoff win. “There’s not a lot of cute women’s apparel in the sports world so we’re able to fill a void out there in the market,” Adamcheck said. Mawby Marketing Manager Claire Lepine told Crain’s in an email that the Lions-related discount has helped boost sales. Mawby at one point sold two cases, or 24 bottles, of the “Detroit” wine in less than 24 hours, she said. “January is always a slower time for wine and alcohol sales, so it’s definitely made an impact,” Lepine said. “We’ve also been getting
great feedback and comments from people who are just so excited and appreciate the gesture.” Little said the promotions run by local businesses can do a lot for those operations. “It’s a good promotion and smart marketing if it resonates with the company’s audience and isn’t forced or inauthentic,” Little said. “Staying true to your brand is the secret to long-term success — just look at the Lions. Had they followed every flash in the pan, they wouldn’t have the momentum they have today. What’s more important, a single night of sales while you compete with the masses, or carving out your own niche for prolonged profits?” Overall, the Lions playoff run has been a boon for many other
Lions fans are some of the most loyal of any of Detroit’s four professional sports teams. The Lions through their struggles continued to attract a wide audience and support, whereas the Red Wings, Pistons and Tigers have had periods with relatively few fans in the stands during down times. Of those four teams, though, the Lions are the only one to not win a championship in the last 40 years. The Wings have four, followed by three for the Pistons and one for the Tigers. Little believes winning is just a small part of why people, near and far, have come to pull for the Lions. “We follow sports teams for the storylines, the emotion, the drama — especially a sport like football,” she said. “Winning is merely a by-product. So, if you have a team with strong storylines and compelling characters like Jared Goff and Dan Campbell, the sky’s the limit for marketability. “Of course, it’s always an easier sell when the team is winning. Everyone likes a Cinderella story, but the Lions haven’t been a winning team for decades and have still managed to capture one of the most dedicated fan bases in sports history. There’s something to be said about that.”
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CLASSIFIEDS
To place your listing in Crain’s Detroit Classifieds, contact Suzanne Janik at 313-446-0455 or email sjanik@crain.com
MARKET PLACE REQUEST FOR PROPOSALS Requests for Proposals are being accepted for:
Marketing Cloud Services RFP 2024 Response Due: March 11, 2024 at 5pm Issued: January 22, 2024 The Mayor’s Workforce Development Board (MWDB) is directly responsible and accountable to the State of Michigan, Labor and Economic Opportunity-Workforce Development (LEO-WD) for the planning and oversight of talent development programs in the City of Detroit. Designated by the MWDB, Detroit Employment Solutions Corporation (DESC) serves as the fiscal and administrative entity that provides workforce services to job seekers and employers. DESC’s primary funding streams include Workforce Innovation and Opportunity Act (WIOA), Temporary Assistance to Needy Families (TANF) that funds Michigan’s PATH (Partnership. Accountability. Training. Hope.) employment program, Food Assistance Employment and Training (FAE&T), Wagner-Peyser Employment Services (ES), and other public and private funding. The Corporation enters into contracts with qualified entities to provide workforce development programs and services to job seekers and employers. American Rescue Plan Act (ARPA) and Midwest Urban Strategies - Growth Opportunity Grant funding may support contracts resulting from competitive bid process. DESC is seeking proposals from qualified individuals, organizations and/or firms.
Bid package for this RFP is available for download at this DESC website:
https://www.descmiworks.com/opportunities/rfps-and-rfqs/. Mayor’s Workforce Development Board Darienne Hudson, Co-Chairperson David E. Meador, Co-Chairperson
Detroit Employment Solutions Corporation Board Alice Thompson, Chairperson Detroit Employment Solutions Corporation Dana Williams, President
An equal opportunity employer/program. Supported by the State of Michigan, Labor and Economic Development, Workforce Development (LEO/WD). Auxiliary aids and services available upon request to individuals with disabilities. 1-800-285-WORK. TTY: 711.
JANUARY 29, 2024 | CRAIN’S DETROIT BUSINESS | 15
OUR NEXT From Page 3
Reinspiring confidence During an hourlong interview, Ijaz and Humphries laid out the corrective actions they have taken since the Series C fell through, detailed the company’s new business plan and made the case that its path is not the same as its ill-fated predecessor A123 Systems. The company moved quickly to address investors’ primary concerns: ONE’s cash position and its leadership. In late November, it slashed its salaried and hourly workforce by 128 employees. Around the same time, Humphries took charge of daily operations. Ijaz said he handpicked Humphries, a board member, to run the company after coming to terms with his own weaknesses. Ijaz, vice chairman of the board and now chief technology officer for the company, has undisputed battery innovation expertise. What he lacks is industrial manufacturing experience. That’s where Humphries excels. The 69-year-old made a career managing high-growth companies and financial turnarounds. He served more than 20 years in executive roles at Flex Ltd., a $30 billion manufacturing company from which he retired in 2021. “As we start thinking of scaling to the multi-billions in revenue, I’ve done that in automotive, I’ve done it in medical, I’ve done it in industrial products … That experience can be very helpful,” said Humphries, who is in the process of moving from California to Birmingham. The hope is that Humphries’ business operations acumen, coupled with Ijaz’s industry-disrupting vision, will reinspire confidence among new investors.
Reality check ONE became a media darling in 2021 after Ijaz took a 752-mile, single-charge trip from metro Detroit to the Upper Peninsula in a Tesla retrofitted with a ONE battery. The following year, at an event attended by Gov. Gretchen Whitmer and U.S. House Speaker Nancy Pelosi, ONE was lauded as the solution to China’s EV battery dominance and Michigan’s ticket to securing the future of the automotive industry. But the last six months have been a reality check for the startup and industry overall. Automakers including Ford Motor Co. and General Motors Co. have cut or delayed production as consumer demand for EVs grows slower than expected. For ONE, the next few months will be critical to its long-term survival. The most urgent task, stemming the cash bleed, is well underway. Ijaz said the company has reduced its capital expenditure by five times. It has mothballed plans to build out more production lines at its plant in Van Buren Township until it secures firm purchase orders to justify expanding. Over the past 16 | CRAIN’S DETROIT BUSINESS | JANUARY 29, 2024
“You have to fix the reasons that you failed,” Our Next Energy founder Mujeeb Ijaz said of the company’s way forward. | NIC ANTAYA
Piston declined to comment. Shyft also declined to comment.
Crucial commitments
Our Next Energy’s Mujeeb Ijaz, Gov. Gretchen Whitmer, Lt. Gov. Garlin Gilchrist and Oakland County Executive Dave Coulter tour ONE’s new headquarters in Novi in October 2022. | GOVERNOR’S OFFICE
to turmoil on the business operations side. Grandiose growth plans without proper consideration of the market created a risk profile that investors couldn’t stomach. They told him that, and he listened. “Make the medium-size business that you’ve built function well, as opposed to not even pausing long enough to do that and trying to grow into this massive world-stage battery company,” Ijaz said, citing a suggestion from investors. “We’re working toward medium size, making sure we get the first markets right.” In making the rounds with investors since announcing leadership and headcount changes, Ijaz said he has met directly with Whitmer and Quentin Messer, CEO of the Michigan Economic Development Corp., which approved $237 million of state incentives for ONE’s plant in Van Buren. Ijaz said he wanted to ensure the officials understood why the company made the layoffs and what its plan was going forward. “They’ve been very, very supportive,” he said. The company “made clear they remain committed to Michigan,” including meeting its investment commitment and creating 2,112 jobs, MEDC spokesman Otie McKinley told Crain’s in late November following news of the layoffs. “If the company fails to achieve its commitments under the terms and conditions, then it will be required to repay all or a portion of the (incentive) funds,” McKinley said in an email.
The idled Piston line, down since the holidays, means that ONE’s most significant source of revenue is shut off, but revenue is not the worry right now, Humphries said. Signing contracts and building a pipeline of real business for the future is the top priority. The company is still aiming to be EBITDA positive by 2026, when its energy grid storage verti- Uphill battle cal is expected to generate sales. Revenue forecast for this year was Given market conditions, the relatively low even before pro- company likely has an uphill batduction stopped and not mean- tle raising more capital, said Reilly ingful toward the company’s bot- Brennan, founding partner at San tom line. Francisco-based Trucks Venture “What’s critical is getting com- Capital, which is not an investor in mitments from customers for ’25, ONE. Its greatest advantage is that ’26, ’27 and ’28,” Humphries said. it has a product with a real shot at ONE is in talks with five top changing the industry, he said, global OEMs and quoting product unlike some of those born from to them, the CEO said. In theory, the SPAC craze a couple years ago. once the first solid purchase order “A lot of the companies that comes through, others will follow. frankly weren’t real businesses That in turn would enable the from 2021 clouded in many ways company to raise more equity funding and access debt to scale factories. “We want to try and bring in as much money as we can as quickly as we can,” Humphries said. “The sooner we can bring additional money in, the more — Paul Humphries, CEO, Our Next Energy security we can give to our investors, to our customers, to our the potential of actually great employees that we have a long- businesses in 2023 and 2024, and term future.” it’s going to take a while for that to Humphries said he wants to work through the system,” Brenprove to investors that ONE will be nan said. “It’s much harder to get good stewards of their capital, financing for things related to EVs sustaining measured growth over and charging now even though the next few years until market de- paradoxically EV sales are up.” mand is projected to soar and the As ONE works through financial ROI makes staying on the roller trouble, Humphries said, it’s imcoaster worthwhile. portant not to lose sight of why people gave it money in the first place. Grandiose plans in check “We have a technology that no That’s where Ijaz admits to an- one else has, and it delivers perother weakness. Big, outside-the- formance that no one else has. box thinking that drove his suc- That’s not just North America, cess as a battery tech engineer led that’s globally,” he said.
“What’s critical is getting commitments from customers for ’25, ’26, ’27 and ’28.”
Engineering technician Jason Bird works to install the integrated battery management system for a battery at Our Next Energy in Novi. | NIC ANTAYA
few weeks, it has met with commercial vehicle customers including Charlotte-based Shyft Group, with the objective of firming up volume commitments and getting better visibility into their production plans. Once the company has that, Ijaz said it will go to Piston with a revised plan for the contract manu-
facturing of its batteries. “We had a number of topics that needed to be resolved, from closing a new line of funding to making sure we got out of the holiday period, to getting to delivery schedule alignment,” Ijaz said. “Those topics are being discussed with Piston. We’ll start the line again at the right time.”
VISTA MARIA From Page 3
“We had to make tough decisions at the end of 2023 on how we’re going to do that,” she said. In a joint statement emailed Jan. 19 to MAP supporters around the state, Vista Maria CEO Megan Zambiasi and Rhonda Davenport Johnson, an executive with Comerica Bank and president of the new MAP board said: “Our organizations have changed because of the pandemic and as non-profits with limited resources, there is a need to focus on our respective areas of expertise. Vista Maria will continue to provide care to address the needs of young trafficking survivors, including residential, health and wellness services.” Vista Maria, which is operating on a $36 million budget for this year, was short of its forecast revenue for 2023 in large part due to labor shortages, Vogt said. “Our 2024 budget looks more favorable given some strategic changes that we have made including recruitment and retention strategies.” Vista Maria — a finalist in Crain’s 2023 Best-Managed Nonprofits program — is refocusing its efforts on residential care and mental health treatment of at-risk,
MICHIGAN From Page 3
“The story is that we used to get rich based upon having these industrial factory jobs. Michigan prospered during that time,” he said. “It’s not true anymore. It wasn’t true in 2004. I fear that we haven’t learned that lesson.” Between 1999 and 2022, real personal income per capita in the U.S. grew by $19,389, from $46,081 to $65,470, or 42.1%. In Michigan, it rose to $57,038 from $45,943 — $11,095, or 24.2%. Relatively weak growth in employment-based earnings accounts for most of the growing gap between the state and the U.S. The report attributes 29% of the difference to slow earnings growth in high-wage, high-education attainment industries and 23% to the drop in earnings in motor vehicles, machinery and fabricated metal manufacturing. The report identifies seven highwage, high-educational attainment industries in which the average wage surpasses $100,000: chemical manufacturing, computer manufacturing, transportation equipment manufacturing (mostly aerospace, but excluding auto), information, finance and insurance, professional and technical (including a lot of white-collar auto jobs), and company management. Auto manufacturing pays less, an average of $73,271 as of 2022. “We had two things going on. Michigan was dependent on the auto industry, and the auto industry particularly in Michigan lost ground, although it also declined nationally in terms of contributing to personal income,” Grimes said. “So that hurt us, and everybody knows that. But nobody notices that the other aspect of the story is
Vista Maria is refocusing its efforts on care and treatment of at-risk girls, including survivors of human trafficking from around the state at the state’s only locked facility for survivors, opened in 2020 on its Dearborn Heights campus. | VISTA MARIA
adolescent females on its campus, including young survivors of human trafficking. Last year, it served 95 girls on its campus, 11 of them trafficking victims. The Aaron and Helen L. DeRoy Freedom Center, a second treatwe didn’t gain the jobs and the income in the high-wage, high-education attainment industries. In fact, that is a more important reason.” Business Leaders for Michigan, the state’s business roundtable, said last year that knowledge-economy jobs grew 35% nationally between 2000 and 2022 but 0% in Michigan. Asked what policy missteps have been made over time and what should be done now, Glazer said: “Basically we have not had a knowledge-economy economic development strategy and we’ve not had a prepare, retain and attract young professionals strategy. This is true irrespective of who’s been in control of the governor’s office or the Legislature for decades.” Most recently, Gov. Gretchen Whitmer has spearheaded the creation of a multibillion-dollar fund that has helped to subsidize electric vehicle and EV battery plants. Grimes likened the Strategic Outreach and Attraction Reserve fund to “playing defense” to “save what you have. That’s manufacturing. But you don’t win unless you have an offense. ... So you need more than SOAR.” Glazer recommended that policymakers focus on revitalizing downtowns and offering transit — “creating places where young professionals particularly want to live.” Michigan’s per-capita income in 2022 was 13% below the national average, its lowest-ever mark since the data was first compiled in 1929. The state in recent years has taken some steps aimed at boosting the percentage of residents with postsecondary degrees by offering college scholarships to new high school graduates and financial assistance to older adults who enroll in community college.
ment site for survivors on Vista Maria’s campus, opened in 2020. It is the only secure or locked treatment site for trafficking victims in the state, according to Vista Maria, something that prevents the girls in treatment from return-
ing to those who have abused them.
MAP’s statewide presence For more than a decade, MAP has been a catalyst in bringing to-
gether stakeholders to improve collective efforts to address trafficking in Michigan, Maitland said, and that will continue when it is once again an independent nonprofit. Last year, it convened an annual statewide summit that brought together more than 110 law enforcement, human service, medical and policy organizations as well as 240 professionals to share best practices and network, she said. “We will (also) continue to cooperate with the Michigan Human Trafficking Commission,” which recently rolled out a data collection standard to help quantify the human trafficking issue in Michigan, Maitland said. MAP has local support and presence in the state’s southeast, west and mid-Michigan sectors, including in Detroit and Troy. On the state’s west side, the Southwest Michigan Human Trafficking Task Force merged into MAP in 2020 and the Ottawa County Human Trafficking Task Force in November while under the Vista Maria umbrella. Those task forces include law enforcement, nonprofits, schools, faithbased agencies concerned citizens and others serving Berrien, Van Buren, Cass and Ottawa counties in West Michigan.
GRAND PRIX
From Page 1
It’s clear that the conservancy, which had never operated at a deficit previously, can no longer count on event revenue to make up a significant piece of its budget, Lyon said. The organization plans to shift its revenue model by seeking more donations and programmatic grants. “People love Belle Isle so much, but I don’t think (it) was perceived as something that needed support,” Lyon said. “We are working to move up in those priorities, to be more visible and have stronger relationships with individuals. All of that is the direction we’re moving in, but it takes time.” Lyon, founding director of arts association CultureSource, is no stranger to the Belle Isle Conservancy. In addition to serving on its board, she worked with Sarah Earley, founding chair of the Belle Isle Conservancy, to develop plans for the merger of multiple nonprofit friends groups that led to its launch in 2011, inspiring other park conservancies around the country to follow its model. The conservancy reopened the Belle Isle Aquarium the following year and has operated it ever since. It also runs educational programs and fundraises (securing, for example, a $2.5 million gift to help fund $10 million in dome repairs at the Anna Scripps Whitcomb Conservatory.) And it engages volunteers to help with island cleanup from spring to fall, which includes taking koi out of winter storage at the aquarium and putting the fish back in a nearby pond.
Early years The conservancy’s budget is a
2023 Grand Prix in Detroit. | NIC ANTAYA
mix of event revenue, donations, grants and retail sales at the aquarium gift kiosk. The Grand Prixmiere, one of two annual fundraisers the conservancy relied on for operating dollars, provided $400,000$450,000 each year that the race took place on the island — about a quarter of the nonprofit’s annual budget. Last year, when the Grand Prix moved back downtown, proceeds from the Grand Prixmiere were split among several charities. The Belle Isle Conservancy received $134,000 from the event, Lyon said. However, $100,000 of that is restricted for updates to the Scott Fountain — a $10 million project the conservancy is also supporting through fundraising. Before departing the conservancy last fall, Hodges secured a $10 million earmark from the state funded with American Rescue Plan Act dollars. But those dollars, which are being shepherded by the Michigan Department of Natural Resources, are restricted for updates to the aquarium’s HVAC system and aren’t contributing to the conser-
vancy’s operating budget. The Belle Isle Conservancy board laid off two of its 15 staff members and made other cuts in December after missing revenue targets, Lyon said, cutting $300,000 from its budget. Fortunately, it has reserves to cover the projected loss of $350,000$400,000 for 2023 and provide a buffer as the conservancy works to increase individual gifts and attract more programmatic grants from foundations this year. The conservancy headed into 2024 with a projected $1.7 million in unrestricted reserves, Lyons said. “The vast majority of nonprofits, especially in arts, don’t have more than a three-month (operating) cushion,” she said. “We have a nine-month cushion.” And though admission to the historic aquarium on the island is free, donations during public days over the holidays totaled $12,000 — nearly triple the year before — despite being open four days rather than five, Lyon said. “Things like that give us hope and give us confidence that we’re headed in the right direction,” she said. JANUARY 29, 2024 | CRAIN’S DETROIT BUSINESS | 17
THE CONVERSATION
Byna Elliott is focused on making a global impact — and Detroit is her home base Byna Elliott’s career keeps her immersed in the city of Detroit, where she was born and raised. As the first in her family to graduate
from a university, Elliott said she didn’t have any fallback plan, but knew she wanted to focus on equity and inclusion in the banking industry. Three decades later, the 54-year-old is the global head of Advancing Black Pathways at JPMorgan Chase. | By Anna Fifelski Did you anticipate that you would be in this position when you were just beginning your career? When I graduated college, I worked for the Office of the Comptroller of the Currency and realized this notion of financial services could be a very rich career. As part of my job, I had a specialty focused on the Community Reinvestment Act, fair lending and consumer compliance laws and regulations, which for me, was really important because I had this sense of fairness around opportunities for access to capital for my community. So I got to focus on that as part of the job and that led me to really having a passion for it, ensuring that communities are not left out and individuals who have dreams and goals have access to the tools to build their wealth and grow wealth for their families. So that’s really what led me to the career was this opportunity to take this job that I didn’t know a lot about other than branches on the corner, and seeing that the full scope of responsibility that banks have to really be a catalyst in communities. What are some accomplishments you’re most proud of? So I would say one of my biggest and proudest moments was that at my previous company, which was Fifth Third Bank, I led a $32 billion community commitment to support underserved communities throughout their bank footprint. When we ended it, we actually achieved a $42 billion outcome and more
something I couldn’t pass up when the opportunity came.
Byna Elliott, global head of Advancing Black Pathways at JPMorgan Chase. | JPMORGANCHASE
importantly, it changed the way that the bank did businesses and products and to deliver products and services throughout the community. I would say the other one was that at the time that George Floyd was murdered, we were all watching from our homes because of COVID. We were experiencing two pandemics — a pandemic around our health and one around racism. I was able to engage the board of directors at Fifth Third at the time to invest ($2 billion) in a racial equity commitment, which is probably still today the second-largest commitment to address racial inequality in their footprint. How did you shift from that role to the global head of Advancing Black Pathways at JPMorgan Chase? When I shared that accomplishment with my peer who was working for JPMorgan Chase, he said, “That’s great. $2 billion is a great
accomplishment. You should be proud of it. But JPMorgan Chase committed $30 billion.” So the idea of $2 billion versus $30 billion and having a global strategy was one that resonated with me. To say “You’ve been really doing a great job of problem-solving in your region in the tech space and the 14 markets. What could it look like and what would it be if you could impact the entire country or have a global impact?’ Even before the pandemic, JPMorgan Chase had been a leader in being intentional around increasing opportunities for building wealth and underserved communities and underserved demographics. I had always admired their program, but the idea of being able to do it at such a large scale with a company that had already committed significant resources to addressing wealth disparities, and creating more opportunities for wealthbuilding in communities was
Is there anything specific you credit to your success? Mentorship played a significant part in my development and growth. The first time my boss asked me if I wanted to take that bigger role on, I said no. And I said I was saying no because I really loved what I was doing in Detroit. I’m a homegrown Detroiter, I didn’t want to move to Cincinnati. I loved being in Detroit. But the reality is that part of the reason why I said no is because I feared not being successful. You do things that you’re comfortable with and you do things that you have a good deal of expertise in, but this new job was something I’d never done before. My friends and my mentors challenged me to write down the three things that I needed to see happen to move forward with pursuing the role, and I wrote those three things down and the things happened in that order and then I raised my hand and called back. Fast forward — I took a role that I was uncomfortable with, didn’t have the knowledge and expertise, but trusted in myself that I could get it done and as a result I had these great outcomes and got promoted a couple more times and positioned myself for greater opportunity. But that didn’t come because I actually was that confident in myself. It came about because I had mentors, sponsors and people that cared about me that I had worked with over the years that encouraged me to take risks.
Read all the conversations at CrainsDetroit.com/TheConversation
TRUE credit union merges with Parkside By Anna Fifelski
TRUE Community Credit Union, headquartered in Jackson, announced the completion of its merger with Westland-based Parkside Credit Union. The credit unions announced plans for the merger last summer. Employees from both credit unions will continue to work together under the TRUE Community Credit Union name. The merger is the latest example of Michigan banks and credit unions utilizing mergers and acquisitions as a growth strategy. The National Credit Union Administration approved 107 mergers between credit unions through the first three quarters of 2023. 18 | CRAIN’S DETROIT BUSINESS | JANUARY 29, 2024
In 2023, Michigan State University Federal Credit Union acquired two Chicago area banks as part of an expansion plan. MSUFCU President and CEO April Clobes previously told Crain’s that growth plans include looking at areas where MSU alumni reside, whether in the state of Michigan or the greater Midwest. Dearborn-based credit union DFCU Financial also announced an agreement to acquire two Florida locations of Iowaheadquartered MidWestOne Bank. The Naples and Fort Myers locations further expanded DFCU Financial’s reach into the Sunshine State, which the institution began in Jan. 2023. Mergers can also result in the
closing of redundant branches. Michigan ranked fourth in the nation for the most bank branch closures from 2020 to 2023, according to an analysis by online lender LendingTree. Chrissy Siders, the president and CEO of TRUE Community Credit Union, said there’s currently no expectation that any locations will be closing due to the merger. The merger between TRUE Community Credit Union and Parkside Credit Union will result in a total of 15 branch locations with over 80,000 members, according to the news release. Combined, the credit unions have $873 million in assets. “Success is driven by (asking)
‘Are we able to identify areas where our members are going to have more products, services, places and people to serve them?’ And we absolutely are able to accomplish that,” Siders said. “‘Will our employees be better because of it through more opportunity for advancement, more opportunity to learn and grow and more opportunity to interact with our members?’ I would say yes to that. And then the future opportunities to impact and reach more people with our purpose, mission, vision and values and being able to check all those things off. It’s really all about the people and it’s all about the organization and our desire to dig deeper into Michigan.”
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