Crain's Detroit Business, January 30, 2023, issue

THE CHIPS ARE STILL DOWN

As auto shops struggle to get chips, broken cars sit waiting for months |

BY RACHEL WATSON

When the transmission control module on Jordan Gray’s 2017 Ford Focus gave up the ghost, he never dreamed he’d end up forfeiting the car altogether — and certainly not for want of a semiconductor chip.

Gray’s sedan broke down in late 2021. He took it to Tom Holzer Ford in Farmington Hills, where he said they gave him two options: Buy an entire transmission system, or wait six to 10 months for the back-ordered chip.

Because the part for his model year wasn’t under recall or covered by warranty, he’d have to pay out of pocket.

What’s more, the dealership was out of loaner vehicles and rentals to drive while he waited.

“I could not a ord the new transmission they were suggesting I get, and in the end, had to have my car voluntarily repossessed because I wouldn’t be able to a ord two car payments,” Gray said. “It wasn’t making sense to pay on a non-working vehicle.”

Gray isn’t alone. As the chip shortage continues into 2023, auto service centers and their customers are su ering the same 2023

PRIORITIES FOR LAWMAKERS

Detroit lawmakers want state’s ban on rent control lifted

Developers warn of unintended consequences amid drive to help tenants

BY ARIELLE KASS, KIRK PINHO AND DAVID EGGERT

Seeing an opportunity in a newly Democratic-led legislature, Detroit City Council members are considering a resolution that would ask the state to lift a 35-yearold prohibition on rent control.

Michigan’s 1988 ban on rent control stops Detroit and other cities from enacting local restrictions

on high rent increases. A request from Detroit to give the city more exibility in limiting rent increases would be another step in its multipronged e ort to grapple with rising housing costs. Close to onethird of residents in Detroit live at or below the federal poverty level. Whether rent control would work to solve a deeply entrenched housing issue in Detroit and elsewhere remains an open question.

Developers say it would limit housing supply and make the economics of development in the city even more di cult.

Academics and tenant-rights advocates are divided on whether it is bene cial as a whole, with many researchers tending to be more suspicious of its long-term bene ts. Nationwide, about 200

See RENT CONTROL on Page 20

See CHIPS on Page 21 The chip shortage, combined with other component sourcing problems and a shortage of technicians, continues to cause service delays. FOX FORD GRAND RAPIDS VIA FACEBOOK

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT NEED TO KNOW

 DOW TO CUT 2,000 JOBS GLOBALLY

THE NEWS: Midland-based Dow Inc. plans to cut 2,000 jobs as part of an e ort to cut $1 billion in costs in 2023 amid economic uncertainty, the chemical manufacturer announced ursday. e company also said it would shut down “select assets,” particularly in Europe, but did not specify what those shutdowns would be.

WHY IT MATTERS: e job cuts amount to about 5 percent of Dow’s global workforce. e company currently employs approximately 37,800 people.

 NORTHVILLE DOWNS COULD MOVE TO PLYMOUTH TOWNSHIP

THE NEWS: e owners of Northville Downs are proposing to relocate their horse racing track to Plymouth Township, a move 4.5 miles away from its current site near Sheldon Road and Hines Drive.

WHY IT MATTERS: Under a planned unit development application for the

southwest corner of Five Mile and Ridge roads in Plymouth Township, Northville Downs would have a halfmile oval harness race track, plus a 4,900-square-foot grandstand with an 18,400-square-foot patio for race viewing; 23,000-square-foot racing building; a 35,500-square-foot horse barn; and a 3,200-square-foot maintenance building.

 SECOND NATURE BRANDS HIRES NEW CFO

THE NEWS: Madison Heights-based Second Nature Brands, the parent company of the Kar’s and Sanders brands, has brought aboard a new chief nancial o cer. Chris Caswell joins the snack foods manufacturer after four years as CFO at Massachusetts-based jelly and juice giant Welch Foods Inc. Caswell starts his new role at the end of February, replacing Herman Brons, who is retiring after less than three years with the company.

WHY IT MATTERS: Caswell will oversee a company that has seen much change and consolidation in recent years. e private equity-fueled consolidation of candy and snack makers started in 2017 when the family-owned Kar Nut Products Co. was bought by PE rm Palladium Equity Partners LLC before being scooped up by London-based CapVest Partners LLP. In that time frame, Kar’s parent compa-

ny acquired metro Detroit’s iconic Sanders brand and West Palm Beach, Fla.-based Brownie Brittle.

 MICHIGAN NURSES CONSIDERING STRIKE

THE NEWS: Nurses at MyMichigan Medical Center in Alma are joining more than 1,000 nursing home workers represented by the Service Employees International Union Healthcare Michigan who are in the middle of voting on whether to strike. ose nurses work at 13 nursing homes across Michigan owned by Ciena Healthcare, e Orchards Michigan, Optalis Healthcare, Pioneer Health Care Management and Amee Patel.

WHY IT MATTERS: Melissa Samuel, president and CEO of the Health Care Association of Michigan, said the sudden loss of 1,000 nurses could spin the entire health care sector into chaos. Nursing homes would likely have to reduce patient capacity and rely on expensive agency sta to maintain regulated patient-to-provider ratios.

Correction

 A Newsmakers pro le of Dug Song in the Jan. 23 issue reported an incorrect gure for the purchase price of Duo Security, which Song founded. Cisco Systems Inc. purchased the company for $2.35 billion.

FOOD & DRINK

Michigan nabs 13 James Beard Awards semi nalists

 More than a dozen restaurants and chefs in Michigan have made the semi nal cut for this year’s James Beard Awards.

 Sandy Levine, owner of Freya and Chartreuse in Detroit and e Oakland in Ferndale, was nominated for Outstanding Restaurateur, while Hajime Sato picked up an Outstanding Chef nomination for his work at Sozai in Clawson. Amando Lopez of Casa Amado Taqueria in Berkley earned a nomination in the Emerging Chef category.

Detroit-based Good Cakes & Bakes was nominated for Outstanding Bakery and Spencer in Ann Arbor was recognized for its wine program. In the regional Best Chef: Great Lakes category, eight Michiganders picked up nominations, including a rare nod outside of a major city:

 Omar Anani, Sa ron De Twah, Detroit

 Abra Berens, Granor Farm, ree Oaks, Mich.

 Norberto Garita, El Barzon, Detroit

 Andy Hollyday, Selden Standard, Detroit

 Ji Hye Kim, Miss Kim, Ann Arbor

 Hamissi Mamba and Nadia Nijimbere, Baobab Fare, Detroit

 Michael Ransom, Ima Izakaya, Detroit

 Sarah Welch, Marrow, Detroit

e Great Lakes category includes chefs from Illinois, Indiana, Michigan and Ohio.

Finalists will be announced March 29. Winners will be honored at the James Beard Restaurant and Chef Awards ceremony June 5 at the Lyric Opera of Chicago.

Longtime Chef Hajime Sato is the owner of Sozai Restaurant in Clawson. SOZAI

VIA

Developer les

$60M suit against Pontiac Medical marijuana license delays cited

DUSTIN WALSH

A group of real estate developers led suit last week against the city of Pontiac over a yearslong delay in issuing a medical marijuana license.

Rubicon Real Estate Holdings, its principal Joseph Brown, and Brown Design Consultants allege in the suit led in Oakland County Circuit Court that the city, and its clerk Garland Doyle, dragged its feet on issuing the permit for nearly four years, causing the developer’s lender to pull its $45 million in loans and led to the loss of several tenants for the proposed development.

e plainti s — alleging violations of equal protection, due process, the First Amendment and Fifth Amendment — are seeking nearly $60 million in damages and legal fees associated with not being able to develop the property. e suit requests a jury trial.

“Because of the defendants’ actions, plainti s have been signicantly damaged, including but not limited to the loss of income, the loss of the increased asset valuation on the subject property from having the leases in place, the increased development costs … the loss of goodwill and reputation and other damages,” the lawsuit reads.

e new suit follows a May 2021 opinion by the same Oakland County Circuit Court judge that ordered the city to approve the permits for the redevelopment, by which time the tenants of the proposed redevelopment decided not to proceed with their lease agreements and the lender bailed on the project.

e suit is the latest blow to the city as it continues to be embroiled in other lawsuits over the city’s long-delayed issuing of medical marijuana licenses.

FOOD & DRINK

A SEASONED APPROACH

As a business, USFL coming to Ford Field is a whole new ballgame

JAY DAVIS

e Pontiac Silverdome hosted events for 26 years and was home to two major title wins — Hulk Hogan pinning Andre the Giant at Wrestlemania III in 1987 and the Michigan Panthers winning the 1983 USFL championship.

Fast forward to 2023 and the Panthers will return to the Detroit market this spring in a new incarnation of the United States Football League. e professional football spring league announced ursday

in Detroit that the Panthers and Philadelphia Stars will play their home games at Ford Field, also home to the NFL’s Detroit Lions.

Ironically, the Panthers beat the Stars 24-22 in that 1983 title game.

e season begins April 15. e Panthers, who went 2-8 in 2022 in Birmingham, Ala., will play their rst home game April 30.

What’s di erent for the USFL this time around? Plenty, including that the league is owned by a single entity — Fox Sports — not by ashy single team owners like real estate mo-

gul Donald Trump, who owned the New Jersey Generals (and who went on to become president of the United States, if you recall) and metro Detroit-based mall developer A. Alfred Taubman, who owned the Panthers in the ’80s. is time, the Lions and Panthers are partners of a sort, according to league Chair and Fox Sports CEO Eric Shanks, with the NFL team as the landlord for the USFL a liate.

Going back to the o ce? Here are some good lunch options

It’s been debated if the COVID-19 pandemic led to the end of the business lunch, but that premise will be tested as more people return to the o ce and dine out nearby.

ere is promise on the horizon with General Motors Co. and its roughly 35,000 salaried employees in Michigan set to return to their workplaces at least three days a week starting Jan. 30.

ere are many restaurants, diners and bars in Detroit and across the metro area that have stayed open for lunch despite the setbacks the pandemic and its economic impact have presented. Others have reintroduced lunch service after cutting back on days and hours of operation for the better part of the last three years. Be

sure to call to make sure your intended destination will be open.

Following is a look at some lunch spots from downtown to the proving grounds.

Downtown Detroit

 Joe Muer’s Seafood is riverfront restaurant in the Renaissance Center may be the go-to spot for General Motors Co. sta ers upon their return to the automaker’s headquarters. On a sunny day, the view of the Detroit River is outstanding. As for the food, the deviled crab balls are a unique appetizer. Same for the lobster corn dogs. e roasted barramundi (Asian sea bass) is a standout served with lobster and crab stu ng, green beans, honey carrots and black garlic. We hear there’s a great happy hour here, too.

Hours and more details: joemuer. com

 The Apparatus Room is restaurant, located in the Foundation Hotel across from the Huntington Place convention center, o ers “iconic New American cuisine rooted in Midwestern ingredients.” And cocktails, like the house Rock & Rye, are a menu unto themselves.

Hours and more details: detroitfoundationhotel.com/apparatus-room

 Townhouse is newly renovated downtown restaurant is a go-to for a classy lunch. It boasts a New American menu that includes burgers and tuna nicoise to salads and a chicken schnitzel sandwich.

Hours and more details: townhousedetroit.com

Eric Shanks (left), FOX Sports CEO, and Darryl Johnston, USFL executive vice president of football operations and a former Dallas Cowboys fullback, Wayne County Executive Warren Evans, Detroit Mayor Mike Duggan and sports broadcaster Curt Menefee. CITY OF DETROIT VIA FLICKR

JAY DAVIS AND BETH REEBER VALONE

The Apparatus Room, located in the Foundation Hotel across from the Huntington Place convention center, o ers “iconic New American cuisine rooted in Midwestern ingredients.”

ROOM

Long road ahead toward Packard Plant site redevelopment

Another marker was hit in Detroit’s long-running quest to demolish the Packard Plant on the east side.

But don’t get your hopes up for something new to rise in its place quickly. Getting a development out of the ground there will be a challenging process complicated by a host of factors.

But rst things rst: e city said Tuesday that it has started demolition on the Packard Plant property it owns at 1539 E. Grand Blvd., across from the Fernando Palazuelo-owned chunk of the massive, historic former auto factory.

LaJuan Counts, the director of the city’s demolition department, said Tuesday morning while talking to reporters outside the building as crews from Carleton-based Homrich Inc. were tearing it down, that demolition — minus the facade, which is expected to be saved — should be complete by March.

Eventually the city envisions razing virtually all of the plant that has been a hulking symbol of Detroit’s decline, and a huge portion of which Palazuelo purchased in a Wayne County tax-foreclosure auction in 2014 for just $405,000. In all, he picked up dozens of parcels totaling some 3.5 million square feet, including the administration building on Grand Boulevard.

Tearing the plant down started in September, when Mayor Mike Duggan and other o cials kicked o the demolition of a Palazuelo-owned building at 6199 Concord St., the rst Packard property Palazuelo owned to come down.

It was a start. And Tuesday’s an-

nouncement is another.

e property is at 631 Orleans St. in the city’s Lafayette Park neighborhood. It has 92 units with 69 one-bedrooms averaging 650 square feet with an average asking rent of $1,195 per month; and 23 two-bedroom units averaging 900 square feet with an average asking rent of $1,495 per month, according to CoStar Group Inc., a Washington, D.C.-based real estate information service.

“Central Park Apartments is a great asset in a great Detroit neighborhood,” Justin Golden, co-founder of Greatwater, said in an email. “The building is in good shape and we intend to continue maintaining it at a high standard for its residents. We are excited about all the development happening in and around Lafayette Park including the I-375 project and riverfront investments.”

Counts

ere’s still a long ways to go before the site’s 40 acres or so — bifurcated by East Grand Boulevard — become ... well, something else, whatever that may be.

Developers will have a host of issues to contend with.

First, the boulevard itself represents a big barrier toward redevelopment, with about half of the property north and half of the property south. So rather than a contiguous 40 acres, you’re dealing with 20 acres or so on each side — making it trickier from a developer perspective.

Secondly, as I have noted before, Palazuelo has pretty deftly kept control of some key parts of the property even though he surrendered many to

foreclosure last year under the weight of hundreds of thousands in unpaid taxes and Detroit Water and Sewerage Department bills.

So ownership of the plant itself also complicates the matter ... at least for the time being.

But Charles Raimi, Detroit deputy corporation counsel, said in an email on Tuesday that the city is moving on making Palazuelo pay for demolition costs it has incurred tearing down 6199 Concord; if Palazuelo doesn’t pay those, the city will pursue taking title to other Packard Plant properties he still owns.

And one expert pointed to demolition and cleanup costs also being key challenges (the city received $12 million from the state for future Packard Plant demolition, so that certainly helps).

Couple all those with what that expert described as a somewhat funky, narrow site shape north of Grand Boulevard bounded by Concord to

the east and railroad tracks to the west and you’re left with a host of issues that still need to be sorted through.

In addition, the ultimate question of what ends up at the site will be key.

For years, Palazuelo had oated a quasi-Bohemian, eclectic mix of uses at the site — ranging from apartments to light industrial, art galleries to breweries and o ce space — but in the last couple years pivoted his vision to what real estate observers have long said was the site’s optimal use: industrial and warehouse space.

We’ll see if that’s the ultimate use that materializes — whenever something does.

Central Park Apartments sells for $11.6 million

Detroit-based Greatwater Opportunity Capital has purchased the Central Park Apartments for $11.6 million.

e sale, which nalized late last year, was brokered by the South eld o ce of Berkadia.

e previous owner, an entity called Central Park Detroit Holdings LLC, paid $6.2 million for the property in March 2017, according to Detroit land records.

“Central Park will bene t greatly in this situation as the buyer plans to continue the initial improvement plan started by the seller prior to the pandemic,” Kevin Dillon, senior managing director of investment sales for Berkadia, said. “ e property is poised for property and unit interior upgrades creating an outstanding living experience for the residents. It was an excellent experience working with both the buyer and seller. is was a strategic acquisition for Greatwater as they continue to add to their Detroit holdings.”

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

The city of Detroit has started demolition on the Packard Plant property it owns at 1539 E. Grand Blvd., across from the Fernando Palazuelo-owned chunk of the massive, historic former auto factory.

Demolition contractors are expected to nish razing this city-owned Packard Plant building by March. KIRK PINHO/CRAIN’S DETROIT BUSINESS

Elliott President, Bank of America Detroit

Holocaust Remembrance reminds us of responsibility

Less than two weeks after commemorating the life and legacy of the great Dr. Martin Luther King Jr., a lesser-known commemoration takes place; on Jan. 27, the world marked International Holocaust Remembrance Day. e lessons we as Michiganders and as Americans must learn from that terrible time in human history are today thrown into sharp relief.

Universal pre-K can o er boost to state’s economy

 If Michigan is serious about its economic growth and improving the labor market, universal pre-kindergarten is nearly imperative.

Gov. Gretchen Whitmer called for a “Pre-K for All” plan in her annual State of the State address Wednesday night. While her speech was sparse on details, Michigan’s economy, businesses and workers would stand to bene t from such a plan.

“Every parent knows an early start is critical to their child’s future,” Whitmer said in her speech. “It’s why we read, talk, and sing to our babies, worry about nding a great child care provider and have wait lists for great preschools.”

Universal pre-K would further shift dollars that families spend on day care for 4-yearolds to a publicly funded program, presumably including public school systems. It’s currently unclear whether private day care centers would stand to bene t under the proposal, but the state’s current Great Start Readiness Program does include private centers.

Universal pre-K has long garnered support from the business community. Business Leaders for Michigan, the Small Business Association of Michigan, Detroit Regional Chamber and chambers from all over the state have supported several di erent plans to expand preschool access.

Currently, nine other states, Washington D.C., and several municipalities o er a form of universal pre-K. e results are hard to dispute.

A May 2021 study by economists at University of Chicago, Massachusetts Institute of

Technology and University of California-Berkley examined Boston’s public pre-K program, which started in the late 1990s and selected participants through a lottery. e economists tracked the outcomes of about 4,000 students in the lottery program between 1997 and 2003, making the enrollees between 19 and 26 years old now.

e kids in the public preschools were less likely to get suspended and more likely to take the SAT. But it’s the educational outcomes that stand out. Children in the program had a high school graduation rate of 70 percent, above the 64 percent of those not in the program. Plus, 54 percent in the program went to college after they graduated, compared with just 46 percent outside of the program.

Naysayers point to a lack of short-term bene ts to universal pre-K programs — and there is some evidence to back that. e Boston study showed no improvement in standardized testing performance. And researchers from Vanderbilt University in Nashville followed nearly 3,000 disadvantaged Tennessee children, with a portion in preschool programs. e children who attended preschool, in fact, did slightly worse on standardized tests. Children in third and sixth grades who attended preschool scored about 1 percent to 4 percent lower scores in reading and math testing, according to the 2021 study.

Jews are being verbally and physically attacked in our own backyards, most recently in the Dec. 2 antisemitic incident at Temple Beth El in Bloom eld Hills. Our heightened security is matched only by our heightened sense of anxiety. Who will be targeted next? Will there be physical violence? Are Jews in America safe?

At e Zekelman Holocaust Center, we believe that businesses have an important role to play in creating a safer and better world, one free of antisemitism and all prejudice. e diversity, equity, and inclusion movement must lead this important e ort.

In a new Skillsoft survey of 1,000 professionals, 72 percent of respondents reported that corporate social responsibility has become more important since the pandemic — 40 percent said that “doing the right thing” guides their e orts.

We are assisting companies with their corporate social responsibility and DEI initiatives. In the last few months, nearly 1,000 business professionals have participated in museum tours, education programs and virtual museum experiences at e Holocaust Center. Corporate education makes up almost a quarter of our adult education programs.

Visiting business leaders to e Holocaust

Center learn that the darkness that descended over Europe during WWII was a result of everyday choices made at every level of society. ey learn how business leaders themselves were complicit during the Holocaust. Many corporations pro ted o the murder of innocent people, while high percentages of individual business professionals were bystanders, failing to help their fellow coworkers. Some major corporations helped the perpetrators, by bene ting from the slave labor of Jews and other victims of Nazi racist ideology, producing the materials and machines used in the killing centers as well as in the greater war.

Despite this, a few courageous business leaders and professionals chose to defy the Nazis by defending their Jewish employees and colleagues, helping them escape captivity and extermination. e Spielberg movie “Schindler’s List” is a dramatization of one such e ort.

Education is society’s best safeguard against hatred. Many in uential people working in the realms of politics, culture and economics espouse strong antisemitic beliefs, exploiting their audience’s ignorance. Recent examples include professional athletes citing lms denying the Holocaust happened; media personalities who promote the canard that Jews are “replacing” the white race; and politicians and musicians who recycle tropes about Jews’ outsize in uence, normalizing antisemitism and hate.

We encourage businesses, places of learning, and law enforcement to schedule a tour at e Holocaust Center. Come and be inspired by the study of Holocaust history to become upstanders today, to take responsibility for business practices and create institutional cultures that value and celebrate diversity and inclusion.

DANIEL SAAD/CRAIN’S DETROIT BUSINESS

UNIVERSAL PRE-K HAS LONG GARNERED SUPPORT FROM THE BUSINESS COMMUNITY.

RABBI ELI MAYERFELD

Rabbi Eli Mayerfeld is CEO of e Zekelman Holocaust Center

THE DIVERSITY, EQUITY, AND INCLUSION MOVEMENT MUST LEAD THIS IMPORTANT EFFORT.

ZEKELMAN HOLOCAUST CENTER VIA FACEBOOK

ANALYSIS

Dustin WALSH

See WALSH on Page 17 The Zekelman Holocaust Center in Farmington Hills.

Chip shortage holding up your auto repair? You’re not alone

GRAND RAPIDS — I was on my way to vacation in Petoskey last June when a warning message ashed across my Ford Focus dashboard and the car came to a halt on northbound U.S. 131. I haven’t driven it since.

My husband and I had the car towed to Keller Ford in Walker, thinking we’d get it back in a couple weeks. ey told us it would be at least a month, which seemed crazy at the time.

Six months later, we’re still waiting.

My Focus is one of a slew of 2014 models that Ford recalled for a faulty transmission control module. I’m sure I got a notice myself — likely mistaken as junk mail and tossed.

It turned out the x was a semiconductor chip, which are still in drastically short supply for automakers and repair shops globally. It didn’t help that the Focus was one of the most popular vehicles of its day — especially in Ford’s home state.

From there, our car troubles snowballed. Our second vehicle was at home on the fritz, and the dealership was fresh out of loaners for us to drive — another upshot of the chip shortage. eir onsite Enterprise Rent-A-Car was also tapped.

DEALS & DETAILS

 MERGERS & ACQUISITIONS

 Salute Mission Critical, Clinton Township, a data center services provider, acquired Iconicx Critical Solutions LLC, Amsterdam, N.Y., a provider of commissioning, testing and consulting services for data centers. Websites: salutemissioncritical.com, iconicxllc.com

 Phoenix Innovate, Troy, a marketing communications rm, acquired UN Communications Group Inc., Carmel, Ind., a commercial printer. Websites: phoenixinnovate.com, uncommgroup.com

 Luxit Group, Farmington HIlls, an automotive lighting supplier and afliate of New Water Capital Partners I LP, acquired a manufacturing facility in Pulaski, Tenn., from Proper Group International LLC. Website: LUXITGroup.com

 Dawn Foods, Jackson, bakery manufacturer and distributor, sold its frozen bakery manufacturing business in Europe, Africa, the Middle East, Asia and the Paci c, to Europastry, Barcelona, Spain, a baked goods producer. e sale includes Dawn’s frozen bakery manufacturing plant in e Netherlands and R&D facilities in the United Kingdom. Dawn Foods will continue to manufacture and distribute bakery ingredients across Europe, Africa, the Middle East, Asia and the Paci c, North America and Latin America. Website: dawnfoods.com

We nally called a few more rental companies, holding out hope for an alternate route to paradise. Several were booked a week ahead. We eventually found a Honda Odyssey at the Gerald R. Ford Airport. We rode the dealership’s free shuttle home, took a cab to the airport to get our rental, and were nally back en route to Petoskey.

In the time since, we’ve gotten our second car xed, had it break down again and gotten it xed again. e dealer where our Focus was waiting was even acquired by LaFontaine

 Altair, Troy, a software company, invested $10 million in Xscape Photonics, New York, N.Y., a start-up that developed patented technology for photonic chips for ultrahigh-bandwidth connections. Website: altair. com

Polk & Associates, Bingham Farms, an accounting, audit, tax and consulting services rm, merged with Holder & Jacobs CPA PC, South eld, an accounting rm. Website: polkcpa.com

 NEW SERVICES

 White Glove, Birmingham, a marketing company specializing in client acquisition and engagement services, launched a simpli ed pricing structure. Website: whiteglove. com

 Lawrence Technological University, South eld, has formed the College of Health Sciences, its fth college within the university, re ecting the university’s addition of several health care education programs over the past six years. LTU introduced a Bachelor of Science in Nursing program in 2017, in partnership with the health care group Ascension Michigan. e university added a Master of Science in Healthcare Management degree in 2019 and Master of Science in Physician Assistant Studies and Master of Science in Cardiovascular Perfusion programs in the Fall 2022 semester. Website: ltu.edu

Automotive.

We’ve borrowed my in-laws’ truck, carpooled, rideshared and stayed home more than we ever thought possible. en, last week, we nally got a loaner.

Max Muncey, senior manager of corporate communications for LaFontaine Automotive, said his service director describes the wait for Ford’s TCM part as an “intergalactic back order.”

“We empathize,” Muncey said. “If we could build the component, we would have by now.”

Dave Wright, of Shaheen Chevrolet in Lansing, said customers at his service department have learned how to live without their vehicles the same way we have. Teenagers aren’t getting their own cars, more commuters are taking the bus, people are going out less and those with an in-person job get dibs on the household car.

“Priorities have got to shift a little bit, as opposed to being so accustomed to the land of plenty,” he said. “As you know, we Americans are always spoiled by that.”

My spouse and I are lucky to have jobs that can be done remotely. But in Grand Rapids, where public transit doesn’t even service every suburb, I often wonder how line workers, servers, teachers and families with kids are getting by.

I doubt they’d see having a working car as a luxury.

At any rate, I’m looking forward to being spoiled again someday soon. Whenever that is.

Contact: rachel.watson@crain.com

(989) 533-9685; @RachelWatson86

Six months ago, I took my Ford Focus for a simple repair. I haven’t driven it since.

My 2014 Ford Focus broke down in June 2022 and I haven’t seen her since. | RACHEL WATSON/CRAIN’S DETROIT BUSINESS

Rachel WATSON

2023 PRIORITIES FOR LAWMAKERS

INSIDE: Ideas from industry leaders and experts to help solve the challenges in tax policy, infrastructure, education, climate change and economic growth: PAGES 9-13

ONLINE: Read stories examining such issues as access to child care, the obstacles facing cannabis businesses and other challenges at CRAINSDETROIT.COM/CRAINSFORUM.

ON THE AGENDA

5 key issues likely to get attention from governor, legislators in Lansing. | BY

DAVID EGGERT

Michigan Democrats enter 2023 with, in their words, pent-up policy ideas after gaining full control of state government for the rst time in nearly 40 years. There is no shortage of issues to tackle, at a time the state is ush with a multibillion-dollar surplus, but a recession is looming. Taxes. Economic development. Education. Infrastructure. Climate change. They are among several priorities on the agenda for 2023 and beyond. Take a closer look:

Gov. Gretchen Whitmer, lawmakers, state leaders and others gather at the Michigan Capitol in Lansing on Jan. 1 as the governor is sworn in for her second term in o ce.

Economic development

The issue: Michigan is engaged in intense multi-state competition to entice EV, microchip and other manufacturers that can secure federal tax credits to onshore production in the U.S.

Where Michigan stands: More than a year ago, the state lacked a large fund to lure companies with cash incentives or support for site preparation and infrastructure upgrades. It now has one after Ford Motor Co. announced EV facilities in Tennessee and Kentucky. A factor, albeit just one of many, was Michigan’s lack of build-ready mega sites. e new Strategic Outreach and Attraction Reserve Fund is being used to prep land and to dangle money at automakers and battery manufacturers amid the transition from gas engines.

COMMENTARY: A look at some of the successes and opportunities: Page 11

e Legislature approved an additional $150 million deposit into the SOAR account last week. Gov. Gretchen Whitmer has told Crain’s that the fund should have money on an ongoing basis rather than the process being “project by project, appropriation by appropriation.” Legislation that would have used taxes generated from SOAR-funded projects to replenish the account every year died at year’s end, but a new push is expected. SOAR, proponents say, helps the state compete for large-scale expansions at a particularly crucial time.

Taxes

The issue: Michigan has an estimated $9.2 billion budget surplus, some of which Gov. Gretchen Whitmer and lawmakers plan to give back to taxpayers dealing with high in ation.

Where Michigan stands: e overall tax burden is relatively low. e e ective state and local tax rate, taxes paid by residents as a percentage of the state’s share of net national product, is 8.6 percent, according to the Tax Foundation. at is fth-lowest in the U.S. e Citizens Research Council of Michigan has said that while it may not feel like it, state government takes a smaller bite out of the average Michigander’s paycheck than it did 20 years ago.

What is next: Whitmer and Democrats who now narrowly control the Legislature have two major tax proposals, have moved to unwind portions of a tax overhaul that Republicans enacted in 2011.

One change would boost Michigan’s earned income tax credit, now 6 percent of the federal credit, to 30 percent, retroactive to the 2022 tax year. It is refundable, which means people with less money get a refund if they do not owe taxes. Expanding the credit has support from a broad coalition of business, religious, health and social services groups, which say 750,000 lower-income householders need help paying bills.

e second proposal would repeal the “retirement tax,” bringing back income tax exemptions on pension income for 500,000 households. It was wrong to raise taxes on pensioners who had expected their benets to be tax-free, Whitmer said, and “we are in a position to make it right.”

Republicans, who pushed for broader tax relief last year without support from Whitmer, are open to an EITC expansion.

COMMENTARY

Other ideas:

Republicans also support a senior tax cut, one they say would cover more types of income and people.

Sen. Thomas Albert, a Lowell Republican, said simply reversing the changes that impacted pensioners “is not a fair way of doing it” because retirees with government bene ts bene ted the most under the old tax structure. Doubling exemptions for all seniors and lowering the age to qualify is a way to “achieve the same end and help all residents and not just a select few.”

The debate comes as policymakers prepare for a possible trigger of an automatic cut to the 4.25 percent individual income tax rate because general tax revenues boomed last scal year.

Citing the surplus, Whitmer told Crain’s she does not anticipate proposing to o set lost revenue from a retirement tax repeal with higher taxes on some businesses, like she tried in 2019. She also supports creating a research-and-development tax credit to attract companies in the electric vehicle battery, semiconductor and life sciences.

ey have successfully pushed for it to be retroactive so residents can le returns or amended returns this year and qualify.

Senate Minority Leader Aric Nesbitt said a child tax credit should be enacted, too.

It’s time to get things right with retirement tax

Michigan has a problem.

What is next: Economic development ocials and government leaders from both parties say the SOAR account has put the state “in the game,” signaling it is serious after big tax incentives were eliminated by Gov. Rick Snyder but later made a comeback in a di erent program that did not last long.

e SOAR fund will have more than $200 million left after legislators soon nalize three large transfers and Gov. Gretchen Whitmer signs a bill depositing $150 million more into the account. More than $1.5 billion will have been disbursed in a year, 15 times the annual allotment to what had been the state’s agship business attraction and retention tool.

Other ideas:

“ is is a window over the next arguably 18 to 30 months that’s going to be vital for Michigan to have an outsized impact,” said Quentin Messer Jr., president and CEO of the Michigan Economic Development Corp. and chair of the Michigan Strategic Fund. “ e U.S. is nally catching up to what the rest of the world has been doing, which is subsidizing companies particularly in Asia and Europe to a lesser extent for R & D and helping de-risk signi cant amounts of capital investment because there will be 18, 20 months of upfront ramp-up where companies are not making pro ts from signi cant investments. at’s part of the ethos in which we’re in. is ethos won’t be (here) forever. So you got to win now.”

Some experts are skeptical that such incentives pay o in improving a state’s economic competitiveness. They are ine ective and expensive, they said. Michigan, according to critics, should focus on bolstering college degree attainment and knowledge-based jobs, though others say manufacturing increasingly requires technology skills and remains crucial.

A dozen years ago, in the painful wake of the Great Recession, the leaders of our embattled state sought scal nancial relief through various legislative maneuvers, including a 4.25 percent retirement tax. Enacted through Public Act 38 of 2011, this new tax blindsided Michigan retirees who unexpectedly saw their budgeted monthly incomes diminished.

To understand the full impact of this tax, one must look through the lens of the demographic. e median annual income for a Medicare bene ciary is $26,000 and from that modest income, housing and food costs in Michigan carve out nearly $11,000, according to the Massachusetts Institute of Technology living wage calculator. is demographic also endures the highest medical costs and prescription drug costs of any other age demographic.

Our state did a shameful thing in 2011 when it pulled the rug out from under an already nancially vulnerable population of people who worked hard, played by the

rules and paid their dues to retire with dignity. ey believed their retirement income would not be diminished by a state tax, but they were betrayed, forcing many to go back to work or delay retirement. To this day, the retirement tax continues to impact new waves of retirees, including the surge of COVID-19 retirees. Enough is enough.

As a erce advocate and defender of those 50 and older, AARP has fought Michigan’s retirement tax from the beginning. Today, with a new Legislature in place, there’s momentum in Lansing through House Bill 4001 and Senate Bill 1 to right this wrong and remove the retirement tax burden from the backs of our retirees. To make it happen, AARP is sounding the alarm and asking all Michiganders, including its nearly 1.3 million members, to turn up the heat by urging state legislators to vote YES on repealing the retirement tax. To contact your state legislator, visit aarpmi.org/repeal.

Let’s get this done once and for all.

Paula D. Cunningham is state director of the AARP Michigan.

Michigan is hoping to lure more EV manufacturers to the state like Ford Motor Co.’s Rouge Electric Vehicle Center (REVC) in Dearborn where a Ford F-150 Lightning is on the production line. | BLOOMBERG

2023 PRIORITIES FOR LAWMAKERS

The issue: Disruptions from the pandemic have resulted in declines in student test scores, which already were a concern before COVID-19 hit.

Where Michigan stands: Michigan fourth-graders rank among the bottom 10 states in reading, a key predictor for student success. ey fell to 43rd in 2022, from 32nd in 2019, in the National Assessment for Education Progress, known as the “Nation’s Report Card.” While reading scores for many states improved between 2003 and 2019, Michigan’s dropped during that period. en they decreased more than twice as much as the national average over the last three years. Declines were steeper among Black and low-income kids.

What is next: Advocacy groups want to change the K-12 funding model to better re ect that it costs more to educate disadvantaged students. A decadeslong gap in base aid among districts was nally eliminated in 2021. And, in 2022, the state met its commitment to provide 11.5 percent more for each at-risk kid, which rarely happened previously.

Critics say it is not nearly enough. A projected $4.1 billion school aid fund surplus, they say, means Michigan can act with urgency to address the crisis.

ey favor an “opportunity index,” so poor students in higher-poverty areas get more per pupil than poor kids in better-o areas. e scale would start at an extra 35 percent for low-income children, three times the current

COMMENTARY

weight, in the wealthiest areas and an additional 100 percent, or more than eight times the weight, for poor kids in the most impoverished areas.

“Money matters in education. Money matters particularly for low-income students,” said Jen DeNeal, director of policy and research for e Education Trust-Midwest. “What the research has shown us is that if you’re a low-income student in a high-poverty district, it actually really does take more dollars to educate you and to get you where you need to be than it does if you’re a low-income student in a very wealthy place.”

e group also supports sizable funding weights for students whose rst language is not English and those with disabilities. Launch Michigan, a coalition of business, education and labor leaders, also backs higher weights than are in place now.

Michigan is one of 15 states providing less state and local funding to its highest-poverty districts than to its lowest-poverty districts, according to Education Trust-Midwest.

How Gov. Gretchen Whitmer and legislators will proceed is unknown. She told Crain’s that while funding strides have been made under her watch, “we’ve got to take that to the next level and make sure that these investments are smart and getting us better outcomes for our students.”

Other ideas:

A host of other education issues could be on the front burner, too. Charter school transparency is one, given Democrats’ newfound legislative majorities. So is tutoring, which is designed to reverse learning loss from the pandemic.

Solutions to help solve Michigan’s education crisis

As Michigan and other states work toward recovering from the pandemic economically, there continues to be a major e ort needed to recover educationally, as well.

Recent data demonstrates the state’s educational performance fell farther and faster in key subjects during the pandemic than many states did that were better positioned systemically before the pandemic.

Before the pandemic, Michigan was one of only 18 states performing worse in early literacy than it was in the early 2000s on the National Assessment of Educational Progress. In fact, between 2003 and 2019, Michigan’s fourth grade reading scores had fallen by approximately one half of a point, while the national average increased by three points during that same period.

In 2022, Michigan ranked 43rd in the country on fourth grade reading, falling from 32nd in 2019. We fell farther and faster during COVID-19 on key subjects — dropping six and a half points in fourth grade reading, which was more than twice the national average in terms of points lost between 2019 and 2022. Michigan’s fourth graders are now performing 7 points lower on the NAEP reading assessment than they were in 2003.

e result of the state’s ongoing educational challenges means that while the recent ndings from the 2022 NAEP, often called the nation’s report card, were concerning for all Michigan students, they were especially so for students of color and from low-income backgrounds.

Black students’ performance on fourth grade reading fell 11 points from the 2019 NAEP, dropping

Michigan into the bottom ve states in 2022, while Michigan’s students from low-income backgrounds ranked the 11th worse in the nation, down from a ranking of 32nd in 2019, according to our recently released State of Michigan Education Report, Beyond the Pandemic.

At the same time, there is much that gives me hope for public education in our state. More organizations and leaders are calling for dramatic investment and thoughtful change to improve public schools.

Indeed, Gov. Gretchen Whitmer’s plan to prioritize investment in education also accompanies other calls for critical changes among legislators and others. ere appears to be rising political will and an emerging movement for change, including through a growing coalition of advocates and other stakeholders.

In our report, we outline an Opportunity 10 agenda of 10 important moves Whitmer and policy leaders should leverage as they consider how to improve the public education system, particularly for the state’s most vulnerable students. ree priorities:

 Invest in educational recovery

New evidence from researchers at Harvard and Stanford universities, as well as my organization’s recent report, underscores how much learning was lost for many students during the pandemic, with urban and rural students often demonstrating much greater learning losses.

ere is much state leaders and districts can do to address students’ un nished learning — and thankfully, there are resources available to

do so. As of January, about 80 percent of the American Rescue Plan Elementary and Secondary School Emergency Relief Fund III dollars are unspent in Michigan — or about $3 billion, according to the U.S. Department of Education.

e profound need — combined with signi cant, rare resources — provides the opportunity for state and district leaders to invest in strategies to ensure all students’ learning is caught up and accelerated.

We urge leaders to support a plan that would leverage federal and state dollars to provide evidence-based strategies to address un nished learning. For instance, intensive tutoring is a practice that can help students catch up.

My organization is among those advocating for this plan, which should include not only state investment, but also robust mechanisms to evaluate the dollars’ e ectiveness and a system of scal transparency and oversight to ensure the dollars are being used as intended.

 Find equitable funding system

Michigan has one of the most regressive school funding formulas in the country, according to state and national research. e state has been underfunding its students for more than two decades, and the state’s academic outcomes are, in large part, a re ection of that. We are truly in a crisis.

Michigan should look to the nation’s leading education states for e ective new models of school funding systems such as Massachusetts, which is making great strides in creating a fair funding system that supports all students.

Indeed, Massachusetts’ funding system includes an index that accounts for levels of concentration of

poverty that impact schools’ ability to support learning. Some leaders in Michigan call this type of approach an “Opportunity Index” as such indexes are designed to create greater opportunity for all students.

An Opportunity Index makes good sense for Michigan. With such an index, Michigan would establish a weighted funding formula that would provide additional funding of 35 percent to 100 percent to students living in poverty, spread across 12 bands determined by concentration of poverty. Students with disabilities need greater funding. We support increasing reimbursements to districts to fund the needs of students with individualized education programs, including funding for special education expenses and specialized transportation costs. e state should make investments in rural districts to account for their higher transportation costs.

Here’s the opportunity: Michigan has a $3.1 billion surplus in the school aid fund, including $1.1 billion in ongoing funding and $2 billion in one-time spending. at surplus can be used to begin to support an Opportunity Index — and greater investment in English Learners and students with disabilities — while state leaders consider a long-term school funding overhaul that would move to a fair funding system.

 Commit to transparency, oversight

All of these proposed investments are long overdue, yet they need to be done thoughtfully and strategically — and that means they need to be paired with a strong new system of scal transparency and oversight.

Presently Michigan lacks a system which allows the public to evaluate easily if dollars targeted to students from speci c backgrounds are

reaching those students and the effectiveness of spending at the school level for impact on student learning.

Lessons from California show why it’s imperative for Michigan to create such a system. In recent years, California overhauled its funding system and dramatically increased its investment in its public education system. However, a growing body of evidence shows the dollars are not being spent as intended.

In an evaluation of California’s Local Control Funding Formula, researchers found only about half — about 55 cents — of every dollar committed to high-needs students was actually spent in the schools with the most high-needs students.

Fiscal transparency and accountability are needed more than ever with the federal funding provided through the Elementary and Secondary School Emergency Relief. Whitmer and legislative leaders should ensure these dollars are being spent on research-backed practices to improve student outcomes.

at’s why we are among the organizations that have joined the Michigan Partnership for Equity and Opportunity coalition, urging legislators to couple new investment in public education with strong, evidence-based systems of scal accountability and transparency, just as leading education states do.

Desmond Tutu once said, “Hope is being able to see that there is light despite all of the darkness.” Amid the troubling data, there is light.

It’s clearer than ever that Michigan can and should embrace this moment — and give all students a chance at success. e Opportunity 10 agenda outlined in our new report would do just that. We are optimistic that our leaders will make the most of this opportune time.

Amber Arellano is executive director of the Education Trust-Midwest.

Year of economic successes, challenges, opportunities

At the start of 2022, we made it clear Team Michigan was on track to have a momentous year — and as we kick o 2023, while we have more work to do, we have delivered signi cant economic opportunity to communities across both peninsulas.

Collectively, alongside local and regional partners, the executive and legislative branches of state government have continued to put Michiganders rst by maintaining focus on the economic health of the state by securing more than $14 billion in EV and battery manufacturing investments, leveraging more than $600 million in private investment for placemaking support for communities around the state, elevating our support for small businesses and entrepreneurs, nding innovative new talent solutions for our employers, and showcasing the opportunity Michigan o ers businesses, travelers and prospective new residents.

Team Michigan’s actions demonstrate that we will out-hustle, out-compete and out-perform our competitors. is Michigan grittiness resulted in winning generational in-

vestments from both domestic and foreign companies. From transformational EV, battery and semiconductor investments that will create good-paying jobs, increase economic activity in our downtowns and grow the customer base for our small businesses across the state, to recognizing the need to o er real-time talent solutions by creating two Talent Action Teams that leverage public/private partnerships to support the mobility and semiconductor industries — we are laser-focused on creating a championship economy in Michigan where economic possibility is felt and realized by all our friends and neighbors.

Looking back to the rst quarter of scal year 2023, the MEDC was able to help support investment projects throughout the state to make longterm equitable growth a reality for a greater number of Michiganders living in rural, suburban and urban areas across the state.

In Big Rapids, Gotion announced more than $2.3 billion of capital investment for the construction of an EV battery component manufacturing facility that will result in the cre-

ation of 2,350 jobs for that region.

In the Tri-City region, Hemlock Semiconductor announced a $375 million expansion that will result in 170 jobs in omas Township to expand its hyper-pure polysilicon facility, a key component in semiconductors.

Marquette’s entrepreneurial ecosystem and incredible recreational opportunities will be accelerated by Shop House Park, where a technology center, R&D center and outdoor recreation incubator will eventually lead to innovations as transformative as the snowboard was when it was created here over 50 years ago.

Michigan’s momentum continued into 2023 when GM announced earlier this month nearly $800 million of investment in their Flint and Bay City facilities that will lead to the retention of jobs in the region.

Good things are happening, and we look forward to more exciting opportunities on the horizon.

But trust and believe, our work is not done; just as we aggressively pursued a higher standard of excellence in 2022, we eagerly look forward to executing on opportunities in our pipeline throughout 2023 to bring more capital investment, job creation and supply chain independence to Michigan.

Economic development is a competitive endeavor, and we cannot — and will not — rest on last year’s successes.

We will ensure Michigan companies have no reason to look elsewhere for growth and will amplify efforts to attract companies to the state, regardless of size, by leveraging our business-friendly environment, low cost of living and access to worldclass talent enrolled in our technical institutions, colleges and universities — from the western U.P. to southeast Michigan and everywhere throughout our two beautiful peninsulas. 2023 will bring its own set of challenges and opportunities, yet the team at the Michigan Economic Development Corporation is poised to work alongside the governor, the bipartisan Legislature and our local partners to ensure that our economic victories continue this year. Working together and focusing on those values that unite us, Team Michigan will capitalize on our relatively stable weather, uniquely balanced quality of life, tremendous two- and four-year institutions and Michigan’s presence as an international state.

Amid all the positives, I realize that too many Michiganders are still not fully participating in the vibrant state

economy. Animated by Whitmer’s call to move mountains to secure opportunities for families across the state, MEDC, alongside other state agencies, is focused on enhancing a whole approach that streamlines permitting, creates more units of workforce housing and addresses the mental health of workers, in addition to our traditional focuses on business attraction, small business growth and Travel Michigan.

When it comes to securing the economic future of this state, we will pursue holistic economic development that places Michiganders rst. Winning transformational projects is a win for small business owners that have large new customers, families have increased employment options and communities have new sponsors for Little League teams and Girl Scout troops.

Economic development only matters because people matter, and MEDC will never lose sight that making the lives of our friends and neighbors better is the reason for MEDC’s existence. With this uni ed and future-looking spirit carrying us through 2023 and beyond, while there will be tests, I know that collectively we will have the answers that will guarantee our brighter future together.

Michigan, let’s get it, together.

Working to advance racial equity and economic mobility for the next generation in the Great Lakes region. JoyceFdn.org

Quentin L. Messer Jr. is CEO of the Michigan Economic Development Corp.

PRIORITIES FOR LAWMAKERS

Infrastructure

The issue: Michigan is spending big on infrastructure, thanks to state borrowing, coronavirus rescue funds, higher-than-expected tax revenues and a federal infrastructure package. But the funding is still short of what is needed after decades of underinvestment.

Where Michigan stands: e state’s roads are a poster child for what happens when policymakers wait too long to do something. Even after the passage of a 2015 law that raised fuel tax and vehicle registration fees to x roads and bridges, a state commission a year later found that an additional $2.2 billion was needed annually. Pavement conditions are projected to deteriorate over the next decade.

What is next: Gov. Gretchen Whitmer will not pursue another gas tax increase after her proposed 45-cents-a-gallon hike stalled in 2019. e state has been selling $3.5 billion in bonds to nance new construction projects and accelerate others between 2020 and 2024. And it is getting $300 million to $330 million additional federal highway dollars per year through the infrastructure law.

e Michigan Infrastructure & Transportation Association, a construction trade group, has commissioned a report to assess how much new spending is needed. Vice President of Government A airs Lance Binoniemi said the study, which may be released in February or March, will likely show the need is higher than the $2.2 billion identi ed more than seven years ago.

“ e Legislature has taken a little bit of an eye o the ball on road funding because the governor put in the bonding program and because the feds came up with a new infrastructure plan,” he said. “But we have not solved the problem by any means. … We’re trying to make up for decades of lost revenues, and you just don’t x that over a veyear bonding program or a ve-year infrastructure program out of the feds.”

Policymakers could begin to more seriously consider the long-term viability of declining fuel tax revenues helping to pay for roads amid the transition toward electric vehicles and more fuel-e cient cars like hybrids.

EVs make up about 5 percent of new vehicle sales in the U.S. S&P Global Mobility expects their share of auto sales to reach 8 percent in 2023, 15 percent by 2025 and 37 percent by 2030.

COMMENTARY

Other ideas:

Some states have optional pilot programs that charge motorists based on miles driven. Implementing something broadly would be complicated and appears to be a ways o , but groups representing road agencies, municipalities and public transit interests are starting to warn of an impending crisis.

EV drivers now pay an extra registration fee annually. Critics allege they are not paying their share compared to people who are taxed at the pump, while others say the fee discourages EV purchases at a time the state should be providing incentives the other way.

New funding plan needed to x roads, infrastructure

As Gov. Gretchen Whitmer begins her second term and new legislative majorities start their work at the Capitol, Michigan’s leaders should nally tackle the big issue facing our entire state: xing Michigan’s roads by developing an equitable, long-term, sustainable funding plan.

e solution to our road funding problem is a longterm investment plan that would dedicate the necessary resources to xing Michigan’s roads and keep them in good working condition while acknowledging the modern technology drivers use. Without a plan that provides stable funding for Michigan’s crumbling infrastructure, we continue kicking the can down the road while conditions only worsen.

Michigan has more than 120,000 miles of paved roadway and the cost

to keep roads in good condition is signi cant. As of 2022, more than 42 percent of Michigan’s lane miles are rated in poor condition. If we stay on the path we’re on, we’ll see that number rise to nearly 50 percent by 2031. is is unacceptable.

e 2022 TRIP Report estimated that the poor condition of Michigan roads costs the average household $4,845 annually due to tra c crashes, congestion caused by unreliable roads, and the cost to repair cars due to roads in bad shape. e report shows that if we don’t make a signi cant investment soon, the average household could be spending as much as $6,273 annually at the end of the next 10 years.

And it only gets worse.

e American Society of Civil Engineers issued a grade of D- for

Michigan’s roads in its Report Card for Michigan’s Infrastructure. And according to the American Road and Transportation Builders Association, 11 percent or 1,240 of Michigan’s 11,284 bridges, are classi ed as structurally de cient. Michigan families use these bridges to go to school, work and vacation.

It’s time to take investing in our infrastructure seriously.

Former Gov. Rick Snyder’s 21st Century Infrastructure Commission issued a report in 2016 that found Michigan needs an additional $2.2 billion in annual funding over a 20year period to get 85 to 90 percent of our roads up to good condition. Since then, Michigan’s leaders have not dedicated the needed funds to get our roads up to that level and our need has grown substantially since then.

Unfortunately, Michigan’s gas tax, which contributes about half of our funding for infrastructure construction and maintenance, is facing an uncertain future. With the rise in

fuel e ciency and popularity of electric vehicles, we are faced with declining revenues generated from the gas pump. at much-needed revenue will only continue to fall in the years to come.

In recent years, we’ve had a series of short-term infrastructure investments, such as the Building Michigan Together Plan that will pump $4.7 billion of state surplus and federal stimulus dollars into infrastructure repairs and upgrades. e federal infrastructure plan enacted in late 2021 is also providing a short-term boost over the next several years. And the $3.5 billion bonding program that began during Whitmer’s rst term provides another short-term injection of dollars for state trunklines through 2025. But these short-term investments are not nearly enough to get Michigan on the right track and they’ll be gone before we know it. ese investments fall well short of the

needed $44 billion of additional funding that Michigan needs over the next two decades. By only funding short-term xes, we aren’t making the necessary repairs to keep our roads in a good-working order for the long term. Instead, we continue to keep coming back every few years to x the same problems over and over again.

It’s clear that the way we’ve been funding Michigan’s infrastructure over the past several decades does not work.

Michigan’s leaders have the opportunity now to address this crisis head on and we look forward to working with them on this critical issue. It’s time to develop an equitable, long-term, sustainable funding plan that will put Michigan drivers rst and gets our roads back on the right track.

A long-term plan to pay for road repairs as fuel tax revenues decline could be a priority for lawmakers. | CRAIN’S DETROIT BUSINESS

Rob Coppersmith is the executive vice president of the Michigan Infrastructure & Transportation Association.

IT’S TIME TO TAKE INVESTING IN OUR INFRASTRUCTURE SERIOUSLY.

Climate change

Where Michigan stands: Gov. Gretchen Whitmer last year unveiled the MI Healthy Climate Plan. Her administration says Michigan is one of 14 states with “bold,” economywide goals such as reducing greenhouse gas emissions 52 percent by 2030 and achieving carbon neutrality by 2050.

What is next: Whitmer told Crain’s she wants to “codify that work so it doesn’t die on the vine” as recommendations only. “ ese are long-term issues, and we’ve got to have a change in mindset where we really enact things that are going to transcend one administration.”

e power sector, which accounted for about 30 percent of Michigan’s greenhouse gas emissions in 2019, has been transitioning to clean energy.

Utilities must supply at least 15 percent of their power from renewable sources, a requirement that leveled o a year ago. Whitmer’s blueprint calls for boosting the mandate to 50 percent by 2030 with legislation or formal commitments from utilities to regulators.

DTE Energy plans to retire what will be the state’s last remaining coal- red plant in 2035. at is ve years later than the Whitmer administration’s recommendation.

Charlotte Jameson, chief policy o cer for the Michigan Environmental Council, said the Legislature historically has done new energy laws every seven or eight years.

“We’re at that point now,” she said. “We could approach it from the perspective of, ‘Let’s do an energy policy rewrite and think about what aspects of the governor’s climate plan fold into that.’ e cornerstone of those energy rewrites has been the renewable energy standard and the energy-e ciency standards.”

Utility o cials may push back by noting they already are transitioning to cleaner energy and questioning the pace at which they would be mandated to do so.

e transportation sector was responsible for almost 28 percent of greenhouse gas emissions in 2019. e administration wants to use an inux of federal funding and other aid to build out a charging network to support 2 million electric vehicles on Michigan roads by 2030.

COMMENTARY

Other ideas:

Whitmer’s proposed incentives to spur EV sales stalled in the Republican-led Legislature last year. She could revive or tweak them following the ip to Democratic legislative control. She previously proposed a $2,000 rebate to buy EVs and a $500 rebate for at-home charging equipment.

Her administration also wants to reduce emissions related to heating homes and businesses by 17 percent by 2030. E ciency and weatherization spending could help. The plan urges incentive programs to convert from natural gas to electric appliances like heat pumps, with an emphasis on low-income residents.

Environmentalists, business lobbyists and others are anxious to see to what extent Whitmer and lawmakers try to turn goals into substantive policies.

ere’s no time to waste to mitigate climate damage

You’ve probably noticed that over the last decade we’ve seen unprecedented ooding, less snow, hotter summer heat waves and worse air quality. At the same time, decades of state rollbacks on landmark environmental policies and lack of much-needed modern policy solutions have left our environment vulnerable to degradation, and people vulnerable to pollution.

e good news? We have a unique opportunity with the new Legislature to combat climate change, while also creating lasting protections for Michiganders and the natural places we love. In her inaugural address, Gov. Gretchen Whitmer called for continued e ort toward carbon neutrality, saying, “Let’s tackle climate change headon while: creating jobs, lowering costs and protecting our air and our lakes, both Great and small.”

e challenge? ere’s a lot to do and little time to waste.

First, we must change the rules of the game For over a decade, Michigan has su ered the consequences of administrative rules and procedures that have systematically eroded environmental protections to the bene t of polluting industries. To heal these wounds and make government function better for Michiganders, we need to reverse these policies, cut red tape and restore transparency and citizen engagement in decision-making processes.

Second, we should put combating climate change and protecting our environment front and center in the state budget. Currently, Michigan is sitting on at least $5 billion in surplus revenue at its disposal. We should use $1.5 billion of that available money to implement the

MI A ordable, Healthy Homes Plan, a historic opportunity to tackle Michigan’s housing crisis, help lower monthly utility costs, remove toxins like lead from our houses, and make our homes climate-friendly, with supports for electric appliances, heating and cars.

Let’s put $1.35 billion toward cutting transportation emissions and reducing road deaths by building commuter rail routes, improving bus operations and creating more safe pedestrian and bike infrastructure. Let’s conserve our natural spaces and improve our parks by investing $500 million in our State Parks Endowment Fund.

ird, let’s clear the decks and take up the many great policies with bipartisan support that are teed up for immediate action. is includes protecting our children from dangerous lead exposure by passing ‘Filter First’ legislation to equip all child care centers and schools with ltered drinking water devices, and by ensuring all kids in

Michigan are screened for lead exposure. And we should pass building code updates to ensure our buildings and homes are more energy e cient.

Fourth, let’s get bold. We must pass historic, equitable policies that combat climate change. We have more environmental champions at the helm of legislative leadership and in the executive branch. Michiganders consistently demonstrate that our natural resources and communities are the beating heart of our state and that protecting those things is a priority. is is the key moment for us to think big and make impactful reforms in the face of climate change.

is means enacting a comprehensive climate proposal that includes sourcing 60 percent of our energy from renewables by 2030 and going 100 percent carbon-free in our electric grid by 2040. We all need to be driving cleaner cars, so the state should create incentives to help us get in them. And we need strong

standards that require 100 percent of all new heating equipment sales to be electric by 2035.

We must make sure everyone, especially those of us in communities hardest hit by storms and heat waves, has ample opportunity to participate in building a climate-friendly future for our state. All of these steps are cornerstones of meeting the goals in Whitmer’s MI Healthy Climate Plan. ey will also create jobs, boost our economy, protect our health, and contribute to a thriving, resilient Michigan — a Michigan we will all want to call home even if our climate changes. Bold environmental and climate action simply means protecting Michiganders and the places we love. As we embark on this new year, the opportunities to create lasting protections are abundant. Climate change isn’t slowing down, and our land, water, and air will continue to feel the impacts. at means we as Michiganders will, too, unless we turn those opportunities into action.

Conan Smith is president of the Michigan Environmental Council.

The issue: Climate scientists continue to warn of the dangers of clinging to fossil fuels that are warming the planet and sparking extreme weather events.

DTE’s Monroe Power Plant | BLOOMBERG

CRAIN'S LIST |

MICHIGAN CREDIT UNIONS

Ranked by 2021 assets

ResearchedbySonyaD.Hill:shill@crain.com

|ThislistofcreditunionsisofthelargestsuchinstitutionsinMichigan.InformationissuppliedbythecreditunionsandtheNationalCreditUnionAdministrationDecember2021reports, ncua.gov.Thisisnotacompletelistingbutthemostcomprehensiveavailable.NA=notavailable.NOTES: 1. LakeMichiganCreditUnionofGrandRapidsandUnitedFederalCreditUnionofSt.JosephmergedinOctober2016. 2. SucceededMarkShobe asCEOinApril. 3. SucceededPeteGatesaspresidentandCEO,e ectiveNov.1. 4. SucceededCherylDeBoeraspresidentandCEO. 5. SucceededMichaelPoulosaspresidentandCEO,e ectiveOct.15. 6. SucceededKarenChurchaspresidentandCEO onFeb.26. 7. VibeCreditUnionandOaklandCountyCreditUnionmergedinJanuary2019. 8. NamedpresidentandCEOinJuly.ReplacedAllanMcMorris. 9. FormerlyEducationalCommunityCreditUnion.RebrandedasArborFinancialCreditUnion, e ective Aug. 8, 2017.

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AUTOMOTIVE Piston Group

The Piston Group announced the appointment of Rosana Moura Garbacik as general counsel. She will be responsible for coordinating the overall legal affairs of the company, including direct support of internal constituents and interfacing with external counsel as required by the business. Garbacik comes to Piston Group with 15 years of North American and Latin American experience.

PUBLIC RELATIONS

Marx Layne & Company

Marx Layne & Company is pleased to announce that Michael Odom has been promoted to Senior Vice President. Since joining Marx Layne in 2006, Michael has delivered high-quality public relations results for clients that include Fortune 100 companies, nonpro ts, and privately held ventures. Active in leadership roles in the Hispanic and LGBT communities, he brings a wealth of experience in areas of community engagement, diversity, and inclusion to the clients he serves.

SOFTWARE

WorkForce Software

Advertising Section

TECHNOLOGY Incite Analytics

INSURANCE

Globe Midwest Adjusters International

Globe Midwest Adjusters International is pleased to announce that Leonard Cradit has joined the rm as Regional Vice President and head of our West Michigan of ce. Leonard brings more than 35 years of awardwinning real estate and sales experience to his position. Leonard’s extensive experience gives him a unique understanding of how to provide clients with a signi cant advantage throughout the property insurance claims process.

REAL ESTATE

Advocate Commercial Real Estate Advisors

Advocate Commercial Real Estate Advisors is pleased to welcome Diane Weisberg as Senior Vice President in the Detroit Of ce.

NONPROFIT

MIU Men’s Health Foundation

Andrea Hamilton has been named executive director of MIU Men’s Health Foundation, a nonpro t organization dedicated to men’s health advocacy. In this role, Hamilton, former divisional vice president for Rocket Mortgage, will be responsible for expanding the organization’s presence in metro Detroit and overseeing its signature events: Men’s Health Event, Run for the Ribbon, Blue Monday, and Cogs & Kegs. Hamilton is a graduate of Adrian College and a member of Alpha Phi International Fraternity.

INDUSTRY

Diane has over 18 years of commercial real estate experience representing both local and national companies with their real estate portfolios. She has extensive experience with tenant representation, portfolio management, and long-term strategic planning.

ACHIEVERS ADVANCING THEIR CAREERS

Neumarker

Razzino

WorkForce Software, the rst global provider of integrated employee experience and workforce management solutions, announced the addition of two seasoned SaaS executives to its leadership team to support the company’s continued business growth, geographic expansion programs and uphold its position as the number one workforce management software provider in the market.

Incite Analytics, the leader in innovative, data-driven digital solutions that help companies solve complex business problems, names Rita Brasler CEO. Brasler’s appointment marks the company’s new focus on driving growth and product innovation to address the increasing amount of data being created by a wide variety of industries. Brasler joined Incite in 2011 as a business intelligence developer and has since excelled in increasingly responsible roles including most recently as COO.

Comerica Bank’s COO to be based in Southeast Michigan

BY NICK MANES Crespi

COMPANIES ON THE MOVE ADVERTISING SECTION

HEADQUARTERS / NEW OFFICES

Lumen Pediatric Therapy St. Clair Shores, MI 888-485-8636 lumenkids.com

Lumen Pediatric Therapy is now open in St. Clair Shores. The state-of-the-art facility located at 26210 Harper Avenue, St. Clair Shores, MI 48081 is welcoming new families.

Lumen Pediatric Therapy is dedicated to enriching the lives of children with autism and provides comprehensive evidence-based services to help individuals maximize their potential. The team uses the latest and most widely accepted teachings and therapeutic methodologies based in Applied Behavior Analysis (ABA), Occupational Therapy, and Speech Language Pathology to deliver individualized plans of care to children and families, helping children with autism shine their brightest. Please call 888-4858636 or www.lumenkids.com to learn more.

MERGERS & ACQUISITIONS

Clayton & McKervey South eld, MI 248-208-8860 claytonmckervey.com

CPA rm Howe & Holscher has joined Clayton & McKervey effective January 6, 2023. This move expands Clayton & McKervey’s private client services group, led by Shareholder Margaret Amsden, CPA, MST, AEP, and enriches the rm’s real estate focus. Clayton & McKervey welcomes new team members Director Lisa Holscher and Client Service Assistant Debbie McDonald. Joyce Howe will provide consulting services.

Megan Crespi, who joined the Dallas-based bank in March 2020 and was most recently the bank’s chief enterprise technology and operations services o cer, has been named Comerica’s new senior vice president and chief operating o cer, according to a news release. Crespi, 49, will work out of Comerica’s Auburn Hills technology center, where much of the bank’s operation systems are housed.

As part of the newly created role, Crespi will oversee the bank’s technology, enterprise security, lending and trade services, corporate real estate, customer contact center as well as two additional areas — data and analytics and a new digital function, which will focus on Comerica’s “digital transformation,” according to a news release.

In late 2021, Crespi was named one of Crain’s Notable Women in Banking.

Crespi’s promotion to COO was announced Wednesday along with two other corporate moves for the bank.

Peter Sefzik, Comerica’s executive vice president and executive director for commercial banking, will assume the role of senior executive vice president and chief banking o cer. Additionally, Megan Burkhart, executive vice president and chief human resources o cer, will assume the role of senior executive vice president and chief administrative o cer.

All three promotions took e ect Friday and each will report to CEO Curt Farmer.

“Each of these individuals brings unique expertise, proven results and demonstrated leadership to their roles,” Farmer said in the release. “I am so pleased to work alongside a team of this caliber who shares my commitment to Comerica and our customers, colleagues, and the communities we serve.”

Crespi was previously CTO at Detroit-based Ally Bank and also worked at PwC and General Motors Co.

Long headquartered in Detroit, Comerica uprooted and moved its corporate headquarters to Dallas in 2007. e bank still stands as Michigan’s third largest in terms of deposits with about $37.7 billion locally as of last summer, according to Crain’s data.

e bank is in the process of consolidating many of its local employees into two buildings in Farmington Hills, as Crain’s previously reported.

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

WALSH

at’s an important distinction between what the program can and cannot do. Especially given that Michigan ranks seventh-worst in the nation for fourth grade reading scores, according to the 2023 State of Michigan Education report, released by the Education Trust-Midwest earlier this month.

But it’s the long-term outcomes that are important here. And a universal pre-K program would serve the state’s goal in boosting college graduation. Michigan ranked 37th in 2021 in degree attainment — Whitmer set forth a lofty, if not impossible, goal of the state reaching 60 percent of Michigan residents with a postsecondary degree or certi cate by 2030.

“If we’re going to move the needle on job participation, then universal

REAL ESTATE

pre-K is absolutely necessary,” said Tyler eile, vice president, COO and director of public policy for Lansing-based economic research consultancy Anderson Economic Group.

“We must think about our state’s demographics. We’re coming into decades with signi cantly fewer workers due to an aging population. We have to encourage a higher participation rate any way we can if we want to achieve sustainable economic growth.”

Michigan has one of the oldest populations with nearly 18 percent of the population 65 and older. And that

population is projected to rise by 82 percent between 2010 and 2040.

ere’s also another bene t to universal pre-K — freeing up parents to work. Michigan’s labor force participation rate is dismal at best with only 59.9 percent of the working-age population actually working or looking for work. at gure has continued to plummet since the modern peak of 68.8 percent in May 2000.

e advent of kindergarten, which wasn’t publicly subsidized in all 50 states until the 1980s, shows a stunning example of how subsidized child care and education can have an immediate impact on the workforce.

Between 1950 and 1990, 40 percent of single mothers joined the workforce when their child entered

Tricked-out Birmingham spec house targets pro athletes and empty-nesters

An under-construction house in Birmingham could serve as a unique entertainment hub for those who wish to live in easy walking distance of the a uent suburb’s central business district.

e builder of the house at 787 Ann St., on the south end of downtown Birmingham and one block west of Old Woodward Avenue, has given himself a deadline of the end of summer to complete the three-story, 3,850-squarefoot house with a nished basement. While the developers aim for occupancy by the start of the next school year, they’re not envisioning young families as the primary target for their pool of buyers.

“We know exactly who is going to buy this house,” said Dan Lynch, owner of Novi-based Lynch Custom Homes, who is developing the property.

Lynch and Realtor James Danley of James Danley & Associates in Birmingham say they’re more likely to see downsizing empty-nesters or people relocating to the area — such as professional coaches and athletes — as their likely pool of buyers.

“ ey want to live downtown, they want a walkable lifestyle,” Danley said. “And they’re not in town long enough

to spend two years building a home. ey want to buy something that’s done.”

Attributes of the home include an attached, two-stall garage built in the middle of the house, a rarity on Birmingham’s smaller lots, a third-story roof-top deck and a ventilation system for smokers.

In short, the home is designed to accommodate guests, whether it be over a poker game with cigars or in the backyard that has room for a small pool.

e game plan, Lynch and Danley said, is to begin marketing the property soon directly to other brokers, as opposed to an open listing. A sale price of around $2.5 million is projected.

Lynch, who has built several highend homes around Birmingham, said his company has seven homes being built in the Oakland County city and another three in the development stages.

e home at 787 Ann St. — on a lot that was previously home to an early 20th century, 1,300-square-foot house that a Lynch-a liated company acquired in 2021 for $450,000 — stands as his most unique at the moment, he said.

“It’s not set up like the majority of my other homes that are de nitely

a public kindergarten program, according to research out of Dartmouth University. e labor force participation rate for women in the prime working ages of 25 to 54 rose from 42 percent in 1960 to a peak of 77.3 percent in 2000, and it’s undeniable that public kindergarten played at least a role in that. In Washington, D.C., which implemented a full-day universal pre-K program in 2009, the labor force participation rate of women with at least one child under 5 years old rose to 76.4 percent in 2016 from 65 percent in 2008, with 10 percent of that increase attributed to the pre-K program, Reuters reported. e crux of creating a universal pre-K program is sustainability, however. Previous governors have attempted a program and failed. Whitmer, who has yet to reveal any funding details or plans, has the bene t of a massive budget surplus thanks to federal pandemic stimulus. But a funding model must be out-

lined sooner rather than later. e funding of pre-K programs varies. Denver and San Antonio have universal programs that are funded through sales tax revenue. Philadelphia uses a tax on soft drinks. Florida’s program is funded through the general fund.

Michigan has a variety of potential funding sources, but nding a solution that satis es the increasingly large political divide may prove challenging. ough the basic idea has substantial bipartisan support, politics is always in the background, and education has become fraught with division.

“ ere are hurdles, but they are worthy of solving,” eile said. “We can’t lose sight of the bene ts of increased (post-secondary) educational attainment. College graduates innovate and hire trades workers in our state.”

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

family-oriented homes, 2.5 kids and a dog,” Lynch said. “ ose homes are laid out a certain way. is one is more laid out for that person that’s probably either a little bit older or a lot younger. So I think the location and some of the design elements are just kind of unique to this type of buyer.”

Birmingham-based Je rey King Interiors is providing interior design services for the project.

While the residential real estate market has gotten soft in recent months, and homes are sitting on the market much longer, properties like what Lynch and Danley are marketing — completed homes with modern features — remain in demand, according to Crain’s interviews with real estate agents.

And for Lynch, whose business is focused almost entirely on the Birmingham market where tearing down to build new has been all the rage for years, there’s still plenty of opportunity, he said.

“I don’t think it’s 50 percent redeveloped yet,” Lynch said of teardowns and new builds in Birmingham, such as what he’s building on Ann Street. “I think you’re probably saturated around 70 percent.”

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

POSITION AVAILABLE

NPPN is working with the Skillman Foundation (www.skillman.org) to recruit for their Director of Policy and Systems. This management role is part of the foundation’s recent strategic planning goal to accelerate the transformation of the region’s educational system. We are looking for candidates with 10+ yrs’ exp w/governmental policy orgs, or similar exp in philanthropy or w/nonprofit orgs. The successful candidate must also have extensive systems level leadership skills & a proven track record in direct management. Job description is at www.nppn.co.

MARKET PLACE

REQUEST FOR PROPOSALS

for this RFP is available for download at this DESC website: https://www.descmiworks.com/opportunities/rfps-and-rfqs/.

NICK MANES

Realtor James Danley (left) and builder Dan Lynch. | NICK MANES/CRAIN’S DETROIT BUSINESS

“EVERY PARENT KNOWS AN EARLY START IS CRITICAL TO THEIR CHILD’S FUTURE. ”

—Michigan Gov. Gretchen Whitmer

Instead of ticket sales, the new USFL says TV deals make up the majority of its revenue.

e original USFL had plans to compete directly against the NFL. Shanks says that’s not the case this time.

“Both the original USFL and the new version started out of a place for the love of football. ere will never be plans for this USFL to go into the fall,” Shanks said. “It’s going to be a spring league to satiate that demand for fans who want to watch pro football in the spring. Athletes are better now than 40 years ago. e quality of play on the eld now is as good as any spring league that’s been in existence. e biggest di erence is our single-entity structure and knowing we’re not here to compete with the NFL.”

e original incarnation of the USFL lasted just three seasons as it worked as a direct competitor of the NFL. e USFL lost $163 million over those three years, folding in 1986 after a stint that included an antitrust lawsuit against the NFL. e “new” USFL debuted in 2022 with eight professional teams all playing regular season games in Birmingham, Ala. e 2022 playo s were played in Canton, Ohio — home to the Pro Football Hall of Fame.

For 2023, the teams will play in “hubs” near their home cities, but not necessarily in their home cities. ose hubs include elds in Birmingham, Ala., Memphis, Canton, Ohio, and Detroit.

Ford Field and the Lions stand to gain from the venture based on ticket sales and sponsorship opportunities. Shanks declined to comment when asked about his expectation for gameday attendance. Ford Field seats about 65,000. Protective Stadium, the Birmingham, Ala., venue that hosted all of the 2022 regular season games, seats about 45,000. Average attendance last season was about 12,500, according to Shanks.

“ e Lions run a lot of the operations on game day and run ticket sales for us,” Shanks said. “We’re both incentivized to make this a success.”

e Lions declined to comment on the terms of the deal with the USFL. Tickets for the rst game of the 2022 USFL season were just $10. e average price of a ticket for an NFL game was more than $200, with teams such as the Las Vegas Raiders commanding up to $4,000.

e low ticket prices serve as a way to get more fans into the stadiums, according to USFL lead play-by-play announcer Curt Menefee.

PONTIAC

From Page 3

To this day, the city has yet to issue a medical marijuana license, nearly four-and-half years after voters in the city authorized 20 medical marijuana facilities in the city limits.

Paula Bridges, communications director for the city of Pontiac, said the city has yet to be served the lawsuit so no o cial comment was given. Rubicon and its attorney, Cindy Rhodes Victor of Kus Ryan PLLC, did not respond to emails seeking comment.

Rhodes Victor represented Hillside Productions Inc. and its owner Joe Vicari and Gary Roncelli in a successful $31 million suit against the city of Sterling Heights after it closed down the company’s concert amphitheater at Freedom Hill in 2003.

“Kids who can’t go to other sporting events can come to (USFL) games,” said Menefee, also the host of Fox Sports’ NFL pregame show. “ at’s what the league is trying to do — make the game more accessible for everyone.”

Shanks said the league didn’t look at prices in other leagues when setting USFL ticket costs. e goal is to make attending games a ordable for families, he said. “ e price range we have in each market is re ective of that,” Shanks said.

e new USFL’s business model has been built around media rights and local and national television ratings, he said.

“You saw in season one that we decided to take our medicine with some empty stadiums,” Shanks said. “We knew that would happen in season one but it was part of the plan. en we evolved into some local markets. I think we’re probably less dependent on ticket sales other than saying we want to grow every year and make it a ordable for families and football fans to come and make this an exciting environment.

“ is is a startup. We’re learning as we go. I think we have the luxury of tweaking the marketing as we go, tweaking o ers for fans as we go. We’re clearly not opening the entire stadium. e Lions will consult us on how to go about o ering tickets, dealing with community groups. We’re trying to get as many people in as we can.”

e expansion comes after the league in its inaugural season showed it was on solid footing, according to Darryl “Moose” Johnston, USFL executive vice president of football operations. e USFL in 2022 was the rst

NFL alternative to complete a full season since the original USFL in 1985.

“ e USFL is now proven as a stable brand on a national stage,” said Johnston, a Fox Sports color commentator and three-time Super Bowl champion with the Dallas Cowboys. “Crowning a champion last July was a great accomplishment. No one who has tried has completed a full spring season of football — not since the 1980s USFL. We expect season two to be even better.”

Major corporate backing helps.

Fox Sports has committed $150 million over three years to the league’s operations, with plans to attract an additional $150 million-$200 million from outside investors. All games are televised by Fox, NBC and partners.

Athletes may be better, but the league as it stands now lacks a bit of name recognition. e original USFL featured players including running back Hershel Walker, who joined the league coming o a historically great career at the University of Georgia. Hall of Fame defensive lineman Reggie White suited up for the Memphis Showboats for two seasons. Longtime Lions standout kick returner Mel Gray played two years with the LA Express.

Shanks on ursday told Crain’s that the USFL has learned from other sports leagues as it works toward sustainability.

Although they are both professional football leagues, there is one major di erence between them: the NFL is a major football league whereas the USFL is a minor league. e minimum salary for a USFL athlete is about $45,000. e minimum salary in the NFL is around $800,000.

Contact: jason.davis@crain.com

(313) 446-1612; @JayDavis_1981

 Dime Store

While the diner in the Chrysler House building (formerly known as the Dime Building) is best known for its breakfast and brunch, it’s still a great spot for a workday lunch. It says its menu is “a unique blend of scratch-made traditional favorites and creative combinations.”

Hours and more details: eatdimestore.com

 Lafayette Coney Island/American Coney Island

We’re not going to disclose which of the adjoined diners is our favorite, but both are great for a quick, lling lunch for nearby ofce workers. Two with everything and a Vernor’s is a good bet, or you can wolf down some chili fries or be good and get a salad (at American only).

Hours and more details: Lafayette and American Midtown Detroit

 Spread Detroit is deli o ers a selection of sandwiches with interesting names, like the Old Kanye, a nod to a line from a track on Kanye West’s 2016 album “ e Life of Pablo,” and the Smooth Criminal. A selection of stu ed angus beer burgers includes the riller and the Hangover, made with mac and cheese, cheddar cheese, bacon and sauteed onions. You might need a nap before you go back to work.

Hours and more details: instagram.com/spreaddetroit

 Jolly Pumpkin is funky brewpub turns out some great wood- red pizzas, salads and sandwiches. Try one of the artisan ales on tap or a hard cider, too.

Hours and more details: detroit. jollypumpkin.com

 Rocco’s Italian Deli

Get your sub sandwich x at Rocco’s, from a hearty meatball to a veggie version. Or grab a salad to eat in or at your desk.

Hours and more details: roccosdetroit.com

 Pho Lucky and Ima

If you like to slurp up your lunch, check out these spots for noodles and more. Pho Lucky has a Vietnamese-focused menu while Ima, across from Wayne State, also offers spicy tuna and sake.

Hours and more details: pholucky.net and imanoodles.com/ midtown

Corktown

 Slow’s Bar-B-Q

From beef brisket to smoked chicken wings and mac and cheese, Slow’s is the spot to go for barbecue in Corktown. In a hurry? ere’s also a to-go location in Midtown

Hours and more details: slowsbarbq.com/

 Ottava Via

You can’t go wrong at this bustling neighborhood Rustic Italian restaurant. It’s cozy enough to talk shop over lunch or bring the whole o ce. Try the bolognese, pizza or share some small plates like arancini and calamari.

Hours and more details: ottavaviadetroit.com

 Mudgie’s Deli

Grab a co-worker for a sandwich with names including Jerk (chicken and jerk mayo), Madill (turkey, bacon, avocado) and Porktown (house-smoked pulled pork, bacon, pickle, Mudgie’s coleslaw), salads and a great variety of soups.

Hours and more details: mudgiesdeli.com

 Nemo’s

If you are craving a burger (and maybe a beer to go with it), head to Nemo’s. In addition to ground beef, it has turkey, black bean and Beyond burgers. Get a basket of fries, too.

Hours and more details: nemosdetroit.com/

New Center

 Baobab Fare

Billed as “a celebration of East African food and culture,” this James Beard Awards 2023 semi nalist offers dishes including its signature Nyumbani (beef slow-simmered in ripened tomato sauce), Kuku (panfried chicken in rich, tangy mustard-onion sauce), vegetarian creations and daily specials.

Hours and more details: baobabfare.com

 Yum Village

Just down the block is Yum Village, which makes Afro-Caribbean meals and fresh juices.

Hours and more details: yumvillage.com

 Supino’s

e Supino’s location in New Center o ers more than pizza (the star of the menu). It has house specials including fresh pasta and chicken piccata. Be a hero at the o ce and bring back some cannolis!

Hours and more details: supinopizzeria.com

 Zo’s Good Burger Sloppy burgers dominate the

ry, and Pharmaco, a marijuana processor, had planned to move into the development. It’s unclear whether Brown or associates are investors in either business.

e leases held millions in value, according to the suit. Pharmaco’s 15year lease is valued at $37.5 million; Family Rootz two, 3-year leases were valued at $21 million and $15 million for Hollywood Market’s 10-year lease.

Strings attached

Rubicon entered into a purchase agreement in 2019 for the former Kmart site, which was then rezoned in 2020 to allow for marijuana businesses.

According to the lawsuit, Rubicon only achieved the conditional rezoning, from local business zoning to commercial and light manufacturing zoning, by agreeing to construct a retail strip and grocery store as part of the development, which would in-

clude two medical marijuana licenses.

Rubicon negotiated leases with several retailers and secured a lease obligation from grocer Hollywood Market for the project.

Family Rootz, a medical dispensa-

e suit alleges City Clerk Doyle refused to issue the necessary medical marijuana grower and processor permits because he believed the property was not zoned for marijuana businesses, despite clear language from the planning commission.

e leases obtained by Rubicon were contingent on the development receiving permits for the marijuana businesses, the suit says.

Rubicon Real Estate Holdings allege in a lawsuit that Pontiac dragged its feet on issuing a medical marijuana permit for nearly four years, causing the developer’s lender to pull its $45 million in loans and led to the loss of several tenants for this proposed development. COSTAR GROUP INC.

The USFL’s Michigan Panthers will play their home games at Ford Field this season, along with the league’s Philadelphia Stars. The league after playing all 2022 regular season games in Birmingham is expanding to play games in Memphis, Canton, Ohio, and Detroit. | JAY DAVIS/CRAIN’S DETROIT BUSINESS

menu here, including e Good Burger (pretzel bun, topped with cheese sticks, American cheese, onion rings and Good Burger Sauce), a Lebanese Burger and a Kafta sandwich.

Hours and more details: zosgoodburger.com

Oakland County

 Bill’s, Bloom eld Hills

Located on Woodward Avenue

e suit also alleges that city ocials then targeted Brown after he achieved a favorable ruling against the city in 2021. e suit alleges ocials told SK Properties, who was redeveloping a housing development in the city and hired Brown as a designer, they would only move forward with the plans if Brown’s rm was removed from the project.

As a result, SK terminated Brown’s $9.3 million contract, the lawsuit alleges.

Pot problems

Municipalities across Michigan are involved in lawsuits over the marijuana permit selection process, including Pontiac, Royal Oak, Berkley, Warren and many others.

Under the Michigan Regulation and Taxation of Marihuana Act of

 Red Dog Saloon, Milford

Workers at the General Motors Co.’s Milford Proving Grounds swear by this place. It o ers standard bar fare (mozzarella sticks, jalapeno poppers, fried mushrooms) as well as chicken wings, burgers and salads. e standout, though, is the selection of three gourmet burgers that feature a half-pound of brisket. Try the loaded brisket burger, made with sriracha and cajun seasonings and topped with french fries and cheese. For lighter faire, try the cauli ower pizza.

Hours and more details: redogsaloon.com

 Pronto!, Royal Oak e lunch menu includes staples such as French Dip and a Reuben sandwich, along with Deluxxe Burger — an 8-ounce patty with cheese, lettuce, tomato jam, red onion and pickles on a toasted brioche bun. e Bennies, sandwiches made with extra large English mu ns, include the Flintstone Rib Bennie made with short rib, mushrooms, caramelized onions, Swiss and Boursin cheeses, poached eggs and sriracha hollandaise sauce. Your co-workers might have to roll you back to the o ce.

Hours and more details: prontolounge.com

south of Long Lake Road, Bill’s fancies itself as an “old-school eatery serving American, French, Italian & raw-bar fare in upscale-rustic digs.”

e restaurant, a part of the Roberts Restaurant Group, is open for lunch

ursday, Friday and Saturday. e lunch menu features an Ortiz tuna melt, a raw bar, a short rib grilled cheese and grilled shrimp kale caesar salad.

Hours and more details: billsbloom eldhills.com

2018, passed overwhelmingly by Michigan voters, the state o ers unlimited licensure to marijuana operations; it’s up to local municipalities to create a competitive formula to decide who is allowed to sell or grow marijuana in their community.

at process often includes community bene ts, like opening a grocer in the development.

Earlier this month, the Pontiac City Council continued to make changes to its medical marijuana scoring system. e city planned to give medical marijuana licenses to ve companies, but a Dec. 9 ruling by an Oakland County Circuit judge found the city’s scoring system was unfair to Marshall-based vertically integrated marijuana company Common Citizen.

Common Citizen’s suit alleged that the city’s process for awarding medical marijuana licenses was arbi-

lobster rolls for lunch in a bright spot walkable from local o ces.

Hours and more details: eatathazels.com

 Sedona TapHouse, Troy

e menu includes a selection of steaks, fresh-caught seafood, pasta, organic greens and gluten-free options. e bar has an extensive craft beer menu with 50 taps on hand.

Hours and more details: sedonataphouse.com

 Stoney River Steakhouse and Grill, Troy

Another Big Beaver Road spot, Stoney River boasts a sophisticated ambiance and emphasizes hand-cut steaks and fresh seafood. It has a full-service bar with unique cocktails.

Hours and more details: stoneyriver.com

Macomb County

 Ike’s Restaurant, Sterling Heights

A favorite of sta ers in the city’s industrial district, Ike’s has a huge lunch menu that includes chicken, seafood and vegetarian options. It also has an extensive Lebanese section that includes four types of kabobs and kibbeh. Burgers and gyros are o ered, too.

Hours and more details: ikesrestaurant.com

 Hi Sushi, Warren is sushi spot is in a bit of an inconspicuous spot near GM’s Warren Tech Center. It o ers a wide variety of rolls, including cooked “special” rolls. e Mexican roll comprises shrimp tempura and avocado, topped with spicy crab salad, crunchy akes, jalapeno and a thick eel sauce. e uncooked section includes a Van Dyke roll, made with

tempura shrimp and spicy tuna, and topped with tuna, yellowtail, salmon and spicy mayo.

Hours and more details: hisushiwarren.com

Wayne County

 Lile’s Sandwich Shop, Dearborn

Less is more at this Dearborn staple. Lile’s o ers a menu featuring just a handful of items, one of which is its famous ham sandwich on a kaiser roll. e ham is cut fresh o the bone.

Hours and more details: Call (313) 581-2821

 Sheeba Restaurant, Dearborn is is a go-to spot for Yemeni food. Signature dishes include Fahsah, a traditional dish of shredded lamb and mashed potatoes served bubbling hot in a clay bowl with fresh clay oven bread. e popular slow-roasted lamb Haneeth is served over Mandi or Zorbian rice.

Hours and more details: sheebarestaurant.com

 Avenue American Bistro, Wayne is relatively new spot in downtown Wayne, less than two miles east of Ford Motor Co.’s Michigan Assembly Plant, has something for everyone. e shareables section of the menu includes Reuben egg rolls (a Detroit staple) and a brisket nacho featuring smoked meat and a tangy barbecue sauce. e section of four sliders, served in pairs, is plenty for a quick lunch. A honey chicken option was recently replaced with a Nashville crispy cod o ering — a tasty spin on the popular chicken sandwich.

Hours and more details: avenuewayne.com

— Crain’s reporter Jack Grieve contributed to this report.

 Sy Thai Cafe, Birmingham

e Birmingham location of Sy ai, which celebrates 30 years in business this year, is the agship eatery. On the menu is ai peanut sauce that makes the ai Peanut entree a winner. Sy ai also o ers dishes featuring duck, shrimp, squid, salmon and snapper.

Hours and more details: sythaibirmingham.com

 Hazel’s, Birmingham

e seafood-centric restaurant also o ers burgers, fried chicken and

trary and rife with con icts of interest. e judge’s ruling e ectively awarded Common Citizen points in the scoring system it hadn’t received before the lawsuit. is pushed Common Citizen into the top ve of scoring eligible for a medical marijuana license, thus muscling out the former fth place holder Nature’s Remedy — which already invested $1.5 million into its dispensary location in Pontiac after being approved by the city’s planning commission, said James Allen, partner at Detroit-based law rm Schenk & Bruetsch PLC.

Allen said he is preparing a lawsuit against the city council over the issue in hopes of receiving an injunction to prevent the city from handing out the licenses.

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Midtown Detroit-based Rocco’s Italian Deli o ers a variety of sub sandwiches and salads for lunch. | CRAIN’S DETROIT BUSINESS

Joe Muer’s Seafood is a riverfront restaurant in the Renaissance Center. JOE MUER’S VIA FACEBOOK

communities have some form of rent control, according to the Urban Institute, a Washington, D.C.-based think tank.

e resolution, put forward by Detroit City Council President Mary She eld, comes as housing costs have soared nationwide, including in metro Detroit. Here, the U.S. Department of Housing and Urban Development anticipated an 11.9 percent increase in rental rates for two-bedroom apartments for the scal year that began Oct. 1, with rates rising to $1,213 a month, from $1,084 last scal yea

David Di Rita, principal of Detroit-based developer e Roxbury Group, said rent control here would be akin to “taking a New York solution to a Detroit problem without realizing it didn’t solve New York’s problem.”

“Rent control is a bad idea wherever it gets done and whenever it gets done,” Di Rita said. “It distorts the market. It reduces the incentive to develop and, in the end, reduces affordability, not enhances a ordability. It is a bad idea. All you have to do is look at the rampant abuse of it and the distortions in the marketplace that get created in markets like New York to understand that government mandates on what the marketplace needs to bear, by way of price to produce a good, is simply bad policy.”

ey’ve grappled with increasing construction costs that have forced them back to the drawing board on projects. Rising interest rates and other factors have further complicated an already complicated — and risky — industry.

“How would you alleviate pressure on the developer side?” asked Clifford Brown, a Detroit-based developer who has worked on projects in Brush Park, West Village and southwest Detroit. “We are still seeing increases in interest rates and construction costs. What motivation would a developer or investor have to make an investment in the city of Detroit, where your income is restricted but your costs and your risk are not?”

What is rent control?

Rent control refers to a government-set limit on the amount of rent a landlord can charge. It’s di erent from rent stabilization, which usually limits the allowable percentage of a rent increase. Both are prohibited under the Michigan law enacted following a failed referendum in Ann Arbor that would have instituted rent control there, said Margaret Dewar, a professor emerita of urban and regional planning at the University of Michigan’s Taubman College of Architecture and Urban Planning.

Economists and others tend to oppose rent control because of negative consequences of such policies, which include decreasing rental housing stock as landlords convert apartments to condos, dampening new apartment construction and creating a disincentive to improve and update existing apartment buildings.

Dewar said in her view, rent stabilization is better — it can help prevent large jumps in rent for tenants while aiming to ensure that landlords can both cover costs and earn a reasonable return. It can be complicated to administer, she said, because it has to be designed so it doesn’t discourage new construction. But it can be useful to residents when rents are ris-

ing rapidly.

Tenant advocates say rising rents have forced cash-strapped renters to the brink and a rent control policy would help them remain in their homes. at creates more neighborhood stability and leads to less tenant displacement.

It’s tempting for Steven Rimmer, a resident at New Center Plaza in Detroit and a founding member of the Detroit Tenants Association. His $625-a-month rent is a ordable, he said, but only because he was able to push back against a $269-a-month increase he said the landlord asked for last January.

Rimmer said he can only see the bene ts of a rent control policy.

“I think Detroiters deserve the right to be stably housed,” he said. “ at’s what Detroiters need, stable housing. at’s not stable if at the end of the lease, it can go up as much as they want.”

Lifting a ban

Detroit City Council President Pro Tem James Tate, who chairs the committee that will hear the proposal ursday, said in a statement that he wants to nd a way to safeguard tenants “who often have no protections nor warning for immediate and outrageous rent increases” while also not harming “a landlord’s ability to maximize the return on their investment property.”

e resolution notes Detroit’s high percentage of renters, its low median income and the stress that a lack of a ordable housing causes. It says a lack of rent control contributes to an “astounding” number of evictions in the city and asks the Detroit delegation of the state House and Senate to introduce and enact legislation rescinding Michigan’s ban on rent control laws.

Information from the 36th District Court shows that there were 3,432 evictions signed in 2022. In 2020,

in an apartment building for at least ve years. e Michigan State Housing Development Authority would have been required to develop and distribute best-practice guidelines for assessing the needs of older adults who have been displaced by increased rents in residential revitalization projects or converted neighborhoods.

Another measure would have mandated that area median income be measured at the municipal rather than regional level so cities with a high poverty rate could better enact a ordable-housing policies. is could be particularly impactful for Detroit.

Sen. Stephanie Chang, a Detroit Democrat who was involved in those proposals, said she is “de nitely eager to do some work around rent because rent is exploding all over the place.”

Joe McGuire, a sta attorney with the Detroit Justice Center, also said many Detroit landlords view their properties as disposable commodities — something they extract rent from for a few years without upkeep, then often lose to tax foreclosure. He said it’s a situation that’s unique to Detroit because of still-low property values but one that regulation can help with.

e state ban, he said, is an outdated way that more rural white areas controlled what majority-Black cities could do.

“We can’t ignore the racial dynamics of this,” McGuire said. “I’m very hopeful the state can take another look at this misguided law. It’s a relatively simple ask. It’s not forcing any city to adopt rent control. It’s not even suggesting it.”

Unintended consequences

when an eviction moratorium was in place for much of the year following the start of the coronavirus pandemic, there were 2,428 evictions signed. e court reported 1,558 in 2021. Democrats introduced legislation to repeal the ban in the past two sessions and a bill to provide an exception to the ban in the prior session, but the bills never got a hearing when Republicans had the majority. Now that Democrats are in power, the push could gain traction.

“I am very supportive of the e ort to address the issue of a ordable housing using all tools available,” Tate said in the statement. “Having the ability to legislatively impact rents for our most in need, who at times have seen their housing cost double or triple overnight at the property owner’s whim, appears a possibility now more so than ever during my Council tenure.”

Mayor Mike Duggan said through a spokesperson that his policy is not to take a position on a bill until it’s been drafted.

It’s not clear whether that will happen. Rep. Tyrone Carter, a Democrat who chairs the Detroit Caucus, said he had not heard anything about the pending resolution. He said there needs to be a “broader conversation” around rent, adding that he is not one who thinks landlords are “horrible.”

He said if a bill is introduced to lift the statewide rent control ban, “I’d want to understand the reasons and the why and the impact.”

“In the last few years, we swung the pendulum toward tenants,” he said. “ ere’s some people that have mortgages on these homes or these facilities. It’s like, OK — moratorium and you ain’t gotta pay rent. But then I look up and you’re getting thousands of dollars in unemployment bene ts? Nobody wants to have that whole argument. It wants to be one-sided. I’m a three-sided person — left side, right side, somewhere in the middle. I got to gure out where the truth is.”

In 2021, Senate Democrats proposed a ve-bill package that, among other things, would have repealed the ban. Other bills would have limited rent to no more than half of a tenant’s income if he or she has a disability, or is over age 70, and has lived

“I think a lot of my colleagues agree that it’s a problem,” she said. “Now we need to really gure out what the solutions are. But in my view, we can start by giving local governments back the ability to innovate and come up with policies related to rent. It doesn’t necessarily have to look like rent control in other states. It could be rent-stabilization programs in some other way. But local governments need to be able to have that exibility. It’s de nitely overdue.”

Chang said she is excited that the Senate now has a new committee, Housing and Human Services, that will explore housing issues. It is chaired by Sen. Je Irwin, an Ann Arbor Democrat who has backed rescinding the 1988 law signed by Gov. James Blanchard, a Democrat. e law was enacted months after Ann Arbor voters rejected a ballot proposal that would have controlled rent increases and a month before Detroit voters considered a rent-control ballot issue, too. at proposal, on the August ballot, would “establish a Rent Review Commission to stabilize and regulate rent increases in the City of Detroit and require owners of rental property to be in substantial compliance with city health and maintenance codes before getting a rent increase.”

But does it work?

Detroit’s version of the rent-control ballot issue “passed overwhelmingly,” said Ted Phillips, the executive director of the United Community Housing Coalition, though it never took e ect. e measure was approved with almost 60 percent of the vote, and Phillips said the 1980s version would have said there could be no rent increase on a property unless it was in compliance with city code.

Many researchers say rent control comes with unintended consequences.

Carolyn Loh, an associate professor of urban planning at Wayne State University, said rent control’s populist appeal is understandable, but the policy is misguided and ultimately hurts the housing market in the long term.

“ ere’s a reason why local governments keep trying this, because it’s so appealing,” Loh said. “Why should people pay so much money in rent? Why should these greedy landlords who don’t even maintain their houses be making money hand over st when they have these lower-income tenants living in these terrible conditions?

“ e landlord is an easy villain, but I hope they don’t go down this road because we have pretty good evidence that there are a lot of unintended consequences. I think the motivation is always noble, but I think if you really want to help housing-burdened Detroiters, this is not the way to go about it.”

A better solution would be an increase in subsidized and other affordable housing, said Lan Deng, a professor of urban and regional planning at the University of Michigan. She said while rent control would be e ective in stabilizing tenants’ costs, research has also shown it reduces the housing supply, including by discouraging new construction. And she said contrary to the claims of tenant advocates, rent restrictions that don’t allow landlords to fully cover maintenance and operating costs can lead to continued disinvestment.

“RENT CONTROL IS A BAD IDEA WHEREVER IT GETS DONE AND WHENEVER IT GETS DONE.”

—David Di Rita, Roxbury Group

To this day, the city is struggling with ways to ensure code compliance on rental properties.

Phillips, who was involved in the e ort then, said market conditions keep renters in subpar units, then price them out. He said a similar rent control measure would actually incentivize landlords to make improvements so they could raise rents while bene ting the city’s housing stock.

A policy that would limit how much rents could go up in Detroit would help keep people housed, said Bob Day, an attorney who works with Detroit Eviction Defense. He said residents’ incomes just don’t match what landlords are charging.

“It’s been brutal, what’s happened in the city,” Day said.

While she agreed that rent control could relieve some of the pressure tenants feel, she said it doesn’t solve the underlying problem of incomes that are too low and housing costs that continue to rise.

“It’s hard to say where it has worked,” Deng said. “ e measures do not directly address the causes of the problems.”

Still, she said, a ban may not be the most e ective approach, either.

What could it look like?

How rent control rules would play out would hinge on how they are written.

Deng said they would need to be designed carefully to ensure a functional rental market continued to exist.

David Whitaker, the director of Detroit’s legislative policy division, said details of any policy would still need to be worked out. Council is continu-

Steven Rimmer pays $625 a month for his apartment at New Center Plaza in Detroit. Right now, he said, it’s a ordable — but that’s only because he was able to push back against a $269-a-month increase. COSTAR REALTY GROUP INC

She eld Tate

ing to move forward with other tenant-friendly proposals, including the establishment of an organization to protect renters and the creation of an eviction prevention o ce at the city.

“I don’t know what that’s going to look like,” Whitaker said. “You’re trying to solve a problem with multiple tools. Rent control may not be the answer, I don’t know.”

A 1988 analysis of the Detroit proposal by the Citizens Research Council of Michigan said it would have exempted new units being rented for the rst time, units in owner-occupied dwellings of three units or less and cooperatively owned units, among some others. A ve-member Rent Review Commission would consider rent reduction requests from tenants and service reduction requests from landlords and would be made up of two tenants, two landlords and one independent member who was neither. Maximum allowable increases would have been capped at 15 percent of the base rent.

e analysis said rent control would erode the city’s tax base by devaluing property and causing a decrease in services due to a lack of funds. It would limit the return on investment, making ownership less desirable.

“Detroiters must decide whether rent control is the best means to insure the availability of decent, a ordable housing,” the report said. “Basic to this question is the e ect rent control would have on marginal rental units: would landlords invest the resources necessary to bring these units up to code, or would they allow them to deteriorate further and abandon them faster?”

A 2022 report from the National Multifamily Housing Council, which opposes rent control, said there was a possibility of more legislation allowing it in a number of states. In St. Paul, Minn., voters in November 2021 enacted a 3 percent cap on yearly rent increases, although members of the city council just a few months after that took e ect rolled back some of the law’s provisions.

Some cities have instituted rules where buildings of a certain size and age are impacted, but others are not.

For years in San Francisco, buildings with four or fewer rental units were exempted from rent regulations because smaller landlords were generally thought to run them, one 2019 study found. But once that happened, larger companies began buying the smaller buildings as a workaround to the rules. San Francisco changed its rules in 1994. Cambridge, Mass. had rent-control rules on the books for nearly a quarter century until Massachusetts voters tossed them out in the 1990s.

“Every system is kind of different,” said Brian Asquith, an economist with the Kalamazoo-based nonpartisan W.E. Upjohn Institute for Employment Research who has studied and written about rent control. “There’s no one-size-fits-all approach. Detroit would be kind of a tough city, in particular, to put rent control into ... In Detroit, where there is still a lot of redevelopment going on, I can’t imagine the City Council there has too much interest in causing those developers to go elsewhere with their money.”

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

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

CHIPS

From Page 1

backlog that has made headlines largely for its impact on automakers — and dealers across Michigan say it isn't over yet.

Lisa Kropp, of Lapeer, had a similar experience with a Ford Focus in need of a new TCM. She said she stayed on the waiting list at Milnes Ford in Lapeer for two years before giving up last month, when she traded in the Focus for a Chrysler Pacica minivan — and $1,000 — from Hank Gra Chevrolet in Davison.

“ ey are probably stuck with it looking for a chip now,” she said.

Dealers on the chip shortage

Jerry Moore, the Grand Rapids division director for Kentwood-based Fox Motor Group, said the chip shortage is still causing production delays, leading to lower sales inventory on Fox dealer lots.

“Our lots are empty. e appearance is, we look closed at times,” he said.

Moore, whose dealerships sell new and used foreign and domestic brands, said some makes — especially Honda and Ford — are still plagued by the chip shortage, while other companies like General Motors, Stellantis, Audi and Kia, are seeing the light at the end of the tunnel.

Moore said a lack of chips isn’t the only problem dealers and garages are facing. Manufacturers are having a hard time sourcing all kinds of components, making for longer wait times for customers in line for repairs.

Je Daniel, service director at Maple Hill Auto Group in Kalamazoo, said sometimes the missing component isn’t a chip for the car itself, but a chip for a machine that builds the car, or a chip for the semi-truck that delivers the car to the dealership lot.

“ at’s where the trickle down happens,” he said. “It’s not just your car. It’s the fact that there may be a semi that needs a transmission

component … so the trucking industry is a ected, as well.”

Max Muncey, senior manager of corporate communications at Highland Township-based LaFontaine Automotive, said Ford has been the slowest brand to recover from the chip shortage, in part due to the Focus transmission issue.

Last August, LaFontaine acquired Keller Ford in the Grand Rapids suburb of Walker and renamed it LaFontaine Ford of Grand Rapids. In the acquisition, LaFontaine inherited Keller’s queue of Focuses under recall waiting for TCM chips — a nightmare LaFontaine’s service director has referred to as an “intergalactic back order,” according to Muncey.

Other than the Ford transmission issue, Muncey said most of the vehicles in need of chips are higher-end autos with luxury features, like heated seats and steering wheels, power running boards or rear camera systems.

Dave Wright, xed operations director at Shaheen Chevrolet in Lansing, said the impact of the chip shortage at his dealership right now is mostly limited to the remote key fobs that unlock some Chevy models.

“ ose have to be ordered by vehicle identi cation number now, so we get them from the manufacturer. Whereas in the past, we would stock those so you can (replace them) when you lose your keys — like a lot of kids do at Michigan State on game weekends," he said. "Now, it all has to be ordered, because there’s such a restriction on that.”

George Glassman, owner and president at South eld-based Glassman Automotive Group, said he doesn’t know a single vendor or dealer that hasn’t in some way been a ected by automotive supply chain issues.

His dealership has resorted to selling luxury vehicles without functioning heated seats and infotainment systems in need of a chip the manufacturer couldn’t get within the expected timeframe, then having the buyer return in a month or

two when it comes in.

How garages and customers are adapting

Dealers agree that patience and communication are key to getting through a tough season with an unknown expiration date, especially when it comes to repairs.

“One of the things we can’t control are back-order parts — when they’re going to be in and whether there are workarounds so that people can get on the road safely in this interim period, before they can get their car back,” Glassman said. “… We’ve been fortunate we’ve got a pretty large loaner car eet. But we’re trying to be intelligent about the distribution of those cars.”

Glassman said the uncertainty has put a strain on his employees.

“People have purchased their car with an expectation that if they have a problem, they’ll bring it in, and in the normal course of business, history will tell them that over a reasonable period of time, the cars will get xed. ... So when we run into some of these supply chain issues, naturally, if we’re unable to get people into a car, that’s when the anxiety can heighten,” he said.

Muncey said the best thing LaFontaine did to keep its customers happy was increasing its loaner eet last year.

Before the pandemic, he said most dealerships only carried brand-new loaners, which they would allow to be driven about 3,000 to 5,000 miles before moving them into their new vehicle inventory to be sold. But given the historic inventory shortage, that wasn't an option.

“We didn’t have new cars available to put into a loaner eet,” he said. “We went out and bought hundreds of additional pre-owned vehicles to serve our guests’ needs in that regard.”

Fox Motors did the same thing.

“We’ve adapted quite a bit at multiple stores, using pre-owned vehicles when needed and putting those in our service loaner eets,” Moore said.

Daniel, at Maple Hill in Kalama-

zoo, said it’s generally been a terrible time for the sales side of the dealership business, but identi ed one silver lining of the inventory shortage: With the average age of vehicles on the road rising to about 12.2 years, more people need parts and service, boosting business in the garage.

“Our parts business grew substantially this year, (and) our service business grew substantially this year,” he said, although he didn’t share speci c numbers.

Wright, at Shaheen Chevrolet in Lansing, echoed that experience, but said the spike in business also means a shortage of technicians to work on vehicles.

“ ere’s more demand, and there’s not enough people to x the cars,” he said.

What this perfect storm means for customers, Wright said, is being forced to adapt to life without a car by carpooling, taking the bus, or using another means of transit. For the most part, Shaheen Chevrolet’s customers — many of whom are either GM employees or related to one — have been an understanding bunch.

“People seemingly are guring it out," Wright said. "It’s just kind of like going back in time, before there were loaner cars and before everybody had the multiple vehicles and whatnot. You kind of had to gure it out.”

Moore, at Fox Motors, said he doesn't have a crystal ball, but feels “some positivity” heading into this year that the component shortages will ease up.

“We are way better than we were six months ago,” he said. “...We feel that 2023 will potentially have a better inventory supply.”

Muncey, at LaFontaine, agreed.

“We still are seeing delays,” he said. “But I would say, overall, we're in a much, much better position today than we were six months ago in terms of overall inventory, as well as moving customers that have been waiting for their chip.”

Contact: rachel.watson@crain.com

(989) 533-9685; @RachelWatson86

When it acquired Keller Ford in the Grand Rapids suburb of Walker, LaFontaine Automotive inherited a backlog of Fords waiting on chips so they can be xed. | LAFONTAINE AUTOMOTIVE GROUP

Kees Janeway on challenges of retail, being a dad to 3

Kees Janeway can trace his career back to one of his earliest deals, helping put Hudson Cafe on Woodward Avenue downtown when he was starting out with Detroit-based Stokas Bieri Real Estate. After time with what was then Taubman Centers, Janeway went out on his own and ultimately started his company, Iconic Real Estate, with Jacob Sworski in 2017. The father of three spoke with Crain’s about the state of downtown retail and the industry in general.

 What are you seeing in terms of downtown Detroit retail?

It’s still pretty dull, for lack of a better descriptor. There is de nitely more people on the streets and more activity, but it is still pretty quiet during the workweek. If you look back at the last 5-10 years of Detroit real estate, the o ce population has been extremely important to the success of the retail down here. I would assert that before COVID, we got to a pretty critical mass of people that were actively spending money. We lost a few (retailers). I don’t know that soft goods is coming back with any sort of vengeance, but I talk to a lot of the food and beverage operators and they seem pretty happy with business volume they are doing, but it’s shifted pretty dramatically from what it used to be.

 The pandemic in particular has had a major impact on shopping and consumer trends, both in the suburbs and city. Talk a little bit about that and how it’s playing out.

I think we have seen a continued shift away from the mall. I think we’ve seen a lot of new retail coming, either open or about to open at Somerset, which is pretty interesting, but that goes to the strength of the location of Somerset, versus, say, Oakland Mall (in Troy) or Lakeside (in Sterling Heights) or Partridge Creek (in Clinton Township).

I think what’s maybe becoming more apparent, outside of food and beverage, is that people with money are continuing to shop. They are not really as negatively impacted. I think they probably split their shopping between online and then go to the retail store to exchange it if it’s not the right look. I think we are still seeing a lot of endof-year discounting, big sales. I’m sure your inbox is full of it, too. Lululemon is sitting on more product than they have ever sat on at the end of the year. Retail

RUMBLINGS

BY | KIRK PINHO

is still adapting. I suspect that strong downtowns will continue to have good sales volumes and tenant mixes.

 What do you do when you’re not working?

I have twin 7-year-olds and a 5-yearold, and two of them are Type 1 diabetics, so there’s a big learning curve, taking care of them and keeping them healthy.

 What’s that been like?

I’m a Type 1 diabetic. I’ve been Type 1 since I was about 12. It wasn’t a shock and I knew it was potentially in the cards, but at the same token you know you can live a pretty happy, healthy and successful life, providing you have the tools to take care of it. It’s expensive, but outside of that, it’s a pretty manageable disease. It’s super challenging to see little girls say they hate this and that kind of stu , but in general, they have a pretty good attitude about it.

 I saw that the honori c you got in high school was “Class Dad.” What is the class dad?

It was 1999 at University Liggett School in Grosse Pointe.

I would assert I probably got Class Dad because, as a diabetic, I wasn’t taking in too much alcohol or

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much literary work as I can. I dedicate for pleasure, and then I get into the business side of

What was the last through “The Big Oyster” (by Mark him was called he did another one, “Cod,” how the world formed in relationship to salt and cod. “The Big Oyster” is also pretty interesting because it’s around New York and Long Island Sound, which

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Report: Ishbia deal to buy Suns expected by NBA trade deadline

THE BID BY METRO DETROIT mortgage mogul Mat Ishbia to take over an NBA team is imminent, according to a report Wednesday afternoon.

Ishbia, the president and CEO of Pontiac-based United Wholesale Mortgage, is likely to assume control of the Phoenix Suns franchise within two weeks and ahead of the Feb. 9 NBA trade deadline, ESPN first reported, citing anonymous sources. The billionaire Ishbia and his brother Justin — a Chicago private equity executive — first agreed to acquire the team from current owner Robert Sarver late last year in a deal that values the team at $4 billion, according to reports. The Ishbias would have a con-

trolling

While Ishbia — who was recently named a Crain’s Newsmaker of the Year — has been unable to speak on the deal while it moves through a review by the NBA, the executive recently told Crain’s that an unsuccessful attempt to acquire the Denver Broncos NFL franchise helped prepare him to move on the Suns.

“I learned in Denver, if you want it, you better go get it. Because other people are going to be really aggressive,” Ishbia told Crain’s earlier this month. “So in Denver, I took more of an approach of trying to gure out how I could buy the team and what the price was. In Phoenix, I took a di erent approach, we’ll say. And one worked out really well and one didn’t work out as I hoped.”

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stake in the team, as well as the Phoenix Mercury WNBA team.

A spokesperson for Ishbia declined to comment to Crain’s on the reports.

“I am extremely excited to be the next Governor of the Phoenix Suns and Mercury,” UWM President and CEO Mat Ishbia said in a statement Tuesday night. UWM