Crain's Detroit Business, February 19, 2024 by Crain's Detroit Business

CRAINSDETROIT.COM I FEBRUARY 19, 2024

LOCAL JOURNALISM

Sarah Alvarez and Candice Fortman of Outlier Media run a nonprofit newsroom in Detroit that also trains residents to cover meetings and puts their notes online. | NIC ANTAYA

NEW PATHS FOR NEWS Creative approaches aim to fill gaps as newsrooms undergo transformation | Page 7

Free college plan worries schools

Will NFL Draft be big for small business? Group opens pipeline for local contracts

Some universities likely to see revenue losses By Sherri Welch

The Michigan Association of State Universities is pushing back against Gov. Gretchen Whitmer’s plan to create free universal community college in Michigan. The proposal, announced during Whitmer's State of the State address on Jan. 24, was included as part of the governor’s executive budget recommendation for fiscal year 2025 released Feb. 7. If approved by legislators and

fully implemented, the community college guarantee could save more than 18,000 students up to $4,820 on tuition and fees each year. The aid would be “last dollar,” covering the gap after factoring in need-based federal Pell Grants and other financial assistance such as the Michigan Achievement Scholarships that rolled out last fall. It would also give an extra $1,000 to high-need students to help offset food, housing, transportation and child care costs.

Macomb Community College | MICHIGAN

By Jay Davis

COMMUNITY COLLEGE ASSOCIATION

However, it likely would translate to revenue losses for the regional four-year public universities in the state, excluding the larger University of Michigan, Michigan State University and Wayne State University, said Dan Hurley, CEO of the Michigan Association of State Universities. See COLLEGE on Page 17

The 2024 NFL Draft could be as big for Detroit's small businesses as it is for the football players who will hear their names called and walk across the stage this spring. So Detroit leaders and organizations are working to ensure as many small businesses in the city as possible get in on the action. A coalition that includes the 2024 NFL Draft organizing committee, the city of Detroit, Visit

Detroit, the Downtown Detroit Partnership, Detroit Police, Bedrock, the Detroit Lions and the Metro Detroit Black Business Alliance is working with the football league to open a pipeline for local businesses to earn event-related contracts. Work is available in the areas of catering, janitorial, event production and infrastructure, according to MDBBA COO Kai Bowman. Bowman told Crain’s that the goal is to ensure the businesses selected mirror Detroit’s population. See DRAFT on Page 15

FOOD & DRINK New Detroit cocktail lounge a nod to Gilbert family.

REAL ESTATE PlatformRedico deal may be a glimmer of hope for New Center.

CONVERSATION OHM Advisors president on Joe Louis Greenway’s potential to connect.

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Motown Museum seeks next CEO Motown Museum has launched a search for its next CEO. Its current chairwoman and CEO, Robin Terry — the granddaughter of the museum’s founder, Esther Gordy Edwards — will cede that role but continue as chairwoman and continue to lead the museum’s expansion. Philadelphia-based Diversified Search Group is leading a national search for the museum’s new top executive. “I look forward to working with our search firm to find the ideal leader who will help take the organization and our programs to the next level. We’ve accomplished incredible growth over the last several years, and we’re excited about where the future is going to take us,” Terry said in a news release. “Now is the right time to begin this search, as we embark on the

By Jay Davis

Motown Museum Chairwoman and CEO Robin Terry thanks supporters at an Aug. 8, 2022, event at the historic Hitsville U.S.A. in Detroit. | MOTOWN MUSEUM

final phase of the expansion and look to immerse the new CEO in the museum’s vision and operations before our campus is complete.” The search will focus on finding a new executive “with exceptional leadership skills and passion for the legacy of Motown,” Terry said. “As we increase our team, this individual will step into a critically important role, as a gatekeeper to one of the most influential music brands of our time and (carry) on the mission and expanded vision of Motown Museum. It is a necessity that the chosen candidate deeply understands the culture of Motown and Detroit.” The museum’s board would like to have the new CEO in place by next year, Vivian Pickard, a newly named member of Motown’s board

and co-chair of the search committee, said in the release. “However, what is most important to our search committee is finding the best qualified candidate who possesses the right skills and embodies the right spirit to lead this institution,” said Pickard, president and CEO of The Pickard Group LLC. Motown Museum is entering the final phase of construction and fundraising for a now $65 million campus expansion that will include an outdoor plaza, interactive exhibits, The Ford Motor Company Theater, recording studios, meeting spaces, a cafe and expanded retail and new programming space. With a $10 million state earmark secured last year, it had raised $59 million of the project as of early October.

THE ORIGINAL COTTAGE INN VIA FACEBOOK

By Sherri Welch

Original Cottage Inn Pizza in Ann Arbor sold A more than 75-year-old Ann Arbor staple is no more. The original Cottage Inn Pizza, located just on the outskirts of the University of Michigan campus at 512 E. William St., closed Feb. 7 after being sold for a new restaurant, according to a message on the company website. The family-owned business, started by Nick Michos and business partner George Petropoulos in 1948 in an 8,314-square-foot multi-story space, has been sold to the owners of Howell-based Coratti's Pizzeria Bar and Bocce. The purchase price for the building was $3.1 million, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. Coratti’s also has a location in Milford, with an East Lansing location set to open later this year. The Ann Arbor Coratti’s will open before May 4 UM commencement ceremonies, according to a Feb. 8 Facebook post. Three of Nick Michos' sons — Jim, Theo and George — have run the business in recent years. The Facebook post, made by the Michos family, states that the

Michos family has worked closely with Coratti’s owner Peter Coratti to ensure a smooth transition. A Cottage Inn location on Stadium Boulevard will be retained by the Michos family, according to the post. “Ensuring the employees are well taken care of is a top priority for us,” the Michos family said in the post. “The new owners are hands-on and we’re confident they’ll carry on our success in this restaurant venture. . . .We want to express our sincere gratitude for our exceptional managers, chefs, and both front of the house and back of the house staff employees. . . . Our guests have meant the world to us. Thank you, once again, for your unwavering support.”

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M&A advisory veterans form new firm By Anna Fifelski

A rendering of Saksey’s, designed to be an intimate space for cocktails, shareable plates and live performances. | POPHOUSE DESIGN

New cocktail lounge a nod to Gilbert family Saksey’s to open in same building as Gilly’s Clubhouse and Rooftop bar By Jay Davis

A new cocktail lounge whose name pays tribute to a similar business once co-owned by Detroit-based real estate mogul Dan Gilbert’s father is slated to open this spring in downtown Detroit. Saksey’s will open this spring in the basement of 1550 Woodward Ave., the same building where Gilly’s Clubhouse and Rooftop bar — a vision from Gilbert’s late son, Nick — is coming together. Saksey’s gets its name from Saksey’s Lounge and Restaurant in Detroit that Dan Gilbert’s father, Sam, ran with Irv Saks in the 1970s. Gilly’s, a sports bar, was the vision of Gilbert’s son, Nick, who died in May at 26 years old. Both bars are expected to open in time for the NFL Draft, which Detroit will host April 25-27. Detroit-based 7OH2 Hospitality is the co-creator and operator of both bars in partnership with

Gilbert’s Rock Family of Companies. 7OH2 principal Josh Lang said Saksey’s is built around unforgettable experiences in an intimate environment. Guests will enter the venue through an alley to find a classy design featuring lacquered woods, adventurous patterns and a refined lighting design, according to a news release. The dining area and bar have just eight tables and 55 seats, creating an intimate environment. The interior was designed by Pophouse, an interior design business owned by Jennifer Gilbert, Nick’s mother and Dan’s wife. Investment into the space was not disclosed. Advanced Building Group out of Detroit is the contractor. Saksey’s offers a perfect contrast to Gilly’s, Lang told Crain’s in an email. “In early 2023, Nick and I toured

the building that is now the home of Gilly’s and Saksey’s. We understood that in order to accomplish our goal of creating an atmosphere for everyone that it would require adding a concept that is not related to the sports bar environment,” Lang said. “We needed something sexy, so we thought why not pay homage to the bar his grandfather had in Detroit.” Saksey’s cocktail menu is being curated by longtime drink expert Eric Hobbie, who was named Las Vegas’ most intriguing mixologist in 2019. Patrons will have their choice of classic or custom cocktails, which will be mixed tableside. The food menu is being put together by 7OH2 executive chef Adrian Estrada and will feature shareable plates. Saksey’s will have a staff of 20 employees, Lang told Crain’s. Live performances will be featured at Saksey’s, which will also be available for private rentals.

Woodward Park Partners, a middle-market merger and acquisition financial advisory firm, opened its doors in September. Since then, it has already closed three sell-side transactions totaling more than $500 million in enterprise value. Gene Bitonti, 48, and Greg McGowan, 44, both from Southeast Michigan, co-founded Woodward Park Partners because they wanted to be able to provide seniorlevel attention to their clients through an independent firm. The new firm is located at 74 W. Long Lake Road in Bloomfield Hills. Bitonti and McGowan define middle-market as any transaction with a less than $500 million purchase price. Woodward Park has a national reach that specializes in industrial distribution and services, building infrastructure, virtual services and more. Woodward Park Partners is named for the intersection of the two streets where Bitonti and McGowan met, while both working at Quarton Partners in 2009, which was later acquired by Cowen. Woodward Park has nine partners, eight of whom joined from TD Cowen and a new hire who joined the team after the firm moved into its office in January. The firm now has more than $900 million of enterprise value under engagement on behalf of clients. “When you spin out, you take a book of business that’s underway, including some of those transactions . . . that are at various stages,” Bitonti said. “And that was 12 engagements with, at the time, close to a billion dollars

Gene Bitonti

Greg McGowan

of aggregate value.” In September, Woodward Park represented Kentucky-based MiddleGround Capital in the sale of Southfield-headquartered Peterson Spring, a specialty spring manufacturer, to First Brands Group, a privately held automotive parts manufacturer in Cleveland. The firm completed two deals in October. It first represented Ohio-based Rockwood Equity in the sale of Houston-headquartered AMACS, a manufacturer of engineered separation and mass transfer products, to privately held holding company PMC Global, a privately held management company and resource partner based in California. Later in the month, Woodward

The firm now has more than $900 million of enterprise value under engagement on behalf of clients. Park served as an adviser to the board of Florida-based Shaw Development, a designer, manufacturer and assembler of sensors and fluid management systems components during New York-headquartered Monomoy Capital Partners’ sale of the company to Chicago-based Madison Dearborn Partners. See M&A on Page 17

One of city’s most recognizable high-rises goes up for sale By Kirk Pinho

Two of the most prominent buildings owned by the late Detroit developer Michael Higgins — one perhaps best known for a mural featuring whales — have gone up for sale. Toronto-based brokerage Colliers International inc., which has a downtown Royal Oak office, has the listing for the Broderick Tower at 10 Witherell St. and the Elliott Building at 1403 Woodward Ave. There is no listing price for ei-

ther property. Higgins died in September at age 74, after a decadeslong career in real estate development, leaving behind a portfolio of property around the city accumulated since he was in his 20s, none more prominent than Broderick Tower. The 34-story high rise, with its 126 residential units and a sometimes-changing mural visible from Comerica Park, opened in 1927 and was designed by Louis and Paul Kamper, according to Historic Detroit, which tracks De-

troit buildings and architecture. A mural of whales was installed by Madison Heights native and College for Creative Studies graduate Robert Wyland, who goes professionally by Wyland, in 1997, but it has sometimes been covered over the years by various advertisements, ranging from Chrysler to Verizon to the Jeep Compass. More recently, there was an ad banner for Dan Gilbert's Rocket Companies Inc. featuring work by See HIGH-RISE on Page 16

The 34-story Broderick Tower on Grand Circus Park has 126 residential units. The building, perhaps best known for its mural featuring whales, is now for sale after its owner, Michael Higgins, died in September. | COSTAR GROUP FEBRUARY 19, 2024 | CRAIN’S DETROIT BUSINESS | 3

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4 | CRAIN’S DETROIT BUSINESS | FEBRUARY 19, 2024

REAL ESTATE INSIDER

Platform-Redico deal may be glimmer of hope for New Center

keeping my eyes on, paror years, Peter ticularly in an industry Cummings has enlike commercial real esvisioned putting a tate that's driven not just grocery store in a new by numbers, but also by mixed-use development relationships. on a surface parking lot While Redico won't immediately west of the have ownership of any of Fisher Building. the properties it's taking Recent news that his Kirk Pinho over from The Platform, Detroit-based real estate development company, The it's probably not bad for Meijer to Platform LLC, is handing over have a familiar face in the mix. Through a spokesperson, both its management operations to Southfield-based Redico LLC and The Platform and Redico declined at least one of The Platform's top comment. An email was sent to executives is moving over to that a Meijer spokesperson seeking company, adds a new twist to the comment as well. Under terms of The Platform/ equation. That’s because Redico, run by Redico deal, which is expected to Dale Watchowski, has a long rela- finalize early next month, Redico tionship with Walker-based Meijer will manage all the properties in The Platform's portfolio of office Inc. The developer has built several and multifamily buildings, parking Meijer supercenters in metro De- decks and vacant land. The Plattroit, including the Gateway Mar- form's projects — namely the reketplace development anchored development of a Milwaukee Juncby the city's first Meijer at Eight tion building at 411 Piquette as Mile and Woodward, and has well as continuing renovations of more plans in the hopper in the the Fisher Building, which has suburbs, including one in Plym- seen tens of millions in improveouth Township that just got the ment in recent years — will contingreen light after a court fight, as ue. Clarke Lewis, who was named president of The Platform in June well as one in Warren. Now of course, just because and will be joining Redico in an Meijer and Redico have worked as-of-yet undetermined role, will together in the past doesn't mean oversee them. Less than a year ago, Cummings there's necessarily something imminent in the works in Detroit teased a grocery store in the neighborhood where his company, now. If — let me stress, if — discus- founded in 2016, has had its bigsions take place, they could also gest impact: the New Center area. "The chances are very good," be torpedoed by any number of things. But it will be something I'm Cummings told Paul W. Smith on

WJR radio when asked about the possibility of a grocery store there over the summer. "We actually have a letter of intent that will bring a 40,000-square-foot grocery store to New Center within the next few years." He does not name the grocer in the interview, or identify the site that would house it. But in the past, grocery has been one of the uses envisioned for the property generally referred to as Lot 2, west of the Fisher Building, both of which are now majorityowned by the Michigan State University endowment and minority-owned by The Platform and Michigan State University Federal Credit Union following a deal last summer. That surface lot is about 2.3 acres and has long been seen as a prime development site. In the summer 2018, there were plans to build more than 300 apartments and a 28,000-square-foot grocery store there, although clearly that has not materialized. But the L-shaped site is likely to continue to get attention as a more than $3 billion investment by Henry Ford Health, Michigan State University and Detroit Pistons owner Tom Gores around that area inches forward, with construction of a new hospital tower plus commercial and residential space planned in the next few years. Meijer opened Rivertown Market, a small-format grocery store on East Jefferson, in the fall 2021. It has about 43,000 square feet.

Demolition of former Pasquale’s Restaurant on Woodward begins By Kirk Pinho

Almost five years after serving its last pizza and antipasto salad, the former Pasquale’s Restaurant in Royal Oak is being razed. Major demolition started Feb. 12. It marks an end for the property that has been unused since April 2019 after the restaurant at 31555 Woodward Ave. north of 13 Mile Road closed after 65 years in business owned by the DelGiudice family. Plans for the site are not clear. Although the Royal Oak Planning Commission signed off in June 2021 on a plan that would include a new Big Boy restaurant with a drive-thru clocking in at about 4,500 square feet, plus a new retail building totaling 5,800 square feet on the site, more recent details on the proposal are not known. A voice mail and email were left with Tom Jablonski, vice president of development for the project's applicant, Southfield-based Big Boy Restaurant Group LLC,

Demolition has started at the former Pasquale’s Restaurant in Royal Oak | BETH REEBER VALONE

seeking details. Joseph Murphy, director of planning for Royal Oak, said in an email that the Planning Department "has not had contact with interested parties" on the property since January 2023, four months before ownership applied for a demolition permit, and that "no one has shown any interest in moving forward with a redevelopment at the site." Crain's reported in August 2019 that Big Boy Restaurant Group signed a 50-year ground lease for the site, which is more than an

acre. The DelGiudice family continues to own the property. Co-owner Michael DelGiudice said in a news release ahead of the spring 2019 closing that they had been "slowing down naturally for the last few years, and after discussing this internally we believe the timing is right." The demolition contractor is Farmington Hills-based BD & E Group LLC, according to Royal Oak online records. An email was sent to the contractor Feb. 12 seeking additional details.

Whitmer proposes massive hike in landfill dumping fee By David Eggert

LANSING — Gov. Gretchen Whitmer is advocating for a 13fold increase in a state fee to take waste to landfills in a bid to curb out-of-state trash and generate more money to clean up contaminated properties. Under the Democratic governor’s budget proposal, the landfill dumping fee — known as a “tipping” fee — would rise from 36 cents a ton to $5 per ton, generating about $75 million more annually. The state budget office says bringing it in line with the average across neighboring states would curtail Michigan’s status as a destination for garbage, mitigate landfills’ emissions of methane — a greenhouse gas — and extend the dumps’ lifespans. The plan is similar to one Whitmer’s predecessor, Republican Rick Snyder, pushed in 2018, when Republicans who controlled the Legislature rejected boosting the fee to $4.75 a ton. Whitmer is hoping the House and Senate, now led by Democrats, are more receptive. The revenue would go to the Renew Michigan Fund, which gets $69 million annually in income tax revenue under a 2018 law that legislators enacted instead of hiking the tipping fee. In addition to the fee increase, Whitmer is asking

Trash is unloaded at a Lennox Township landfill in a 2022 file photo. | AP

lawmakers to change how Renew Michigan funds are spent. Environmental remediation and brownfield cleanup would get 75% instead of 65%. The state has more than 24,000 known polluted sites that are tough to redevelop without government assistance. Initiatives to expand recycling would receive 13% rather than 22%. Landfill oversight would get 7% instead of 13%. Nearly 52 million cubic yards of solid waste was sent to 67 Michigan landfills in the 2021-2022

fiscal year. About 24% was imported from elsewhere, predominantly Canada, which accounted for roughly 19% of all waste disposed of Michigan, according to a report compiled by the state Department of Environment, Great Lakes and Energy. A lot of the imported garbage went to landfills in Wayne and Macomb counties. Whitmer’s plan faces an uncertain future in the closely divided Capitol. Rep. Sarah Lightner of Springport, who is the top-ranking Re-

publican on the House Appropriations Committee, said of the proposal: “I get it, as far as wanting to keep other people’s trash out of our state. But from 36 cents to $5 is a huge jump, and that will be passed on to the consumer. That’s going to raise costs.” State budget office spokeswoman Lauren Leeds estimated the average resident would pay $4 more per year if Whitmer’s initiative is passed. Sen. Jeff Irwin, an Ann Arbor Democrat who chairs a budget

subcommittee that will consider the higher tipping fee, said he is excited about it and backed Snyder’s attempt, too. “Michigan should no longer be the magnet for trash for the Great Lakes region,” he said, adding that the additional revenue would help clean up thousands of orphaned, contaminated properties “that polluters have left behind.” “The landfill industry has always been opposed to increasing fees,” Irwin said. “They like the additional business that Michigan gets by having the lowest fees in the region by far. They’ve always had a significant amount of sway with the Legislature.” The Michigan Waste & Recycling Association, an industry group, said the proposal is “initially concerning due to the impact it would have on all Michiganders,” including residents, companies, local governments, school districts and hospitals. “The environmentally safe, efficient, and affordable collection and management of waste materials is essential to public health and safety, all while supporting business and economic growth,” the organization said in a statement. “As more details emerge, we look forward to working with the governor and Legislature on this proposal.”

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FEBRUARY 19, 2024 | CRAIN’S DETROIT BUSINESS | 7

LOCAL JOURNALISM

NEWS From Page 7

But even the largest news organizations that remain in Michigan have been hard hit. The Detroit Free Press had a newsroom of more than 400 before the 1995-97 Detroit newspaper strike, a former Free Press staffer recalls. In 2000, the Detroit News had a newsroom of 300, publisher Gary Miles recently told Axios. Those numbers have steadily eroded. In 2023, the Newspaper Guild of Detroit had 75 union members at the Free Press and 31 at the News, which doesn’t include nonunion journalists, according to Guild data. At the Macomb Daily, the Guild’s membership went from 72 to 11 between 2013 and 2023. Staffing information is not available for MLive Media Group, which has newspapers in Grand Rapids, Ann Arbor, Flint, Bay City, Saginaw, Jackson, Kalamazoo and Muskegon. But the chain had four rounds of layoffs and buyouts between 2009 and 2018. (The author of this story retired from MLive in 2021 and still has a freelance contract with them.) Local journalism is “in crisis,” said Tim Franklin, who heads Northwestern’s Local News Initiative and is a former top editor at the Indianapolis Star, Orlando Sentinel and Baltimore Sun. “I equate the local news crisis to being journalism’s climate change. It’s this grinding attrition,” he said. “We’re at a real inflection point for local news in America. The question is, how are we going to get out of this?” It’s a question that Stephen Henderson thinks about a lot.

‘Nobody is watching’ Henderson was deputy editorial page editor of the Detroit Free Press when the newspaper was covering one huge story after another: The Kwame Kilpatrick scandal, the auto bankruptcies, the Detroit city bankruptcy. Henderson won a 2014 Pulitzer Prize for his columns on city issues. Henderson left the Free Press in 2017 and helped to found BridgeDetroit, an offshoot of Bridge magazine, a nonprofit news outlet that covers statewide issues. Henderson is immensely proud of BridgeDetroit, which has six full-time staffers and several contract workers. But he’s the first to acknowledge it can’t match the breadth and depth of coverage provided by the Free Press and Detroit News. “BridgeDetroit is doing really great stuff,” he said. “But there’s never a day in which I imagine it’s an adequate replacement for the newsrooms that I used to work in. It’s not even close.” That’s worrisome, say many, because of the importance that the media plays in holding government officials accountable, keeping the populace informed and helping to foster community connections. 8 | CRAIN’S DETROIT BUSINESS | FEBRUARY 19, 2024

Change in newspaper journalists working in 2005 vs. 2022 The number of newspaper journalists working in Michigan from 2005 to 2022 has decreased by 58%.

-60% or more -40% to -60% -20% to -40% 0 to -20% 3%+ Source: Medill Local News Initiative; Bureau of Labor Statistics

U.S. newspaper employment in 2005 and 2023 Total newspaper employment has decreased by more than 70% across the United States in the past 15 years. . -29% Accounting and Management -58%

Newsroom

-70%

Other, Administration and Support

-75%

Sales and Marketing

-85%

Production and Distribution

Source: Medill Local News Initiative; Bureau of Labor Statistics

U.S. newspapers, 2005 and 2023

Michigan news landscape

There has been a net loss of 2,886 papers since 2005.

Total number of outlets in 2023

7,419 7,000

14 9 16 Digital Ethnic Public sites outlets broadcasting

6,000 5,000 4,000

241 Total news outlets

3,000 1,472

1,000 0

Michigan has 202 newspapers: 45 dailies and 157 weeklies. 170 150 157 125 100

4,792

2,000

Michigan newspapers

1,213

75 50 25 0

’05 ’23 Nondaily

’05 ’23 Daily

202 Newspapers

’22 ’23 Daily -2% change

’22 ’23 Weekly -8% change

Source: Medill Local News Initiative

“I really do believe there’s never been a better time to be a corrupt local politician because nobody is watching the henhouse,” said Sue Ellen Christian, a former Chicago Tribune reporter and now a Western Michigan University journalism professor. “There are very few local reporters now, few local news outlets with the bandwidth to pull the documents, go to obscure committee meetings — that’s where you find the story, the string that you pull that becomes a really good, important local news story.” Gannett, which owns 20 Michigan newspapers including the Detroit Free Press and Lansing State Journal, did not respond to a re-

quest for comment for this story. Gary Miles, executive editor of the Detroit News — owned by Digital First Media in Denver, which also operates the Oakland Press, Macomb Daily and News-Herald in Southgate — declined comment. MLive also declined to comment.

‘That was stupid’ For much of the nation’s history, newspapers were a core pillar of democracy and the population’s primary information source. They were also highly profitable. Most newspapers’ revenue came from advertisers — retail

stores, supermarkets, movie theaters, car dealers, real estate listings, employers seeking to fill jobs, candidates running for office. In the late 1990s, publicly traded newspaper companies averaged a 19.5% profit margin, which was two to three times higher than the average for U.S. manufacturing companies, said a 1999 report by Harvard’s Nieman Foundation. In the past quarter century, the internet has completely upended the business model. Most people now get their news online. Monetizing digital news sites is a challenge; the explosion of online searches and social media has created new ways for people to stay

informed and for advertisers to target potential customers. It didn’t help that media companies initially posted all their news content online for free. “That was stupid,” said Esther Thorsen, a Michigan State University journalism professor who studies media economics. “‘Here, Facebook. Here’s all our stories’. … I think the statistics are now that about 50% of people never read a newspaper or look at TV news. They get their news from social media.” The result has been a downward spiral in which media conglomerates cut costs to maintain profitability, which only seems to exacerbate declines in advertising and circulation. In 1997, Gannett reported a 27% return on investment. From 202022, the company lost money. It returned to profitability in 2023 after slashing its workforce from 21,000 in 2019 to 11,200. But many question whether Gannett — and a host of other corporations that have laid off staffers in recent years — are digging their own grave. In 1999, the Sunday circulation was almost 770,000 for the Detroit Free Press and 820,000 for the Detroit News, according to Michigan Press Association data. In 2022, the Free Press’ Sunday circulation was 103,000, according to Gannett’s 2022 annual report. The Detroit News no longer has a Sunday newspaper. “It’s as old as capitalism itself — you have to make a product that people are willing to pay for,” Franklin said. For the big media companies, “the big question I have is, can they survive long term by giving people less and charging more and expecting people to go along for the ride?”

‘A pretty simple calculation’ There are success stories. In 2020, Charles Colby purchased The Sun-Times, a Washtenaw County weekly that covers Chelsea, Dexter and Saline just after it went defunct. Colby — who has a background in marketing and lives in Dexter — revived the publication and it’s now doing well enough that he’s launched a new website and divided the Sun-Times into publications for Chelsea, Saline and Dexter. The Sun-Times has five reporters, three advertising salespeople and two administrators in addition to Colby. The key has been local ownership and interesting, relevant content, he said. “In my estimation, it’s a pretty simple calculation — if the newspaper is of value to the reader, the newspaper becomes of value to the advertiser,” he said. Local ownership helps in selling advertising and subscriptions, Colby said. He’s also more willing than a corporation to break even vs. maximizing profits. “Ownership from afar is almost always the kiss of death” for newspapers, he said. Another success is the growth of online news sites such as Bridge magazine, Chalkbeat and Michigan Advance. Issue Media Group,

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which started in 2005 with Model D, an online magazine in Detroit, now operates 12 news websites in Michigan, including the Ann Arbor Concentrate, Flintside, Lansing Area Capital Gains, Second Wave in Kalamazoo-Battle Creek and Rapid Growth in Grand Rapids. Many of the new startups were created as nonprofits. “I think that’s the future — no offense to our many colleagues in traditional newspapers who are still doing very important work and working harder than ever in the toughest conditions ever,” said John Bebow, founding CEO of Bridge. “I’m bullish about the nonprofit models for a variety of reasons,” he said. “I think their growth potential is only limited by the passion and interest of readership markets. There is money in every midsize city in Michigan to have thriving nonprofit newsrooms. It’s the challenge of whether journalists can capture the public’s attention enough to get them to pay.” But, he acknowledged, a nonprofit newsroom “takes a tremendous amount of energy to build. ... You need accounting services, benefits, payroll management, insurance, stuff that adds up to hundreds of thousands of dollars. You’ve got to have all that backend stuff before you can gather any news.”

‘Filling gaps’ Ben Lando has taken on that challenge. In 2019, he created NowKalamazoo, which already has won awards from the Michigan Press Association and recently garnered a mention in the New York Times. But Lando and his staff — one full-timer and a slate of freelancers — are focused on deep dives into issues such as homelessness and gun violence. At this point, NowKalamazoo doesn’t attempt routine coverage of city and township governments, school boards, crime and court news, business openings and closings, obituaries and local sports. “For me, it’s not about replacing,” Lando said. “It’s about filling gaps” in news coverage. Sarah Alvarez also is about filling gaps. In 2016, she helped to create Outlier Media, a nonprofit news organization in Detroit. Outlier’s initiatives include its Detroit Documenters project, which has trained more than 500 Detroiters to attend local governmental meetings and take notes. The notes go through a pair of editors and are posted online. The documenters, who are paid $18 an hour, are not journalists, Alvarez stresses. But the notes help keep citizens abreast of what’s happening on panels such as Detroit’s Board of Police Commissioners and alert journalists to potential stories that need more in-depth reporting. The documenters project also increases civic engagement by employing hundreds of Detroiters to be active observers of local government. But just as with traditional journalism, fiscal sustainability is the

Sarah Alvarez and Candice Fortman of Outlier Media run a nonprofit newsroom in Detroit that also trains residents to cover meetings and puts their notes online. | NIC ANTAYA

Total estimated circulation of U.S. daily newspapers In 2022, estimated total U.S. daily newspaper circulation (print and digital combined) was 20.9 million for both weekday and Sunday, down 8% and 10%, respectively, from 2021. 60 million 50

‘Some foreboding about 2024’

40 30 20 10 0

1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s

Note: No data for 2010. To determine totals for 2015 onward researchers analyzed the year-over-year change in total weekday and Sunday circulation using AAM data and applied these percent changes to the previous year’s total. Only those daily U.S. newspapers that report to AAM are included. Affiliated publications are not included in the analysis. Weekday circulation only includes those publications reporting a Monday-Friday average. Comparisons are between the three-month averages for the period ending Dec. 31 of the given year and the same period of the previous year (2015-2019). Sources: Editor & Publisher; estimate based on Pew Research Center analysis of Alliance for Audited Media data.

Unique visitors of newspaper websites The average monthly unique visitors to the top 50 U.S. newspapers by circulation in the fourth quarter of each year. 13.9 million 12.0 million 11.1 million

10.0 8.0 6.0 4.0 2.0 0.0

big challenge for Outlier and other nonprofit newsrooms, especially as grants typically fund limited periods. “Being a nonprofit does not change the fundamental economics of news,” Alvarez said. “It’s a very difficult business model.”

2014

2015

2016

2017

2018

2019

2020

2021

2022

Note: The data represent the average traffic for each website in October/November/December of each year. The analysis is of the top 49 newspapers by average Sunday circulation, according to the Alliance for Audited Media, and the Wall Street Journal and the Comscore results for the papers’ homepage URL. Source: Comscore Media Metrix Multi-Platform US Unique Visitors October-December 2014-2022. Pew Research Center.

profit newsrooms such as Bridge, Outlier and NowKalamazoo. In December, the Rotary Club of Traverse City hosted a brainstorming session for community leaders to consider ways to support and promote the region’s media outlets. Community members also have an important role to play, by realizing that when it comes to local news, people get what they pay for, said Christian, the WMU professor. “If you care about what’s happening in your community, then pay for local news” by subscribing to local news sites, Christian said. “The inevitable response is, ‘Well, it’s just so bad.’ To which I say, ‘So what do you expect? Nobody’s paid for 20 years, and now we’re on fumes.’”

There is no silver bullet for the news industry, experts agree. “There is no one answer to this problem,” said Franklin, the Northwestern professor. “But in general, for legacy local news outlets, it’s making the pivot from print to digital and making the pivot from an advertising-based business model to a readerrevenue-based model. So changing the income equation so that it’s more focused on digital subscriptions, and then finding other diversified revenue streams. “But what really worries me is that last year, we saw a huge number of layoffs across the media industry — Tim Franklin, who heads including in local news, and Northwestern’s Local News Initiative we’ve seen advertising revLeach, the Holland Sentinel exenues just plummet for a lot of local news organizations, so that ecutive editor, echoes that sentigives me some foreboding about ment. The reporting on Ottawa Impact proves the importance of 2024.” On the other hand, more and local media in keeping communimore foundations and philanthro- ties informed and holding public pists are interested in supporting officials accountable, she said. “What we do has value,” she local news initiatives, Franklin said. “But journalists can’t live on said. A coalition of 22 national foun- air. We have to eat. … By giving a dations recently announced plans couple of dollars a month, you’re to pump a half-billion dollars into able to help prevent cronyism, local news efforts over the next corruption, all of those sorts of five years. Meanwhile, local foun- things that nobody ever wants dations are giving money to non- happening in their community.”

“What really worries me is that last year, we saw a huge number of layoffs across the media industry including in local news.”

FEBRUARY 19, 2024 | CRAIN’S DETROIT BUSINESS | 9

LOCAL JOURNALISM

6 strategies to bolster local journalism in Michigan Traverse City to consider ways to bolster the region’s local news coverage, said Jacob Wheeler, publisher of the Glen Arbor Sun. The Rotary Club of Traverse City hosted the daylong event, in which community leaders met in the morning and journalists in the afternoon.

By Julie Mack

Michigan’s news industry is in crisis. The internet has completely upended the business model. Most people now get their news online for free. Advertisers once wholly dependent on newspapers now have many more options. Local journalism has gone from being a highly lucrative business to one on life support, struggling to survive. “The revenue that we lived off is just not there anymore,” said Stephen Henderson, a former Detroit Free Press editor who went on to found BridgeDetroit, an online nonprofit newsroom. “It’s almost impossible to sustain a news organization the way we used to.” The shrinking of local newsrooms can have major implications for communities. “There’s research that shows in news deserts or low-information communities, corruption increases, and civic participation goes down. So does turnout in local elections and the number of candidates seeking public office,” said Tim Franklin, who heads Northwestern University’s Local News Initiative, which studies American journalism. “So, there are tangible consequences to the lack of local news,” Franklin said. “It’s the watchdog role, the accountability role. And I would argue it goes well beyond that. I think local news organizations are the glue that holds together communities in many ways. They provide residents with information about deaths and weddings and local businesses that are opening and closing, what’s happening with schools. These are all the intangible, ephemeral things that local news does that makes a community feel like a community, that connects people. And that’s what’s been lost.” Henderson, Franklin and others agree there is no single strategy to shore up floundering media companies. But there are paths to increasing resources for local journalism.

Increase financial support from readers A major challenge for media organizations is that people now expect to get their news for free. For newspapers to stay financially viable they need to transition from a business model largely funded by advertising to one largely funded by subscriptions — and that means educating customers about the necessity of paywalls for accessing online content. “That’s one of my struggles,” said Amber Rood, general manager of The Daily News in Greenville. When people complain about paying for online news stories, “I explain to them that the writers are educated employees and they need to be paid. … I don’t get to fill up my gas tank for free or get my groceries free” and news reporting 10 | CRAIN’S DETROIT BUSINESS | FEBRUARY 19, 2024

Deploy citizen watchdogs

Outlier’s Documenters program helps Detroit residents inform their fellow citizens of the actions taken at public meetings. | NIC ANTAYA

Moreover, it’s unrealistic to think that philanthropy will fully fund the depth and breadth of coverage once provided by for-profit newspapers, such as routine coverage of city and township government, schools, crime and court news, local business coverage, obituaries, high school sports, and local arts and culture. “More than 90% of all local news organizations are for-profit,” Franklin said. “So as important are nonprofits are becoming, it’s still a small percentage of the overall number of local news outlets.”

Increase collaboration between local media outlets For-profit companies such as those that own the Detroit Free Press and the Detroit News have had a series of cutbacks in the last decade. | CRAIN’S DETROIT BUSINESS FILE PHOTO

is a service that requires payment. Key to getting and keeping subscribers is providing a steady stream of interesting and relevant content, a challenge for shortstaffed newsrooms. But communities should also understand that they get what they pay for. “You got to pay for your local news. You just got to,” said Sue Ellen Christian, a Western Michigan University journalism professor. “Readers have not been funding local journalism. And so to people who complain about local journalism, I say, ‘Do you subscribe?’ It’s like asking when you complain about an elected official: ‘Did you vote?’”

Increase support from foundations, corporate sponsorships and philanthropists “Philanthropy is moving into local news in a big way, and in an unprecedented way,” Franklin said. Last September, a coalition of 22 foundations launched the Press Forward initiative, committing

more than $500 million over the next five years to bolster local news organizations and initiatives. “Half a billion dollars is a lot of money,” Franklin said. “It’s not enough money to solve the crisis, but my hope is it will at least provide some runway for a number of local news organizations to figure out a new model.” Michigan now has a number of online news organizations largely funded by foundations and corporate sponsors, including Bridge, BridgeDetroit, Michigan Advance, Chalkbeat and Outlier Media in Detroit and Issue Media Group, which operates 12 news websites in Michigan including the Ann Arbor Concentrate, Flintside, Lansing Area Capital Gains, Second Wave in Kalamazoo-Battle Creek and Rapid Growth in Grand Rapids. However, there is a limit to what foundations and corporate sponsors are willing to fund: It’s often money for intensive reporting on specific subject areas, such as health care or education, and grants are typically for limited time spans.

Competition has long been part of journalism culture. But as newsrooms shrink, it makes more and more sense for local news outlets to collaborate and maximize their collective resources. “Our DNA has always been to compete with one another locally, and, to me, the secret sauce is how we retain that sense of competition that gives us great local news while allowing collaboration,” Christian said. For the past two years, Christian has been part of the Southwest Michigan Journalism Collaborative, an initiative funded by the Kalamazoo Community Foundation and involving 12 media outlets in the Kalamazoo-Battle Creek region. (The writer of this story also participated in SWMJC.) In 2022 and 2023, collaborative members wrote more than 75 stories on various issues around mental health care and each media outlet was allowed to publish any or all of those stories. The foundation grant was not renewed, but SWMJC is seeking new funding and moving onto new topic areas. More collaboration between media outlets was a big takeaway at a Dec. 1 brainstorming session in

One of the fundamental responsibilities of the local news media is covering county, city and township government as well as school boards, a labor-intensive effort. Outlier Media, a nonprofit digital news organization in Detroit, is trying to combat that with its Detroit Documenters project, in which it has trained 500 Detroit residents to attend local government meetings and take notes, which are posted online. The documenters, who are paid $18 an hour, don’t write stories or do the follow-up reporting that a journalist would do. But the documenters do help keep an eye on local officials and keep residents informed. It’s a grant-funded model already being replicated in other communities, said Sarah Alvarez, a founder of Outlier Media.

Enact public policies that bolster revenues for media organizations About 20 states have passed legislation or are considering legislation to bolster local news organizations, Franklin said. Among those policies: Directing government agencies to spend part of their marketing budget on local news advertising; tax credits for local news subscriptions; and/ or tax credits for local businesses to advertise in local news outlets. “There’s legislation pending in California that would basically require the tech platforms to reimburse local news outlets for use of their content,” Franklin added. “I don’t know if that’s going to pass, it could be a game-changer.”

Use artificial intelligence “At the moment, we’re not there yet where AI can deliver reliable, accurate news and information 100% of the time,” Franklin said. “But I think in the not-to-distant future, we’re going to see AI-generated local content in local publications. The question is: How extensive can that be? Certainly, in some cases, such as with local sports or local business or local events, you can see AI playing a role.” If AI can help make local news gathering more efficient and free up human journalists for more indepth reporting, “then AI can be a really powerful tool that can help local news.” The challenge, he said, will be judicious use of AI and knowing when and how to use it, adding it’s a mistake to see AI “as a universal solution of a lot of different problems.”

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COMMENTARY | LOCAL JOURNALISM

Being vital is a better strategy than going viral

Here are a couple of the things eading the headlines, you going on right now, as I see it. would think that the media is on death’s doorstep. What is really happening is an inflection Consumption changes point on changes already in progress for years. It’s easy to point a finger at the It’s not like people aren’t spendalmighty algorithm, the formulas ing time with media. People are tech companies use to decide watching a billion hours of Youwhat’s in your feed. But we can’t igTube each day, and YouTube has Jer Staes is a nore that the way we live, for better more than 100 million paying co-founder and or worse, has changed. People are subscribers. busy. Kids, jobs, commutes, gym the host and Obviously, you’ve heard the sto- producer of the time, making dinner; you name it. ries of TikTok and Instagram’s suc- Daily Detroit What you create has to fit into cess. But did you know that Face- podcast. daily life. It must be useful or interbook’s “Golden Age” is now? More esting enough for people to keep people are using Facebook (even in North locked in. There’s a lot of competition for America) than they ever have. I would have time and attention. been surprised if I didn’t have a post that If you want to play the algorithm game, recently did more than 750,000 impressions there’s success in short, punchy content on our page. that gets the point across, often with visual Newsletters are seeing a rise, too. There impact. are independent journalists, writers and But what you want to do, in time, is set collectives of creators, building subscrip- yourself apart through connection. Viral is tions and getting advertisements; covering all well and good, but vital pays the bills. their niches like no one else can. Some have Community works, where you’re “part” of a paywall, and others don’t. something. The runaway success of the New And podcasts. Despite some recent York Times (they’ve recently added another shakeouts, deals big and small are still hap- 300,000 subscribers, with more than 10 milpening. It turns out you can’t just grab a lion people paying) is not just about the random celebrity and think they’ll be good news part, but the games, the recipes, the at making a podcast. It’s a talent of its own puzzles. Being an NYT subscriber tells othand the cost structure of some shows were er people something about you. Public raout of control compared to the revenue. dio often uses this strategy well. I still have

and wear my “Public Radio Nerd” shirt, and my Detroit Public TV novelty license plate. Podcasts are a great “companion” medium. You take it with you, helping you get through the worst or mundane of your day. Washing the dishes, walking the dog or driving. Where you may have blocks of 15, 30 or 60 minutes to get into a story. Or you’re working a job where your mind needs to escape, or need someone to keep you company. Connecting to storytelling and conversations is as old as human history. Whatever way you can find to go deeper and make it valuable with a connection that sets you apart from the algorithm. That’s a tall order, but can be done.

Standing apart After the last few years, it’s understandable that news avoidance is on the rise. Whatever your political beliefs, it’s been a ride. But the news can’t only feel like a chore. Guilting people into giving up money every month isn’t a viable business strategy. You need to give people affirmative reasons to support what you’re doing. Maybe it helps them do their job. Makes them feel that they’re a part of something. Or just flat out entertains them. A mentor of mine, an award-winning member of the Michigan Journalism Hall of

Fame, taught me to ask “What’s the plus one?” and I’ve taken that advice to heart over the years. It still works today. What’s the point of rewriting the same thing everyone else did, fishing for traffic, when you can build an audience by adding context, a new fact, or a new perspective? Or can you save someone time, by distilling something and sending people to the best work possible? If you step back and think about it, especially in national news, there’s a lot of the same. Who really needs 65 versions, most all the same, of the latest presidential story? Of course a few are going to rise to the top, and the others will fade away. Cable news gets a lot of attention among pundits, but there’s no guarantee it sticks around, either. This path does take more work. But it adds more value. When people feel like they’re getting value, whether it’s underwriters, partners or supporters, they’ll give value back. If you’re giving people the same thing everyone else is, you’re a commodity. I don’t know what the future holds. I do not have all the answers, and do have a lot to learn. But I do know doing the same thing over and over and expecting different results is the definition of insanity. Unlike some, I am optimistic. It will look different, but there is a path forward by keeping the main thing the main thing, and being that “plus one” to people’s lives.

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

JoyceFdn.org FEBRUARY 19, 2024 | CRAIN’S DETROIT BUSINESS | 11

LOCAL JOURNALISM | COMMENTARY

Strong democracy is worth investment in local news

lenges to our voting and voteayoffs. Strikes. Shrinking aucounting systems, to dispel all the diences. News fatigue. mysteries and conspiracy theories. The news about today’s ◗ It’s not just small or niche nonnews business is pretty bleak. But drowned out by the roar of bad profits. Last year, the Detroit Free headlines is something far more Press joined other news outlets at positive: The quiet blossoming of “Advancing Democracy” workideas into a journalism that is more shops, co-hosted by the Solutions responsive, more inclusive, more Journalism Network, where they collaborative — and worthy of inexplored how to refocus election vestment if we are serious about campaign reporting on what voters democracy. want to know, instead of what canHugh Dellios Where do parents, taxpayers, is a former didates want to tell them. ◗ Even what you’re reading right policymakers, and CEOs find news editor and they can trust, amid all the distrac- correspondent now, Crain’s Forum for Michitions on social media, talk radio, with the gan, is an effort to resurrect the and cable TV? Well, here’s a few Chicago kind of invaluable, in-depth public places where philanthropy is help- Tribune, affairs reporting that other media ing new ideas hatch, right in the Associated can’t or don’t spend money on great state of Michigan: Press, and anymore. Without a website pay◗ Bridge Michigan, with its NPR. He now wall, it’s free to the public. The question is how we give partner Bridge Detroit, is an manages the these projects the oxygen they award-winning, nonpartisan news Journalism organization that offers original, program at the need to thrive and scale, against so many financial, technological, and fact-based reporting on big-picture Joyce other threats. And there’s no time public affairs for the state. It’s one Foundation in to lose, given how many of our of a number of respected nonprofit Chicago. Joyce communities are turning into newsrooms sprouting across the is a sponsor of country, such as the Texas Tribune, Crain’s Forum. “news deserts,” according to Northwestern University’s Medill Local CalMatters and Wisconsin Watch. ◗ Outlier Media serves Detroit residents’ News Initiative. This is where philanthropy can help. need for useful information about housing, transportation, and more — and starts by Foundations in Michigan and beyond have asking directly what people need to know, increasingly stepped up to support journalthrough its pioneering text-message system ism, recognizing that our media troubles and the explosion of misinformation underthat’s become a nationwide model. ◗ Votebeat Michigan, another nonpartisan mine our communities’ highest priorities, nonprofit, was born of lessons from the 2020 such as good schools, fair elections, public election, and focuses on illuminating chal- health, and public safety.

Nonprofit newsroom Outlier has trained more than 500 Detroiters to attend local governmental meetings and take notes, which are then edited and posted online. | NIC ANTAYA

The Joyce Foundation has expanded its journalism grantmaking to help strengthen nonpartisan, independent reporting on public policy issues in the Great Lakes region — including in Michigan. More recently, it is exploring how to fortify “trusted messengers” for communities who don’t see themselves or hear their voices in traditional media. That is the idea behind Press Forward, a national campaign to revitalize local news. Through it, 22 foundations — including Joyce — have pledged to spend $500 million over five years to empower local journalism again, make it more inclusive, build new business practices, and explore changes to public policy that might help it prosper again. Half a billion dollars sounds like a lot, but fixing such a pervasive national problem is going to require far more. The underlying aim is nudging all of us to acknowledge the dangers in our news crisis, so we can address it in our own neighborhoods, through community foundations, private donors, corporate sponsorships, reader donations, and other means. So far, so good. Local Press Forward chapters have sprung up in states such as Minnesota and Alaska, and in cities such as Chicago; Springfield, Illinois; and Wichita,

Kansas. By itself, philanthropy isn’t the ultimate solution. But it can be a bridge to a moment when this generation’s media entrepreneurs have had a chance to solve the puzzle of a more sustainable business model, one that serves audience needs, counts on a variety of solid revenue streams, and restores value in producing news. Like at Outlier, a good starting place is to listen better. Another Joyce investment is a new study of audiences across the Midwest by the Pivot Fund, a venture philanthropy organization. Its goal is looking deeper into where people choose to get their news today, and who they trust, especially in communities of color and rural communities. A strong, free press is essential to the functioning of our society – and that’s why it’s the only private industry specifically protected by the U.S. Constitution. But unless we invest in real newsrooms, we’ll continue to see the disappearance of real reporters who ask the tough, informed questions that help forge good policy and hold our leaders accountable. The return on that investment? A betterfunctioning, more stable democracy. The alternative? Maybe waking up one day without one.

Local news outlets should seize the moment

tion. How do we get honest reportn a recent wintry morning, ing on local events and issues six of us from a local journoticed by readers, viewers and nalism collaborative sat listeners in our digital age of conaround the table in a nondescript tent saturation, misinformation office of a monthly community and online chaos? Plus, not only magazine, fingering the printed are adults overall consuming less agenda. The first item: “Need to news, but many also now intenraise funds to support collaborationally avoid any news and its attive operations and work.” tendant hyperbole, negativity and Like most local news operations Sue Ellen in Michigan and beyond, the publi- Christian is the fear-mongering. Local news is an oasis from the cations in the collaborative are 2021-2024 national muck. The Gallup/Knight struggling to stay afloat financially Presidential study from last year showed that and are sharing reporting on key Innovation adults in the U.S. trust local news topics to expand the outlets’ reach Professor in and resources. The collaborative, Communication organizations two times more than national news outlets (44% to 21%), the Southwest Michigan Journalism at Western and perceive local journalists as Collaborative, represents nine news Michigan caring more about the impact of or community information organi- University. She their reporting. zations, as well as the student is the author of For the collaborative and the namedia and journalism program at “Everyday Western Michigan University. Media Literacy: tion’s many struggling local news outlets, there was this hope-giving The collaborative members are An Analog finding: “When Americans perworn out from battling a common Guide for Your ceive that local news organizations challenge that I address in my book Digital Life.” do not have the resources to report on media literacy and news media literacy: The attention economy. Our soci- the news accurately and fairly, they are ety isn’t short on news, we’re short on atten- more likely to say they would consider pay12 | CRAIN’S DETROIT BUSINESS | FEBRUARY 19, 2024

ing for news in the future,” stated the report. The future is now, people. Substantive research indicates that with the loss of local news, communities and our society lose more than just prep sports and city commission coverage. Reduced staffing at local newspapers results in fewer candidates running for mayor and lower voter turnout, according to one California study. Local newspaper closures mean poorer standards of public finance, including increased government wages and higher deficits, a 2018 national study reported. Members of Congress who are less covered by the local press work less for their constituencies and more for the national party, another study found. Plus, when a local newspaper closes, people don’t find another local news source. According to a Massachusetts Institute of Technology study, they turn to national news, which makes people more likely to vote for one party up and down the ballot. No one will routinely and neutrally cover local happenings except local journalism. As it is now, national and regional outlets

don’t care about smaller communities until there is a school shooting, a natural disaster or an over-the-top power grab involving library books. The “local” news choices on my Apple News feed are laughably large and far away: Chicago is my local news choice. Detroit isn’t even an option. A healthy democracy depends on an informed citizenry. Local news is essential, and today’s financially struggling outlets need local paying subscribers.

Reduced staffing at local newspapers results in fewer candidates running for mayor and lower voter turnout. A major hurdle for the collaborative is getting noticed by residents in this age of clickbait, AI-generated news and disinformation. It’s one reason I created a website for teens and adults focused on media literacy and news media literacy, so people can learn the skills to assess real news from bot-produced fake content. With local news, the people reporting and writing are not only real, but they are neighbors.

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COMMENTARY | LOCAL JOURNALISM

Responsive journalism brings community concerns to forefront

ridgeDetroit was born from the belief that residents of our city need and deserve a newsroom that is focused on their communities and concerns — the same communities that often go unrepresented in the local news market. Cities across the country see that lack of representation, but here in Detroit it has become particularly acute — though we are a market fortunate to still have two daily newspapers, a handful of TV stations, several specialty news publications and other nonprofit newsrooms. We know from Pew research that just two in 10 people have ever had a chance to speak to a journalist. That number drops the younger and Blacker the community is. And at the same time, research shows that Black Americans are far more likely to trust news when it comes from people who look and sound like them. This is where nonprofit news organizations like BridgeDetroit have much to offer. Four years ago, a group of concerned journalists and professionals came together to craft a community-engaged, community-focused, journalist-led newsroom designed to listen to

BridgeDetroit newsroom and contributors photographed in December 2023. (From left) Kayleigh Lickliter, Quinn Banks, Christine Ferretti, Malachi Barrett, Stephen Henderson, Jena Brooker, Micah Walker, Orlando Bailey, Evan Daugherty and Nushrat Rahman. | VALAURIAN WALLER

Detroiters — centering on the city’s passionate yet underserved residents. Our goals are to build authentic relationships with our fellow Detroiters and treat their experiences and priorities with dignity, intention and respect. We work to produce and widely distribute journalism in response to Detroiters’ priorities and concerns, and we lift awareness of Detroit-focused information needs in the regional news market. Because we are not a

traditional newsroom with stockholders, we are not beholden to making a certain return. We are beholden to our members and they keep us honest in the work that we do. The heart of BridgeDetroit’s responsive journalism model turns on two questions: To do this, we meet Detroiters on their porches through our door-todoor canvassing efforts. We hold community conversations on topics our members have told us mat-

ter to them throughout different corners of the city. We are constantly getting suggestions and tips from Detroiters. And when someone calls our number asking for help, we do our best to get it for them or direct them to someone who knows better. BridgeDetroit has been in contact with thousands of Detroit residents about their lives, their communities and the issues that challenge them. The information generated from those conversa-

tions — digital, in person, phonebased — has shaped coverage published by BridgeDetroit, but also its overall approach to reporting in the city. As we do this, we are building a pipeline of diverse journalists dedicated to community-focused news and lasting relationships with Detroiters. The challenge for our future is a similar challenge to what other traditional newsrooms face — can we afford to keep doing this type of work without having to lose staffers and coverage? As a nonprofit, we must constantly prove our worth to donors and supporters. And as we get further along into a major fundraising year, we must balance our desire to serve our community with operating within our means. Any journalist will tell you there is always more that can be done. More meetings to cover, more people to hold accountable, more stories to tell, more truth to be found. And when newsrooms shrink under the strain of funding and job cuts, these vital services can get lost in the process. Detroiters deserve a newsroom that cares about what they care about. And we will continue to fight to provide that for our city.

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Building code changes could hamper housing goals By Nick Manes

During her annual State of the State address last month, Gov. Gretchen Whitmer said she wants to “build, baby, build” as a means of addressing the state’s housing shortage. But a key trade group says the Whitmer administration undermines that very message with a push to overhaul the state’s residential construction building codes. Specifically, the state’s Department of Licensing and Regulatory Affairs has proposed mandating sprinkler systems for fire safety in all new residential construction, which if implemented would make it just one of a few states to do so. Additionally, the proposed changes would call for updated insulation and framing aimed at

Michigan’s proposed building code changes in residential construction call for updated insulation and framing aimed at greater energy efficiency. | BLOOMBERG

greater energy efficiency. Bob Filka, CEO of the Lansingbased trade group Homebuilders Association of Michigan, said his organization and its membership

are all for increased energy efficiency and fire safety. However, Filka contends the proposed changes don’t do enough to meet those goals and will increase costs

PEOPLE ON THE MOVE

for builders at a time when new construction is sorely needed to meet the state’s needs for additional housing inventory. The group estimates the proposed code changes would tack on about $20,000 to the overall cost of construction of a home. “A conservative or liberal economist would say, ‘You don’t raise taxes when the economy is in a recession,’ ” Filka said. “The analogy for the housing crisis we’re in — essentially a housing recession — is that the time to raise costs by $20,000 or more? And I would argue that no, it’s not the time. We have a huge (housing) affordability and attainability problem.”

Proposed mandates Changes to the state’s residential building code proposed by LARA

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

ACCOUNTING

CONSTRUCTION

HEALTHCARE / INSURANCE

LEGAL

Plante Moran

ARCO National Construction | Detroit

Gallagher

Burris Law

GBS promotes Chadd Hodkinson to Market Leader, MI Public Sector. He will be responsible for continuing to guide Gallagher’s growth in the MI market. By empowering teams who have deep expertise in MI public sector benefit programs, anticipating public sector client needs and exceeding client expectations, the Gallagher Public Sector Practice is driving client benefit program stability & sustainability. Chadd joined Gallagher in 2015, and has over 20 years of professional consulting experience.

Lindsay N. Kandow and Erica K. Schaefer joined Detroit-based Burris Law as patent attorneys and partners. Kandow focuses on Kandow the preparation and prosecution of electrical and software patents and has led teams of patent attorneys to assist clients with patent portfolio development and management. Schaefer concentrates her practice on the preparation and prosecution of mechanical, electromechanical, and design patents. Schaefer Both attorneys bring extensive experience as patent attorneys and team leaders and will be engaged in the overall management and growth of the firm.

Dana Coomes has assumed the role of managing partner of Plante Moran’s Macomb office where she’ll focus on developing and growing the firm’s Macomb staff. She’ll also continue serving the firm’s technology, automotive and higher education clients. Coomes succeeds Dave Herrington, who is preparing for retirement on June 30.

Mitch Hudepohl was recently named Director of Business Development of ARCO’s newest affiliate office in Detroit. Mitch has nearly 10 years of construction experience and has managed large-scale construction projects nationwide. His deep industry knowledge and commitment to customer experience have made Mitch an invaluable asset to ARCO clients. He looks forward to servicing new and existing clients throughout the Detroit market.

INSURANCE FINANCIAL SERVICES

J.P. Morgan Private Bank AUTOMOTIVE

Autobridge Inc In a strategic move aimed at accelerating growth and expanding its reach within the automotive industry, Autobridge proudly announces the appointment of New Sales and Marketing Director, Alexander Grube, a seasoned professional with over a decade of automotive experience, to lead its sales and marketing efforts. Join us as we explore the exciting journey ahead. 14 | CRAIN’S DETROIT BUSINESS | FEBRUARY 19, 2024

Christie Evey joins J.P. Morgan Private Bank in Birmingham as an Executive Director and Banker. Christie works closely with business owners and families who have come into wealth through succession, and who seek trusted guidance from one of the most respected financial institutions in the world. She recognizes that clients are not only looking for ways to strengthen the family business, but to strengthen the business of family. Most recently, Christie joins the firm from Bank of America.

Kapnick Insurance Specializing in manufacturing, hospitality and agribusiness sectors, Emily Kouzmanov is Kapnick’s newest commercial risk client executive. She is eager to deliver tailored solutions that exceed client expectations. An MSU alum, her expertise is backed by extensive experience in consultative sales and leadership within the hospitality industry. Her roots in the dairy industry further enhance her ability to serve Michigan’s agribusinesses.

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include requiring specific framing and insulation, as well as mandatory sprinklers intended for fire suppression. The proposed changes, which will go through a public comment period, are part of a mandated review the agency must go through for adopting international code standards, according to a statement from Andrew Brisbo, director of the Bureau of Construction Codes at LARA. “Adopting internationally recognized codes, beyond being required by statute, ensures the state is best positioned to leverage new building techniques and materials to reduce construction costs, improve energy efficiency, and provide for safer residential and commercial structures,” Brisbo said. “LARA is committed to aligning the state’s building codes with the Statewide Housing Plan and Michigan Healthy Climate Plan.” Adopting the energy codes could save a first-time homebuyer approximately $7,300 over 30 years, according to figures from LARA. Filka implied that the code changes amount to a giveaway to manufacturers of such items, “instead of convincing homeowners their products are worth purchasing.” The increased energy efficiency sought through the changes can be achieved with myriad modern technologies at a lower price and giving builders more flexibility, according to Filka. The mandate on sprinkler systems, he said, amounts to something of a red herring. The real push, according to Filka, should be around ensuring people have working smoke detectors, particularly in older homes. “People aren’t dying in new homes from fires,” according to Filka. Rich Kligman, a now former president of Filka’s organization and the founder of Plymouthbased homebuilder Superb Custom Homes, wrote on the topic in a Crain’s opinion piece last year. “So long as the energy performance of a home meets the same targets, why must the state dictate a narrow approach to achieve it,” Kligman wrote. “Let technology and innovation reign instead of mandating methods and products.” Some 46 states have completely removed the sprinkler requirements for one- and two-family homes, according to a 2019 report from the National Association of Homebuilders, the most recent data available. Only California and Maryland mandate sprinkler systems, while Massachusetts and New York have “partial” mandates.

New housing units The Whitmer administration, in 2022, laid out a plan to build or rehabilitate 75,000 housing units around the state within five years. The real need, however, is closer to 190,000 units, Amy Hovey, director of the Michigan State Housing Development Authority, previously told Crain’s.

DRAFT From Page 1

“I started working with the local organizing committee about a year ago. The first thing we wanted to do was get an idea of some of the requirements the NFL was looking for as far as vendors,” Bowman said. “From an MDBBA perspective, we wanted to ensure the businesses were a good representation of what Detroit looks like, which is a city that’s 80% Black. We’ve also been vocal about ensuring that Dearborn, with the largest Muslim population ... participates.” To be eligible, businesses must have Minority Business Enterprise certification, according to Bowman. The Detroit Civil Rights, Inclusion & Opportunity office has certified about 40 MDBBA-member businesses. Those businesses have also been nominated for the NFL Business Connect program, which connects experienced, event-ready businesses with opportunities to compete for contracts related to major NFL events. The city CRIO office as of Feb. 13 had held three citywide certification fairs. Around 600 businesses have been nominated for fewer than 100 contracts, Bowman said. “It’s a big pool, for sure,” Bowman said. “But we’re not thinking about just the Draft. We want these businesses to think about all the other events coming to Detroit — the Grand Prix, Rocket Mortgage Classic, (NCAA men’s basketball) Final Four. We want them to be prepared to get contracts for all of those events, too.” Draft organizing committee coChair Alexis Wiley told Crain’s that the group is working intensely to create opportunities for Detroit businesses to be highlighted during the Draft when it is in town April 25-27.

Opportunities abound

MARKET PLACE

The NFL Draft is a big deal for the city with the potential for more than $100 million in economic impact, officials have said. Detroit lost out on bids to hold HEALTH BENEFITS the annual event in 2016 and 2018. Then the NFL announced in March 2022 that the 2024 Draft would take place in Detroit for the first time. Bowman said some businesses have already been selected for work leading up to and during the Draft. For example, De-

REAL E

The 2024 NFL Draft is set for April 25-27 and Detroit small businesses will be a big part of the event. | JAY DAVIS

The Love Experience owner Nina Love (center) and her crew will be busy when the draft comes to town, catering meals for a production crew working the event. | NINA LOVE

MBE certification, applicants needed references, a breakdown of company information and a detailed price quote. Along with the catering, Love’s company is being considered as a vendor for the Draft during which The Love Experience would host a pop-up at an undisclosed location. The catering company will also work a Draft party hosted by Detroit PAL. Love said she’ll have 35-40 people working the week of the Draft. “This is huge,” said Love, who relocated to Detroit from Baltimore in 2021. “It’s probably a career-boosting move. It’s one of those moments in time you get to level up. I’ve been cooking since I was 19 and I’m almost 40, so I’ve been preparing for an opportunity like this my whole career. It’s an opportunity for myself and other business owners to showcase our talents, experience, and our teams.” Love’s business is just one that will be right in the thick of the NFL Draft hoopla. Bowman said about 20 busi-

“It’s probably a career-boosting STATE move. It’s one of those moments COMMERCIAL PROPERTY in time you get to level up.” — Nina Love, owner, The Love Experience troit-based, Black woman-owned The Top Pic Collective will handle all on-set decor for the event. Another Detroit-based, Black woman-owned hospitality business, The Love Experience, will cater food and drink for the Draft production crew for seven days around the event. Owner Nina Love, who started the company in 2012, called the application process intense. Outside of earning

JOB FRONT

nesses will be selected to operate directly in the Draft footprint, which runs from Campus Martius Park to Hart Plaza on the Detroit River. (Renderings of the footprint were released this month.) More than 100 businesses were invited to apply. “It’s a huge benefit to the businesses that are selected for that,” Bowman said. “The 20 businesses that participated in the 2023 Draft in Kansas City made a little more than $1 million. We’re really just working to make sure Detroit businesses have a fair shot at NFL contracts and beyond. The Draft has been a huge catalyst for getting small business owners in gear as we prep for roughly 300,000 to 400,000 people to be in the city during the Draft.” Visit Detroit President and CEO Claude Molinari previously said 300,000 guests over the three-day event is a conservative figure. No matter how many people show up, the NFL Draft is a big moneymaker. Visit KC found that the 2023 NFL Draft generated more than $164 million for the city’s economy. Bowman estimates the 2024 edition could bring about $150 million to Detroit.

All of that won’t be spent in the heart of downtown, though. Bowman said plans are in place for a night market in Eastern Market on April 26. TV Lounge, a 15,000-square-foot Black-owned dance and night club near Cass Technical High School just north of downtown, will host a Welcome to Detroit event on April 24. The Corner Ballpark, in Corktown at Michigan Avenue and Trumbull, will host food truck rallies all three days of the Draft. “Yes, the Draft itself will be largely downtown, but there’s not enough places downtown to feed 300,000 people,” Bowman said. “There’ll be a number of activations outside of the footprint, too. We’re working on some things in Greektown, Capitol Park. There are conversations happening on

how to activate some of the neighborhoods outside of downtown.” Bowman believes this NFL Draft has the potential to be bigger than previous editions. He noted there are seven other NFL cities within driving distance of Detroit as a factor. “I don’t think people understand the magnitude about what’s going to happen to the city,” Bowman said. “It’s going to be a huge event for a lot of parties, small businesses included. It’s really exciting. It’s almost a dress rehearsal for some other events like the Super Bowl or NBA All-Star weekend. The difference is (the Draft) is a free event. I don’t think you’ll see that many people in the city again for a while. It’s going to be really exciting.”

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CLASSIFIEDS

To place your listing in Crain’s Detroit Classifieds, contact Suzanne Janik at 313-446-0455 or email sjanik@crain.com

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FEBRUARY 19, 2024 | CRAIN’S DETROIT BUSINESS | 15

Plan to expand Music Hall takes a step forward By Sherri Welch

across the country, the nonprofit bonds are something Music Hall leaders said hasn’t been used in Detroit for almost 25 years, since the renovation of the Michigan Opera House. “The use of 501(c)(3) tax exempt bonds has been an overlooked development tool in the city for decades,” said Vincent Paul, president and artistic director of Music Hall. “My hope is that other notfor-profits in the city will follow our example.” Unlike municipal bonds where a public entity issues them and is on the hook in the event of default, Music Hall will be the obligator and borrower on the tax-exempt bonds, securing them with its current cash flow and a fund reserve of 5%-10% of the amount borrowed to ensure payments aren’t missed. The bonds lower the cost of borrowing for charitable nonprofits by almost 2 percentage points, Ghebre Mehreteab, the former CEO of the National Housing Part-

The Detroit Economic Development Corp. has approved Music Hall Center for the Performing Arts’ plan for a $122 million expansion it has in the works in downtown Detroit. The project plan now heads to Detroit City Council for a public hearing and approval, said Rebecca Navin, general counsel for the EDC. With City Council approval, the EDC then must give a final blessing to the issuance of up to $80 million in nonprofit bonds for the project before it can move forward. The 501(c)(3) tax-exempt bonds, which are available for use by charitable nonprofits and must be issued by a public body, will finance roughly two-thirds of the cost of the expansion planned for the vacant lot next to Music Hall’s historic home on Madison Street at Brush Street. A finance product often used in affordable housing, nonprofit hospitals and university projects

HIGH-RISE From Page 3

ry of downtown Detroit remains very strong. Both assets have a light value-add component to them (where) a new owner can make modest improvements to the assets to grow top line revenue. Their exceptional locations, unique floorplans, and positioning in the marketplace makes them attractive to investors looking for growth opportunities.” Hague said ownership would “prefer to sell them as a package but we would consider selling them separately as well if the pricing was right.” At the time of his death, Higgins had been working on a large redevelopment of the Leland Hotel downtown as well as a mixeduse project in the West Village neighborhood at East Jefferson and Van Dyke. In addition to those, information provided by his company in September said he had various West Village properties, a

Detroit artist Phillip Simpson and another for Oscar Mayer Lunchable Dunkables, the Detroit Free Press reported. Higgins led a 23-member group of investors that owned the building after $55 million was spent redeveloping the tower in the early 2010s, opening it in 2012. Colliers marketing materials say the Broderick Tower is 90% occupied, with units commanding an average of $2,017 per month. An email was sent to two former associates of Higgins seeking comment Feb. 15. Two blocks south of Broderick Tower at Woodward and Grand River avenues, the six-story Elliott Building has 23 units that were renovated less than 10 years ago. The units are 83% occupied with average rents of $2,019 per month, the materials say. Gilbert’s Bedrock LLC has a master lease for the first-floor retail and basement. — Tyler Hague, executive vice president, Colliers Tyler Hague, a Colliers executive vice president who leads the brokerage firm’s 25-unit condominium building Midwest Multifamily Advisory on East Jefferson and vacation Group out of Chicago, said the condos in St. Thomas, Virgin listings were in the works prior to Islands; Aspen, Colo.; and Bay Harbor in northern Michigan Higgins’ death in September. “We have gotten a ton of inter- that are all occupied or leased est in these assets and expect the as rentals by property managprocess to be very competitive,” ers. The company-provided inforHague wrote in an email to Crain’s. “Both assets are iconic mation also says Higgins had properties that rarely become owned various restaurants over available and the growth trajecto- the years.

“Both assets are iconic properties that rarely become available...”

16 | CRAIN’S DETROIT BUSINESS | FEBRUARY 19, 2024

Music Hall Center for the Performing Arts in Detroit is looking at using a certain type of bond financing that would save it money on loans for an addition. | TOD WILLIAMS BILLIE TSIEN ARCHITECTS/PLOMP

nership Foundation and adviser to Music Hall on the project, told Crain’s last fall. The 100,000-square-foot, multistory expansion is slated for construction on the parking lot at the corner of Madison and Randolph streets in downtown Detroit, next

to Music Hall. It will include a new underground concert venue with capacity for 1,900 people, recording studios, offices for agents and other music industry professionals and a music academy operated by the nonprofit. The architect on the plan is New

York City-based Tod Williams Billie Tsien Architects. Principal Tod Williams is the brother of R. Jamison “Rick” Williams, the former longtime chairman of what is now Detroit Opera and chairman emeritus of Birmingham law firm Williams, Williams, Rattner & Plunkett PC.

Moroun company buys former Auburn Hills ski hill-turned-landfill By Kirk Pinho and Kurt Nagl

A large former ski lodge and, later, landfill in Auburn Hills along a key trunkline for General Motors Co. has sold to the Moroun family’s Warren-based Crown Enterprises LLC. The sale, recorded with the city Jan. 10, of the more than 79 acres at Lapeer and Dutton roads was for $2.55 million, or $32,181 per acre, according to a broker on the deal. Plans for the site are not known. Kenneth Dobson, vice president of the Moroun family’s Detroit International Bridge Co., only said Crown “is exploring development options” for the property. The land sits within a key supply corridor for Detroit-based GM. It is about two miles from Orion Assembly, where the automaker is investing $4 billion to convert the factory for electric vehicle production. Just a mile and a half south of the Crown property is the former Palace of Auburn Hills site, where GM said it would invest $200 million for a value-added supplier plant to feed the assembly plant. Crown’s purchase comes as the Moroun family expands its logistics empire. Logistics Insight Corp., an affiliate of the Morouns’ trucking giant Universal Logistics Holdings Inc., won GM’s logistics business at Factory Zero in Detroit. The com-

An aerial photo of an Auburn Hills site purchased by Warren-based Crown Enterprises LLC. | COURTESY OF COLLIERS INTERNATIONAL

pany was tapped to operate a new 793,520-square-foot warehouse at the former site of the American Motors HQ on the city’s west side. On Detroit’s east side, Universal Logistics operates a 1 millionsquare-foot parts sequencing plant for Stellantis NV’s assembly plants. Crown also owns a nearby 925,000-square-foot logistics warehouse servicing Stellantis, though Universal does not operate that one. The previous owner was RJL Equity Holdings LLC, an entity registered in Auburn Hills to Rich LaLonde, who co-owned Summit Place Automotive Group with his wife, Tania, prior to his death in 2020 at age 62. A press release from the Royal

Oak office of Toronto-based brokerage house Colliers International Inc., which brokered the deal, says the site was developed as the Silver Bell Ski Lodge in the early 1960s with fill material that may have been contaminated. When the developers behind Silver Bell went bankrupt in the late 1960s, new owners operated what the release called a “substandard” landfill there “lacking modern standards, proper liners and systems for leachate and methane gas treatment.” Landfill operations there stopped in 1979, the release says. Crain’s reported in 2001 that a group of investors planned a $100 million business park at the property, but that never materialized.

COLLEGE

would look for, minimalconcern that having ly, a larger increase for completely free communext year to help stem any nity college could have a loss of tuition revenues as severe enrollment ima result of more freshmen pact on the incoming being diverted to compipeline of students at munity colleges, Hurley the state’s regional public said. universities.” Last year, public colA December report Dan Hurley leges and universities saw from Growing Michigan Together, a council created by a 5% increase in operating supWhitmer in 2023 to study the port. “That is a much more reserved state’s slow population growth, included a recommendation that figure than we’ve seen the last Michigan expand its pre-K-12 sys- couple of years. We recognize the tem to a pre-K-14 system by pro- revenues are stabilizing,” but the viding access to two free years of state universities experienced two postsecondary education in high decades of cuts before reinvestschool, public university or col- ments were made the past couple lege or any qualifying career and of years, Hurley said. “We’re well below a national technical education pathway for students who reach an academic context ... of where we should be in terms of state funding for our standard. “That would be most ideal,” universities. We will be working with legislators in the weeks and Hurley said. The association representing months ahead to try to increase the state’s public universities will state funding for universities in also push back against the pro- the next budget. Our request was posed 2.5% increase in operating 5%, double the rate of inflation, support for the public universities and we’re going to stick with that.” Including the public universiand community colleges and

ties in the offer of two years of free college to students who meet academic benchmarks “would have been a very, very, very expensive proposal,” said Brandy Johnson, president of the Michigan Community College Association. The community college guarantee is a relatively inexpensive program to implement because it’s a last-dollar grant program that builds on the foundation of federal Pell Grant funding to students, she said. “We’re really excited to learn more about what the governor is proposing,” Johnson said. The $1,000 proposed as a direct payment to needy students is needed, Johnson said. “Even if you waive the cost of tuition ... that doesn’t mean that student can afford college if they can’t afford their basic needs or if they can’t afford not to work,” she said. Clearly communicating that some education beyond high school, whether it be a certificate or an associate’s degree, is truly a necessity in today’s labor market is important, she said. “I really hope that the universities will look at this as an opportunity to attract transfer students … and make their institutions transfer-friendly,” Johnson said. One area of opportunity: expansion of the guaranteed admission promised by 10 of the regional public universities in September to high school students graduating with a 3.0 grade point average or better to transfer students, she said. “A junior and senior pay the same amount as a freshman or sophomore, sometimes even more,” she said. Michigan’s private colleges and universities have a variety of partnerships with the community colleges, including articulation, concurrent enrollment, direct transfer

and pathway agreements, said Robert LeFevre, president of Michigan Independent Colleges & Universities. “We work very, very closely with the community colleges, and as a result, we have a lot of transfer students,” he said. LeFevre said the association is not overly concerned that its members will lose students if the dedicated support is approved for community college students, and on-campus housing shortages for the private institutions make him less worried about having bodies for that housing. Community colleges have had a variety of advantages over private colleges over the past several years, such as the Michigan Reconnect program, which launched in 2021 to provide a tuition-free path to an associate’s degree or career training for students 25 and older. Legislators last year temporarily lowered the minimum age for the program to 21. “While programs were created specifically for community colleges, we’ve still had enrollment gains. I’m not convinced that what is good for community colleges is somehow bad for four-year colleges,” he said. “We’re intrigued by the governor’s proposal. It’s interesting. We think it could be helpful, but we don’t know yet. We haven’t seen the math on it yet.” Of bigger concern to the private colleges and universities is the phase-out of the Michigan Tuition Grant program. “We were completely blind-sided by the change in the tuition grant,” LeFevre said. The Michigan Tuition Grant provides up to $3,000 for qualifying students attending independent colleges and universities. It would be phased out over the next several years to consolidate state financial aid into the Michigan Achievement Scholarship, which provides up to $4,000 for students at the private colleges and universities. The governor did not define phase-out in her budget recommendation, LeFevre said. “It is clear, however ... that going forward, students will not get both (Michigan Tuition Grants and MAS) even if they got both this year.” Phasing out the grants will remove an important piece of funding that enabled eight more of the private colleges and universities to package and offer tuition-free opportunities for students, LeFevre said. It’s not clear what impact that will have on enrollment at the schools, but the loss of the tuition grants will translate into higher costs and possibly debt for students who can least afford it, he said.

rates and talks of a recession since 2022 all had an impact on the money market. Though several economists agree that the economy is poised for a soft landing in 2024, with a looming presidential election, McGowan said advisers should take the geopolitical climate and risks into consideration when working with their clients.

“Generally speaking, when there’s an election the country does pretty well. The government loosens fiscal policy which helps the economy,” McGowan said. “There’s a lot of people that believe that the feds will lower rates because of what’s happened with the normalization of inflation, as well, but it’s something that we’re monitoring all the time. If it’s not a good time to

sell, because of what we’re seeing either in the economy, or what we’re seeing in the debt markets, we’re not going to advise our clients to go to market to go through that process.” Bitonti and McGowan agree that growth is in the firm’s future, in the form of senior-level partners and through a summer internship program they plan to implement.

From Page 1

“There is likely to be a significant hit to enrollment at the regional public universities and with that, a potentially significant loss in tuition revenue and auxiliary enterprise revenues like housing and dining operations,” he said. The association is in the process of analyzing the impacts of the proposed community college guarantee on its members, Hurley said. “It’s pretty easy to foresee, as has been the case in Tennessee ... the first to implement universal free community college, that there would likely be a potentially significant reduction in freshman enrollment at Michigan’s public universities,” he said.

Budget proposal The budget proposal includes a 2.5% operating increase for public colleges and universities, totaling $42.5 million for university operations and $8.9 million for community colleges. Another $62 million would go to the Michigan Reconnect program providing free tuition to adults 25 and older and $20 million to the Tuition Incentive Program providing support to lower-income students attending Michigan’s public and private universities. Also in the budget, $30 million for the Michigan Achievement Scholarship, down from $50 million for fiscal 2024. The free community college program would be rolled into the Michigan Achievement Scholarship. “The intention in current law is to increase the ongoing funding each year until the MAS is fully implemented, which will take several years as additional cohorts become eligible,” Lauren Leeds, director of communications for the state budget office, said in a statement. “Based on first-quarter data and projected costs of the Community College Guarantee, it’s estimated that raising the allocation by $30 million, to a total of $330 million, keeps us on track to fully fund the program when all cohorts come online.” Many of the regional public universities have one or more of the state’s 28 community colleges in close proximity to their campuses, Hurley said, noting four-year public institutions saw a 27% decline in undergraduate enrollment from 2013 to 2023. Slight gains in enrollment last fall stemmed the decade of losses, he said. “We have been super appreciative of the Michigan Achievement Scholarship; it’s a game changer,” Hurley said. “But I think there is

M&A From Page 3

“It was a really difficult environment in the last quarter of last year and we were able to complete three transactions on behalf of really private equity clients,” Bitonti said. “If you look at the broader transaction volume from an M&A perspective,

Regional public four-year universities like Eastern Michigan University in Ypsilanti could lose revenue under Gov. Gretchen Whitmer’s plan to offer two years of free community college education, says the CEO of the Michigan Association of State Universities.

Grand Valley State University is based in Allendale (above) with a campus in downtown Grand Rapids. | AMANDA PITTS/ GVSU UNIVERSITY COMMUNICATIONS

you’ll note that the third quarter and fourth quarter last year were down, arguably, from where they’ve been previously. And that’s really been a hallmark of this team and part of the legacy of all these previous firms which is the ability to get difficult deals done for our clients.” Several factors led to the challenging market in 2023, McGowan said. Instability, increasing interest

FEBRUARY 19, 2024 | CRAIN’S DETROIT BUSINESS | 17

THE CONVERSATION

OHM Advisors President Jon Kramer on Joe Louis Greenway’s potential to connect OHM Advisors President Jon Kramer is overseeing a lot of big projects through the Livonia-based architecture, engineering and

planning company. OHM is handling design and construction engineering of various phases of the 27-mile Joe Louis Greenway in Detroit. It's also working with the city of Detroit on a project in the Warren/Conner neighborhood related to pollution from the Stellantis Detroit plant and flooding. OHM is part of a $60 million Great Lakes Water Authority Downriver transmission water main project to increase reliability and redundancy to about 300,000 residents. And the company is working on a two-year, $1 million study of sewer systems in Dearborn and a $8 million expansion of Stine Community Park in Troy. The 50-year-old Kramer, who has been with OHM for nearly 31 years, discussed the scope and importance of those projects and his career arc with OHM in a conversation with Crain’s. | By Jay Davis How’s the work on the Joe Louis Greenway going? It’s really exciting for me. The Joe Louis Greenway is 27.5 miles connecting neighborhoods, people and parks. It’s honoring a boxing legend. It’s going to feature arts and some other programming. I’m an outdoor person. I like to follow trails. Detroit has the Dequindre Cut, the Riverfront. The Greenway is connecting everything together, including communities like Dearborn, Highland Park and Hamtramck. How do you think the project will change the city? It’s a little bit of everything. I mentioned Hamtramck and some of the other surrounding communities that I think forever didn’t see themselves as part of Detroit. Connecting the actual cities is one thing. When you get people out walking, seeing things, it brings people together. We did another park, Roosevelt Park in front of Michigan Central Station. We were excited about the programming. You watch the last couple of weeks with the Lions doing so well and people are out there hanging out, walking. I can picture people barbecuing, doing all kinds of things. It’s things you don’t need a car for. You can eat, go to sporting events, with no worries about paying for parking. We’re not necessarily known for our public transportation. Why is access to walkable spaces so important? If the only way you can get from A to B is by car it can create a lot of issues. Think about the sporting events people come down for: They park, go to the game and leave. If you’re trying to get to Eastern Market and other places, if there’s no safe way to walk, you might not go and nobody’s looking after certain spaces. When you create a trail, it becomes a community space. You see hikers, bikers out. People feel safer. People start to clean up things and it encourages good, safe traffic. I think it’ll really connect the cities and the people. Tell me about some of the other projects OHM is working on.

Constantly learning and growing from having all of those roles is actually what kept me (with the company). When I started, we had one office and 80 employees. Now we’re at nearly 20 offices and 700 employees. I think if we were still doing what we did 30 years ago, if we were still that small company, I wouldn’t have stayed.” I mentioned how we finished Roosevelt Park. Some of the projects really aren’t out there for the public eye. Some are underground. We’re working with the Great Lakes Water Authority on a project related to Downriver water. A lot of people don’t see that, but 300,000 customers in Downriver communities are affected by that. We’re working on a project for the Great Warren/Conner neighborhood plan. Those neighborhoods surrounding the Stellantis plant affected by pollution from the plant, flooding from the storms. We’re doing work in Dearborn on a city and sewer project to reduce flooding. All of these things are infrastructure related. We’re working to take care of the environment. Tell me a little more about the Stellantis work. We’re teamed with a number of firms. It’s all Detroit-based firms working on the project. Usually the first thing we do is listen to the residents, hear their problems so we can work to produce solutions to solve all their problems. You’ve been with OHM for more than three decades. The company now has 19 offices in five states. How many different roles have you had within the company? Dozens. I started as an intern, getting coffee and things like that. Then you move up to engineer. I worked as a project engineer, then a project manager, then client representative, group director,

Read all the conversations at CrainsDetroit.com/TheConversation 18 | CRAIN’S DETROIT BUSINESS | FEBRUARY 19, 2024

vice president of engineering, COO. I’ve been president the last three and a half years. How did each of those positions prep you for where you are now? Constantly learning and growing from having all of those roles is actually what kept me (with the

company). When I started, we had one office and 80 employees. Now we’re at nearly 20 offices and 700 employees. I think if we were still doing what we did 30 years ago, if we were still that small company, I wouldn’t have stayed. If you want to have top-notch staff, if you want them to stick around, you have to give them opportunity. They may not be able to wait 15 years for a guy or girl to retire. I made some lateral and vertical moves, and that’s how I learned about how the company works. Why are you so invested in the continued revitalization of Detroit? We call ourselves a community advancement firm. Some of the projects we’ve worked on recently like the Greenway — it starts at McNichols and heads to the Riverfront. Our first office back in 1962 was on McNichols. To see something connect communities like (the Greenway) is wonderful. Where we take our pride in being a community advancement firm is that we try to make sure people get the infrastructure they need to thrive. Detroit is a perfect example of that. It had its heyday, seen a bit of a decline. We’re excited to contribute with different ideas. We have urban planners look at what communities need and want. We have meetings where we ask residents what they want and need. We have groups design things and come up with solutions. Our people live in all the communities we work in. We try to be a part of all of those cities.

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