Crain's Detroit Business, February 27, 2023, issue

Some markets remain hot.

‘RUIN PORN’ NO MORE?

A year ago, city of cials prioritized about 100 properties, big and small, for remediation. This year, they have added more and are aiming to make a big jump in progress.

ON PAGE 8

Costly therapies: Risk and reward

Disease cures could bankrupt employers

BY DUSTIN WALSH

A growing wave of cutting-edge treatments is promising cures for people with conditions that were once considered untreatable. Gene- and cellular-based therapies, once the topic of merely science ction, are now a reality and

moving from experimental clinical trials to use in hospitals across the country.

But while they hold the promise of e ectively curing diseases like leukemia, hemophilia, cystic brosis and more, the immense costs of the treatments have employers, who are most often on the hook for

Monroe Blocks plan gets new direction

Concert venue among changes

BY KIRK

paying for these treatments — which can top $2 million per regimen — terri ed of what decision may come, according to experts.

See GENE on Page 21

ISSUES Neighbors say Starbucks faced challenges.

17

Dan Gilbert’s Bedrock LLC is proposing a new, phased vision for the Monroe Blocks site downtown that calls for repurposing the National eatre facade for a new 2,000-seat concert venue. e development shift for the

3.66-acre site in the central business district also recon gures the programming to include 250 to 280 residential units, down from 482 that were originally conceived, and about 400,000 square feet of o ce space, a reduction from 857,000 square feet that were in the previous vision.

A retail, restaurant and market hall component, clocking in at

See MONROE on Page 20

4

PINHO CAR-T therapy re-works the genes of the body’s own immune cells.

The city of Detroit has started to demolish parts of the Packard complex after a judge ruled it could proceed and charge the owner.

NEED TO KNOW

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

 HAP, CARESOURCE TO FORM JOINT VENTURE

THE NEWS: Health Alliance Plan, the integrated insurer of Henry Ford Health, signed a letter of intent to create a joint venture with Dayton, Ohio-based CareSource to expand its Medicaid coverage and re-enter the public health care exchange program. HAP currently provides Medicaid coverage to fewer than 40,000 in the state, exclusively in the thumb region and in Oakland, Macomb and Wayne counties. CareSource, one of the nation’s largest managed Medicaid providers, has 2.3 million members across seven states. Besides Medicaid, it o ers marketplace and Medicare Advantage plans.

WHY IT MATTERS: Currently, HAP insures less than 2 percent of the statewide Medicaid population, but hopes to grow its Medicaid membership to 100,000 through the expansion.

 FORGOTTEN HARVEST

NAMES NEW CEO

THE NEWS: Forgotten Harvest has named Adrian Lewis its new CEO. Lewis, who started in his new role this month, joins the Oak Park-based food rescue following more than a decade as market leader for Walker-based Meijer Inc.

WHY IT MATTERS: He replaces interim CEO Lorna Utley, who took over in December after previous CEO, Kirk Mayes, left after eight years with the organization, which works to reduce food insecurity in the region.

 UM ENDS VACCINATION REQUIREMENT FOR SOME

THE NEWS: e University of Michigan will no longer require proof of vaccination against COVID-19 for some students and faculty. e Ann Arbor-based university’s vaccination policy, which went into e ect Aug. 30, 2021, required all sta and students to be vaccinated for COVID-19. at now does not apply to students living o campus or nonclinical employees, UM President Santa Ono and Chief Health O cer Robert Ernst said in a letter.

State University, have not yet changed their vaccination policy requiring proof of shots.

 FRIENDS FOR ANIMALS OF METRO DETROIT GETS NEW CEO

THE NEWS: Dearborn-based Friends for Animals of Metro Detroit has named Cory Keller its new president and CEO. Keller, who has 17 years of experience with animal welfare efforts, will start his new role on March 13. He is currently the manager of the animal care and control division for the city of Cleveland.

WHY IT MATTERS: e nonpro t has run the Dearborn Animal Shelter through a contract with the city since 1996.

 TUESDAY MORNING TO CLOSE ALL BUT 1 MICHIGAN STORE

THE NEWS: Discount home goods retailer Tuesday Morning plans to close more than half of its U.S. stores, including locations in Troy, Grand Rapids and Portage, after the company led for Chapter 11 bankruptcy last week.

CRAIN’S AWARDS

Crain’s seeks Excellence in HR, Best Places nominees

Crain’s Detroit Business is looking to honor outstanding human resources teams and individual employees in our 2023 Excellence in HR special section on June 19, 2023. Award categories this year are Overall Excellence; HR Technology; Employee Experience & Retention; Recruitment; and Diversity, Equity & Inclusion. Visit hrawards.secure-platform.com to nominate a notable HR team or individual by March 19, 2023.

 COOL PLACES BECOMES BEST PLACES

Crain’s is renaming its annual Cool Places to Work special recognition section to Best Places to Work in Southeast Michigan. e coolest organizations to work for are certainly the best places to work. ey may o er bene ts from parental leave to senior care and pet insurance, along with exible work hours, happy hours, and clear paths to leadership. Crain’s 2023 Best Places to Work in Southeast Michigan is a research-driven award program open to organizations operating for a least one year. See our eligibility requirements and register your company today at BestPlacestoWorkMI.com.

WHY IT MATTERS: e decision comes in anticipation of President Joe Biden’s plans to end the federal public health emergency for COVID-19 response on May 11. Other universities in the state, including Michigan

WHY IT MATTERS: In Tuesday Morning’s second time ling for bankruptcy in three years, the company reported under-performing sales at some of its stores, according to a report from CoStar News.

Realtors group to split with Realcomp

Move puts access to listings in question

NICK MANES

In yet another sign of uncertainty for the metro Detroit residential real estate market, two of the region's major industry groups are going through a fairly public divorce.

Citing unspeci ed but competing philosophies, the Greater Metropolitan Association of Realtors — which represents more than 11,000 Realtors around Southeast Michigan — has informed its members that it has opted to end its “shareholder status” with Realcomp, the Farmington Hillsbased company that operates one of the local multiple listing services used by real estate professionals, according to a letter GMAR sent this month and obtained by Crain’s.

e letter also says a new MLS-type product is in the works.

“GMAR has been the largest shareholder of Realcomp, and this decision was the product of a great deal of thought and e ort by GMAR and its leadership team,” reads the letter, sent by CEO Vickey Livernois. “GMAR spent months attempting to resolve various issues with Realcomp and the other Shareholders, but in the end, could not overcome di erences in philosophy, vision, and leadership structure. We are con dent this move will pave the path for an even brighter future for our entire organization.”

e stated plan by the Southeld-based GMAR — one of a handful of Realtor-focused industry groups around the region — brings far more questions than answers, and the downstream impacts on the operations for Realcomp, agents and GMAR are unclear.

Real estate agents typically belong to such groups, which serve as owners of companies like Realcomp that provide listings and other relevant data that agents use in service to their clients.

FOOD & DRINK

LOCATION, LOCATION, LOCATION

As rush for real estate ends, these metro Detroit markets stay hot

NICK MANES

Call it the haves and have nots.

While there’s a certain amount of gloominess in the raw data concerning metro Detroit’s housing market, local executives say they’re witnessing the emergence of plenty of hot markets at a variety of price points.

Data from myriad recent market reports show that closed and pending sales are o signi cantly from a year ago. e inventory of homes for sale is going up — although still far from enough — and homes are sitting on the market longer.

All the while, data show that buyers are seeing little by way of price relief.

While the overall market has declined signi cantly from the pandemic-era peak of late 2020 and much of 2021, local real estate executives say the result is a market where, simply put, some places are hot and some places are not.

Two years ago, geography mattered little, said Jeanette Schneider, president of Troy-based Re/ Max of Southeastern Michigan. During that time period, would-be buyers sought to make the most of rock-bottom interest rates, the likes of which are unlikely to reap-

pear in the foreseeable future.

Now, Schneider said, that’s not so much the case. “ ere is the beginning of a localized market coming back,” she said. To that end, recent data does show that activity remains strong in many areas around metro Detroit.

Hottest markets

On the upper end, markets including Novi and Ann Arbor remain active with prices remaining fairly stable over the last year and many homes still selling at or over asking price.

Likewise, more mid-priced markets such as Canton Township, Wixom and Livonia are seeing similar trends as are entry-level priced markets including St. Clair Shores and Westland. at data comes from the research department of Southeld-based Real Estate One Inc., the largest residential brokerage rm in the region, which analyzed multiple listing service data. Overall, it’s still “a pretty good market,” said Randy Repicky, the market research manager for Real Estate One.

James Beard nods help local chefs shine a light on their cultures

All of the 2023 James Beard Foundation Award semi nalists have worked hard to earn their recognition as chefs and restaurateurs, but some have come a longer way than others.

A handful of the 13 semi nalists in Michigan earned the nod by staying true to their roots — roots that extend to di erent parts of the world. ey immigrated to the United States at various stages of their lives. Emerging Chef category nominee Amado Lopez — owner, operator and chef at Casa Amado Taqueria in Berkley, moved from Mexico to Chicago when he was 5 years old. Hamissi Mamba and Nadia Nijimbere, the husband-and-wife team that owns and operates East African cuisine restaurant Baobab Fare

in Detroit’s New Center area, moved from east African country Burundi to Detroit in 2014. Ji Hye Kim, chef and owner of Korean restaurant Miss Kim in Ann Arbor, moved from South Korea to New Jersey at 13 years old.

Each of those Beard semi nalists — Kim and Mamba and Nijimbere in the regional Best Chef: Great Lakes category — brings their culture and upbringing to their work. at includes cuisine from their home countries. Sharing food from those places was always a part of the plan for each of the nominees. e Beard recognition itself? Not so much.

Cooking with pride

Lopez, who in 2015 moved from Chicago to Rochester to take a job as

executive catering chef at the Plum Market chain, admits he was shocked to learn he earned the semi nalist nod. He opened his taqueria in late 2020 in a small space at 2705 Coolidge Highway that previously was home to hot dog restaurant Atomic Dawg.

“I was just cooking one day and I heard someone screaming. I thought something was wrong and we were gonna have to close up,” Lopez said of getting the good news. “It’s an honor. It gives you a real sense of pride. I don’t think a lot of chefs set out to win awards when they start, but recognition is nice sometimes.

“All my life, all I’ve done is cook. I started watching my dad cook when I was 7.

Homes in Livonia, like in the Rosedale Gardens Historic District, are among the top sellers in the mid-price range in Southeast Michigan. | ANDREW JAMESON/WIKIMEDIA COMMONS

Baobab Fare co-owners Hamissi Mamba (left) and Nadia Nijimbere brought their brought their culture and cuisine from Burundi to Detroit. | BAOBAB FARE

e Ilitch, Ross transformational brown eld funding by the numbers

e state’s socalled transformational brown eld real estate development funding mechanism was enacted in 2017 and has not been used much since.

In fact, if approved, a request from the Ilitch family’s Detroit-based Olympia Development of Michigan and Stephen Ross’ New York City-based Related Cos. for $616.3 million in funding on $1.53 billion in new construction and redeveloped buildings would only be the third time the state has signed o on its deployment.

So how does it work, where does the money come from and where would it be deployed?

e program allows for developers who meet certain project cost thresholds — in Detroit’s case, $500 million at a minimum — to apply to capture various state taxes, some short term and some long term.

e captures don’t take place if a project isn’t completed.

In e ect, transformational browneld funding for large-scale projects comes from the following buckets: Tax-increment nancing on state property taxes at the developed property over 30 years; exemption on 100 percent of the state sales tax on construction materials and 100 percent of the state income tax on construction labor; a 20-year capture of 50 percent of the state income tax on permanent employees at completed buildings; and a 20-year capture of 100 percent of the state income tax on residents of new residential properties.

For the Ilitch and Ross projects, 10 of which are scattered around the former’s District Detroit area, that breaks out as follows, according to a summary of the proposal that has been approved by the Brown eld Redevelopment Authority Board but also needs City Council and Michigan Strategic Fund approval.

 Construction materials sales tax exemption: $38.1 million.

 Construction worker income tax exemption: $11.4 million.

 Permanent employee state income tax exemption: $278.4 million.

 New resident state income tax exemption: $74 million.

 State property tax TIF: $214.4 million.

Of the projects envisioned, the most heavily subsidized through the TBP are new o ce buildings, which are being proposed in one of the most di cult o ce environments in recent memory.

Keith Bradford, president of Olympia Development and District Detroit, told me two weeks ago that level of subsidy is a function of the building uses and the way the TBP is structured.

Because there are slated to be a high concentration of permanent and

higher-paid workers in those new buildings, the amount of income tax capture on them is higher. It’s not, Bradford said, a function of increased aid to more challenged real estate sectors.

Hence, that’s why a 493,000-squarefoot new o ce tower at 2200 Woodward Ave. with 28,000 square feet of retail has a total transformational brown eld capture of $171.1 million, with $104 million of that coming from permanent worker income taxes on a project costing an estimated $340.1 million. e TBP capture is a shade over 50 percent of that.

at’s also why another 546,000-square-foot o ce tower with 10,000 square feet of retail, slated to go at either 2305 Woodward or 2300 Cass Ave., would receive $165.2 million in transformational brown eld funding, with $113.7 million of that coming from permanent workers. at project is expected to cost $278.7 million, so the TBP award amounts to about 59.3 percent of that.

And a mixeduse building with 131,000 square feet of o ce and 18,400 square feet of retail at 2300 Woodward costing $83.7 million would receive more than half that ($42.8 million) in TBP subsidy. Of that, $27.6 million comes from permanent worker state tax capture.

And the Detroit Center for Innovation business incubator in the former Loyal Order of the Moose Lodge Building at 2115 Cass Ave., with 83,500 square feet of o ce space and 10,800 square feet of retail, has a $59.7 million development cost and a $28.4 million TBP subsidy totaling about 47.6 percent of the development cost. Permanent worker state income tax captures amounts to $17.5 million of the TBP subsidy.

e other proposed project TBP allocations are as follows:

 2250 Woodward residential building, with 287 mixed-income units and 27,000 square feet of retail: $216 million development cost, $69.2 million TBP subsidy.

 Conversion of the Fox O ce Building into a 177-room hotel with 11,000

square feet of retail: $121 million development cost, $22.7 million TBP subsidy.

 e 191-room Little Caesars Arena hotel with 22,000 square feet of retail: $190.8 million construction cost, $40.4 million TBP subsidy.

 Redevelopment of the former Hotel Fort Wayne into 131 units of residential space with 5,300 square feet of retail: $68.7 million development cost, $22.8 million TBP subsidy.

 Detroit Center for Innovation residential tower at 2505 Cass with 261 mixed-income residential units and 8,800 square feet of retail: $150.1 million development cost, $47.9 million TBP subsidy.

 Redevelopment of the Detroit Life Building at 2210 Park Ave. with 16 units of residential and 3,000 square feet of retail into residential: $23.6 million development cost, $5.8 million TBP subsidy.

Of course, the transformational brown eld funding program is not the only public money sought as part of the revived vision for the District Detroit, which spent years languishing with little residential construction, ts and starts on new buildings and an overall plan from July 2014 that did not live up to what was promised. e total as of right now is about $797 million on $1.53 billion in construction.

e DDA has committed $48.75 million in funding for more a ordable housing at deeper Area Median Income thresholds ($23.75 million) and up to $25 million for road improvements, utilities, security and public space upgrades for the area. e Ilitches and Ross are also seeking another $133 million in subsidies in the form of commercial Public Act 210 and residential Neighborhood Enterprise Zone tax abatements up to 10 and 15 years, respectively.

e Detroit City Council is considering various NEZ approvals now. at also does not include the $100 million the state earmarked for the Detroit Center for Innovation, a proposed $250 million University of Michigan graduate school campus that would serve as a second anchor for the District Detroit.

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

Moosejaw

to be acquired by Dick’s Sporting Goods

Outdoor gear and apparel retailer was purchased by Walmart in 2017

JAY DAVIS

Madison Heights-based Moosejaw will soon operate under a new giant umbrella.

Dick’s Sporting Goods on Wednesday announced it reached an agreement to acquire the outdoor gear and apparel retailer from Walmart. Walmart acquired Moosejaw in 2017 for $51 million.

e sale is expected to be completed in March, according to a news release.

Financial terms of the Moosejaw acquisition were not disclosed. Dick’s and Moosejaw declined to release any additional details on the deal.

Moosejaw CEO Eoin Comerford will stay on and report to Dick’s Senior Vice President Todd Spaletto, who is also the president of Dick’s outdoor brand Public Lands, the release stated.

In addition to its predominantly online sales, Moosejaw operates 13 brick-and-mortar locations in Michigan, Arkansas, Colorado, Illinois, Kansas and Missouri, including stores in downtown Detroit, Birmingham and Ann Arbor. It has 240 employees.

e acquisition of Moosejaw will expand Pittsburgh-based Dick’s outdoor portfolio. Dick’s (NYSE: DKS) launched specialty retailer Public Lands in 2021 with a goal of celebrating and protecting public lands for all, according to the release. Along with an online store, there are seven Public Lands retail locations — none in Michigan.

Dick’s noted in the release that Moosejaw “operates a highly successful e-commerce platform, has a loyal customer base, strong vendor relationships with leading outdoor brands and a passionate workforce.”

“We admire what Moosejaw has accomplished over the past 30 years as leaders in the outdoor industry and look forward to the opportunity to share insights and learn from one another,” Spaletto said in the release.

“We believe there’s potential to grow the Moosejaw business and provide compelling experiences and an expanded product assortment to its millions of loyal customers.”

Established in Binghamton, N.Y., in 1948, Dick’s Sporting Goods has more than 850 Dick’s Sporting Goods, Golf Galaxy, Field & Stream, Public Lands, Going Going Gone! and Warehouse Sale stores and more than 50,000 employees. e

retailer reported 2022 revenue of $12.12 billion.

Walmart in its most recent earnings report didn’t mention Moosejaw or Moosejaw.com speci cally, but said its e-commerce sales in 2022 increased by 17 percent.

Walmart spokesperson Jaeme Laczkowski said Walmart does not disclose brand sales gures. Moosejaw.com as recently as 2021 had revenue of $152.7 million, according to e-commerce insights website ecommercedb.com.

In 2018, the year after it bought Moosejaw, Bentonville, Ark.-based Walmart launched an online “premium outdoor store” curated by Moosejaw that o ered high-end outdoor apparel. O cials from some of the featured brands asked that items be pulled from the site out of fear Walmart.com would bring down prices on their products, according to an Outside report.

Laczkowski in a statement said the retail giant is excited about the new opportunity Moosejaw has with Dick’s.

“Moosejaw joined the Walmart family to expand our assortment and expertise in the specialty outdoor category, and make Moosejaw accessible to more customers,” Laczkowski said. “Since acquiring Moosejaw, Walmart.com has grown from 70 million to hundreds of millions of items. While Moosejaw operated as a standalone business, it was able to leverage Walmart’s scale and customer reach to propel the Moosejaw Madness. We’re excited about this new opportunity for Moosejaw to reach even more athletes and outdoor enthusiasts in its mission to make the outdoors more inclusive.”

Comerford in a December interview with active lifestyle publisher SGB Media said in ation had pushed Moosejaw to push items through promotions.

“Macroeconomic pressures combined with unseasonably warm weather and bloated inventories create a highly promotional environment,” Comerford said in the interview. “We’ve been through these pressures in the past, but what’s different this year is that many brands’ own DTC (direct to consumer) businesses are driving the promotional level. As a retailer, we are left to match these discounts or maintain margins and lose sales.”

Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

A rendering of a proposed o ce tower at 2200 Woodward Ave. The building would be heavily subsidized by the state’s transformational brown eld public nancing mechanism. | OLYMPIA DEVELOPMENT OF MICHIGAN AND RELATED COS.

THE PROGRAM ALLOWS FOR DEVELOPERS WHO MEET CERTAIN PROJECT COST THRESHOLDS — IN DETROIT’S CASE, $500 MILLION AT A MINIMUM — TO APPLY TO CAPTURE VARIOUS STATE TAXES.

One of Moosejaw’s Michigan locations is on South Main Street in Ann Arbor. COSTAR GROUP INC.

It’s time for nonpro ts to think di erently

EDITORIAL

Leaving the era of ‘ruin porn’ behind

Detroit is home to two globally known symbols of urban decay. Both of them are on their way to losing that designation, though through di erent paths.

Detroit became a destination city for “urban explorers” and ruin-porn photographers, drawn by beautiful and massive buildings like the Michigan Central Station and Packard plant that had fallen into decay. at’s not the kind of tourist destination Detroit wanted to be. And it’s changing.

As outlined by reporter Arielle Kass in this month’s Crain’s Forum section, Detroit Mayor Mike Duggan has declared war on Detroit’s most pressing examples of urban blight — creating a hit list of properties that’s grown to more than 150 examples that the city will ght to clean up, demolish or otherwise eliminate.

Duggan’s focus on commercial blight comes after years of a relentless e ort on residential blight — demolishing unsalvageable homes in a city whose population fell over decades by two-thirds, and renovating and putting into productive use those houses that can be saved.

Duggan’s hit-list approach reads like his standard playbook: methodical, data-driven and designed to enforce accountability. You can’t eliminate the worst examples of blight unless you know what they are.

And using the city’s one-time money from

federal COVID relief grants for a big push on commercial blight is wise, an investment that can pay dividends for years to come.

A key to success will ultimately involve luring more private investment dollars outside of the downtown/Midtown core that has symbolized Detroit’s renaissance but also its broader challenges.

ose success stories now have Detroit showing up on lists of great places to visit rather than places to be avoided, and it’s no longer even surprising when that happens.

But Detroit is a large city. Anyone driving the length of Gratiot or Grand River will be humbled and perhaps discouraged by the scale of the problem of commercial blight.

One of the most prominent entries on the M100 list is Lee Plaza, which is slated for renovation and redevelopment. But rising costs have kept that redevelopment from getting o the ground. Developer David Di Rita hopes to overcome a $10 million nancing gap in time to start work on the empty building by the end of next year.

It’s an illustration of the di culties that remain, and a project that we hope can succeed.

Also to sort out: Some property owners dispute whether they even belong on the list, another example of how complex an undertaking this is. Making progress on those claims will require resources.

e renovations of the train station and the in-progress demolition of the Packard plant show that improvement is possible, with coordinated and methodical work, private investment and public support.

ey can be new kinds of symbols that can help inspire further change — and leave the “ruin porn” tourists at home.

So far in 2023, the nonpro t organizations our community depends upon — and the business community supports — have not yet had a chance to enjoy the “post pandemic world” they looked forward to just a couple of years ago. e “Roaring ’20s” have not materialized and the fear of recession on top of lingering pressures make this a pivotal time for the sector. e National Council of Nonpro ts reports the top two trends for nonpro ts this year are limited resources and increased demands stemming from increased needs in our communities. If you ask around our region, you will hear the same.

I encourage businesspeople to consider what you have done when you have been faced with the “more with less” conundrum, then share that advice with the nonpro ts you support and serve. You don’t just demand “increased sales,” just like nonpro ts can’t snap their ngers and immediately raise more money. Even if it could happen, in both cases, that only solves one part of a compound challenge. You must look deeper for change, and I’m not talking about anything directly involving nancial statements, although those are certainly important.

Best business practices should extend far beyond revenue development. at is why Life Remodeled’s mission includes helping other nonpro ts enhance their abilities to sustainably serve. Recently, we hosted more than 100 nonpro t professionals for a one-day workshop to help them consider

and implement business best practices. We emphasized what should be the top organizational priorities for the short-to-long term for all organizations.

First, too many nonpro ts struggle to believe that they can actually attract and retain top talent. But they can and they must, in order to ful ll their missions. Nonpro t careers can and should be attractive to the professionals who feel called to them. Just like businesses in all industries, the nonpro t sector must commit to a workplace and career path that allows professionals to thrive and grow and earn a level of fair compensation. at needs to be understood then prioritized by leadership, governance board members and the donors who will make it possible.

At the same time, nonpro ts need to take a page from business by prioritizing strategic planning. Too many organizations go through a long planning process only to underutilize the result. e strategic plan should guide the organization through whatever it encounters, and all other plans should be designed to support a relatively succinct central strategy, just like in the most successful businesses.

Anytime someone suggests that a charity be run “like a business,” it can create nervousness as it conjures thoughts of ruthless pursuits of money over people. Running a nonpro t on the right business principles is not at odds with compassion. e people of this community served by nonpro t organizations deserve excellence. As nonpro ts face the daunting task of delivering on their missions during this uncertain time, they are best served by adapting business fundamentals to plan for and realize the next level of impact, not just their next scal year.

DANIEL SAAD/CRAIN’S DETROIT BUSINESS

RENOVATIONS OF THE TRAIN STATION AND THE IN-PROGRESS DEMOLITION OF THE PACKARD PLANT SHOW THAT IMPROVEMENT IS POSSIBLE.

CHRIS LAMBERT

Chris Lambert is CEO and founder of Life Remodeled, a 2022 nalist for Crain’s Best Managed Nonpro t.

NONPROFITS NEED TO TAKE A PAGE FROM BUSINESS BY PRIORITIZING STRATEGIC PLANNING.

Our Next Energy looks beyond EV batteries for growth

Startup hopes to double its revenue projection in next ve years

KURT NAGL pected to grow rapidly in the coming years, and Aries Grid is an important signal to investors that the company plans to diversify revenue from electric vehicles, he said.

Novi-based Our Next Energy Inc. is tapping into the grid with ambitions to double its revenue projection over the next ve years and woo even more investors.

e fast-scaling startup, whose core product is lithium iron phosphate batteries for vehicles, is launching a stationary energy storage system marketed at public utilities such as DTE Energy Co. and Consumers Energy Co.

e new vertical, called Aries Grid, will stand alongside its commercial vehicle battery business, which has started early-stage production, and its passenger vehicle business, for which a $1.6 billion plant in Van Buren Township is being built out for production next year.

e energy storage business is expected to begin generating revenue in the near term, ONE CEO Mujeeb Ijaz said. He said the rst major project will be announced within a month but declined to provide more details.

“In our business discussions with utility customers, we can double our company’s revenue projections by taking on this new vertical,” Ijaz said. “ is has been a part of our business plan all along.”

Ijaz previously told Crain’s that Our Next Energy booked about $4 billion in revenue over the next ve years. He said the forthcoming project announcement would paint a clearer picture of the new vertical’s revenue upside.

e Aries Grid is essentially a 40foot container packed with 78 Aries battery packs — the same pack it is producing for commercial vehicles.

“We put (them) inside this grid container as a way to move from transportation up to utility-scale storage without inventing the building block all over again,” Ijaz said.

Aries Grid is a product born from a concept first discussed during the announcement of the new EV battery plant in Van Buren Township. Our Next Energy said then that DTE would purchase the energy storage of finished batteries in the plant in a “gigafactory-to-grid” model.

“At the time, when we wrote that agreement with DTE, they said they would like to cooperate with ONE e ectively on stationary storage. And at that time, we had no product,” Ijaz said. “We started to invest ourselves in developing the utility product.”

e battery containers — o ered in 2-, 3- and 6-megawatt-hour modular units — can be set up wherever the customer chooses. ey allow utilities to store energy from the grid and renewable sources, such as solar and wind, and use it when they choose.

Key market usages are for building energy bu ering, or managing peak and valley energy loads; backing up power for data centers; and for microgrids that collect solar energy and store it during the day for usage at night, for example.

Ijaz said he sees the vertical being 20 percent to 25 percent of the company’s overall business once its units are scaled up.

e energy storage industry is ex-

“ at’s important to investors because our book of business will grow,” he said. “As that happens, investors think about how are we going to get the capital we need to grow a factory to keep up the business that we’re trying to get into.”

Our Next Energy announced earlier this month that it raised $300 million in its Series B round, achiev-

ing unicorn status with a $1.2 billion valuation.

Ijaz said he is already looking at opportunities to lease more factory space in Van Buren Township and planning its Series C round.

“I think we’re on a track to being diverse and independent, not required to partner only with one or the other but rather open to the whole market, and that’s going to be our strength,” he said.

Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

From top talent to top employers, Crain’s Career Center is the next step in your hiri ng proc es s or job search.

Our Next Energy’s newest product, Aries Grid, is a container packed with batteries designed to store energy for utility companies. | OUR NEXT ENERGY

COMMERCIAL BLIGHT

INSIDE: A tale of two symbols: Michigan Central Station and the Packard plant nd opposite fates. PAGES 14

ONLINE: View an interactive map that shows the status of properties listed by the city as commercial blight.

CRAINSDETROIT.COM/CRAINS-FORUM/MAP-DETROIT-BLIGHT

RAMPING UP THE FIGHT AGAINST

COMMERCIAL BLIGHT

A year ago, city of cials prioritized about 100 properties, big and small, for remediation. This year, they have added more and are aiming to make a big jump in progress.

An international exhibition of photos of Detroit’s abandoned and decaying commercial buildings made him “extremely angry,” Mayor Mike Duggan said last year. He believed it continued the “ruin porn” reputation in the popular imagination, the idea that dilapidated sites were drawing tourists.

It also prompted the city to step up e orts to demolish and rehabilitate buildings that in some cases had been empty for generations. And after an initial dozen were identi ed, Duggan said in his 2022 State of the City address last March, he wanted to expand the scope to encompass even more blight.

“I want to make sure there’s no

chance somebody comes around with a new camera and takes new pictures,” he said. “So we made a list of the next hundred.”

at list became known as the M100, and has since ballooned to 150 blighted commercial properties the city is tracking. Most are slated for demolition, but others may still be saved.

“I think it’s actually a sign of optimism,” Richard Hosey, the owner of Hosey Development and the redeveloper of the Fisher Body No. 21 plant, said of the M100. “ ere was a time when the list would have been so big, people would say, ‘Why are you putting together a list? It’s just the city.’”

e creation of the M100 rep-

resents a focused, coordinated effort to be proactive about blight elimination, members of the administration said. And while progress can sometimes be slow, information from the city’s demolition department shows a dozen properties have come down since the list was started in 2021, while two are actively moving toward demolition and another dozen are out for bid.

LaJuan Counts, director of the department, said she expects all the properties slated for demolition to be contracted out this year, with the majority being torn down this year.

Duggan said in January that another 40 or so were going through environmental remediation and he expected every property to be torn

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BY ARIELLE KASS

down or rehabilitated by the end of 2025.

Rattling o a list of projects and progress, Duggan said he doesn’t need to explain to Detroiters the effect demolishing eyesores like the Packard Plant would have on residents’ psyche.

“People visited from around the world to say they walked in the ruins of Detroit,” he said. “As you can tell, I’m very much focused ’cause each one of these is a symbol of Detroit’s decline. And we’re going to eliminate once and for all the ruin porn tours in the city of Detroit.”

‘Much better strategy’

Abandoned manufacturing cen-

ters, empty strip malls, vacant apartment buildings: “ ere’s a lot of commercial blight in the city of Detroit,” said John Mogk, a distinguished service professor at Wayne State University’s law school.

Detroit or a city entity now owns half of the worst o enders, according to the M100 list, and Mogk said local government could use help from the state for additional tools that could give the city options to mitigate the blight. One thing is clear, though, he said: blight places a heavy burden on an area, and if the city is to have a future, it must not let commercial blight stay, or spread.

“Ruin porn,” the images of decaying sites such as Lee Plaza in Detroit, inspired city leaders to increase e orts to remediate commercial blight to bring about citywide change. ARIELLE KASS/CRAIN’S DETROIT BUSINESS

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“It has a chilling e ect,” Mogk said. “You can’t redevelop an area unless you eliminate the blight. It’s too risky to invest in an area that’s blighted.”

One of the main bene ts of the M100’s creation, said Tyrone Clifton, director of the Detroit Building Authority, is the way in which city leaders are now working together across departments for a common purpose in a way that wasn’t happening before when it came to that type of remediation.

e result, he said, is a “much better strategy” when it comes to determining what should happen to various properties — and better communication, so departments aren’t working at cross purposes. In the past, he said, one department could be moving forward with rehabilitation plans, while another was readying for demolition.

e new approach is far less haphazard, said Ray Solomon II, director of Detroit’s Department of Neighborhoods.

“We were reactive,” he said. “Having a list, knowing where it’s at, is being proactive. ... We responded to the re, we responded to the squeaky wheel.”

e list is a living document, the administration said, with properties staying on it even after they’ve been rehabbed or torn down and conditions changing as more information becomes available. A version of the list sent earlier this month showed fewer

than 10 properties had changed categories since Crain’s reported on an earlier version of the list in March 2022, and 33 properties had been added, many of them schools.

With decades of vacancy, some properties are too far gone to be saved. Just 15 of the properties on the M100 are listed as renovation projects, though some privately owned properties that have violations and are being targeted by the city’s legal department may yet be salvageable. Additionally, Crain’s found several properties that were listed for demolition whose owners said they were doing work on

them; some, the city said, had not yet been updated on the M100 list Crain’s received.

e city wants to save buildings when it’s possible to do so, Clifton said.

“I wouldn’t say everything has to go,” he said. “Buildings have to be occupied. It’s amazing how much they deteriorate when they’re not.”

Target date: 2025

e city is using American Rescue Plan Act dollars, which have to be spent by 2026, to fund the demoli-

View interactive map of properties labeled commercial blight

In March 2022, Detroit Mayor Mike Duggan identi ed about 100 commercial properties that would be targeted for blight remediation, a list known as the M100. Nearly a year later, city o cials have amended, updated and reworked the list, which remains an ever-changing, internal working document. Some property owners say they have found errors in the list, and the city says it will continue to update it as information is veri ed and property statuses change.

tions. But Duggan said his goal is for all the properties to be reused or knocked down by the end of 2025.

How easy that goal is to meet remains to be seen.

Counts, the demolition director, said the federal money has allowed her department to speed up work on a list of some 400 commercial properties she has been tracking and readying for demolition. Properties are often taken down because they are a public safety issue, she said, and her department is prioritizing those near parks, schools or other areas where people walk or congregate, to ensure

The list — which has ballooned to 150 properties — includes major areas of blight, like the Packard Plant, Lee Plaza and Fisher Body No. 21 Plant, all high-pro le buildings in various states of disrepair. But a number of the privately owned properties are neighborhood buildings that include apartments, former schools and churches in disrepair. Take a look at the list and see where the properties are located at crainsdetroit.com/ crains-forum/map-detroitblight.

A bold strategy to lowering prescription drug costs

At the end of last year, Gov. Gretchen Whitmer and the Michigan Department of Insurance & Financial Services (DIFS) laid the groundwork through Executive Directive 12 of 2022 to take bold action to lower prescription drug prices for Michiganders. This month, the governor’s budget proposal to help lower insulin drug prices is an aggressive sign of leadership that should be commended.

The governor’s willingness to tackle this problem head-on by enticing and spurring competition among drug makers is refreshing and courageous. She is taking on Big Pharma with her open arms invitation to entice any drug manufacturer to Michigan willing to produce insulin at more affordable rates.

When other elected leaders have chosen easier, less complicated roads, our governor has chartered a new path aimed at solving the problem, not politicking with promises that have failed historically to lower insulin costs.

For years, policymakers have attempted to address prescription drug costs by punching at health plans and pharmacy bene t managers (PBMs). But they’re ghting the wrong opponent — we are allies in this battle, not enemies.

Because the U.S. doesn’t regulate drug prices like many other nations, health plans and PBMs have no authority to negotiate drug prices effectively. Drug makers are free to charge PBMs and health plans at whatever prices they deem reasonable for prescription drugs.

According to the U.S. Department of Health and Human Services, Americans pay higher prices for prescription drugs than any other country in the world. Prescription drugs are more than 2.5 times higher than in other similar highincome nations. The median launch price of a new drug in the U.S. increased from $2,115 in 2008 to $180,007 in 2021— a 20% annual increase each year. Researchers report that the percentage of drugs that cost more than $150,000 a year increased by 9% in 2008-2013 and then 47% in 2020-2021.

The Centers for Medicare and Medicaid Services (CMS) has reported that prescription drug spending is projected to outpace growth in all other major healthcare sectors, averaging 6.1% annually through 2027. Insulin and epilepsy drugs have increased by staggering margins over the past few years, forcing Michigan Attorney General Dana Nessel to take action against unsubstantiated insulin drug prices.

The trend in drug prices outpaces growth in prices for all other healthcare services.

According to research conducted by a national healthcare association, nearly a quarter of every premium dollar goes to pay for prescription drugs — an amount higher than any other spending category — more elevated than outpatient and inpatient hospital costs.

To make matters worse, drug manufacturers have successfully convinced policymakers to enshrine state and federal mandates in laws that require certain drugs to be covered by insurance without utilization controls or customers’ out-of-pocket expenses, greatly exacerbating the cost of healthcare premiums.

There is an adage that my dad always told me growing up: “Sometimes, you must ght re with re.” That is precisely what the governor and DIFS are doing, and their actions should be applauded. Not only are they ghting the right opponent, but they’re also throwing creative punches that are rightfully aimed at effectively lowering insulin drug costs for Michiganders.

Dominick Pallone is executive director of the Michigan Association of Health Plans

A rendering of a reimagined Fisher Body No. 21 plant as an apartment building. MCINTOSH PORIS ASSOCIATES

those areas have the commercial hazards removed.

She said 55 properties are in a bid package that the City Council should vote on soon, though all may not be on the M100 list. Others at imminent risk of collapse will be taken down on an emergency basis, Counts said.

She’s hopeful that the work will move quickly, in line with Duggan’s desires, though the formal procurement process and necessary environmental remediations can take a “signi cant amount of time.” Counts said the department got the OK to move forward with ARPA money just six months ago, one of the reasons that more buildings haven’t been demolished a year after the announcement of the M100.

Progress, Counts said, will be clearly noticeable.

“It would mean we’ve taken a signi cant bite out of the city’s overall blight concerns,” she said. “It’s not having to feel like it’s a weight.”

But demolition isn’t always the right move, even for the demolition director.

“A lot of times, if we encounter a structure we feel like can be saved, we’ll ask,” Counts said. “You can’t demolish your way to the best quality of life.”

Other challenges await those who are working to reoccupy buildings. Some developers have a good idea and good intentions, but can’t nancially support a project, said Solomon, with Detroit’s department of neigh-

borhoods.

Even those who have solid backing say the process can be challenging.

omas Habitz, an urban planning specialist at Henry Ford Health, said he’s been trying to nd a developer partner for a property the hospital system has owned for a decade at 1494 Holden.

e building has four storefronts on the rst oor and ve apartments above, and Habitz said he’s considering someone who might develop the property as entirely residential, since he’s not sure if the Elijah McCoy neighborhood can support commercial uses. Henry Ford has maintained the building, Habitz said, boarding up windows and removing re escapes that were in disrepair, but hasn’t done any rehabilitation work.

He’s hopeful that a recent announcement about the hospital’s plans for a $2.5 billion development project in the area will help spur growth and make it easier to nd a partner. Habitz said he’s getting a lot of interest and wants to have a partner named “in the near future,” hopefully by the end of the year.

A chain reaction

It’s slow going, too, for other developers who have made more progress on some of the iconic properties they hope to save.

David Di Rita, principal of the Roxbury Group, hosted a celebration last January after Detroit’s City Council earmarked $7 million to help him re-

develop Lee Plaza into more than 100 apartments for seniors, most of them a ordable.

e 15-story building, built in 1927, had been abandoned for decades. It was previously slated for demolition.

Last January, Di Rita said he expected construction to be beginning now, but earlier this month, he said the project’s nancing was still in ux. With high in ation, Di Rita said, there’s about a $10 million gap to make the numbers work. He said he’s “increasingly con dent” nancial closing will happen before the end of this year, but that no physical work has started on the building yet.

Di Rita said he has weekly meetings with the city about his progress, a sign of how high a priority Lee Plaza’s rehabilitation is for the administration.

Lee Plaza remains one of the most prominent buildings on the M100. Di Rita said he thinks it’s a good thing that the city is keeping a “hot list” of properties. He called its existence “evidence of genuine progress.”

It shows, he said, that “substantial blighted buildings like these are not acceptable in Detroit.”

“It’s an unwillingness to accept the unacceptable,” Di Rita said. “If we’re going to be a world-class city, a list like this does not exist.”

Listing out the properties that are in

the worst shape, and that need to be dealt with, “forces a community discussion,” Di Rita said.

Hosey, the Fisher Body No. 21 redeveloper, said his own project is working its way down the “traditional Detroit two-year development path” as he seeks nancing. Plans call for more than 400 apartments, coworking space, retail and other uses at the site.

As he moves forward with the project, Hosey said the buildings on the M100 had long been symbolic of what Detroit couldn’t do. As more and more of them see movement, he said, the tide is likely to change. eir successes will o er proof that improvements can be made, leading others who are eyeing di cult projects to take them on.

Changing what buildings like those

on the M100 represent is important, Hosey said, especially since Detroit lost other iconic buildings a decade ago. He’s heartened by the fact that there are viable plans for the city to manage much of the blight that’s accumulated over years.

“Optimism is one thing, but you’ve really got to prepare for reality,” Hosey said. “It’ll be very cool to look at that list 10 years from now.”

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

“A LOT OF TIMES, IF WE ENCOUNTER A STRUCTURE WE FEEL LIKE CAN BE SAVED, WE’LL ASK. YOU CAN’T DEMOLISH YOUR WAY TO THE BEST QUALITY OF LIFE.”

—LaJuan Counts, director of Detroit’s demolition department

Mike Duggan | NIC ANTAYA/CRAIN’S DETROIT BUSINESS

Property owners, city records aren’t always in agreement

ARIELLE KASS

Chet Pitts has given up trying to redevelop a vacant apartment building in the city of Detroit.

e 21-unit building at 1602 Lemay St. in East Village was slated for demolition 20 years ago. It didn’t happen then and, in 2016, Pitts said, the building was donated to MET Plus. Pitts said he wanted to use his nonpro t to create permanent supportive housing in the city.

He went to the City Council, met with o cials and tried to get the property o Detroit’s demolition list. It still shows up on the M100 list of the most blighted properties in the city.

“I’m not getting anywhere,” he said. “I feel defeated.”

e city’s M100 list — which has ballooned to 150 properties — includes major areas of blight, like the Packard Plant, Lee Plaza and Fisher Body No. 21 Plant, all high-pro le buildings in various states of disrepair. But a number of the privately owned properties are neighborhood buildings like Pitts’. Several of those community owners are frustrated by their experiences with the city, or by information on the list that is simply incorrect.

When Pitts got an October notication of the planned demolition, he went to members of City Council to protest the action. at led to meetings with city o cials, but the property was already moving forward with a pre-demolition environmental review, con rmed Rudy Harper, a demolition department spokesman. e property still appears on a list of those in the demolition process — in that review stage — but a new application for a deferral rescinded in 2018 was deemed acceptable. e environmental review was completed.

e windows are boarded up and Pitts said the property “de nitely needs rehab,” but said he’s done some work on it.

“I’m doing the right thing in the community, I’ve been doing it,” Pitts said. “Fast forward to now, I’m tired. ... e city building department, they won’t get their foot o my neck.”

Pitts said he felt defeated by ongoing battles to save the building. He has listed it for sale for $300,000.

“It’s like they don’t want me to succeed at all,” he said.

John Roach, a Detroit spokesman, emphasized that the M100 is an internal working document that can change daily. Mayor Mike Duggan said it is updated on a weekly basis. But the list, which includes ownership information and whether a

property is slated for demolition or rehabilitation or is in legal limbo, has information on it that is sometimes months or years out of date.

“All involved departments have access to the central list and update it when necessary, and su cient checks and balances are in place,” Roach said in an emailed statement.

Patricia Dockery is another local resident frustrated with e orts to try to save a vacant building. She has architectural plans to transform 9301 Oakland Ave. in the city’s North End neighborhood into a co ee shop, engineering training center and 10 units of a ordable housing. But at the end of January, she received a notice from the city of Detroit threatening to demolish the 98-year-old structure.

e property is one of 115 earmarked on the M100 for demolition. Dockery, executive director of the Sta ord House, said she’s furious that the building could be torn down while she still has plans to save it.

“ ey’re not stabbing Dan Gilbert in the back, or Roger Penske,” she said. “ ey’re coming after small people who are doing the work.”

e city sees Dockery’s project di erently than she does. A February request from Sta ord House to defer the demolition was denied, according to information from David Bell, director of the city’s Buildings Safety Engineering and Environmental Department, or BSEED. e city’s demolition department currently has the property on a list of buildings that it’s doing environmental work on before sending it to be bid for removal.

To delay a demolition, permits need to be secured within 10 days and work on a property needs to be completed in six months, an email from Bell said. e Sta ord House application indicated no permits will be pulled for seven months, Bell’s email said, while design and development work continue for the site. Concept sketches, he added, show multiple code violations and parking on land the Sta ord House does not own.

Dockery told Crain’s she put close to $100,000 into pre-development for the property, including gutting it, and removed people who were living in the vacant building. She said she expected construction to start in April or May. e organization had been maintaining the property, Dockery said, though Roach said there was absolutely no sign of renovation.

“We’re ghting it tooth and nail,” Dockery said. “We’re ghting it.”

Roach emphasized repeatedly that the M100 document is ever-changing. While he said Dockery’s case was going through the proper process, discrepancies elsewhere in the list don’t necessarily mean errors, he said — just that

something has changed and the list needs to be updated.

No building is demolished without the city completing a full title search on the property to ensure that the current legal owner is aware of the proposed action and has a chance to respond to it, Roach said. e only exception, he said, is emergency demolitions, when a structure poses an immediate threat of collapse and is a danger to residents.

Dockery said it wasn’t until she received the January demolition notice that she learned the city had been trying to communicate through an address Sta ord House hadn’t used since 2016. She said she was particularly frustrated to learn that because she had hosted Duggan in her home and had been involved in the North End Neighborhood Framework Vision process.

“It’s not like the city didn’t have access,” she said. “ ey’re very lax, extremely lax, about city business.”

Another property, at 24623 W. Grand River Ave. in a northwest Detroit neighborhood called e Eye, is also still listed on the M100 for demolition, though another demolition department spokesperson said it

was removed in September, after the owner complied with a court order to replace a missing roof.

Shelly Steciak, the owner, said the building was burnt when she bought it in 2021; she’s thinking of putting a day care or a car wash there now. Electricity was going in.

“ at ain’t even a blight anymore. It’s been refurbished,” she said of its inclusion on the list. “I don’t want my building to be demolished after I put all this money into it.”

Julieta Allen, a real estate agent with Clyde Realty who helped Steciak with the purchase, said the property was not supposed to be on the list and the city was behind in updating its information.

at’s also the case when it comes to the ownership of some properties. Prater Commercial Carpentry is listed as the owner of 10123 W. Grand River Ave. in Midwest Detroit, but Ryan Prater said he hasn’t owned the property since 2013.

“We’ve constantly been sending bills back to the city of Detroit,” he said. “We don’t own the building at all.”

He added that it was “in decent shape” when last he did. e build-

ing is in the demolition process, according to the city’s department, and environmental work is being done on the building before it is bid out for removal.

Kelli Wiley Valvona, the registered agent for Dinah Might LLC, said in a message that developer Philip Kafka had planned to turn the former Continental Motor Co. property into “an ode to the urban industrial history of Detroit” in the form of an indoor public park or museum. But Kafka sold the Albert Kahn-designed property in 2021, Crain’s previously reported.

e city is pursuing legal action against the owners of the property at 12802 Kercheval Ave. in the Riverbend neighborhood — the owner is still listed as Dinah Might on the M100 list. Valvona said Kafka sold because there wasn’t enough time to correct the violations on the property.

“As far as I know, it was purchased by a large national company that has torn down a good portion of the historic site, and plans on using what remains as public storage,” she wrote. “ e city has a challenging task on their hands — to keep the city safe and deter absent owner speculators. At the same time, we are saddened to see such a magnicent piece of history destroyed in the name of ‘progress.’”

Even those whose information is accurate are sometimes experiencing frustration. Athanasios Koikas, the owner of 5014 Grandy St. in Poletown East, said he had no idea the four-unit at he owns was considered a blighted property — certainly not among the most blighted in all of Detroit. e city demolition department is currently preparing the request for proposals that would include the demolition of that property.

“ at don’t make any sense,” Koikas said, saying the property was “some building in its day.” “I can’t see how it’s the most worst. It’s boarded up and everything. Other properties are wide open.”

Chet Pitts had wanted to renovate his 21-unit building (below) at 1602 Lemay St. but says it has become too di cult to navigate the requirements, which has moved him to try to sell the property instead. | PHOTOS BY NIC ANTAYA/CRAIN’S DETROIT BUSINESS

“WE’RE FIGHTING IT TOOTH AND NAIL. WE’RE FIGHTING IT.”

—Patricia Dockery, vowing to combat the notice for demolition for a building in the city’s North End she is seeking to renovate.

COMMERCIAL BLIGHT

COMMENTARY

Targeting blight helps stabilize neighborhoods

No other city has a story quite like my Detroit. Growing up, I vividly remember a vibrant city with neighborhoods like mine, full of character and people like Ms. Moody who made the neighborhood children homemade ice cream each summer.

Fast forward to 2007, when economic conditions in the region caused the population of our beautiful 140-plus square mile city of over 1.8 million residents to decline — but the properties those residents occupied and the buildings they worked in remained.

Today, the impact is still evident.

Opportunity rising

Strong leadership, reinvestment and community partnerships have helped stabilize and improve residency rates in recent years, but residential and commercial property blight became a major issue for Detroit to contend with.

e Detroit Demolition Department was born in 2020 under Proposal N for Neighborhoods, the bond-funded initiative to demolish 8,000 blighted houses and stabilize 6,000 more for resale. As we got to work, we took a data-driven approach with safety and transparency as our top priorities. I understood to be successful in this process, we would need to have an e ective communication strategy. Public mistrust of the prior program was apparent.

I’ve spoken at hundreds of community meetings, created a demolition dashboard for live updates and even shared meals with residents at their kitchen tables to educate the com-

COMMENTARY

munity on the process and restore trust.

As expected, with Proposal N’s steady progress and an increase in previously vacant properties being purchased by Detroiters, the current amount of residential demolition has signicantly reduced. We’re on a steady path to resolve residential blight and now, under Mayor Mike Duggan’s leadership, the necessary resources and funding have aligned for us to formally tackle the city’s commercial blight.

Residents take part

e demolition team regularly elds comments and questions from residents and suburban neighbors about the commercial properties. Many ask why we’re spending millions of dollars on a process that erases our history rather than preserving and rehabilitating these buildings.

Unfortunately, due to years of neglect, exposure to the elements and even res or vandalism, the commercial structures the city has identi ed for demolition are too deteriorated to salvage.

We receive questions and concerns from Detroiters from every district and neighborhood. What they all have in common is the desire to see their communities return to their former glory — bustling, diverse neighborhoods complete with safe, attractive homes and local businesses to patronize inside city limits. Our commercial demolition program exists to provide a fertile ground for just that — to make our neighborhoods ripe for residential, recreational and industrial development.

e city has announced plans and, in several cases, begun to remove or renovate the city’s most infamous vacant buildings. Among these are Lee Plaza, the Packard Plant and the former Michigan Central Train Station. Across the city, vacant schools and mid-sized commercial buildings that border residential corridors are also being addressed in a concerted and intentional e ort to remediate blight holistically. We’re not only addressing popular downtown areas, but also focusing heavily on residential neighborhoods where the majority of longtime Detroiters live, work and play.

We’ve celebrated incremental successes so far. After years of corrosion

and multiple res, neighbors lamented the remains of the old Frank Beard School near Lafayette and Waterman. Just across the highway, there’s active construction on the Gordie Howe International Bridge, set to open in 2024. e crumbling building has been removed, making the site that much more attractive for new development opportunities.

We’re also nearing completion of the demolition e orts at the former LaChoy Headquarters, which until recently languished with just three of its four retaining walls remaining. is facility borders the forthcoming Joe Louis Greenway, and its removal clears the way for continued construction on this community-fo-

cused project.

We have a unique opportunity to e ect immediate and tangible improvement across the city. e Demolition Department exists solely to serve city residents — to help improve standard of living, increase property values, and render every neighborhood safer and more beautiful.

We know that respecting Detroit’s rich history is paramount, but actively setting the stage for an equally rich future is just as critical. As a 26-year employee of the city, I don’t think we’ve ever been closer and more able to impact the future for our residents and provide such opportunity for the next generation.

e future of the past: Let’s be smart about old buildings

Wow! It has only been about 10 years ago that Detroit’s major historic preservation successes could be summed up as the Fox eatre and the Book Cadillac Hotel. Much of downtown’s central business district was empty and abandoned. e impact since that time in the commercial business structures has been amazing.

e list of major historic buildings saved and put back into reuse should be celebrated. e Broderick Tower, Wurlitzer, Metropolitan, David Whitney, lower Woodward and Capitol Park areas, David Stott, Eddystone, and numerous other buildings, all which were in advanced states of disrepair through abandonment or just neglect, have been put back into economic use.

e building thought to be lost for the ages, Michigan Central Station, has been saved by Ford. I am lucky to be part of the Michigan Central Station Christman/Brinker construction team. Standing on the roof of Michi-

gan Central on any given day, looking across the city, I can clearly see how so much of the downtown history has been saved; yet the opportunities to continue advancement and progress through preservation remain to dene Detroit in the future.

ree signi cant opportunities lay ahead.

 First, the opportunity is prime to complete investment in Detroit’s magnicent architectural past. With the new Gordie Howe Bridge, the opening to welcome a signi cant reinvestment of Fort Wayne may nally be at hand. Many unused structures are perfect reuse opportunities for low-income housing.

High on the list — Detroit’s unutilized former public-school buildings — are a fantastic history piece for adaptive reuse while investing into the local neighborhoods. United Artists and Lee Plaza are moving forward in various stages. Fisher Body Plant 21 is awaiting its path forward.

Many former apartment buildings in the downtown area, boarded up

for years, are candidates. As Devan Anderson, president of Preservation Detroit, points out, many preservation projects are actively spilling out beyond downtown and gaining momentum. Midtown, Eastern Market, Marygrove Campus, Belle Isle and other areas are seeing the expansion of historic building investment. Neighborhoods and light commercial spaces out Gratiot, Grand River, Michigan Avenue and other connectors all have historic resources ripe for investment and adaptive reuse.

Michigan’s Historic Preservation Tax Credits combined with similar federal credits are powerful tools easily utilized to help. Let’s continue the investment.

 Second, is the opportunity to build careers with historic preservation.

e preservation building trades are a great career path for so many of Detroit’s residents. Working with Ford at Michigan Central Station, we were able to develop a unique program called Fast Track. Partnering with the Michigan Building Trades Council we sponsored Detroit residents for a paid internship with a path to apprenticeship in the building trades.

With support from the construction community, over 80 percent of these residents are now on a path to learn career trades with no college debt. is program focused on opening doors for the under-represented in the trades and was successful.

Paul Dunford, president of Bricklayers and Allied Craftworkers Local 2 of Michigan, the largest masonry restoration trades union in Detroit, is actively looking for new apprentices. e masons provide the skill that is required on nearly every restoration project, brick and stone restoration work. e skills are transportable and timeless.

Aging workforces and COVID impact have created opportunities for Detroit residents, which, with focus and teamwork, we can introduce more careers. Let’s work together to advance Detroit’s trade workers.

 ird, is the opportunity to eliminate the mindset that old buildings just need to be demolished. ere remains a mindset, with a decreasing group of persons, that “old” should still be torn down. e sad loss of such buildings as the original City Hall, hotels like the Statler, Hudson’s, Packard

Plant, and, recently, the American Motors Headquarters; these landmarks can never be replaced.

Once demolished, that architectural history and fabric of the community is gone forever. Yes, there are times that something will be lost for something new.

Henry Ford’s quote that “Whether you believe you can do a thing or not, you are right” can be tied to Detroit’s governmental and business leaders who have saved and will continue to save Detroit’s historic buildings.

Yes, many buildings can and should be adaptively reused for the 21st and 22nd centuries. From simple sustainability, there is justi cation to keep the energy already put into historic structures. For keeping Detroit’s history alive and blended with the new, history is what makes Detroit, well, Detroit.

If there’s a desire to save, if we believe we can save historic buildings for the good of our community, then Detroit’s building owners, developers, designers, contractors and building trades will continue to see their past as part of a great future. I look forward to that opportunity.

LaJuan Counts is director of Detroit’s demolition department.

Ronald D. Staley is executive director of historic preservation at e Christman Co.

Some buildings on the Packard plant site have started to come down. LARRY PEPLIN/CRAIN’S DETROIT BUSINESS

Train station vs. Packard plant: A tale of two symbols of Detroit

Michigan Central Station was empty for 30 years before Ford bought it in 2018, unveiling plans to turn the former train station into a hub for autonomous and electric vehicle development. Its rehabilitation is expected to nish this year.

e last cars rolled o the line at the Packard Plant in the 1950s, though other tenants remained in the sprawling complex. Demolition of parts of the plant have been intermittent, the most recent began late last year, and much of the city-owned portion should be down by March, though privately owned portions remain.

Both the train station and the Packard Plant were among the city’s draws for tourists seeking close encounters with Detroit’s commercial blight. But the iconic structures have taken divergent paths in recent years as one was saved and one fell further into disrepair.

Why did their futures split? It’s a matter of both practicality and vision.

Long odds

With its location in Corktown, the train station is at the heart of the city of Detroit’s renaissance. e Packard Plant, however, is more than ve miles northeast, in the Gratiot Town/ Kettering neighborhood, a far more residential — and less central — area.

Saving each property was a long shot, said John E. Mogk, a distinguished service professor at Wayne State University’s law school. But the Packard’s odds were longer.

“Ford Motor came along and saw a need,” Mogk said of the company’s purchase. “Otherwise, the train station would probably still be vacant. ere was one chance in 100 and it materialized. e one chance in 1,000 for the Packard hasn’t materialized.”

So much of the di erence between the properties comes down to location. Population density isn’t strong enough near the Packard site to support dense redevelopment, said John Roach, a Detroit spokesman. And the development potential isn’t nearly as strong for the Packard, said David Di Rita, principal of the Roxbury Group, who is putting together nancing to turn the long-vacant Lee Plaza into a ordable apartments for seniors.

“ e Packard is utterly devoid of practicality,” Di Rita said. “I had people telling me they were going to turn part of it into a hotel and I had a hard time not laughing. Ask yourself, is this a place where hotel guests are going to go? It does not lend itself to the hospitality market.”

One-time owner Fernando Palazuelo took control of the property in 2014; he lost most of the Packard to foreclosure last summer, though he retains control of some pieces of land. He originally planned a mixeduse redevelopment with apartments, manufacturing, a restaurant, art gallery and other space, but the project never gained traction. In 2020, he marketed it for sale, largely as a demolition/new construction project.

For Di Rita, there are three questions to determine whether a blighted property can or should be rehabilitated: What is the physical layout of the building? Where is it located? And what is the state of repair? For pre-World War II buildings, “it’s the rst two that tend to decide the ques-

tion,” he said. “ ese buildings were built to last 1,000 years.”

e Packard’s location has been the thing that’s counted it out from development, Di Rita said. And while the train station’s would have been a nonstarter 30 years ago, now its location couldn’t be better. e only thing

it needed, he said, was someone to solve for what could be done there.

“ e train station falls into the rather-be-lucky-than-good category,” Di Rita said. “By the time Ford locked on, the locational disadvantages had fallen away. ... It’s a wonderful space, it has great natural light,

it had a lot of things going for it. Now you can look at it and go, ‘Anything’s possible.’”

at’s not the case, he said, for most properties on Detroit’s M100 blight list — including the Packard.

“Given its location, too many uses that you would quickly and easily consider if it was closer to the city center fall away,” he said. “You could go through every building on that list and run that math and a lot of them are going to fall into the Packard category.”

An impossible task

LaJuan Counts considers it “an honor” to take down parts of the Packard Plant.

e city’s demolition director said being able to eliminate blighted structures is a quality of life issue. If a building isn’t maintained, she said, it’s only going to be structurally sound for so long. And the Packard no longer is.

“ ere’s so many things that made it not a viable option to preserve that location for any type of future development,” she said.

e Packard is so large, and has been exposed to the elements for so long, that redeveloping it seemed like an impossible task, said Tyrone Clifton, director of the Detroit Building Authority.

A series of individual buildings divided by a road — with a bridge that collapsed on to it in 2019 — the Packard “is just a ruin,” he said.

“Bridges falling into the street, these are immediate concerns,” said Richard Hosey, the owner of Hosey Development, who is working to refurbish the Fisher Body No. 21 plant.

“I wish the owners would have en-

gaged years ago.”

Hosey said the most blighted properties have long been symbols of what can’t be done in Detroit. But that changed with the work that’s ongoing at the train station. It meant “a ton of e ort” from a lot of di erent parties, namely Ford, Hosey said.

A single structure, the train station got new windows in 2015, helping to protect it from the weather. Its rehabilitation, Clifton said, marked a major cultural shift for the city.

“It was embarrassing. It was almost like if the Renaissance Center had been vacant for 30 years,” Ray Solomon II, director of the Department of Neighborhoods for Detroit, said of the train station’s state of disrepair. “Having that iconic building be rehabbed and as beautiful as it looks is amazing. It de nitely helps build pride.

“ e mayor talks all the time, folks would come in to town just to take picture of our abandoned structures. at was probably No. 1, where it all started.”

Now, to see it on the brink of reopening, “it’s the greatest feeling,” Solomon said.

Counts said the train station is one of a small number of properties it would have hurt her feelings to demolish. She remembers taking the train to Toronto as a child, and said it’s important to keep historical structures like the station when they can be saved — to maintain the memories of what Detroit was like as well as to highlight construction marvels.

“Being able to save those kind of gems like the train station, it means a lot,” she said. “ e layout of the train station lended itself to far more opportunities than the Packard Plant did.”

The city of Detroit has started to demolish parts of the Packard complex after a judge ruled it could proceed and charge the owner. | LARRY PEPLIN/CRAIN’S DETROIT BUSINESS

Above and at left: Michigan Central Station in January 2022 as Ford Motor Co. works to renovate the building in Corktown. |NIC ANTAYA/ CRAIN’S DETROIT BUSINESS

Belle Tire to expand following acquisition of Ohio-based service centers

Allen Park-based Belle Tire is widening its footprint in Ohio.

Belle Tire Distributors Inc. on Tuesday announced it is acquiring Toledo-based Tireman Auto Service Centers. Belle Tire will take over ownership of all 18 Tireman locations, including 15 in northwest Ohio and three in southern Michigan, according to a news release. e deal will close March 13, according to Belle Tire spokesperson Erin Sikora.

Following the acquisition, Belle Tire will have 19 Ohio locations.

e company rst expanded into Ohio 20 years ago. Belle Tire now has 165 stores in Michigan, Ohio, Indiana and Illinois.

e more than 300 current Tireman employees will be added to a Belle Tire workforce that includes more than 2,700 people, Sikora said. Store-level leadership will not change. Belle Tire intends to keep the acquired stores operating under the Tireman name for the forseeable future, Tire Business reported.

Financial terms of the acquisition were not disclosed.

Belle Tire has annual sales of more than $600 million. Tireman,

founded in 1948, generated more than $56 million in sales in scal 2021, Tire Business reported.

Belle Tire President Don Barnes III, a 2022 Crain’s 40 under 40 honoree, said the move makes perfect sense.

“We share similar cultural values, the communities we serve are important and customer service is the bottom line,” he said in the release.

“ at would not be possible without the people in the stores and taking care of them like family.”

Tireman CEO Randy Jones said that a people- rst attitude is a big reason why he decided to sell to Belle Tire.

“I can’t imagine a better partner to take over now that I have decided to retire,” Jones said in the release.

“Belle Tire is a family-owned company like us. ey value their people and believe in doing the right thing for their customers like we do.”

Founded in 1922, Belle Tire offers a variety of auto services including at tire repair, tire replacement, alignments, brakes, batteries, shocks, struts, exhaust systems and glass replacement and repair.

Contact: jason.davis@crain.com

(313) 446-1612; @JayDavis_1981

Forvia

plots major

growth in clean fuel

alternative hydrogen in North America Company sees market starting to pick up in commercial vehicles

Automotive supplier Forvia has bold plans for hydrogen growth in North America as it weans itself from internal combustion and zeros in on a niche outside of pure electric batteries.

e French company, whose North American base is in Auburn Hills, has invested more than $300 million in hydrogen since 2018 — primarily in Europe and Asia as the clean fuel alternative has failed to gain traction in the U.S.

North America, with prototype and pre-series builds for tank and hydrogen storage systems as well as validation testing, Shappell said.

Spokeswoman Misty Matthews declined to detail the investment or where the pilot line would go but said she expects an announcement to be forthcoming.

A likely landing spot in Southeast Michigan could be the American Center for Mobility in Ypsilanti Township, where a rst-of-its-kind hydrogen hub is expected to open.

ufacturers in the U.S. to play catchup, Abdel-Baset said.

“ is is the rst time in the U.S. we’ve seen that kind of commitment,” he said. “We’ve seen a big uptick in the quoting activity.”

Belle Tire on Tuesday announced the acquisition of Toledo, Ohio-based Tireman Auto Service Centers. | FILE

DEALS & DETAILS



CONTRACTS

 Lumenore, Madison Heights, a business intelligence platform, has a contract with iQ Innovation Hub LLP, Pune, India, an integrated technology partner, to increase business momentum and expansion into the U.S., European Union and Indian markets. Website: lumenore.com

 Altair, Troy, an information technology company, has a license agreement with TU Delft, the Netherlands, a public technical university, for use of 1 million Altair unitsto access simulation, data analytics, AI, and high-performance computing software solutions. Altair also has been named the o cial computational science and arti cial intelligence partner for the New York Yacht Club American Magic, challenger for the 37th America’s Cup. Altair will provide the team with software technology, consulting services, and two “work streams” to

improve boat and sailor performance. Website: altair.com

 EXPANSIONS

 Jobes Technology Solutions, Holly, a technology consulting rm, launched AccelHealth Systems, a platform to help health organizations, specialty provider networks, and hospital-based management organizations coordinate care.

Website: jobestech.com

 e Dental Hygiene Clinic at Macomb Community College, 27956 College Park Drive, Warren, a dental clinic, is now open and accepting patients. Phone: (586) 445-7161.

Website: macomb.edu/community/dental-clinic.html

 Athletico Physical erapy, Oak Brook, Ill., an orthopedic rehabilitation chain, has opened a new location at 10560 Hartland Square Drive, Unit 4, Hartland. Phone: (810) 279-2899.

Website: athletico.com/Hartland

However, the business case has changed in the past year, said Charles Shappell, director of zero emissions engineering for Forvia. Hydrogen is primed for its moment in the spotlight as more vehicle makers come to realize the need for hydrogen to hit emissions reduction goals and as billions of dollars in incentives for the technology from the federal In ation Reduction Act come down the pike.

“We see the market in the U.S. starting to pick up, especially as it relates to commercial vehicles,” Shappell said. “We’ve seen a lot of companies realizing that hydrogen is really the only true zero-emission option they have, so this has driven a lot of interest and a lot of activity in the hydrogen fuel cell for heavy-duty trucks and medium-duty trucks.”

Forvia is in talks to sell its commercial vehicle exhaust business in the U.S. and Europe to Cummins, it announced this month, marking a potential milestone in its ICE divestment and hydrogen growth plan.

e company, which nalized its takeover of lighting giant Hella a year ago, is aiming for $3.7 billion in hydrogen sales by 2030. Its total revenue in 2022 was $25.5 billion. Forvia declined to say what percentage of it was tied to hydrogen.

As it looks to establish its hydrogen business outside of Europe and Asia, Forvia will launch a pilot line in

Reuben Sarkar, CEO of the center, has been working to diversify the state-backed testing and validation center from solely autonomous technologies to those going mainstream more quickly, such as hydrogen.

Sarkar declined to comment on “any prospective deals.”

Forvia’s hydrogen fuel technology is on the road in Europe with a commercial van by Stellantis as well as the Hyundai Xcient, marketed as the “world’s rst fuel cell heavy-duty truck.”

Its hydrogen products are not in production in the U.S. A big reason is lack of infrastructure and urgency from OEMs, said Tarek Abdel-Baset, Forvia’s chief engineer of hydrogen storage systems for North America.

ere are fewer than 50 hydrogen fueling stations in the U.S. today, with nearly every one of them in California, according to the U.S. Department of Energy. By comparison, there are several hundred in Europe, which is quickly scaling up.

e In ation Reduction Act, which calls for a $3/kg incentive for zero-carbon hydrogen, is fueling man-

Forvia is in talks with U.S.-based OEMs for hydrogen fuel systems on commercial vans to semi-trucks. While automakers are focused mainly on plug-in electric for passenger cars, batteries have their limitations, Abdel-Baset said. ey are very heavy and bulky, especially those with enough energy to power a big truck. at cuts into storage space, which is a major drawback for delivery vehicles. Additionally —

at least with the current technology — they take longer to charge and lack the range o ered by hydrogen fuel tanks, which can be lled in a handful of minutes for 400-500 miles of range.

e initial adopters of the technology in the U.S. are expected to be eet vehicles, such as those used by Amazon, Walmart and FedEx, plus utility trucks and any companies that operate from a central hub, where hydrogen tanks can be installed.

“ e rst high-volume production vehicles are starting to hit the road as early as 2026 and accelerating rapidly through 2030,” Shappell said. “How rapidly remains to be seen.”

Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

Forvia displayed a new line of products at its Auburn Hills headquarters last week, including its hydrogen powered, emission-free drivetrain. |FORVIA

“WE’VE SEEN A LOT OF COMPANIES REALIZING THAT HYDROGEN IS REALLY THE ONLY TRUE ZERO-EMISSION OPTION THEY HAVE, SO THIS HAS DRIVEN A LOT OF INTEREST AND A LOT OF ACTIVITY...”

—Charles Shappell, director, zero emissions engineering, Forvia

PEOPLE ON THE MOVE

ACCOUNTING

UHY Advisors

Ali Baydoun has been promoted Managing Director of UHY Advisors in the Great Lakes. Baydoun is a leader of the business enterprise services team, providing advisory, tax, and attest services for clients in the dynamic middle market. He leads a team of professionals assisting businesses in the manufacturing and cannabis industries. He is called upon regularly to speak on important tax planning topics and is a past recipient of the Rising Star Award from the Arab American Professionals Network.

ACCOUNTING

UHY Advisors

Steve Katzman has been promoted Managing Director of UHY Advisors in the Great Lakes. Katzman is a leader of the audit and assurance practice and the national staf ng and dealership practices. He assists clients with strategic business planning, tax planning strategies, transaction services, operational improvements, industry-speci c taxes, and other related services. He also provides research related to the presentation and valuation of various transactions within nancial statements.

ACCOUNTING

UHY Advisors

Scott Ventline has been promoted to Managing Director of UHY Advisors in the Great Lakes. Ventline is a leader in the tax practice and is a national accounting for income taxes resource. He provides income tax provision audit support and preparation under US GAAP and IFRS, for public and nonpublic companies. He is project leader for large corporate compliance co-sourcing projects and is a tax consulting national resource for Section 382 and 280G studies.

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

ADVERTISING / PR / MARKETING LAW

Lambert Global Lambert, a PR, IR and integrated marketing rm, welcomes Melissa Roy as Managing Partner. Melissa joins Lambert to lead its Public Affairs Practice following the acquisition of Roy Public Affairs Management, a full-service communications and policy advocacy rm. A registered lobbyist, Melissa has 20 years of public affairs experience for government entities, non-pro ts and publicserving organizations, previously serving in leadership roles with Advancing Macomb and Detroit Regional Chamber.

Honigman LLP

Honigman LLP is proud to announce that James Reid IV has joined its Labor and Employment Department as a partner in the rm’s Ann Arbor of ce. His responsibilities include counseling business owners and entrepreneurs in making strategic HR decisions. He earned his J.D. from Wayne State University and B.A. from Michigan State University. Reid was recognized as Michigan Rising Star 20152019, Oakland County Executive’s Elite 40 under 40, 2019, and DBusiness Magazine Top Lawyer 2017-2022.

COMPANIES ON THE MOVE

To place your listing, contact Debora Stein at 917.226.5470

Equipment distributor appoints new CEO

BY CRAIN'S DETROIT BUSINESS

McNaughton-McKay Electric Co., a wholesale electrical distributor serving markets in Michigan and elsewhere, announced Tuesday an upcoming change in leadership.

Brieden Consulting Group

Grosse Pointe, MI 313.447.0900 briedencg.com

ENGINEERING / DESIGN

Infrastructure Engineering Inc. and Af liates (IEI)

IEI hires Mr. Paul Ajegba, PE as a Senior Vice President to oversee planning of the rm’s national, corporate growth strategy, as well as lead operations and business development in their Detroit, Michigan of ce. Paul’s engineering career includes more than 32 years with the Michigan Department of Transportation (MDOT), four of which were as Director, where he provided leadership, strategy, and direction of the Department’s $5 billion transportation program.

INSURANCE

Globe Midwest Adjusters International

Globe Midwest Adjusters International is pleased to announce that George Belmore has joined the rm as our Claims Operations Manager. George brings more than 30 years of process improvement, customer care management and insurance claim adjusting experience to his position. George’s knowledge and expertise in claims management have allowed him to focus on strategic planning and implementing process improvements here at Globe Midwest.

NONPROFIT

Detroit Cristo Rey High School

Nicole Gize has been named the Director of Development at Detroit Cristo Rey High School. Gize has worked in nonpro t fundraising, strategic planning, and corporate sales for more than 25 years. Her experience includes directing Southeast Michigan alumni relations for Northwood University, developing fundraising and strategic partnerships for Children’s Hospital of Michigan Foundation, and most recently working with several nonpro ts as an Associate Partner at The Vella Group.

TELECOMMUNICATIONS

Comcast

Jeff Marston has been named vice president of Sales and Marketing for Comcast’s Heartland Region which includes Michigan. He manages a team of nearly 500 employees and is responsible for leading consumer sales and marketing for X nity Internet on the 10G network, Mobile, TV, Voice, and Home products and services. Prior to his new role, Marston served as VP of Business Services for Comcast where he led commercial sales, marketing, operations, new construction and market development.

Brieden Consulting Group in Grosse Pointe is celebrating its 10th Anniversary! A Michiganbased employee bene ts broker specializing in group services, with an emphasis on culture enhancement and development, BCG is more than just bene t experts, they are culture specialists – providing value and communication on what matters most for companies and their employees.

BCG knows no boundaries when it comes to being a partner that clients can trust. Ten years in the business, means business.

SHARE YOUR COMPANY’S JOURNEY

Feature

Donald Slominski Jr., chairman and CEO, will retire from the leadership role March 31. e board of directors appointed President Mark Borin to succeed Slominski as CEO on April 1. Following the transition, Slominski will continue to serve on the organization’s board of directors in the role of executive chairman.

“It’s been my honor and privilege to serve the employee-owners at McNaughton-McKay.

Strong and healthy companies innovate and evolve in ways which include solid succession planning at the forefront,” Slominski said. “I am very excited about the way the board has positioned the company for sustainability into the future and am honored to continue to play a role in how our strategic direction evolves for years to come.

“Mark is a proven, successful leader and has developed deep relationships across our organization and industry as well as a solid understanding of our business since joining us in 2020.”

Madison Heights-based McNaughton-McKay, founded in Detroit in 1910, is wholly owned by its employees. Along with its subsidiaries — e Reynolds Co., Flow-Zone, Mid-Coast Electric Supply, Cani Electric Supply and S&D Service and Distribution GmbH — it serves customers in more than 65 locations in Michigan, Colorado, Georgia, Ohio, North Carolina, South Carolina, Louisiana, Texas and New Mexico as well as Germany.

Slominski joined McNaughton-McKay in 1996 as the director of nance and was elected president and CEO in 2005.

Slominski guided the company through the successful transition from a family-owned to an employee-owned organization, delivering a variety of strategic acquisitions and transforming the company from 800 employees and $450 million in revenue to 1,750 employees and $2.2 billion in revenue.

For more information, contact Debora Stein at dstein@crain.com or submit directly to CRAINSDETROIT.COM/COTM

As executive chairman, Slominski will continue to provide leadership and direction, working collectively with Borin and the board to develop strategy for McNaughton-McKay’s future growth, the company said.

Borin joined the McNaughton-McKay leadership team as president in June 2020. Prior to that, he spent 12 years at Pentair plc, most recently as executive vice president and chief nancial o cer.

Slominski

Borin

Midtown Starbucks neighbors back up safety concerns

But some worry closure of bustling co ee shop poses new issues in busy neighborhood

JAY DAVIS

Starbucks Corp.’s announcement this month that it would close its Midtown Detroit store over safety concerns was met with plenty of skepticism.

After all, it was a bustling co ee shop at a busy corner that is also home to a popular Whole Foods Market and high-priced lofts. e area is home to more than 250 businesses, including the Detroit Medical Center, Orchestra Hall and new luxury homes in Brush Park.

Starbucks spokesperson Sam Jefferies told Crain’s last week that the closure wasn’t related to one speci c incident.

“ ere are challenges seen in cities across America related to chronic homelessness, the mental health crisis and the COVID-19 pandemic,” Je eries said. “We considered di erent options and had talks with local leaders to help prioritize security. We made every e ort to support this store in particular,” he added. “Unfortunately, our mitigation hasn’t worked.”

Some customers, nearby businesses and police data support the co ee giant’s claim.

e Detroit Police Department has reports of 133 incidents near the Starbucks store at Woodward and Mack avenues, according to a database of police crime reports dating to 2017. Incidents include disorderly conduct, aggravated assault, weapons possession, credit card fraud and obstructing police. It is unknown how many of those reports came directly from the Starbucks store, whose last day of business was Feb. 12.

On Jan. 18, police responded to a call at the Starbucks store because of a person with a weapon, according to the database.

By comparison, at a similarly busy area at Michigan Avenue and Trumbull in Corktown, there were 104 reports of criminal activity, according to the database.

Detroit and Wayne State University police did not return calls seeking comment.

O cials with the neighboring Whole Foods Market declined several requests for comment over the last week and requests for comment from the grocer’s corporate media relations were not returned.

e incidents in the area and at the Starbucks store led a neighboring business to enact stronger security measures.

e Great Expressions Dental ofce next door in recent months added a system that allows customers into the o ce only after a front desk sta er buzzes them in. An employee who agreed to be interviewed on the condition of anonymity, said that before the dental o ce installed the security system people who were not patients would enter to solicit patients for money. She told Crain’s on Tuesday that one person spit on a co ee station meant for customers. Another knelt down to drink water from a dispenser meant for customers.

“ at Starbucks was our go-to spot,” the Great Expressions sta er said. “ ere were a lot of things that happened. ere was a man who was notorious for stealing online orders

o the counter. He attacked a manager after he was asked to leave. ere was a security guard in the back, but he never did anything to stop the incidents.

“I’ll admit that it’s a lot quieter on this corner since the Starbucks closed. e thing people need to understand is that, yes, you can dress it up and call the area ‘Midtown,’ (but) it’s still downtown Detroit. ere’s a lot of tra c on this corner. We’re on the ground oor of a space at Woodward and Mack. e Woodward QLine stop is right outside. You have (the Detroit Medical Center) right here, and they release people all the time that they maybe shouldn’t. I think a lot of things played into the store closing.”

Jason Hall, who manages the Trek Bikes shop across from the nowclosed Midtown Starbucks, told Crain’s he’s seen some incidents at the co ee shop.

“ ere’s a di erent dynamic over there,” Hall, who co-founded the Slow Roll group bike ride. “Whenever I was in there, the volume of what

(sta ) had to deal with was a lot higher on the meter of violence.”

He said his store, which caters to specialty consumers, hasn’t encountered violent incidents.

He added that Starbucks’ closure isn’t good for the area.

“I don’t like it at all. I dislike the potential of an empty space being across the street from us,” Hall said. “Starbucks helped us out when people needed water or a quick snack.

ey could just go right across the street. I had friends who worked there. e company is giving them the opportunity to transfer to a di erent store, but it feels like a piece of the community leaves when a business closes.”

Jason Basile, who works with the Detroit Wayne Mental Health Authority in the New Center area, stopped by the Midtown Starbucks store on Tuesday looking to get a drink. Basile, who said he frequented the co ee shop, was shocked to see it had closed. He said he never encountered any problems in his stops at

co ee shop.

“I know people hawk things outside the store all the time, but I’ve never seen anything take place inside the store,” Basile said. “I’ve got to imagine the closure is painful for the area. It’s painful for me because I have to nd another place to get co ee.”

Midtown Inc. Executive Director Sue Mosey told Crain’s in an email Feb. 17 that Starbucks management worked to reduce incidents inside the store, but neither she nor Starbucks’ landlord, Peter Cummings and a group of investors, were made aware of serious issues at the store until news of the closure was made public.

“I am sure they have had issues like many publicly accessible type businesses in urban areas have with folks coming in who were not necessarily customers and just hang out,” Mosey said. “ is is a highly dense corner with a lot of pedestrian activity. I do know this location did a lot of business for the 15 years they were open. As you are aware, Starbucks has closed over 16 other urban locations ... I suspect this model just is not working for them anymore.”

— Crain’s Detroit Business Senior Reporter Kirk Pinho contributed to this report.

Contact: jason.davis@crain.com

(313) 446-1612; @JayDavis_1981

the

The Starbucks co ee shop at Woodward and Mack avenues in Detroit’s Midtown neighborhood closed this month when the company announced it would shutter the store due to “safety concerns.” | JAY DAVIS/CRAIN’S DETROIT BUSINESS

Great Expressions dental o ce next to the closed Starbucks. A sta er said the business recently installed a buzzer system to let customers in. | JAY DAVIS/CRAIN’S DETROIT BUSINESS

MARKETS

For some, the current market makes for a “teeter-totter” that is “changing rapidly back and forth,” said Erick Monzo, owner and Realtor with Mount Clemens-based e Monzo Group.

e agent said that in recent months he had seen a large uptick in potential buyers moving to the sidelines amid uncertainty about interest rates.

“ at is over,” Monzo said, noting that showings for the agency are up and he’s seeing more situations arise where multiple o ers are being made, particularly amid limited inventory in much of the geography he covers such as Macomb County.

‘Still competitive’

Recent buyers around Southeast Michigan say the current market requires patience.

Max Nielsen, an engineering manager at Stellantis, and his ancée Triston Wyer owned a 1,000-square-foot home in Royal Oak, which between dogs and a planned family was not large enough. e couple’s Royal Oak home sold in a matter of days, so they moved in with family while searching for a new home.

ey recently had an o er accepted for a 1,600-square-foot house in Madison Heights, near 14 Mile and Campbell roads, on which they are set to close in the coming days.

e market was “competitive,” Nielsen said, but that came as little surprise to him. Despite the time that passed in looking for the right house, the overall process was smooth, he said.

“It worked out pretty well,” Nielsen said. “We looked at quite a few houses and didn’t give up.”

With an average sale price of just more than $200,000, Madison Heights stands as a city where the majority of homes last year — 59 percent — sold within 10 days, up 12 percent from the year before, according to the Real Estate One data.

Two-thirds of homes in the Oakland County city were sold at or over asking price, a decline of 11 percent from the year before.

at buyers like Nielsen are still nding plenty of competition when house hunting comes as little surprise to Repicky, the market research expert with Real Estate One.

Showings of homes, for example, remain strong and roughly on par with 2021, one of the best years for home sales in recent memory.

“I also think the market is stronger than most people give it credit for when you talk about a weaker market,” Repicky said. “I mean, sales are down but one of the biggest reasons sales are down is because there’s a lack of quality inventory. And we still have a pretty strong pool of buyers sitting on the sidelines, waiting for the right house to come on the market.”

More inventory needed

While far from the peak of the real estate market in 2021, much of what appears to be causing some of the stress expressed by buyers is the overall lack of inventory, agents say.

While the most recent Re/Max of Southeastern Michigan report shows that overall inventory has ticked up slightly from a year ago — from 1.4 months of supply to 2.1 months — that’s still a far cry from the six months of inventory usually considered a “balanced” market.

And Schneider, the local Re/Max executive, said she sees little to indicate that will change anytime in the

Hottest markets in Southeast Michigan

* Ann Arbor and Ypsilanti have a di erent system that keeps the clock ticking longer for days on market and 10-day sales. SP=sales price. DOM=days on market.

Source: Real Estate One Market Research Dept. Data Source: Realcomp MLS using Great Lakes Repository Data

foreseeable future.

Perhaps the best chance for bringing a large amount of new inventory — beyond large-scale new construction, which has its own myriad challenges at present — would be aging baby boomers moving out of their homes.

Still, many people are choosing to age in the homes they’ve had for years.

“I just don’t see what causes an inux (of new inventory) in the short term,” Schneider said.

Monzo, however, did see one mechanism that could bring about an increase of options for ready buyers: distressed foreclosures.

“ e hope is that bank-owned homes starting to trickle into the market will sustain us.”

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

Homes in Ann Arbor neighborhoods, like the Old West Side Historic District, are among the hottest real estate markets in the upper price ranges in Southeast Michigan. | ANDREW JAMESON/WIKIMEDIA COMMONS

These are the most active housing markets across several levels of pricing as measured by factors including number of closed sales and days on market.

“He started a restaurant after we moved to Chicago. I’ve been cooking since I was 17. I’ve worked with some great chefs. You see what they can do and you strive for that. It’s nice to be recognized by your peers and groups like the Beard Foundation. ey’re doing good stu . You look at this year’s nominees and it’s a lot of people I don’t think would have been nominated in the past — people leaning on food from other countries.”

It’s the second straight year Baobab Fare and its owners have earned a spot in the regional Best Chef: Great Lakes category in its two years of operation. Last year, Baobab Fare at 6568 Woodward Ave. was also recognized by Esquire magazine as one of the 40 best new restaurants in America.

Mamba is grateful to be in Detroit, and said the success he and Nijimbere are having wouldn’t come in another city.

“None of this has been easy, but I believe all of it is possible because we’re here,” Mamba said. “Coming into this country, we knew only a few people knew about East Africa, and through food is how we tell our story and give back to this city in the country we love.

“ is food is who we are. Making that bridge, connecting East Africa culture and food to Detroit, is something we wanted to do because we’re proud of where we come from and where we are today.”

Kim is proud of where she is now, too. e chef, who opened her restaurant in 2016 in Ann Arbor’s Kerrytown as part of the Zingerman’s Communi-

REALCOMP

From Page 3

e letter from Livernois says GMAR will “o er a robust MLS product and experience as of January 1, 2024, and a smooth and seamless transition in all respects.” But it o ered no details on how it will meet its members needs.

Realcomp executives declined to comment for this report.

Local residential real estate executives say that at the moment they expect business as usual as it relates to the two organizations and their members and users, but more news should emerge as the year goes on.

“It’s something to keep an eye on and it’s certainly bound to catch some people’s attention,” said Jeanette Schneider, president of Re/Max of Southeastern Michigan, which has nearly 900 Realtors in the area. “I’d suspect we’re months away from lots of decisions being made.”

Schneider added that even once those decisions are made, she expects no changes for buyers.

Similarly, the overall e ect of the split — should the parties decide to go through with it — is likely to be minimal and akin to a large company changing software vendors, according to Dan Elsea, president of Real Estate One, the state’s largest residential real estate brokerage rm based in South eld.

Elsea said he is a member of multiple real estate boards and can get a subscription to Realcomp through any of those memberships. Should GMAR and its members move on from Realcomp, he said he expects many agents would simply have multiple board memberships.

“Day-to-day for agents, I don’t see it as a big issue,” Elsea said.

While acknowledging MLS access is

ty of Businesses, has also earned Beard nominations two years in a row.

Speaking during a Feb. 17 TED Talk at the University of Michigan focused on “glitches” — sudden and unexpected changes one encounters every now and then — Kim said she wasn’t supposed to be in the U.S.

“Being here wasn’t a part of my plan,” said Kim, a University of Michigan graduate and Ann Arbor resident.

“My passion for Korean food has allowed me to share my culture with other people. Food is universal, but each dish tells a unique story based on the ingredients and the people who prepare the food. My decision to immigrate to the U.S. from Seoul was the glitch that started the journey that culminated in the creation of Miss Kim. I dreamed that Michigan would be one of the regions of Korean food.”

Kim told Crain’s that the diversity

on display in this year’s James Beard nominations is great to see.

“It’s wonderful that more diverse people — immigrants, women, non-Chicago chefs — are getting more nominations,” Kim said. “ at’s how it should be. We make great food. We just didn’t have as much privilege or the platform for it. It’s great the (Beard judges) recognize that more than before.”

Good problem to have

e recognitions also bring a boost in business. e weekend following the Beard announcement, Casa Amado had to close early one night because it ran out of food. at Saturday, people were waiting before it opened and by 6:30-7 they just couldn’t make any more food, Lopez said.

as another multiple listing service company in metro Detroit, with its user base primarily in the Macomb County area.

Executives with MiRealSource declined to comment for this report.

Realcomp members

Realcomp consists of eight Realtor boards from around Southeast Michigan. GMAR said it intends to drop out by the end of the year:

 Greater Metropolitan Association of Realtors

 Dearborn Board of Realtors

 Detroit Association of Realtors

 Eastern Thumb Association of Realtors

 Grosse Pointe Board of Realtors

 Livingston Association of Realtors

 Lapeer and Upper Thumb Association of Realtors

 North Oakland County Board of Realtors

a “core portion” of any agent’s business, there are a handful of options for GMAR’s agents, which account for about 70 percent of Realcomp’s users, according to Nathan Boji, president of GMAR and o ce manager for Re/Max Classic in Farmington Hills.

Among those options would be ending their a liation with GMAR and joining other realty boards that continue to work with Realcomp, or continuing to work with GMAR and whatever MLS option it o ers.

Schneider pointed out that Shelby Township-based MiRealSource serves

A letter sent to Realcomp subscribers earlier this month by CEO Karen Kage and obtained by Crain’s said current members of GMAR would “need to apply for services” with one of seven other realty boards operating around metro Detroit to continue using the organization’s services. ose boards include the Grosse Pointe Board of Realtors, Livingston County Association of Realtors and the North Oakland County Board of Realtors.

Messages sent by Crain’s to the other realty boards seeking comment were not returned.

Boji, in an interview with Crain’s, said conversations between the GMAR and Realcomp are ongoing and con rmed that the association will maintain its ownership status of Realcomp at least through the end of the year.

He declined to address any of the differing opinions between the two groups that led to the decision to split. e “decision was not made in haste,” Boji said of GMAR’s decision to leave Realcomp.

Similar to Schneider, Boji said any speci cs on what the split may mean and how it will a ect GMAR agents or Realcomp and its operations will be determined in the coming weeks and months.

However, there are some general goals the group hopes to achieve with the split, Boji said.

“Realtors may have more options for tools they use in their business everyday,” he said. “ e goal is to make sure everyone has the best service to conduct their business.”

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

“It’s good for business, but we still want to give people a good experience. Sometimes when you’re that busy, you don’t have time to give everybody the best experience you want to give them,” he said. “Honestly, I think the food is secondary when you run a restaurant. Treating people well should be your rst priority.”

Business has spiked for Baobab Fare, too. Even more so than asking about speci c dishes, customers now ask about the owners.

“People are asking about our culture, about East Africa, about Burundi,” Mamba said. “People want to know about us — what brought us here. at’s been our goal since day one. We’ve wanted to tell that story. We want people to enjoy our food, but we want them to know where it comes from, why we make it.”

If you can make it here …

Lopez said his father planting his own ag showed him anything is possible as an immigrant in America. Like the Baobab Fare owners, the chef is working to show customers Mexico’s cuisine is more than tacos.

While tacos are a featured item on the Casa Amado menu, a monthly dinner club, De Noche, o ers a variety of Mexican cuisine.

“I think the American palate is opening up. You know, Mexican food is not just tacos,” Lopez said. “ e special dinners have complex things — sauces and things like that. You learn that the food on the west coast of Mexico is way di erent than in central Mexico. It’s just like barbecue here. It’s di erent in Texas, St. Louis, Kansas City. Tex Mex has been around awhile. I like Tex Mex but I’m glad to see people, small business owners, cooking to show more of their personality and where they’re from.”

Mamba says the variety of authentic, ethnic food in Detroit has grown by leaps and bounds. at growth is being aided by local restaurateurs like Lopez, Kim, Mamba and Nijimbere.

“ ese are people who live in the city, who care about the city, which is very important,” Mamba said. “ at’s something to be proud of for any immigrant looking to open a business in the United States.

“Coming to this country is a huge risk, but it gives you an opportunity because there are a lot of people from your home country who wish they could be in your position. at’s what helps you stay focused.”

Contact:

“You look at this year’s (James Beard Awards) nominees and it’s a lot of people I don’t think would have been nominated in the past — people leaning on food from other countries,” said Amado Lopez of Casa Amado in Berkley. | JASON DAVIS/CRAIN’S DETROIT BUSINESS

Ji Hye Kim, chef and owner of Korean restaurant Miss Kim in Ann Arbor, moved from South Korea to New Jersey at 13 years old. MISS KIM

Schneider Boji

MONROE

about 90,000 square feet, could also include a new downtown grocery store, and the entertainment component, which includes the new National eatre vision, encompasses about 60,000 square feet. Between 1,500 and 1,800 parking spaces are also planned.

e Downtown Development Authority board signed o on the proposal on Wednesday afternoon.

Ko Bonner, CEO of Bedrock, told Crain’s in an interview that when he rst joined the company in 2020 he “wasn’t sure” about the stalled Monroe Blocks project, which Bedrock is now simply referring to as the Development on Cadillac Square.

“Frankly, I told Dan that, and as it turns out, I think I was right,” Bonner said.

“It was a very large, mixed-use development that, once you started you are sort of committed to it because it is all adjoined. I think my experience has always told me that if you can design a large project in a manner where you can phase it, then you have a much better chance of bringing it to the marketplace at the right moment, especially given the three di erent market components you’re trying to hit like the o ce market, the residential market, and the retail, restaurant, entertainment marketplace.”

Work on the site halted within months of a December 2018 groundbreaking ceremony on what was then an $830 million project that was to feature a 35-story o ce tower, a 17-story residential tower and other uses in a total of 1.4 million square feet across a series of buildings.

At the time, Bedrock executives said the developer was navigating complex terrain with multiple high-pro le building projects such as the development on the J.L. Hudson’s department store site, the Book Tower and Book Building and an addition to One Campus Martius.

Bonner said he wasn’t aware of why the project wasn’t moving forward when he arrived to Detroit toward the end of 2020, but he said he “wasn’t entirely convinced that it was the right design.”

In February 2021, the Downtown Development Authority board approved a modi cation of a development agreement for the parcels giving Bedrock an additional two years to submit a revised proposed development plan. e deadline for that was Friday.

e board required that the proposal incorporate the National eatre facade and may include phasing for the project. e rst phase is required to include 30 percent of the total land area and not exclusively be parking, and construction is required to start within a year of the DDA board approval.

e rst phase, consisting of the National eatre project and market hall components, is to begin by Sept. 1, 2024; the second phase, with residential, retail and parking, is to begin by Oct. 1, 2026; and the third phase, consisting of parking, retail and o ce space, is to begin by Jan. 1, 2028.

A new venue

If it comes to fruition as intended, Bedrock would bring the rst new concert venue to the city in years with the restoration of the National eatre, which opened in 1911 after being designed by Albert Kahn, according to Historic Detroit, which tracks Detroit buildings and architecture.

Bedrock says it believes the last time a major new live-music venue opened in Detroit was when what is now the Fillmore Detroit theater reopened in 1989, at that time as the Clubland dance/concert hall at 2115 Woodward Ave.

Since the Monroe Blocks project was revealed in 2016, the expectation had been that the theater’s facade would be preserved and restored, but the remainder of the building would be demolished, with the facade serving as an entryway into the project.

“When I looked at it with my team here, we thought we could do much better than that,” Bonner said, noting that some of the decision-making process was driven by the amount of people who visited the site’s temporary activations, such as a drive-in movie theater and an outdoor recreation area called the Monroe Midway.

“We started taking a hard look at (whether) there is a way to bring the National eatre, not just the facade,

but the actual venue back to life in a manner that is constructive and additive to our overall building program,” Bonner said. “We think there is, based on some of the research we’ve done.”

As part of this plan, the facade would be restored; the remainder of the building would be razed; the facade would be moved to face Cadillac Square and the new venue would be built behind it.

Development proposals for the site go back years and mayoral administrations.

2021 purchase and what Bonner said are discussions to convert to residential.

at Schostak/Meridian plan fell through, ultimately giving way to Gilbert’s stalled $830 million vision that’s being replaced by a new proposal.

It’s been nearly a half-century since anything was built on the site.

Finding funding

Bonner said that because the project has received approvals for a transformational brown eld package subsidy, it is subject to an a ordable housing agreement Bedrock has with the city.

at agreement was restructured last year when Bedrock was attempting to solicit Detroit City Council support for a $60.3 million tax break on the Hudson’s project. at agreement requires that 30 percent of the units in Bedrock’s portfolio be a ordable at 60 percent of the Area Median Income or lower, but the complex agreement provides the company considerable wiggle room.

“We will be determining how best to ful ll our obligation, and there are a number of ways of doing it and certainly one of the ways is incorporating some of the units within the development,” Bonner said.

In 2018, Bedrock received approval for what at the time was $618.1 million in transformational brown eld funding for four projects totaling what was then $2.14 billion in construction: e Monroe Blocks; the Hudson’s site development; the redevelopment of the Book Tower and Book Building; and the addition to One Campus Martius.

e precise value of the Cadillac Square development subsidy at the time was $295.5 million, with $136.2 million of that coming from capturing state income taxes on workers expected to be employed in the new properties.

However, due to the decreased size of the o ce component, the precise value of that incentive package is not yet known. Bedrock says now that its new vision is public, it will work with the Michigan Economic Development Corp. on underwriting and incentive analysis.

e reduced o ce component reects a new reality: Less demand for space than there was prior to the COVID-19 pandemic. But still, Bonner said, the phased approach to the development allows for Bedrock to ride out a bit more of the uncertainty in the market.

For example, former mayor Kwame Kilpatrick proposed, with New York City-based Northern Group Inc., a $150 million development called Cadillac Centre on a portion of the property that would have included apartments, o ce space, a movie theater, public fountain and grocery store.

e timing couldn’t have been worse for the announcement.

It was rolled out just two weeks before the text-message scandal that eventually would eventually bring down Kilpatrick, one of its chief proponents. Nine months later, it went on hold after the developer modi ed the plans and a key deadline was missed.

Five years after that, Livonia-based Schostak Bros. & Co. planned a $111 million, 16-story o ce tower for Meridian Health, which was then locally owned by the Cotton family, immediately next to Cadillac Tower, which today is owned by Gilbert after a late

“We’re positioning ourselves so that if the market begins to lean in our favor, we will be able to take advantage of the market and meet that moment,” he said.

Bedrock also is building roughly the same amount of new o ce space in the Hudson’s site development.

And to the north, the Ilitch family’s Olympia Development of Michigan and Stephen Ross’ Related Cos. are jointly proposing several new o ce projects, including a pair of high-rises, totaling about 1.2 million square feet as part of a series of new construction and redevelopment projects clocking in at an estimated $1.53 billion.

On the other hand, Henry Ford Health along with Detroit Pistons owner Tom Gores are proposing a $2.5 billion plan in the New Center area that would convert existing ofce spaces to residential.

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

Rendering of development at Cadillac Square. GENSLER

The Monroe Blocks development includes a 3.66-acre site across several central business district blocks. | HERNZ LAGUERRE JR/CRAIN’S DETROIT BUSINESS

“IT WAS A VERY LARGE, MIXED-USE DEVELOPMENT THAT, ONCE YOU STARTED YOU ARE SORT OF COMMITTED TO IT BECAUSE IT IS ALL ADJOINED.”

—Ko Bonner, CEO, Bedrock

Michigan had most nursing homes cited for violating vaccine mandate

DUSTIN WALSH

Michigan’s health care industry violated the federal COVID-19 vaccination mandate more than any other state, according to data released by the Centers for Medicare and Medicaid Services.

CMS cited 66 nursing homes, or about 15 percent of all locations in the state, in the year since the mandate went into e ect. at’s the most facilities cited in any state in the U.S., ahead of Pennsylvania with 64 and California with 58 citations.

Nationwide, CMS cited about 750 nursing homes, according to data analyzed by the Associated Press, meaning Michigan accounted for nearly 9 percent of all citations.

Out of the Michigan total, 26 of the cited nursing homes were located in metro Detroit, including Beaconshire Nursing Center in Detroit, Green eld Rehab and Nursing Center in Royal Oak, Medilodge of South eld, Lakeside Manor Nursing and Rehabilitation Center in Sterling Heights, Maple Manor of Novi and more.

GENE

From Page 1

“ e treatments are life-saving or life-altering,” said Bret Jackson, president and CEO of the Economic Alliance of Michigan, an industry group that advocates for lower health care costs for some of the state’s largest employers. “ ey are truly miracles of modern science, but the costs are life-altering too. It’s the ticking time bomb for the private health insurance system.”

How does it work?

Cellular therapy is where cells are injected or implanted in a patient to repair or replace damaged cells. Gene therapy involves altering genes to treat a disease or repair genetic material.

A major shift occurred in 2017 when the U.S. Food and Drug Administration approved the rst personalized, cell-based immunotherapy, called chimeric antigen receptor or CAR T cell therapy, for people with acute lymphoblastic leukemia. Scientists had unlocked a way to genetically engineer a patient’s own immune system to make a protein that could latch onto cancer cells and destroy the deadly blood cancer.

e FDA approval opened the oodgates to the creation of new, life-saving therapies that could oneday potentially eradicate deadly genetic diseases. Prior to that, therapies of this nature were only used in experimental clinical trials.

e e ectiveness of the treatments has pushed the FDA to approve more and more gene- and cellular-based therapies. In 2020, there were nine therapies approved for use. is year, the FDA is expected to approve 13 more with the list of these treatments projected to grow to as many as 100 by 2025 with thousands of therapies currently in clinical trials.

Roughly 200 applications for gene and cellular therapies are being sent to the FDA annually, said Chris Bouschet, president of the Michigan market for employee bene ts consulting rm Marsh McLennan Agency.

In 2020, the Alliance for Regenerative Medicine estimated that 1,100 gene and cellular therapy developers

Several nursing homes cited did not return emails and calls to comment on the citations.

Industry groups representing the state’s nursing homes and hospitals told Crain’s the rules were confusing and application uneven, leading to the mass of violations in the state.

Mandate in place

CMS published a rule in November

were in operation globally, rising by more than 100 new developers annually.

“ e pipeline is signi cant,” Bouschet said. “It’s not the largest component of the health care spend (in the U.S.), but it’s the fastest growing.”

At what cost?

While these new therapies hold the power to unlock a chance at extended and improved life for those who su er from deadly diseases, the question of who is going to cover the extraordinary costs is a growing concern among employers.

A single CAR T cell therapy to treat acute lymphoblastic leukemia costs at least $370,000 with an all-in cost nearing $1.5 million.

In Michigan, 88 percent of companies with 5,000 employees or more and 93 percent of companies with 1,000 to 4,999 employees surveyed by Marsh McLennan in 2022 have a self-funded insurance plan, where they assume the nancial risk of health care services to their employees. Typically, an insurance company administers the claims and payments, but self-funded companies pay for the entire services rendered. at means if a bill for a gene- or cellular therapy is issued, the employer is on the hook to cover it. e bill for a single employee needing a gene- or cellular-therapy could bankrupt a company or severely reduce their ability to operatenancially, Bouschet said.

“ ese therapies are rapidly becoming the focal point of health care because they hold so much potential,” Bouschet said. “But they are staggeringly expensive. Historically, companies viewed really expensive claims as the odds of being struck by lightning. ey were willing to take that risk. But with the number of these therapies growing rapidly, the odds of being struck by lightning are changing.”

Many companies, particularly those with fewer than 5,000 employees carry an extra insurance plan called stop-loss coverage. is caps the employers’ per-employee spend annually. For Michigan companies with fewer than 500 employees, the median cap is $125,000, according to

members — all of which have since been struck down, repealed or partially blocked.

As a result of the court battles, the mandate took e ect in some states sooner than others, but a U.S. Supreme Court ruling in January 2022 allowed the mandate to go forward nationwide. CMS has been enforcing the requirement in all states since Feb. 20 last year.

for the state’s nursing home industry.

“It wasn’t clear that contract workers and individuals such as delivery drivers were required to be included on provider vaccination logs, and providers were cited. Clari cation came slowly. However, our data from the last few months shows very few citations around this issue.”

2021 mandating that health care facilities receiving Medicare or Medicaid funding require their workers get at least the initial doses of a COVID-19 vaccine. e health care vaccination mandate was part of a broader e ort by President Joe Biden’s administration to boost vaccination rates nationally.

Similar mandates were issued for employers with more than 100 workers, federal contractors and military

Marsh McLennan data. For companies with 1,000 to 4,999 employees the median cap rises to $300,000. e median cap for companies with 5,000 or more employees — only about 50 percent of these companies in Michigan carry stop-loss coverage — is at least $500,000.

But an employee receiving one of these therapies is not a cut-and-dry bill for employers, Bouschet said.

“ ese programs (stop-loss insurance) have annual renewal processes,” Bouschet said. “ e insurers will absorb the loss the rst year, but a new rate will be renegotiated with the employer the following year.”

e rising prevalence of these therapies means employers will undoubtedly be stuck with higher benets costs.

Complicating matters further is that stop-loss insurers have the ability to “laser” out an employee from coverage if that employee has previously cost them lots of money from these therapies. e insurers can even laser out certain treatments, such as the gene- and cellular therapies if it’s causing massive overages.

A bene ts manager from one of the state’s largest employers, who spoke to Crain under the condition of anonymity, said the company has yet to receive a bill for a gene or cellular therapy and currently does not carry stop-loss coverage. However, conversations are beginning on how it plans to pay for these therapies as they become more prevalent.

Cruel decisions

If an employer is saddled with one of these high-cost claims, their entire bene ts package is now at risk, said Jackson.

“ ere’s a tremendous amount of concern in the market place over these high-cost claims,” Jackson said.

“Some of the bigger companies, even with a million dollar claim, they can weather the storm. But a company of 500 to 1,000 employees? A bill that size impacts all of their other employees by putting their health plan at risk. ese are life-and-death decisions, for the employee and the company.”

Companies can elect to carve out these therapies from coverage under

Facilities can be cited for vaccination violations for a variety of reasons, including for failing to document vaccination exemptions granted for medical or religious reasons and failure to follow their own infection-control protocols, such as requiring unvaccinated sta to wear N95 masks.

CMS does not list the speci c reasons for violations, and the facilities are given time to correct the de ciencies before a follow-up inspection.

“When the mandate was rst issued, providers had a lot of questions about who was meant to be included in the tracking,” said Melissa Samuel, CEO of the Health Care Association of Michigan, the main advocacy group

their bene ts plan, but doing so is a potential death blow for employees needing these treatments.

“Sometimes, the company is literally choosing whether the company survives or the patient gets coverage,” Jackson said. “It’s not the company’s fault. ey want to help the employee but only so much can be done if one person’s coverage takes down the coverage for the rest of the employees.”

Jackson said his group recently met with a pharmaceutical company about a $2 million therapy. e pharmaceutical rm expressed interest in creating a ve-year payment plan for self-funded employers to cover the cost of the therapy over time. But questions arose over who pays that liability if an employee dies, retires or takes a job with another company, Jackson said.

“How do we even make the payments for these sustainable?” Jackson asked. “Does the bill follow the employee or is the company stuck with the liability? ere’s simply no answers for this today.”

Blue Cross Blue Shield of Michigan, one of the state’s largest insurers, said it is maintaining balance between cost and e cacy.

“We currently cover gene and cell therapies in our fully insured business and for employer groups,” BCBSM said in a statement.

“We are monitoring the drug pipeline and studies of the potential e ectiveness of these therapies as more of them are expected to become available over the next few years. e therapies are being o ered at an extraordinary cost that needs to be evaluated against their actual success rate. We want to serve our members but there is a need for the health care system to reconcile their enormous price tag with maintaining a ordability and access for not only our members but for everyone.”

Kollet Koulianos, vice president of payer relations for the National Hemophilia Foundation who moved to Northville last year, believes developers of these therapies will have to reduce costs for the treatments to be e ective and sustainable.

“If I had a crystal ball, I believe it

It’s not just nursing homes that face citations. Among 110 hospitals cited by CMS nationwide, 15 were in Michigan.

Four Corewell Health East hospitals (formerly Beaumont Health facilities) were cited — Dearborn, Trenton, Taylor and Wayne.

Other hospitals include Henry Ford Health Hospital in Detroit, Detroit Medical Center’s Harper University Hospital in Detroit and Trinity Health Livonia Hospital.

Since March 2020, more than 3 million cases of COVID-19 have been reported in Michigan, resulting in nearly 42,000 deaths.

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

would indicate that the greatest chance for success will include manufacturers bringing these products to market at reasonable prices (not what the market will bear) and transitioning from the current fee-forservice payment model to one or more solutions that ties payment to performance,” Koulianos wrote in an op-ed published in late 2021 in the journal Molecular erapy. “Whether paid in a lump-sum, up-front payment or paid over a period of time when performance metrics are met, health plans will need some assurance that they will not be paying several million dollars for a new treatment if the response or durability is not guaranteed.”

Bouschet said his rm is already advising companies on how to handle these claims as they stand currently. Speci cally, he advises acting in advance in hard negotiations with stop-loss providers. His advice is to negotiate a cap on how much the annual rate can increase, even with the presence of these expensive therapies. Another avenue is for companies to negotiate stop-loss coverage with a no lasering clause that prevent the insurer from carving out employees or treatments from the coverage.

“ ere are gaps and exposures (for employers) everywhere,” Bouschet

said. “ e reality is the majority of companies have never received one of these bills, but I can assure you that when they do — and they will — the experience will alter their path. Employers will let the rst one (gene or cellular therapy) through, but they will then evaluate their future risk and exposure of their health plan. If their protections are not ironclad, the results could be devastating to their business.”

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

“SOMETIMES, THE COMPANY IS LITERALLY CHOOSING WHETHER THE COMPANY SURVIVES OR THE PATIENT GETS COVERAGE."

—— Bret Jackson, president and CEO, Economic Alliance of Michigan

JOHN TAGGART/BLOOMBERG

Aric Nesbitt on leading Senate Republicans in the minority

Aric Nesbitt is in an unfamiliar position leading Republicans in the Michigan Senate: minority leader.

Until January, his party had a nearly 40-year run in control of the chamber. And during his time as a lawmaker — six years in the House, four in the Senate — he had been in the majority. Now Nesbitt, 43, is a GOP standard-bearer as Democrats fully take power across all three branches of state government.

As a legislator, he has helped to rewrite the energy law, overhaul the auto insurance law and oversee Democratic Gov. Gretchen Whitmer’s COVID-19 response. He was Michigan’s lottery commissioner between legislative stints and previously worked as a legislative and congressional aide and advocate for lower taxes. He has a master’s in international business from the Norwegian School of Economics and a bachelor’s in economics from Hillsdale College.

BY | DAVID EGGERT

 What was your upbringing like?

I grew up south of Lawton, Porter Township, on a sixth-generation dairy and grape farm (that supplies the local Welch’s plant). My family’s been farming in Southwest Michigan for generations but in the same township for six. ... Deep roots. My great-greatgreat-grandma built the rst fence in our township, the township I still live in, and that was to keep the deer out of her outdoor kitchen. ... I was the middle of ve kids. (Our names) all started with As, so that’s where Aric with an A comes from. ... I was kind of the one that all the siblings could get along with, the peacemaker. ... ... If we’re going to take this car to school in the morning, we’d have to get up at 5:30 and do morning chores. ... Growing up, I’d read a lot of biographies. That was always my thing. Instead of Hardy Boys, I’d be reading Oliver North’s “Under Fire” or something. My parents were pretty apolitical, but they’d always vote. They weren’t really involved in any organized political stu , but my dad would always say, “If you don’t vote, you can’t complain.” So my dad complained a lot. Dad served three terms in Vietnam. He’d always nd a way to get an interest in each of the kids.

 What was your interest?

With me, I was kind of always interested in current events and politics and what’s going on. All of a sudden I saw my dad ordering the National Review, The Washington Times National Weekly edition. He’d always take the opposite side or position of whatever I had. I didn’t realize it until I was probably later in high school that he was just trying

RUMBLINGS

to make me a little stronger on the debate side. It wasn’t about his position. It was about how do you strengthen your own position, the beliefs that you have. ... My dad passed away three years ago. It was an Agent Orange presumption. It was a lung cancer. Figured it was Agent Orange coming back to kiss him 50 years later.

 Why did you run for o ce?

In 2010, I decided I had something to add because I thought Michigan was heading in the wrong direction. ... I thought I could add something to restart the economy. ... We worked with Gov. (Rick) Snyder to lower taxes, to eliminate the old Michigan business

tax, scrap thousands of rules and regulations, concentrate on getting Michigan’s scal house in order, eliminate the $2 billion de cit, made the tough decisions to balance the budget and pay down long-term debt.

 What is the path back for Republicans?

At the end of the day, Michigan is a center-right state, both economically, culturally. The issues that we win back on are very just meat-and-potatolike. Don’t spend more that you have. Provide tax relief to all Michigan small businesses and workers. ...

Let’s create a system where we’re looking forwards instead of always backwards on things, such as paying down long-term debt that helps us balance budgets in the future and prioritize things such as infrastructure, education and law enforcement. ...

Let’s actually have expectations. Let’s actually have goals that third-graders should be able to read by third grade.

Let’s say that we have expectations in schools for basic reading, for math and writing instead of getting into some of this woke social policies that we’ve seen. ... It’s about empowering the individual instead of the government. It’s empowering entrepreneurs and challenging entrepreneurs to invest and grow in the state instead of closing them down. It’s really looking at what are those areas of getting back to basics on infrastructure, education, law enforcement, the economy and budgets. The Democrats knew that last year. They knew we’d win on all those issues. ... They spent tens of millions of dollars scaring people on that abortion issue.

 Minority Republicans recently caught Democrats unaware and adjourned session before an expected vote on major tax legislation. The majority responded by removing two Republicans from committees and eliminating one’s leadership position. It also threatened to end the longstanding requirement that there be a recorded roll-call vote to give a bill two-thirds support for immediate e ect, which would diminish Republicans’ negotiating leverage. What is your reaction?

Change the rules before you’re even out of the rst inning — it’s just not the right way to play the game. ... You should sit down with the other side and actually negotiate those rules. (When Democrats surprised Republicans and adjourned in 2021 during votes on voting bills, he said, then-Senate Majority Leader Mike Shirkey acknowledged being caught at-footed and the Senate voted the next day.) This goes back as old as legislative bodies go. (He said he used the maneuver in part because House members, including Republicans, were blocked from giving speeches on the tax bill that day before it came to the Senate.) The rules force you to actually sit down with the other side and negotiate. That’s not a bad thing. Is that a bad thing? Senate Resolution 12 (to change immediate e ect voting) is a nuclear option. Why do that? The last four years we negotiated. We got IE on some stu , didn’t on other things. On a policy bill they just become law the next year. On a budget bill, if both sides are serious about the negotiation, you usually get there.

Popular Southwest Detroit pizza spot PizzaPlex closing

A POPULAR NEOPOLITAN PIZZA restaurant in Southwest Detroit announced it will be closing at the end of the month.

PizzaPlex, founded in 2017 by spouses Alessandra Carreon and Drew McUsic, began when “a backyard pizza hobby spiraled happily out of control,” the restaurant wrote in an Instagram post announcing the closure. Monday is the last day.

e certi ed Verace Pizza Napoletana restaurant also featured karaoke and other events.

No speci c reason for the closure was announced and a restaurant employee said the owners were traveling and not immediately available to answer questions about the decision.

A GoFundMe is seeking to raise $3,000 to help employees who will

be laid o with the closure. By Feb. 17, the goal had nearly been reached.

Crain’s reported in 2020 that the restaurant in Southwest Detroit had shifted to a mobile business model,

after trying carryout and pizza kits earlier in the coronavirus pandemic.

It used a small trailer with an oven welded in and a tented prep area to make pizzas for private events or at bars.

PizzaPlex drew inspiration from Carreon’s mother’s hometown, the restaurant said on its web page. It also supported various Detroit nonpro ts and had a pay-it-forward pizza program.

In the Instagram post, the restaurant’s owners said they had dreams of a more equitable food service industry. Decisions there were made “with deep intention,” the post said, and the decision to close was made “with heavy hearts.”

“It’s been (a) real, and wild, and wonderful lookout from this window,” the post said.

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PizzaPlex, a restaurant and event venue in Southwest Detroit, is closing. | INSTAGRAM

Aric Nesbitt is the Michigan Senate minority leader.