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Request For Proposals

 A $36 million loan for the Marshall Area Economic Development Alliance to buy, improve and convey land for the project. e loan will be repaid through a future Strategic Site Readiness Program grant from SOAR, which would need legislative approval.

e Michigan Economic Development Corp. said it anticipates also asking for site readiness program funds in the future to pay for additional land acquisition and site-development activities. While the agency declined to specify an amount, an o cial with knowledge of the state’s plan told Crain’s the extra funding may reach $800 million, bringing the total to $1.8 billion. Gov. Gretchen Whitmer proposed an immediate $800 million infusion into SOAR as part of her budget proposal.

e deal is the fourth in a year to support a new EV battery plant in Michigan, following the creation of the SOAR Fund in late 2021.

Josh Hundt, executive vice president and chief projects o cer for the Michigan Economic Development Corp., said Ford considered multiple states and countries for the plant.

“Michigan’s ability to meet project timelines and provide a cost-competitive location were major factors in Michigan being the company’s choice for this project,” he said.

He estimated that the Marshall area will see an additional $30 billion in personal income from direct, indirect and induced jobs over 20 years.

Gabby Bruno, Ford’s director of economic development, said there have been “a lot of false narratives” about the factory. It is not a joint venture, she said, adding that a Ford subsidiary will have “full control” of the plant.

“I can tell you that there was no lack of competition for this project,” Bruno told the board. “Michigan competed against numerous states and countries to win this investment, in large part because of strong economic-development tools like the ones we are discussing here today.” e auto industry is at a “critical

Treats

From Page 5 e more customers, the better, Mills said. More sales would obviously help her bottom line, but it would help in a variety of other ways, too. Mills said she works on her business sun up to sun down and putting much of what she makes back into the business, which doesn’t allow her to add paid sta to lighten her load.

Mills, technically the business’ lone employee who receives some free help from her sister and a couple of friends, projects about $100,000 in sales in her Laurel Park Place space in its rst year.

Business has been steady, Mills said. Opening around the Christmas holiday season gave her a boost. So did Valentine’s Day.

“You have to have chocolate-covered strawberries for Valentine’s Day,” she said.

“I knew starting out would be a bit of a bumpy road but I’m not going to let that stop me,” Mills said. “It’s hard for a lot of business owners, but I’m going to push through.”

Why a mall?

As a rst-time business owner, any crossroads,” she said, “which drives the necessity to focus on the most cost-competitive locations for future investment. Public-private partnerships like the one we are discussing here today are important to keep Michigan at the forefront of automotive manufacturing. e economic support you are considering for this project plays a key role in helping make the business case for Ford to expand its EV footprint here in Michigan.”

John Mozena, president of the Center for Economic Accountability in Grosse Pointe Woods, criticized incentives as “ruinously expensive failures” because Michigan has 185,000 fewer manufacturing jobs than 30 years ago.

“Please just stop. Please stop throwing billions of dollars in a shrinking industry that has done nothing but abuse the generosity of Michigan’s taxpayers for decades,” he said during the board meeting.

“By approving yet another massive subsidy for a massive automotive manufacturer, the MSF board will continue to fail at its statutory responsibility quote ‘to promote economic growth and to encourage pri- vate investment, job creation and job upgrading for residents in this state’ unquote.”

EV battery factory packages authorized in the past year include:

 $824 million in state incentives and assistance for General Motors Co. to spend up to $4 billion converting its Orion assembly plant to build fullsize EV pickups and, with joint-venture partner Ultium Cells LLC, to construct a $1.5 billion to $2.5 billion battery plant in Lansing. e agreement includes a $600 million Critical Industry Program grant to GM, a Renewable Energy Renaissance Zone exemption worth $158 million over 18 years and $66 million from the Strategic Site Readiness Program for electric, water and sewer upgrades. e projects will add between 3,200 and 4,000 jobs and retain 1,000 jobs.

 $715 million for China-based Gotion Inc. to build a $2.4 billion factory near Big Rapids and create at least 2,350 jobs. e deal includes a $125 million Critical Industry Program grant to Gotion — one of the world’s biggest battery manufacturers — a Renaissance Zone break worth $540 million over 30 years and a $50 million SSRP grant to support the pur- chase of land and infrastructure improvements.

 $237 million for Novi-based startup Our Next Energy Inc. to open a $1.6 billion plant in Van Buren Township and create 2,112 jobs. e agreement includes a $200 million Critical Industry Program grant to ONE, a tax exemption valued at $21.7 million and a $15 million loan.

Quentin Messer Jr., who chairs the Michigan Strategic Fund board and is president and CEO of the MEDC, said it is important to understand that a lot of the additional site-readiness funding that the state will seek for the Ford factory “would have had to happen for any project that was going to go (the) Marshall” megasite. Other states and countries, he said, have been working to develop buildready land for 10, 15 or 20 years.

“Literally in a year, we have signicantly closed the gap,” Messer said. “When you do that, you have to pay dollars in one swoop. I think people sometimes lose perspective on that.” Crain’s manufacturing reporter Kurt Nagl contributed.

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

In 2015 the mall underwent $5 million in renovations and saw the opening of an H&M apparel store. High-end department store Von Maur anchors the mall, where the food court is nearly empty.

Mills doesn’t worry about the current and future state of malls, though, as it relates to her small business.

“I can’t worry about that. I wanted to nd a place to start my business and I did,” she said. “I think we’re in a good spot. ere’s a lot of foot trafc in this section of the mall. We get the shoppers and the people who just come to walk around the mall for exercise. I’ve seen and read about what’s going on with malls, but that didn’t play a role in how or where I started my business.”

It’s an age-old business question of whether a company should stick to what it does best, or diversify to help weather cyclical businesses, especially in an industry that can take hard and sudden turns due to factors outside of the company’s control.

“Do you want to be less of a onetrick pony?” Guy Cecala asked of the company’s strategy in seeking out a new CEO given its reliance on mortgage lending for the majority of its revenue, which in 2021 was almost $13 billion.

“ at may dictate who they want as their CEO going forward,” said Cecala, the executive chairman of industry publication Inside Mortgage Finance. “All large nonbank lenders face that issue, but the success record of those who have tried isn’t that great.”

As the mortgage sector has taken a downward plunge over the last year or more, that diversi cation strategy has been communicated primarily by Farner, a nearly 30-year veteran of the company despite being only 49 years old. e goal, Farner has previously said, largely revolves around moving the company into other areas of consumer nance, such as personal nance, auto loans and home solar power. e goal is to become more of a nancial technology company, as opposed to just a mortgage company.

Given that focus, industry experts say the company’s board and retained recruiters have a fundamental question as they go about their search.

“Do they focus on the core of their business,” said Jay McCanless, a senior vice president for equity research at Wedbush Securities, referring to mortgage lending. “Or do they nd someone to help them grow and diversify even further?” e plan calls for Farner to retire as CEO of Rocket Companies on June 1, and for Bill Emerson — the current vice chairman of Rock Holdings and a veteran executive of Rocket Mortgage and a liated companies — to become interim CEO. space can be a good space. Malls, though, have gone through a decline in recent years.

Emerson, 60, will also replace Farner on Rocket Companies’ board of directors, which became e ective earlier this month, according to a regulatory ling. e incoming interim CEO has a long history in the mortgage industry, having previously been CEO of Rocket Mortgage, and observers say they think the company has a strong bench of new talent..

Rocket declined requests for interviews with Farner and Emerson.

Regulatory lings show that Farner holds a signi cant personal stake in the company, worth more than $52.5 million based on last Monday’s closing price of $8.87 per share, up slightly following news of his retirement.

He also has over $1.8 million in shares in a trust for his children.

Malls were already in trouble prior to the start of the COVID-19 pandemic in early 2020, but as shoppers shifted to online sales and stores closed, shopping center owners struggled to pay the bills. ere are about 700 malls in the U.S., down from about 2,500 in the 1980s. Local- ly, Lakeside Mall in Sterling Heights is set to be demolished and replaced with a mixed-use development. Last year, Fairlane Town Center in Dearborn was sold to a Dallas-based real estate company and e Mall at Partridge Creek in Clinton Township was sold into receivership. is truly is just the start for Mills, who hopes to eventually have 10 Lekker locations and eventually offer franchising opportunities.

Laurel Park Place opened in 1989 and has been owned by Tennessee-based CBL Properties since 2005.

“I see really big things for this business,” Mills said. “Who doesn’t love chocolate?

“It feels like this road has been so long that this has to work and I’m going to do everything in my power to make sure that it does.”

Contact: jason.davis@crain.com

(313) 446-1612; @JayDavis_1981 at process is likely to take between three and 12 months given the current market for executive talent, said Todd Hohauser, the CEO of Troy-based executive recruitment rm Harvey Hohauser & Associates.

Late last year also saw the retirements from the company of CFO Julie Booth and Angelo Vitale, who was general counsel and secretary.

A regulatory ling on Monday said that the Rocket board has retained an undisclosed executive search rm to nd a replacement for Farner.

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

COVID-19’s early days saw a major dry-up of available projects, said Whitney Marx, principal of Detroit-based MarxModa, a MillerKnoll dealer.

“ e pandemic did hit our industry extremely hard,” Marx said. “ ere was sort of a collapse of available projects. So that did hurt all of us tremendously. If I had to put a number on it, I would say 2019 to end of 2022 there was probably a reduction of 30 percent of job opportunities that we were all up ghting for.”

Marx said, however, that the rst few months of 2023 give her hope moving forward, projecting to generate about 5 percent more in revenue than her company did in 2019. MarxModa reported to Crain’s 2021 revenue of $45 million compared to 2020 revenue of $61 million.

“What I’m seeing right now is a complete ip, and I would expect we will be surpassing prepandemic levels” this year, Marx said.

Today, metro Detroit’s o ce market has a vacancy rate of 19.2 percent, with the region’s second-largest submarket, South eld, clocking in at an eye-popping 30.1 percent vacancy, according to Q4 data from the Royal Oak o ce of brokerage house JLL. On a net basis, some 925,000 square feet of space became vacant.

Despite those headwinds, Flora and Nigel Addison, director of opportunities for Interior Environments, said the company had record revenue last year, increasing sales by 15 percent from 2021. Revenue for the company has not gone down during the pandemic, they said. e rm’s Novi o ce has grown from $51 million in 2020 revenue to $53 million in 2021 and $64 million last year.

“It went from what was really scary to a really exciting opportunity,” Flora said. “It really, I think, gave us almost what we needed in this accelerated way, redesigning the workplace and allowing all of our existing customer base and future customer base to think of something that hasn’t been done before.”

It’s not just upgrading space in readily apparent ways, Addison said.

“People are coming back to the ofce and they’re realizing this is terrible and they hear everything,” Addison said. “We’ve invested a lot of time and energy into creating a division that does acoustics and architectural products to help alleviate some of the sounds.”

Orchestra

From Page 3 e orchestra plays “tarab,” traditional Arabic music, pulling a group of about 32 performers for each show from a pool of Arab and other U.S. musicians playing both Western instruments and instruments unique to the Arab world, including a reed ute called a “ney,” a 12-string lute called an “oud,” and a lap harp called a “qanun.” Other common instruments used in the music are violins, cellos and synthesizers. Songs often feature singers as well. e orchestra performs a few times a year at the Ford Community & Per-

Baabalki is a world-class Arab music singer who will be performing at the Kennedy Center as a featured singer, Richards said.

“We are not a traditional orchestra in that we don’t have a concert hall, and we don’t have full-time musicians,” she said.

And Heather Lanier, COO and principal of Troy-based Steelcase dealer NBS Commercial Interiors, said the pandemic has forced executives to talk about workspace design and o ce space “as part of their talent management strategy.”

“We’ve been trying to get their attention for years,” Lanier said. “We’re very passionate that space, when it’s well designed and very thoughtful in its intention, can help an organization improve its business results by appropriately placing di erent divisions or business units adjacent from one another.”

Lanier said NBS has maintained pro tability throughout the pandemic, although revenue has dropped considerably. Prior to the pandemic, NBS pulled in about $136 million, and in 2020 it dropped to $103 million, and to about $98.3 million in 2021. But last year, the company grew to about $120 million.

Lanier said that although the company’s o ce furniture sales revenue is still “challenged,” other sectors — K-12 forming Arts Center in Dearborn in between performances in other cities. is year’s schedule of 12 performances took it to Flint, Houston, Miami, Washington, D.C., and San Antonio, among other places.

Beyond its own performances, NAO also provides music education focused on singing locally at Fordson High School in Dearborn and before the pandemic, Chelsea High School. A group of about 30 Fordson students will perform on March 4 at the Dearborn Performing Arts Center, Richards said.

It has established chapters, or support groups, in San Antonio, Houston and Dallas. ey operate as extensions of NAO, hosting fundraisers, gathering the local Arab American community together and overseeing other events to celebrate the Arab culture with the community as a whole.

Growing a following

After a pandemic hiatus in 2020, and higher education, and health care, among them — are bright spots.

West Michigan strength

ings are di erent on the other side of the state.

West Michigan o ce furniture dealers say they are keeping busy despite the changing o ce real estate landscape.

Year over year, Grand Rapids’ o ce vacancy rate rose from around 11 percent to 13.8 percent in fourth quarter 2022, according to JLL’s latest Grand Rapids market report. Transaction activity remained muted in the quarter, limited to smaller leases and renewals along with a few new-construction deliveries. e region’s Q4 vacancy rates are much lower than those of larger metros like Detroit (19.2 percent), Chicago (19.5 percent), New York (15.9 percent) and Los Angeles (22.5 percent).

Dave Sha er is CEO of Interphase Interiors based in Grand Rapids, and Johnny Brann Jr. is its president and owner. e company is a Haworth dealer and workspace designer with clients primarily concentrated in West Michigan, Traverse City and the Upper Peninsula.

Although Interphase is a private company and does not disclose revenue, Sha er and Brann said they’ve had three straight record-breaking years for total sales volume and an increase in customers despite pandemic

NAO once again took the stage in 2021. It collaborated with University Musical Society at University of Michigan in March 2022 and performed during Midtown’s Detroit’s Concert of Colors through a contract with the Detroit Symphony Orchestra last summer, she said.

NAO has also collaborated with the Ann Arbor Symphony Orchestra and is set to team with the Houston Symphony in March.

During COVID NAO also went digital, livestreaming performances to its Facebook and YouTube pages. Beyond collaborations with well-established orchestras, that move has helped the small organization raise its pro le.

Its YouTube channel has since grown to more than 400,000 subscribers, and it has attracted 3 million to 4 million views every month for the past 18 months, Richards said.

“ at’s really helped us. It makes our concerts bigger (and) our donors want to donate more.” lockdowns, the rise of remote and hybrid work, and rising o ce vacancy rates. ey said as a smaller market with more family-owned businesses, shorter commute times and more traditional ideas about in-person work, West Michigan is more insulated from the more drastic downturns of larger markets.

(was) trying to make there be not so much disconnect between o ce versus plant,” Sha er said.

Todd Custer is CEO of Steelcase dealer Custer Inc., which has clients in Southwest, West and Northern Michigan and Northern Indiana.

He said his company struggled in 2020 and 2021 as clients faced the “start, stop” nature of lockdowns and COVID surges, but 2022 revenues were back to where they were pre-pandemic. He did not disclose speci c numbers but said the recovery was mostly due to increased business in the health care and education segments rather than the o ce market.

On the o ce side, he said some companies are downsizing, and Custer is being booked to help those clients redesign their post-pandemic footprints.

Brann and Sha er said all three of Interphase’s primary segments — ofce, education and health care — are performing better than they were in 2019.

“We have not seen businesses taking less o ce space,” Brann said. “ ere’s certainly been some refreshing of space. We’ve had plenty of new builds, and we’ve had record years over the last three years. So, in West Michigan, I would say it’s very strong, and I would anticipate getting stronger as more people begin to either get back to work in the o ce full time and/or with that hybrid model, which will still entail the same amount of space.”

Another contributing factor they cited is having manufacturing clients that are trying to avoid a sense of inequity among line workers, who can’t work from home, and white-collar employees, who can, by bringing the latter back in person at least most days.

One manufacturing client redesigned both the o ces and the plant workers’ break areas so that they would all have a better work experience.

“What they did … in that example, e increasing number of performances and larger venues NAO is playing are showing on its bottom line. e small cultural group’s revenue is expected to double this year, breaking $1 million, Richards said. It earns about two-thirds of its budget through ticket revenue; the remainder comes from sponsorships, grants and donations.

NAO is now playing for crowds of 2,500-3,000 people, triple the audience sizes it saw in 2021, Richards said.

NAO’s performance in the nation’s capital comes on the heels of its second trip to the Middle East, following a 2019 trip to Saudi Arabia where NAO made history with the rst female musicians in the country’s history to perform on stage, Richards said.

In January, the orchestra per-

“It’s more community spaces, collaboration spaces, spaces that are more energizing (and) enticing,” he said. “It’s bringing more of that residential world into the space, more comfortable types of spaces, and also, more hospitality elements into the space … (as) people are so used to being at home. … No one wanted to come back to their old space, and they needed something new and vibrant.”

Some of the bigger renovation projects Custer has tackled during the pandemic include renovating the grocery chain and food distributor SpartanNash’s corporate headquarters last year and refreshing Kellogg Company’s Battle Creek headquarters between 2020 and 2021 to improve common areas and meeting and collaboration spaces.

“People are kind of really looking at their real estate and their buildings and saying, ‘What do I need to do? What investments do I need to make to drive people in to come back into the o ce at a more consistent level?’” he said.

Custer said he expects the trend of companies moving to smaller o ces or retooling the space they have will continue this year.

“It’s going to be interesting what happens in 2023, just with the economy, and if this recession happens and people pull back on spending,” he said. “But hopefully it’s like in 2022, and people continue to look at real estate and space di erently and make investments where they can and should.”

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

Contact: rachel.watson@crain.com (989) 533-9685; @RachelWatson86 formed in Sharja in the United Arab Emirates, near Dubai, a trip arranged by NAO supporters Ghassan Saab, CEO of Flint general contractor Sorenhson Gross, and his wife Manal Saab, Richards said.

Despite NAO’s growth in recent years, the Kennedy Center performance, which will be livestreamed, could put it on the map, Richards said.

“ ere are a lot of people who don’t know who we are even though we have some visibility,” she said. “To be able to say we’ve performed at the Kennedy Center just gives you additional street cred.”

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