Crain's Detroit Business, March 6, 2023, issue

REAL ESTATE

As

Rocket, UWM take di erent paths to weather storm

Di cult fourth quarter showcases diverging strategies for Detroit’s largest mortgage lenders

BY NICK MANES

Metro Detroit’s two largest mortgage lenders emerged from a di cult fourth quarter, which underscored their increasingly diverging paths.

Rocket Companies Inc., the Detroit-based parent of Rocket Mortgage and other consumer nance companies, and United Wholesale Mortgage in Pontiac have their headquarters about 30 miles apart from each other, and both originate mortgages.

e comparisons mostly stop there.

Both companies more than made it through a di cult 2022 during which rapidly rising interest rates

crimped pro tability and e ectively crushed the re nance market. But the strategies employed by the two companies were vastly di erent and o er some glimpses into how each will operate through the rest of this year and beyond.

UWM has fared better — at least in the short term, one industry expert says.

“ e bottom line is, United Wholesale’s broker business grew enough in certainly the latter part of (2022) to enable it to keep up originations in a rapidly declining market,” Guy Cecala, executive chairman of industry publication

See LENDERS on Page 20

Brinker Group looks to build on reputation and expand

Construction rm works on city’s biggest projects

BY JAY DAVIS

Visit any of the various sections of Detroit and chances are you’ll see work done by Corktown-based Brinker Group.

Brinker Group — a Black-owned business comprising ve companies that do everything from construction management, glass and metal work, electrical work, carpet and ooring, to exterior and interior carpentry work — has worked on some of the biggest projects in the city. at includes the $85 million Henry Ford Detroit Pistons Performance Center and Little Caesars Arena. Brink-

Brinker Sr.

er construction management division L.S. Brinker is also one of the managers on Ford Motor Co.’s Michigan Central Station project in a joint venture with Detroit-based Christman company.

Larry Brinker Sr., who established the business in 1989 in Detroit after working in construction and as a truck driver, is proud of what he’s built. And he’s still building, expanding business to another state.

“We’ve had to make ourselves more attractive as a company to attract some of the best

See BRINKER on Page 21

BY KURT NAGL

1-800-Call-Sam. 855-Mike-Wins. Joumana “Always Watching.” • For years, the billboards of these local law rms have been the wallpaper of metro Detroit’s roadways. But the battle for dominance is intensifying — and not just among the usual players. • Enter Morgan & Morgan, an Orlando, Fla.-based personal injury law behemoth, whose “Size Matters” advertising campaign has recently swept through Michigan and across the country.

PAGE 18

Why Joumana Kayrouz is looking beyond billboards.

price of oating-rate loans rises, landlords feel the pain. PAGE 8

Billboards for personal injury law rms have been the wallpaper of local freeways. A big push by an out-of-town rm, Morgan & Morgan (bottom), is ramping up competition for local players like Davis Injury Lawyers (top). | NIC ANTAYA/CRAIN’S DETROIT BUSINESS

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

leader to replace the outgoing executive. Brad Dick, the current group executive for services and infrastructure, will be the new COO. He replaces Hakim Berry, who will go to Michigan Medicine to lead human resources and labor relations.

 DUGGAN PROPOSES PROPERTY TAX CUTS IN BUDGET

THE NEWS: Detroit Mayor Mike Duggan called for city residents’ tax burden to be lowered Friday, asking that City Council approve a budget that reduces property taxes in each of the next two years. It also calls for spending to demolish privately owned abandoned homes and to give bus drivers raises. e budget also pays toward the city’s pension program, the rst time since bankruptcy a decade ago that the city has been required to put money toward the retirees’ costs.

WHY IT MATTERS: e proposal would roll back property taxes by one mill this summer and a second mill next summer. Duggan said he thought the rollback could save homeowners $50-$100 this year on their property taxes and more the year after.

 CITY OF DETROIT GETS NEW COO

THE NEWS: Detroit Mayor Mike Duggan has named a new chief operating o cer, elevating an internal

WHY IT MATTERS: Dick has the credentials. In his current job, he has spent the past eight years spearheading beautication e orts in the city, including the removal of commercial blight, the cleanup of more than 2,000 overgrown alleys and the revitalization of more than 150 parks and a number of recreation centers in the city.

 HEADCOUNT PLUMMETS AT MORTGAGE COMPANIES

THE NEWS: Securities lings this week by the two largest mortgage lenders in the country — Detroit-based Rocket Companies Inc., parent of Rocket Mortgage, and Pontiac-based United Wholesale Mortgage — show that the two companies reduced their employee headcounts by about 9,500 employees total in 2022.

WHY IT MATTERS: Rocket and UWM have undertaken vastly di erent strategies to weather the storm in the mortgage industry over the last year as interest rates increased at a rapid clip in 2022. ose actions put a damper on the mortgage purchase market, and all but crush the re -

nance side of the business.

 MICHIGAN ASSOCIATION OF UNITED WAYS NAMES NEW CEO

THE NEWS: e Michigan Association of United Ways has promoted executive Hassan Hammoud to president and CEO of the statewide association. He will move into the new role e ective March 13.

WHY IT MATTERS: Hammoud, 41, has been with United Way for 13 years, most recently serving as executive director of its wholly owned subsidiary, Michigan 2-1-1, a health and human services hotline and referral service.

 SENATE APPROVES DISCRIMINATION BAN

THE NEWS: Anti-discrimination protections for LGBTQ people would be codi ed in Michigan’s civil rights law under legislation approved Wednesday by the state Senate, where supporters said such provisions should nally be enshrined in statute after a decadeslong push and not solely be safeguarded by recent state and federal court rulings.

WHY IT MATTERS: Michigan’s business lobby, including chambers of commerce and major companies, backs the Democratic-sponsored bill partly as a way to attract and retain a talented workforce.

LEGISLATURE

Legislation would pave way for museums’ millage bid

 Legislation enabling the creation of county authorities to levy a millage to support the Charles H. Wright Museum of African American History and the Detroit Historical Museum was introduced ursday. A similar bill failed to gain traction the legislature last year. e legislation is the rst step in the museums’ pursuit of an operating millage in Wayne and Oakland counties.

Introduced by Sen. Sylvia Santana, SB136, the “History Museum Authorities Act,” would enable any county in the state to create an authority to bene t the two museums, aligning with the legislation that enabled the Detroit Zoo and Detroit Institute of Arts to secure operating millages. If it becomes law, authorities would be able to levy a 0.4 mill tax on all taxable property for up to 20 years to bene t the two, Detroit-owned history museums. e bill is now before the Senate Committee on Finance, Insurance and Consumer Protection. If the legislation is passed by both chambers, county boards of commissioners would have to approve the creation of the history museum authorities.

e two museums would then take their joint operating millage request before voters in the two counties through a ballot proposal. e Detroit Historical and Wright museums are only pursuing the millage in Wayne and Oakland counties.

Introduced by Sen. Sylvia Santana, SB136, the “History Museum Authorities Act,” would enable any county in the state to create an authority to bene t the Wright Museum and the Detroit Historical Museum. | FILE PHOTO

Wabeek Club’s facelift aims to secure its future

$10M project adds resort-style amenities

JAY DAVIS

An Oakland County country club has undergone a $10 million facelift that ownership says is vital to the club’s future.

Wabeek Club in Bloom eld Township undertook the major renovation work over the last several years, aiming for a resort-style experience by adding such amenities as outdoor entertaining space, a spa and new dining options.

‘HEROIN HOUSE’ GETS TRANSFORMED

In Sherwood Forest, freshened-up home is ready for entertaining

NICK MANES

Once home to an alleged Detroit heroin dealer, the residence at 19691 Shrewsbury Road in the city’s desirable northwest Sherwood Forest neighborhood has been through some changes in the last half-century.

For more than 20 years, the home has been owned by John Corvino and his husband, Mark Lock. Corvino, 53, and the dean of the Irvin D. Reid Honors College at Wayne State University, and Lock,

48, and an attorney, are ready to move on from the 2,700-squarefoot, two-story Tudor-style home where they’ve entertained and maintained a garden grown from the remains of shrubs and weeds in the backyard over the past few decades.

e 85-year-old home was set to hit the market March 3 at an asking price of $525,000, or about $195 per square foot.

Public records show the home was purchased for $240,000. Corvi-

no told Crain’s he wasn’t sure how much they had invested in the home over the decades.

Still, Corvino and Lock have done work. e home was previously owned and occupied by a Realtor who did a “cheap renovation,” as Corvino described it.

“We did a lot to undo that ... and make it fresh,” he said, pointing to the newer kitchen and various cosmetic upgrades in the bathrooms.

See HOME on Page 17

About this feature

e renovations to the club that opened in 1972 also include a complete interior upgrade of the private club’s 45,000-square-foot clubhouse, including the addition of a tness area. New locker rooms feature steam showers, cold rain showers and a sauna. e upgrades also include a redesigned ballroom and dining room and updated kitchen equipment.

Golfers can now work on their game indoors in the new golf simulator room, which features two TrackMan systems. e club pro shop was redesigned with new merchandise added and new workspaces created for members.

Royal Oak-based Art Harrison Interiors designed the indoor changes. Exterior upgrades have been made, too. e pool has been updated and Wabeek has added a 2,500-square-foot outdoor patio and re pit lounge with views of the rst and 18th holes.

See WABEEK on Page 17

Young urban farmers ght for limited land as Grand Rapids grows

GRAND RAPIDS — When the Great Recession roiled Michigan in 2008, Takidia Jenkins-Smith started a garden at her home in southeast Grand Rapids to stretch her grocery budget. Twenty-four at the time with three young sons to feed, she kept at it, eventually growing food for friends and extended family.

In 2017, she spun the hobby into Fresh Beets Urban Farm, a commercial venture selling quick-growing household vegetables like greens, tomatoes and peppers via a community-supported agriculture model.

But as she scaled the business, reliable land became an issue.

Sometimes, she leased parcels in southeast Grand Rapids. Other times, private landowners let her cultivate it for free, turning underutilized lots into urban farms — for a time.

“One of one of my largest plots that was volunteered to me, they ended up putting houses on it,” said Jenkins-Smith, now 39. “People would be excited about the project, and then they would change their mind.”

Jenkins-Smith’s is a common refrain among younger urban farmers, who often face the choice of competing for valuable land in cities ornancing larger rural plots.

As the average age of U.S. farmers nears 60, advocacy groups and industry leaders are pushing for policy changes that remove barriers to entry for the next generation — namely, the cost of land.

Kellogg Co. and Meijer Inc. announced they will provide undisclosed sums to the National Young Farmers Coalition to send a group of young farmers, including ve from Michigan, to Washington, D.C. eir task is to lobby members of Congress

Crain’s new “Before it Hits the Market” report features prominent and unique properties about to go on the market — especially those with a backstory. Tell us about your unique property — before it lists. Contact reporter Nick Manes at nick.manes@crain.com. See FARMERS on

and the U.S. Department of Agriculture to shift power and resources to their generation of farmers in general and people of color in particular. e companies, which declined an interview, said in a joint statement that access to land and capital are the two biggest barriers to entry for young people, especially those who don’t come from farming families.

Grand Rapids resident Alita Kelly, land organizing director for the National Young Farmers Coalition and chair of the West Michigan Young Farmers chapter, said real policy shifts are needed for that to change.

e West Michigan Young Farmers chapter is speci cally concerned with improving access for farmers of color and women. And since farmers of color typically live in urban areas, her chapter is primarily focused on Grand Rapids.

The Sherwood Forest home of John Corvino and Mark Lock, set to hit the market soon. | STYLISH DETROIT REAL ESTATE PHOTOGRAPHY

WEST MICHIGAN

Barbat

RACHEL WATSON

Alita Kelly, left, chair of the West Michigan Young Farmers chapter, with Lynette Thomas-Moore at Moore Garden and Farm in Muskegon. Kelly’s group advocates for policies that woud remove barriers to agriculture for young farmers. | SERGIO CIRA REYES

Demolition on the existing Wayne County criminal justice complex downtown is expected to start in the coming months.

Pending the county’s ability to relocate its employees and inmates to the new facility at I-75 and East Warren Avenue, Bedrock LLC CEO Ko Bonner said his company “would love to begin deconstruction activities later this year.”

“We will be in a position to hand over the keys in April,” Bonner told me last month. “We are close, about 85 percent done. e last strokes are always the longest. en it’s really how fast can the public sector move their facilities.”

ere is a March 14 deadline for substantial completion of construction on the new complex, although it’s not clear what the implications are for missing that mark.

I reached out to both Wayne County and a Bedrock spokesperson seeking additional details, as well as a member of the Wayne County Commission who is on a subcommittee on the criminal justice complex.

But during a meeting early this month, James Carter Fisher, assistant corporation counsel for Wayne County, told subcommittee members that businessman Dan Gilbert’s

team was saying it would meet that deadline.

at March 14 date “starts the sixmonth move process,” Carter Fisher said.

“We have been having pretty much daily walk-throughs of the buildings” with end users like prosecutors, sheri ’s department personnel and others, he said.

“We are a little skeptical they will hit that turnover date. It is something we will monitor closely.”

In June 2018, Wayne County approved an agreement with Gilbert’s Rock Ventures LLC to build a $533 million criminal justice complex to replace the existing complex on Gratiot Avenue.

at move paved the way for the demolition of the site commonly known as the “fail jail” site, which became a symbol of municipal mismanagement when it was saddled with delays and major cost overruns.

As part of that deal, Gilbert is to acquire the Frank Murphy Hall of Justice, Division I and Division II jails, plus the Juvenile Detention Facility, following completion of the new complex.

e existing jail site, about half of a broader 15.4-acre site controlled by Gilbert, is planned ultimately to become an “innovation district,” it was announced in 2021 after the previous plan for the Detroit Center for Innovation to go there collapsed.

e new I-75/Warren complex, others have reported, has also been

over-budget like the “fail jail” was, although cost overruns are generally absorbed by Gilbert and his companies.

e Detroit Free Press reported last month that the cost of the new jail complex is $609 million, or more than $75 million over projected costs.

CCIM Michigan chapter names rst female president

Alis Manoogian has been selected as the rst female president of the Michigan chapter of Certi ed Commercial Investment Member, or CCIM, a commercial real estate and investment trade organization.

Manoogian is currently assistant vice president of investment sales at South eld-based Farbman Group.

“It is truly an honor to be chosen as the next president of CCIM Michigan,” Manoogian said. “I hope that by being in this role, I’m able to serve as an example for young women who want to seek leadership opportunities in commercial real estate to obtain a CCIM credential.”

Women as well as minorities have been under-represented in commercial real estate for decades. A press release on Manoogian’s selection says women represent just 36 percent of commercial real estate employees.

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

A view of the Frank Murphy Hall of Justice (right) and adjacent Wayne County jail.| KIRK PINHO / CRAIN’S DETROIT BUSINESS

Gotion exec: EV battery plant near Big Rapids ‘not a done deal’

BY KURT NAGL

Gotion Inc. hopes to move forward with a $2.4 billion EV battery parts plant in the Big Rapids area, but it has a backup plan that could involve leaving the state if the deal falls apart, said Chuck elen, the company’s vice president for North American operations.

Since announcing the plant and plans to create 2,350 jobs last year, the Chinese battery manufacturer has run into some resistance that has caused it to delay construction and recon gure the factory footprint.

e company has remained largely silent amid the uncertainty, but in a ursday interview elen opened up about how Gotion is responding to opposition, o ering details of the planned factory and how it ts into the company’s quest for EV battery dominance — if it comes to fruition.

“A project of this scope takes an awful lot of due diligence, and we’re still performing that, so it’s not a done deal,” elen said. “We are still going through the discussions with the state and the township and the county and making sure this is all still a good t.”

e plant, which would be the

company’s rst in the U.S. and would make anode and cathode materials for EV batteries, was originally pitched as several buildings totaling 2 million square feet, straddling two townships in Mecosta County. After Big Rapids Township board mem-

bers voiced concerns over its ties to China and impact on the water table and environment, the company turned its focus solely onto Green Township. elen said the investment amount and number of jobs created

would remain the same in the altered plan.

“If the local population is not wanting the project, and we’re not going to be a orded to be a good corporate citizen, then we would not choose that location, right, that just

makes sense,” he said, adding that he is still in talks with Big Rapids Township and “hopeful” about reaching a resolution.

elen declined to comment on how political tensions between the U.S. and China might be a ecting the project.

Gotion, based in Shanghai and partly owned by Volkswagen, is the world’s sixth largest battery manufacturer with ambitions to be a bigger player. Key to that plan is expansion in the U.S., starting in Michigan.

elen said the company surveyed 44 locations around the U.S. before landing on the Big Rapids area site, due to the cost and availability of land, labor pool and proximity to Ferris State University, which would serve as the main job training pipeline.

e company considered existing buildings, including old General Motors Co. and Ford Motor Co. plants around the country, but none were tall enough, elen said. e cathode and anode manufacturing process requires large mixing vats and ceilings at least 70 feet high. e typical manufacturing plant is no taller than 50 feet.

“So to use a brown eld really didn’t lend itself to this operation,” he said.

See GOTION on Page 20

Thelen

After Big Rapids Township board members voiced concerns over Gotion’s ties to China and impact on the water table, the battery maker turned its focus solely onto Green Township. | BRYAN ESLER

Cannabis-tracking mess demands a closer look

A“clerical error” that caused a dayslong re drill roiled the state’s edgling cannabis industry last week, and it bears a much closer look.

e state’s system for tracking cannabis from the time it’s still in the ground until consumers buy it is run by a Florida-based company called METRC LLC. is “seed-to-sale” tracking system is intended to make sure that all cannabis sold in the state has been grown, processed and sold by licensed companies and keep black-market weed out of the market.

Michigan regulators rely on this system when they need to enforce those laws.

But a notice from METRC to the state Cannabis Regulatory Agency that 85 percent of customers hadn’t paid a $40 monthly service fee bill and would be cut o from access to the system set o a wild scramble last week — and much confusion.

CRA regulators worked to alert companies on the list as delinquent on bills and eventually sent out a bulletin to all of them. ey then clogged phone lines to METRC customer service in an e ort to gure out the problem.

e real problem? Most of them weren’t delinquent at all.

e company later walked back the notice and said the gure was only 11 percent of customers who were more than three months past due on their bills. It blamed clerical er-

Michigan must choose: top-down or bottom-up

The choice between a top-down or bottom-up economic approach is becoming clear as Lansing politicians prepare for two important debates.

Legislative Democrats are considering a bill to repeal the state’s right-towork law, while also supporting plans backed by Gov. Gretchen Whitmer to use billions in state funds to subsidize a handful of rich corporations. One such plan, according to published reports, may add nearly $750 million in scal favors to a state incentive package for Ford Motor Co. and would raise the value of its incentive deal to nearly $1.8 billion. e verdict is in on such top-down economic development e orts. ey don’t work.

ror for the mixup.

CRA chief Brian Hanna blasted the company in an interview with Crain’s and called for it to sort out a billing system that cannabis companies have complained about.

“ e fact of the matter is we had multiple datasets from METRC that were apparently inaccurate,” Brian Hanna, executive director of the CRA, told Crain’s. “... e industry is going through hardships right now with the prices being so low, and they don’t need inaccurate data and poor communication from METRC.”

at’s a big problem.

No cannabis can legally be sold in Michigan without being recorded in METRC. e reliability of its tracking system is critical to the legitimacy of an industry still trying to build credibility and that has consistently decried the e ect of black-market cannabis on a market where prices have crashed because of oversupply.

It’s still unclear exactly what went wrong in the data transmitted to the state. It is perfectly clear that it took too long to sort out the mistake before sending an entire industry into a panic that it would grind to a halt.

It might be easy to dismiss this as a simple error that was xed with no harm done. But because of the bigger issues surrounding the mistake and the importance of this tracking system, a closer look is needed.

Mistakes happen. But the integrity of the data in this system is important in ensuring integrity in an industry whose legitimacy depends on it.

Close scrutiny of what went wrong and what the CRA could have done di erently is in order. As is an examination by the state of the processes and the integrity of the METRC system.

Unfortunately, politicians and special interests have strong incentives to promote these counterproductive policies. Just don’t be fooled by promises that they will invigorate Michigan’s economy or arrest the exodus of Michigan residents.

As if o ering up $1.8 billion to just one company wasn’t bad enough, there is yet another plan to put $1.5 billion over the next few years into the state’s Strategic Outreach and Attraction Reserve fund. Lawmakers are heralding these subsidies as essential for the state to thrive, but the data tells a di erent story.

e Mackinac Center studied a database of 2,300 Michigan-speci c subsidy deals across nine programs or program areas going back to 1983. e 2020 study compared companies and their performance with similar establishments that received no subsidies, tracking employment at each.

In ve of the nine state subsidy programs, there was no meaningful hiring di erence between subsidized and unsubsidized companies. In one, subsidized companies actually hired fewer net workers than their unsubsidized counterparts.

In the three that showed job creation, the cost per job created was stratospheric. e now-defunct Michigan Economic Growth Authority program o ered up to $125,000 per year per job. at’s not a sustainable way to build an economy, and it’s a slap in the face to unsubsidized employers.

Why do governments hand these subsidies out? Because they are powerful political tools for elected o cials who want to take credit for creating jobs. Governors are twice as likely to increase subsidy spending when they are running for reelection. Companies that make

political donations are four times more likely to get subsidies than those that don’t.

e same mechanism plays out in the Democratic leadership’s drive to repeal Michigan’s right-to-work law. Unlike many labor laws, right-to-work is not about the power balance between workers and employers. Rather, it’s about the relationship between union members and union bosses. e law prevents contracts that require employees to join and pay a union as a condition of working.

Just as corporate welfare deals are politics dressed up in rhetoric about job creation, the right-to-work repeal e ort dresses up in the rhetoric of worker’s rights. e description doesn’t agree with reality.

Two former United Auto Workers presidents pleaded guilty in 2020 to conspiring to steal more than $1 million in union funds. Members discovered union leadership had routinely been spending their dues on golf, swanky vacations, booze and other luxuries. More than a dozen top union o cials were found guilty on corruption charges. is is a textbook case of the rot that results when workers have no choice about union membership. But until federally mandated changes to the UAW’s election process, members had no direct say about who their leaders would be.

Right-to-work gives employees a choice in whether to support a union, creating a pro-worker environment in which union bosses are forced to pay more attention to the interests of members or risk losing them entirely. Some union leaders concede the benets of the law.

“ is is something I’ve never understood, that people think right-to-work hurts unions,” former UAW secretary-treasurer Gary Casteel told e Washington Post in 2014. “To me, it helps them. You don’t have to belong if you don’t want to. So if I go to an organizing drive, I can tell these workers, ‘If you don’t like this arrangement, you don’t have to belong.’” ere is clear economic power in freeing both workers and businesses from centralized, top-down control. e share of manufacturing employment in Michigan is 26 percent higher in a given county than it would be absent our right-to-work law. e history of Michigan is one of bottom-up success. e entrepreneurs who built the state were not seeking subsidies or following union dictates. ey invested in Michigan for what was then a positive business climate.

How our state’s elected o cials handle corporate subsidies and right-to-work in 2023 will tell us whether Michigan remains addicted to outdated top-down models or is ready to move toward a brighter, freer future.

GETTY IMAGES/ISTOCKPHOTO

IT IS PERFECTLY CLEAR THAT IT TOOK TOO LONG TO SORT OUT THE MISTAKE BEFORE SENDING AN ENTIRE INDUSTRY INTO A PANIC.

JOHN MOZENA AND MICHAEL LAFAIVE

John Mozena is the president of the Center for Economic Accountability.

Michael LaFaive is the senior director of scal policy at the Mackinac Center for Public Policy.

THERE IS CLEAR ECONOMIC POWER IN FREEING BOTH WORKERS AND BUSINESSES FROM CENTRALIZED, TOP-DOWN CONTROL.

FARMERS

Access to capital

e West Michigan Young Farmers chapter, which has about seven members ages 35 and younger, launched the West Michigan Farmers of Color Land Fund about a year-and-a-half ago with a GoFundMe campaign. e group is raising $55,000 that will go toward securing land and infrastructure for people of color who want to farm in West Michigan.

e fundraiser was modeled after two successful e orts in southeast Michigan. e Detroit Black Farmer Land Fund, launched on Juneteenth in 2020, has funded 37 awardees who are now landowners, while e Washtenaw County Black Farmer Fund raised $100,000 in its rst round after launching a year ago.

Kelly describes the West Michigan fund as “a mutual aid framework” for farmers on the local level.

“(It will help) us to work with our community and nd creative, tangible solutions that are impactful — even though we know that federal policy change is going to be the thing that moves the needle the most,” she said. “But we can’t really wait for federal policy change to advocate and support our local BIPOC growers.”

One federal olive branch that has been extended: e USDA is working to establish an O ce of Urban Agriculture in Grand Rapids and another in Detroit. Kelly is hopeful the Grand Rapids branch will connect farmers with grants and loans to fund their ventures.

“ at’s something that we’ve needed desperately in this area,” she said.

Land hurdles

Although acquiring urban farmland is theoretically more a ordable than buying a large rural plot, city farming comes with plenty of hurdles. As chair of the Urban Agriculture Committee for the city of Grand Rapids until last December, Kelly saw the lack of available land rsthand.

At last count, she said there were only about 60 vacant plots in Grand Rapids, most of which are too small to scale an urban farm. Churches or developers own other green space in the city that might be ripe for agriculture, she said.

ere’s also tension between urban farmers and developers about the most appropriate use of vacant land, especially given Grand Rapids’

housing shortage. Kelly said the city of Grand Rapids has indicated it’s willing to allow urban farming on some vacant lots, but those wrinkles have yet to be ironed out.

Jenkins-Smith was ready to give up on urban farming altogether after turning over so many lots.

“(It) was OK, because I didn’t want to lock people into something that they didn’t believe in anymore, but it was disheartening,” she said. “I would have put in all of this input into the soil and used all these resources, manpower and everything to get it ready for production and then ... have someone change their mind the following season.”

She had decided to start shopping for rural land when she learned of USDA grant funding opportunities for urban agriculture. She’s currently exploring starting a packaged produce line or selling directly to house-

holds instead of running a CSA. She also recently acquired 0.7 acres in the Comstock Park area of Plain eld Township for an urban farm, and hopes to buy more in Grand Rapids.

Alternatives for farmland

Liz Visser, a member of West Michigan Young Farmers, serves as farm manager for the Blandford Nature Center Farm in Grand Rapids. e nonpro t nature center’s farmland is on land cultivated under an agreement with the city of Grand Rapids.

Visser’s situation allows her to farm for Blandford without having to buy her own land. But that’s a rarity for most young farmers — “especially if you want to farm close to your community, and your community happens to be in an urban area,” she said.

Visser said her advocacy work is about pushing to preserve land for farming so it doesn’t all get swallowed up for building projects.

“ ere are midsize cities that have a di erent approach to urban agriculture, and I think it’s just about, where are the priorities?” she said.

“Right now, it seems like the priority is trying to get as much housing as possible (on) vacant lots in the city. And I want to be clear, I don’t think that’s a bad goal. … But something that I would love to see is if there was just a priority made on making some land accessible for if people wanted to grow on it in an urban area.”

The talent pipeline

West Michigan Young Farmers notes on its website that people of

color are “drastically underrepresented” in farming in the U.S. About 1.4 percent of farmers nationally are Black, according to the most recent USDA Agricultural Census, and that percentage is lower in Michigan.

Kelly and Visser believe that can change, not only through friendlier government policies, but by fostering interest in farming among young people.

e Blandford Nature Center Farm tries to hire as many young people as possible and allows them to explore a variety of interests within farming, like beekeeping, cut owers and sugar-sap collecting, as well as raising crops, Visser said. e nonpro t also routinely hosts young volunteers from schools and community groups.

Kelly in 2021 launched the Freedom School, a community garden behind the MLK Park Lodge in Grand Rapids where children learn how to grow and harvest food.

at same year, she and several community groups, including Visser at Blandford farm, won a grant from the USDA to launch the Freedom Farm Collective (now called Grow Collective). ere, they plan to provide mentoring for young growers at the elementary, middle and high school level, as well as an incubator for BIPOC growers, Kelly said.

“We’re still at the beginning stages of really guring out what that looks like and how to get funding to get that o the ground … but that’s the direction that we would like to take things in the future,” Visser said.

Contact: rachel.watson@crain.com (989) 533-9685; @RachelWatson86

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COMMERCIAL LENDING TEAM

Takiedia Jenkins-Smith, 39, is the owner of Fresh Beets Urban Farm, a family venture that has been located on various plots of land on the southeast side of Grand Rapids over the past 15 years. TAKIEDIA JENKINS-SMITH

COMMERCIAL REAL ESTATE

IN DEMAND

Industrial real estate is ourishing but needs more space

PAGE 10

FLOATING INTO DANGER

As costs from interest-rate hikes rise, landlords are feeling the pain

KIRK PINHO

Some commercial landlords are experiencing sticker shock.

Not due to rising interest rates for borrowers — although that plays a role — but instead the cost of renewing what are known as interest-rate caps on some types of commercial real estate loans.

In effect, those derivative con -

tracts are insurance policies sold by lenders to borrowers against debt with floating rates which act as a safeguard for borrowers (and lenders, too). When interest rates were lower, those caps were inexpensive hedges against the fluctuating interest on their short-term loans. But today, expect some gasps when hearing the rates for those policies.

Manus Clancy, senior managing director of New York City-based Trepp LLC, which tracks commercial real estate finance and commercial mortgage-backed securities, said borrowers over the last four or five years have been using floating-rate debt to lower their costs or increase their flexibility compared to fixedrate 10-year debt.

Lenders required the cap because

they didn’t want borrowers’ debt service coverage ratios, or DSCRs, to drop below a certain level. DSCRs are a metric of cash on hand to pay for debt payments.

In essence, they sought to avoid situations where interest rate increases were “eating into” DSCRs, Clancy said, triggering a default.

— Manus Clancy, senior managing director, Trepp LLC See COSTS

“IT TURNS OUT THAT WAS SHORT-SIGHTED. CAPS WERE CHEAP...”

COSTS

From Page 8

And instead of buying, for example, a ve-year interest-rate cap — opting instead for the cheaper twoyear cap with three one-year options to renew — borrowers may now be feeling the pinch.

“It turns out that was short-sighted,” Clancy said. “Caps were cheap. When interest rates were near zero, if you had to buy a cap on LIBOR or SOFR, which are the two indexes that loans owed o of, you could have had it for a song. It was de minimis, maybe 15 basis points of the loan balance.”

LIBOR was the London Interbank O ered Rate; SOFR is the Secured Overnight Financing Rate, the replacement for LIBOR after it was revealed that the system was corrupted.

But today, with interest rates much higher, renewing those policies can be burdensome one-time expenses that could cause landlords to try to cash out of their investments or seek capital calls from existing investors who may be unwilling to pony up the cash to re-up those policies.

A Wall Street Journal story from January cites a 2019 Mortgage Bankers Association report that says about one-third of commercial real

estate debt has oating interest rates.

With eight rate increases approved by the Federal Reserve in less than a year as it attempts to curb in ation, costs for interest-rate caps

have soared, experts said.

“It’s become extremely expensive,” said Ryan Denomme, managing director of Friedman Finance, a subsidiary of Farmington Hillsbased Friedman Real Estate.

State gives Wyandotte mixed-use project with housing a $3M boost

BY NICK MANES

A proposed mixed-use development in the Downriver area is poised to move forward following approval of incentives of nearly $3 million by the state’s economic development arm.

The board of the Michigan Strategic Fund on Tuesday morning approved tax increment financing and loan incentives for a nearly $10 million residential and retail development in Wyandotte.

3131 Biddle LLC, affiliated with Wyandotte-based Rise Above Entertainment LLC, plans to redevelop a city-owned vacant building in the city’s central business district, just blocks from the Detroit River. A briefing memo from the MSF says the project will include 35 “workforce” rental units at below-market rental rates, as well as retail and restaurant space and various “public improvements,” such as parking and alleyway improvements.

Ron Thomas, owner of Rise Above Entertainment, could not immediately be reached for comment.

The developer was previously behind another mixed-use project in downtown Wyandotte that brought 13,000 square feet of office space, six apartments and one restaurant named The Vault.

In total, the MSF board, which controls the state’s economic development checkbook, approved nearly $1.4 million in TIF tax cap-

ture and more than $1.56 million in a Michigan Community Revitalization Program loan.

e overall project of just more than $9.7 million is expected to generate a 10.3 percent return over 20 years, according to the MSF memo.

Thomas, as the developer, is bringing about 13.6 percent — just over $1.32 million — in equity to the project.

The MSF briefing memo says the incentives are needed to help the development achieve its rent goals

A 3-percent rate cap on a shortterm loan of, say, $50 million or $60 million would have cost perhaps $25,000 in 2018, Denomme said.

“ e same cap today is probably close to $1 million,” he said.

Data from Riverside Risk Advisors LLC, cited by the WSJ, says a threeyear, 4-percent cap on a $100 million loan rose from $200,000 in October 2021 to $2.2 million in October 2022. It was $45,000 in October 2019.

And it’s not just landlords who are grappling with this.

Developers working with construction loans may also be feeling the pinch, said Tim Kalil, senior managing director for Huntington National Bank in Troy. If those loans are coming due and need to be converted to what’s colloquially referred to as “mini-perm” — miniature permanent — debt, there could also be concerns. “ at could have a lot of the same implications,” Kalil said.

But Joshua Bernard, principal of South eld-based Bernard Financial Group, said there is an upside.

Lenders are responding with more loan options for 3-to 5-year xed interest-rate debt rather than oating-rate loans.

“A new xed rate loan may not require as much of a capital infusion to right-size the loan balance for the current interest rate environment as would otherwise be paid towards a new interest rate cap contract if refreshing or extending a oating rate option,” Bernard said. “ e question for the upside-down borrower remains: would you like to rent or buy your next 12-24 months of debt service? And if you would only like to rent, how much are you willing to pay in premium for that option without gaining any real long-term relief?”

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

of being reserved for those making as low as 80 percent of the area median income, about $53,600.

Housing advocates around the state have long talked about the need for such types of residences, often called workforce housing.

State lawmakers late last year passed a package of bills — which were signed by Gov. Gretchen Whitmer — to help spur such activity.

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

Skyline view of the South eld Town Center business district. Some commercial real estate landlords may be feeling the pinch of interest-rate cap costs. FILE PHOTO

Denomme

A rendering of the proposed development in Wyandotte

Industrial real estate is ourishing, but needs more space

Local experts see little slowing down as ‘market remains as good as it’s ever

BY KIRK PINHO

Perhaps no major commercial real estate asset class has performed better than the industrial and warehouse market the last several years.

As automakers continue the push toward electric and autonomous vehicles and suppliers of all sizes need space to support that, local experts see little slowing down in the sector, which accounts for hundreds of millions of square feet of space around the region. Developers regularly come forward with new speculative projects, condent enough in the market demand that they are willing to risk putting shovels in the ground and raising walls without a tenant locked in.

According to a fourth-quarter report from the local o ces of New York Citybased brokerage rm Newmark, active industrial and warehouse construction hit a two-year high at 7.5 million square feet, with 82 percent of that being Class A bulk warehouse facilities.

is year alone, developers are expected to bring to the market 16 new spec warehouse developments with over 5 million square feet of space. at gure rivals the past 10 years combined, a period during which there were 23 spec warehouse buildings with 10.2 million square feet, according to Newmark. e vacancy rate is just 3.4 percent.

“In terms of industrial real estate, we really are leading the nation,” said Dan Labes, executive managing director for Newmark focusing on industrial and warehouse space. “ e industrial real estate market in particular seems to move along and not listen to the noise

been’

brown eld nancing for a 531,000-square-foot multi-tenant spec building in Taylor on a former unlicensed land ll site near I-94 and Inkster Road.

“We’ve had a really good run here,” said Kyle Morton, vice president of development for Ashley Capital.

“If you look at the speculative buildings that have delivered the last ve or six years, the only vacancy I think can of is that we have 100,000 square feet left in Livonia in one of our buildings, but we have an agreement with a tenant and the lease just isn’t signed yet.”

Other active developers include NorthPoint Development LLC, which has projects in Detroit, Warren, Harper Woods and elsewhere; Detroit-based Sterling Group and Dallas-based Hillwood Enterprises LP, which is building on the former Michigan state fairgrounds site in Detroit; and Flint Development, which has projects in Wixom and Pontiac.

and the market remains as good as its ever been.”

“I’m not seeing many headwinds to slow us down,” Labes said, pointing not just to the transition to EV and AV, but also the rise of e-commerce giants like Amazon plus more traditional retailers like Target and Kroger needing distribution space.

Few developers in the sphere are as active as the Canton Township o ce of New York City-based Ashley Capital, which has several spec projects in various stages of development around the region. Just last week, the company received Michigan Strategic Fund approval for just shy of $2 million in

A study by Commercial Search, a division of Yardi Systems Inc., says that the Detroit market has the 13th highest amount of industrial construction taking place, clocking in at 10.5 million square feet. Other Midwestern cities like Chicago (27 million square feet), Indianapolis (15.7 million square feet) and Columbus (13 million square feet) outpace the metro region. e company says nationwide there is more than 690 million square feet under construction, besting last year’s previous all-time high of 592 million square feet.

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

Ashley Capital plans $40 million building on former land ll site

BY KIRK PINHO

Industrial and warehouse developer Ashley Capital is taking on another plan to redevelop a former land ll. e $40 million project for a new 531,500-square-foot multi-tenant light manufacturing, warehouse and distribution building on more than 70 acres of Taylor property has received Michigan Strategic Fund approval for $1.93 million in state brown eld tax incentives.

at follows approval of about $3.5 million in local captures, according to an MSF memo on the project.

Kyle Morton, vice president of development for Ashley Capital, said he anticipates going before the city for site plan approval this summer and begin work later this year, with completion on the spec building in 2025. Novi-based Oliver / Hatcher Construction is the general contractor while Wyandotte-based Detroit Ar-

chitectural Group Inc. is the architect. e property is around I-94 and Inkster Road, to the east of Ashley Capital’s property in Romulus totaling 136 acres known as Metro World Commerce Center.

An MSF memo says the Taylor site up until 1978 had been used as an unlicensed land ll and has contamination that, were it not for the browneld plan, makes redevelopment of the site unviable.

Ashley Capital, based in New York but with a Canton Township o ce, is one of the most active and dominant warehouse/industrial developers in Metro Detroit.

It has projects recently completed or underway in Highland Park, Flint, Canton Township, Orion Township, Livonia, Hazel Park, Sterling Heights and elsewhere.

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

The current Eastland Mall site is being revamped into industrial/warehouse space. | KIRK PINHO / CRAIN’S DETROIT BUSINESS

New industrial/warehouse space has been erected at the former Cadillac Stamping Plant in Detroit. | KIRK PINHO / CRAIN’S DETROIT BUSINESS

The $40 million project for a new 531,500-square-foot multi-tenant light manufacturing, warehouse and distribution building in Taylor received Michigan Strategic Fund approval for $1.93 million in state brown eld tax incentives. | DETROIT ARCHITECTURAL GROUP

Capitol Park building designed by Kahn to add four oors, new facade

KIRK PINHO

e Capitol Park neighborhood in downtown Detroit is expected to see a roughly $13 million restoration and addition to one of the last vacant buildings there.

Karp and Associates, which has several projects in the tiny enclave west of Woodward Avenue, is planning to add four stories to the roughly 16,000-square-foot, seven-story building at 1133 Griswold St. and add a new facade.

“It took nearly a decade to acquire this building, which makes it ever more gratifying to both us and the community to turn what was rotting vacant blight into a beautiful, productive asset,” Richard Karp, who is principal of Karp and Associates, said in an emailed statement.

Karp is seeking Historic District Commission approval on March 8 to changes proposed to the Albert Kahn-designed building.

In all, the redevelopment would bring rst- and basement-level retail, a second- oor o ce and 25 apartments to oors three through 11, said Karp. ere would be 16 one-bedroom units, eight two-bedroom units and one three-bedroom unit, with 20 percent a ordable at 80 percent of the Area Median Income.

e building dates back to 1921 when it was built for the United Savings Bank of Detroit, according to a city history of the Capitol Park local historic district. Construction costs at the time were estimated to be $150,000.

A half-century later in 1971, it was bought by the Detroit and Northern Savings and Loan Association, which proceeded to remove the

Kahn limestone facade, in lling window bays with concrete and installing the largely windowless facade that remains in place today. ose changes also disquali ed the property from receiving historic tax credits.

In an email, Karp said his company plans to create a facade that is “a historically compatible design that is still wholly new and not falsely historic.”

Project financing comes both from a Commercial Rehabilitation Act, or PA 210, property tax freeze as well as $5 million in funding from a $13.74 million grant the Downtown Detroit Partnership received in September. A Detroit City Council briefing memo says the project funding sources include a $4.39 million senior-position loan from Farmers & Merchants Bank, the $5 million grant and $3.35 million in equity.

Contractors on the project are Karp’s BuildTech Ltd. as general contractor; and architecture rms Pappageorge Haymes, which is working on the facade, and Kraemer Design Group, which is the architect of record.

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

The facade of 1133 Griswold St. in Detroit’s Capitol Park neighborhood. COSTAR GROUP INC.

A rendering of how the 1133 Griswold St. (left) building should look after work is completed next year. Karp and Associates proposes adding four oors and overhauling the building’s facade. KARP AND ASSOCIATES

Detroit sues un nished Perfecting Church for blight

Lawuit claims under-construction church has not been maintained and presents threat

Calling the site of an incomplete church project a “public nuisance,” the city of Detroit led suit last last month against Pastor Marvin Winans’ Perfecting Church, asking that a judge declare the property abandoned and blighted and require the church to clean it up or deed the property back to the city.

e suit, led in Circuit Court in Wayne County, claims the church has not been maintained and “presents an imminent threat to the health, safety, and welfare of the public.” e property, at 19150 Woodward Ave., was deeded to the church from the city for $13,000 in 2005, according to the lawsuit. And after 18 years, Perfecting Church has failed to complete construction.

“ is has been going on for 20 years, literally,” said Conrad Mallett, Detroit’s corporation counsel. “Positive forward progress must be made in the very near term.”

e original plans called for a 4,200-seat church, a 35,000-squarefoot administration building and a 1,000-space parking structure, the suit said. But the church has not been completed, the administration building and parking structure have not been started and no building permits have been issued since 2015, the ling said. Mallett said there had been no work done on the property in at least ve years.

In an emailed statement, Winans said he didn’t think the city was acting in good faith by ling the suit.

“Perfecting Church has been in constant discussions with the City of Detroit, and we believed we are upto-date in addressing all matters of concern posed by the city,” Winans

said. “We are shocked and extremely disappointed that the city would take this course of action in the dark of the night.”

e church’s attorneys are reviewing the lawsuit, he said.

But Mallet said he’s been clear with Winans about what the city needs, including a one-on-one meeting in December where he previewed a January letter the city would be sending. In the hand-delivered Jan. 6 letter, Mallett said he needed a Building Status Report that included a construction timeline for completing the project, evidence that accessory structures are well-maintained and other assurances by Feb. 13.

On Feb. 13, he said, there was a call from the church’s attorney, but no response to the city’s request.

“We got what we always get, which was pleasant conversation,” Mallett said.

Mallett said he still wants the church to turn in a Building Status Report so the condition of the unfinished project is known. The suit also calls for proof of financing to complete the project by April 6, and an executed contract with an approved licensed architect by the same date.

e church is on the city’s M100 blight list, a list of properties that the administration is targeting to demolish or rehab in short order. It was

one of dozens that were added since the list was rst announced a year ago. Mallett said it represents one of about 150 large properties that need to be brought into compliance.

In addition to asking the church to clean up its property, remove debris and prove its ability to nish the project, the suit asks for a receiver to be appointed if the church cannot abate the nuisances on its own. It also asks that Detroit be a rst priority lienholder in the case that a receiver is appointed.

Mallett said Winans is “a man of great resources and ability” and he is hopeful he will be able to nish the church project. He wants to see progress on some level in the next

six months, he said, saying nancing can be assured and letters can be signed.

“We’re going to push and push and push to get that done,” Mallett said. “We’re not going to be satis ed with a court date that’s pushed back to 2024.”

Mallett said the city has been in conversations with the church since 2016. In that time, he said, nothing has changed.

“Bishop Winans is a good and decent human being, but he is in violation of the law and must be held to account,” Mallett said.

Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB

Lee Plaza renovation runs into delay as it deals with rising costs

David Di Rita stood on a stage inside the decrepit Lee Plaza hotel 13 months ago to share his excitement about the $7 million Detroit City Council earmarked for his planned rehabilitation project of the long-vacant high-rise.

“It’s a preview to coming attractions,” Di Rita, a founder and principal of the Roxbury Group, said at the time. He expected construction at the building at 2240 W. Grand Blvd. in New Center to begin a year later — or, about now.

But Di Rita said last month that rising construction costs have delayed the project, which would turn the 15-story building into 117 units of senior a ordable housing, plus some market-rate units. He said he now expects nancial closing to come at the end of this year, and for construction to begin after that. Rehabilitation of the 1927 building is expected to take between 18 and 24 months.

“We have not begun any physical work on the building yet,” he said. “We’re still in the pre-development stage.”

Di Rita said there was still a $10 million nancing gap for the project, and he has exhausted “all the usual

sources” of nancing. But he said he’s “increasingly” sure the numbers will work.

“I have a high degree of con dence we’ll gure this out,” he said. “Lee Plaza, it’s all or nothing.”

e building had been slated for demolition when Mayor Mike Duggan took o ce in 2014, the mayor said last year. e city spent $1 million to secure it in the hopes of keeping further degradation at bay. Still, a year ago, there were holes in the walls and ceiling; a main staircase had crumbled; there were piles of rubble in the corners of the building; interior windows were broken; plaster-covered horse hair hung from the ceiling; and many walls were marred with gra ti.

At one point, the building had once had gold leaf accents, intricate designs on the walls, delicate rosettes on the ceiling and sweeping archways.

“We’re looking at a project that already was challenging because of the state of decay in the building,” Di Rita said.

Dan Austin, a spokesperson in Detroit’s Housing and Revitalization Department, said if Di Rita were successful, it would be a huge preservation success for the city.

“Any time you get to save a gorgeous architectural gem while serving low-income housing, it’s a win,” he said.

Di Rita said cost estimates moved between 15 and 20 percent. When the numbers seemed close, “massive in ationary pressure just opened the gap again.” But he said nancing work is moving forward and he’s meeting weekly with the city, which still owns the building, to update leaders on his progress.

Di Rita called Lee Plaza a “very complicated transaction with a lot of moving parts.” But he said past iconic buildings that were demolished likely could have been saved with more time — so he doesn’t want to give up on this one.

Di Rita’s Roxbury group also rehabilitated and reopened e Metropolitan, another structure that many thought was beyond being saved after it sat vacant for nearly 40 years.

“It’s right to say if we can’t save this building in this location, what does it say about supporting future growth?” he asked. “It used to be the re exive point of view was, ‘Let’s tear it down.’ at answer almost never was the right answer.”

Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB

ARIELLE KASS

ARIELLE KASS

Rising construction costs have delayed the Lee Plaza project, which would turn the 15-story building into 117 units of senior a ordable housing, plus some market-rate units. ARIELLE KASS/ CRAIN’S DETROIT BUSINESS

The suit, led in Circuit Court in Wayne County, claims the church has not been maintained and “presents an imminent threat to the health, safety, and welfare of the public.” | NICK MANES/CRAIN’S DETROIT BUSINESS

Blue Cross lost money in 2022 on rising costs, investment woes

sale and the investment portfolio.

BCBSM instituted a 6.9 percent increase for 2022 policy renewals and a 6.9 percent rate adjustment for Blue Care Network. BCBSM typically seeks state approval for rate hikes in May.

e Blues are in the red.

Blue Cross Blue Shield of Michigan reported Wednesday a net loss of $777 million in 2022 due to rising operating costs, losses from its investment portfolio and ongoing COVID-19 response.

e Detroit health insurer reported a loss on revenue of $32.8 billion, down from a net income of $360 million on revenue of $32.5 billion in 2021.

Providing health care remains a loss leader for e Blues. BCBSM reported $19.25 billion in revenue from member and self-funded insurer premiums in 2022. But expenses outweighed premiums at $20.11 billion, leading to an $811 million loss on its health care insurance bene ts side of the business.

Nationwide membership for BCBSM also dropped by about 2 percent last year, as well, to a total of about 5.19 million.

In 2021, its $374 million loss on providing health insurance was

buoyed by a strong investment portfolio that returned $907 million to the insurer.

at portfolio last year, however, su ered under poor corporate performance throughout the public sector, resulting in a $74 million loss.

e Blues’ losses last year were also exacerbated by a one-time charge of $314 million related to the pending sale of its Advantasure subsidiary. In September last year, Aliso

Viejo, Calif.-based health insurance administrator UST HealthProof entered into a de nitive agreement to buy the Glen Allen, Va.-based Advantasure for an undisclosed sum.

BCBSM formed Advantasure in 2016 to provide back o ce, compliance and call center services largely to Medicare Advantage plans, which allow private insurers to sell Medicare.

e insurer also paid out $739 mil-

lion in COVID-related expenses, including $25 million for administering the vaccine, $171 million for testing and $543 million in treating patients.

On an earnings call with reporters, Joe Radtka, vice president of enterprise nance and chief risk o cer for BCBSM, could not con rm whether premiums would rise due to the poor nancial performance. But he did note that the losses were largely due to the charge related to the Advantasure

Despite the losses, BCBSM President and CEO Daniel Loepp believes the nonpro t was successful at weathering tough economic conditions.

“We managed through tremendous volatility in 2022, driven by the lingering economic e ects of the pandemic and uneasy nancial markets,” Loepp said in a press release.

“Despite these challenges, Blue Cross stood behind our members and maintained a strong and stable credit rating.” e insurer has maintained an A credit rating over the past ve years. Because BCBSM is a nonprofit mutual, meaning it is a taxable organization, it paid $133 million in federal, state and local taxes last year.

Despite the losses in 2022, BCBSM CEO Loepp, 65, earned $17 million, up from $15.6 million in 2021. e top executive’s compensation included a $13.9 million bonus, up $1.3 million from the year prior, and a $1.7 million base salary.

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

DUSTIN WALSH

Detroit health insurer reported net loss of $777 million

Blue Cross Blue Shield of Michigan reported Wednesday a net loss of $777 million in 2022 due rising operating costs, losses from its market portfolio and ongoing COVID-19 response. FILE PHOTO

LARGEST SOUTHEAST MICHIGAN LAW FIRMS CRAIN'S LIST |

Ranked by number of attorneys in Southeast Michigan as of January 2023

16

WARDLE, LYNCH, HAMPTON, TRUEX AND MORLEYPC 2600 Troy Center Drive, P.O. Box 5025, Troy

17 WARNER NORCROSS + JUDDLLP 2715 Woodward Ave. Suite 300, Detroit 48201-3030 313-546-6000; wnj.com

19 HEWSON & VAN HELLEMONTPC

25900 Green eld Road, Suite 650, Oak Park 48237 248-968-5200; vanhewpc.com

19 VARNUMLLP 160 West Fort St., Detroit48226 313-481-7300; varnumlaw.com

BruceTruex,president, senior partner and co-managing partner; NathanEdmonds, senior partner and co-managing partner

NazliSater,MatthewCasey andMichaelBrady executive partners

MichaelJolet,co-managing partner/president;Robert Ste es,co-managing partner/VP;ElaineSawyer andGregoryHoelscher co-managing partners

RonaldDeWaard,chair, managing partner;Eric Nemeth,managing partner, Detroit;MatthewBower, managing partner, Ann Arbor;RichardHewlett, managing partner, Novi;MichaelRomaya, managing partner, Birmingham

19 HOWARD & HOWARD ATTORNEYS PLLC 450 W 4th St, Royal Oak48067 248-645-1483; howardandhoward.com

22 MIKE MORSE LAW FIRM 24901 Northwestern Highway, Suite 700, South eld48075 248-350-9050; 855mikewins.com

Consumers Energy, Dow Chemical, Fifth Third Bank, Johnson Electric North America, Robert Bosch, Tenneco, United Wholesale Mortgage

48 3013044186191NA

JonKreucher president and CEO 51 62 411000051124BMO Harris Bank N.A., Konami Gaming Inc., Martinrea International Inc., Stryker Corp., ThyssenKrupp, BorgWarner Inc., SigmaTron

0050005050NA

MichaelMorse attorney, CEO, owner 50 46

NOTES: e. Crain'sestimate. 1. TobesucceededbyPaulMersinoinMarch. 2. FormerlyJa eRaittHeuer&WeissPC.Enteredintoanagreementtomergewiththe rmofTaftStettinius&HollisterLLPinadealthatwasannouncedinSeptember2022.The deal was nalized in January.

LARGEST MICHIGAN LAW FIRMS CRAIN'S LIST |

Ranked by number of attorneys in Michigan as of January 2023

Green eld Road, Suite 650, Oak Park48237 248-968-5200; vanhewpc.com

19 SECREST, WARDLE, LYNCH, HAMPTON, TRUEX AND MORLEYPC 2600 Troy Center Drive, P.O. Box 5025, Troy48007-5025 248-851-9500; secrestwardle.com

MichaelJolet,co-managing partner/president;Robert Ste es,co-managing partner/ VP;ElaineSawyer, co-managing partner/secretary; GregoryHoelscher co-managing

BruceTruex,president, senior partner and co-managing partner;NathanEdmonds, senior partner and co-managing partner

23 GARAN LUCOW MILLERPC 1155 Brewery Park Blvd., Suite 200, Detroit48207 313-446-1530; garanlucow.com

|Thislistisanapproximatecompilationofthelargestlaw rmsinMichigan.Totalnumberofattorneysdoesnotinclude"ofcounsel."Itisnotacompletelistingbutthemostcomprehensive available.Informationwasprovidedbythelaw rmsorgatheredfromtheirwebsites.FirmswithheadquarterselsewherearelistedwiththeaddressandtopexecutiveoftheirmainMichigano ce.NA=notavailable.NOTES: e. Crain'sestimate.

ResearchedbySonyaD.Hill:shill@crain.com

be succeeded by Paul Mersino in March. 2. Formerly Ja e Raitt Heuer & Weiss PC. Entered into an agreement to merge with the rm of Taft Stettinius & Hollister LLP in a deal that was announced in September 2022. The deal was nalized in January. Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data

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Rick Hampson has joined Old National Bank as Metro Detroit Market President. Rick has 27+ years of commercial banking experience in large corporate syndicated banking and middle market banking. His investment experience includes fundraising, capital markets, and private equity investment as well as investment banking and managing M&A advisory efforts. He is a current Board Member for Gleaners, Big Brothers Big Sisters, and the Detroit Regional Chamber. Rick has an MBA from Columbia University.

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Old National Bank

Adam Zale joins Old National Bank as a Commercial Real Estate Underwriter. He is supporting Old National’s CRE lending and is part of a new Old National commercial team in Southeast Michigan. Adam has over 18 years of banking experience, most recently with Flagstar Bank. He earned a Bachelor of Science degree in Business Management from Maranatha Baptist University.

Shuttles to be paired with mobile app

FINANCIAL SERVICES

Old National Bank

Daniel Zinser joins Old National Bank as Senior Vice President, Corporate Banking. Daniel will be responsible for helping lead Old National Bank’s growth effort in Southeast Michigan. Daniel has more than 15 years of commercial banking experience including, credit, portfolio management, middle market and large corporate lending. He has an M.B.A and a BS in Finance from University of Detroit Mercy.

Ann Arbor-based autonomous shuttle operator May Mobility is partnering with New York Citybased Via, a provider of ride booking and routing technology, to roll out more autonomous vehicles.

The companies, which have partnered since 2021, last Tuesday formalized a “plan to deploy thousands more AVs” around the world in the next three years, according to a news release.

The goal is for May Mobility’s shuttles to be paired with Via’s mobile app, which will offer on-demand rides to the public through AI-based booking and intelligent routing algorithms.

“May Mobility and Via share a deep belief in technology’s ability to provide equitable transit solutions,” Manik Dhar, chief commercial officer for May Mobility, said in the release. “The communities we serve benefit from our combined depth of autonomy technology experience and fleet deployment solutions.”

FINANCIAL SERVICES

Getzler Henrich & Associate

Kevin A. Krakora

has been named the Automotive Practice Leader of Getzler Henrich & Associates LLC, one of the nation’s oldest and respected middle-market corporate restructurings and operations improvement rms. A long-time Managing Director with the rm, this announcement of Mr. Krakora’s leadership of the Automotive Practice is recognition of both his depth of knowledge and longtime automotive industry-centric service, and the signi cance of dedicated industry services groups.

NONPROFIT ECON DEVELOPMENT

Detroit Economic Growth Corporation (DEGC)

Dr. Marlo Rencher has joined DEGC as the rst president of the small business initiative Detroit Means Business (DMB), a coalition dedicated to meeting the needs of Detroit-based small businesses. As a fearless advocate that understands small business challenges, Dr. Rencher is ideally suited to direct DMB’s strategic agenda. Dr. Rencher will elevate DMB’s programming and create innovative opportunities that foster a diverse, equitable, and inclusive environment for local entrepreneurs.

NONPROFITS

IFF

IFF has promoted Steve Rose to managing director of portfolio management. Bringing more than 30 years of experience to the role, including the last six as a senior portfolio manager, Rose will work in partnership with IFF’s chief credit of cer to provide strategic oversight of the organization’s $443 million loan portfolio in the Midwest. Rose earned a bachelor’s degree from the University of Toledo and an MBA from Wayne State University.

Financial terms of the deal were not disclosed.

Last summer, May Mobility brought its Series C investment funding up to $111 million, bringing the Toyota-backed startup’s total fundraising to around $200 million over the last six years.

The company said last year that its vehicles had provided more than 300,000 “revenue-generating rides” in nine cities.

May Mobility operates on-demand shuttle service in Ann Arbor, Grand Rapids and Arlington, Texas. Contact:

KURT NAGL

Mobility provided more than 300,000 revenue-generating rides in nine cities as of last year. | MAY MOBILITY

“MAY MOBILITY AND VIA SHARE A DEEP BELIEF IN TECHNOLOGY’S ABILITY TO PROVIDE EQUITABLE TRANSIT SOLUTIONS,.”

—Manik Dhar, chief commercial o cer, May Mobility

From Page 3

While small by comparison to many other homes in Sherwood Forest and nearby Palmer Woods, the four-bedroom, 3.5-bathroom residence “lives large” with a “very ecient and comfortable” layout, according to Corvino. Each room ows into the next.

e layout — which includes an older second kitchen in the basement — lends itself to entertaining. Corvino said that since he and Lock have owned the home, they’ve hosted a variety of parties, intimate dinners for friends, weddings and fundraisers.

Still, the entertaining Corvino and

WABEEK

From Page 3

A 10,000-square-foot, 120-seat second-story patio overlooks the club’s 180-acre, 6,451-yard, 18-hole course designed by Pete Dye in partnership with golf legend Jack Nicklaus. Dye also designed the Radrick Farms Golf Course in Ann Arbor, along with courses in 28 other states and 12 countries.

Wabeek is also boasting “worldclass cuisine, dining, and superior beverage program” with ne dining in its exclusive Tribu Mediterranean restaurant.

e upgrades are necessary, according to Wabeek Club Chair Joe Barbat, who is part of the group that purchased the now 50-year-old club in 2019 for an undisclosed price. Barbat, CEO of West Bloom eld Township-based Barbat Holdings LLC, is a developer who recently purchased the Grand Army of the Republic building in downtown Detroit.

“ is club is in the heart of Bloomeld Hills and has a superior golf course. We knew that if we had the opportunity to acquire the club, we could bring in a design team to renovate the club and bring it back to life,” Barbat told Crain’s on Wednesday. “ e club was so old and dated. e only thing that was really inhabitable when we bought it was the golf course. We knew the club well, like the course, but we could never have a nice dining experience while we played.”

The ownership group is made up

Lock have done seems a far cry from the reported activities in the home 50 years earlier.

Interesting history

A May 1971 article in the Detroit Free Press says that then-owner Morris Lee Williams was arrested there on suspicion of being “one of the biggest and wealthiest heroin dealers in Detroit.”

A neighbor at the time described Williams as being a “pretty hip dude,” and the Free Press article said he was known for sporting a bejeweled wristwatch and fashionable clothes. Drugs and drug paraphernalia were also found around the home, the article says.

While hardly hiding from that

darker side of the history of house, Corvino and Lock say they’re selling a “transformed” residence.

e kitchen was fully renovated in 2009 and the house bears many other modern amenities.

Perhaps most di erent, they say, is the broader neighborhood. While Sherwood Forest and Palmer Woods have been stable, middle- to upper-middle class neighborhoods in Detroit for decades, the larger suite of amenities — particularly the dining and shopping options available on nearby Livernois Avenue — is fairly new.

at, the sellers expect, will be a selling point. Lock and Corvino said they’ve been seeing an increasing amount of young families ock to the area, which they expect could make

for the likely buyer of their home.

Desirable neighborhood

Austin Black, associate broker and Realtor with @properties Christie’s International Real Estate who’s marketing the house, said the neighborhoods have de ed some of the challenges seen in the broader housing market. Multiple o er situations in Sherwood Forest and Palmer Woods are still common and the price per square foot buyers are paying for those homes has been trending up over the last several months, according to multiple listing service data.

“A lot of that is attributed to inventory being low in those neighborhoods and people do want to live there,” Black said.

Some cart path improvements and work on sand bunkers should be complete before the start of this year’s golf season, according to Sharkas. Tee boxes will be leveled o , too. All the equipment used to maintain the course was replaced last year.

It’s a long, detailed process for a club to prepare to potentially host a PGA event. Barbat said that’s something that’s been on his mind while making the upgrades.

“ at’s something that’s in the fu-

As for the sellers, they plan to live in their cottage in Douglas near Lake Michigan for the next year while Corvino is on leave to write a book.

Corvino — who lived in downtown Detroit in the late 1990s and watched the demolition of the former Hudson’s building — said that when the couple returns to town in 2024, a new condo in the central business could very well be in their future.

“Maybe we’ll live in the new Hudson’s Tower,” Corvino said, referring to the Bedrock project in downtown Detroit being build at the site of the former department store. “Wouldn’t that be full circle?”

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

ture,” Barbat said. “Not in the near future, but it’s de nitely in our longterm plans.”

More changes are on the way. Barbat said the ownership group plans to invest an additional $5 million over the next three years to make improvements to the clubhouse entrance, the addition of an outdoor deck to the clubhouse dining room and banquet facility.

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

of more than a dozen individuals, families and businesses. Each of those owners is between 30 and 50 years old. Bringing in a new generation of members has been a focus and played a part in the upgrades. To help entice young families, a new arcade-style kids room was added.

e club’s members were not assessed any fees to help pay for the upgrades, according to club general manager and operating partner Lee Sharkas, who spent 14 years as executive chef of the Andiamo Restaurant Group and 15 years as executive chef and general manager of Shenandoah Country Club in West Bloom eld Township.

e approach has worked. Since the ownership change, Wabeek Club has grown from 150 members to 380, Sharkas said. A golf membership costs $10,000 to enroll plus a $795 a month fee. A social member-

ship (no golf) is available for a $3,000 enrollment fee plus a $325 monthly charge.

Wabeek revenue gures were not disclosed.

Barbat told Crain’s that all of the moves his group have made are strategic.

“Everyone in this area in that 3050 age demographic knows the Wabeek Club has one of the best golf courses in Southeast Michigan,” he said. “ e challenge in trying to add members when nobody wanted to join a course where the only thing you could do is golf. A lot of the golf club clubhouses are old-school, lots of wood. Here we have white marble, clean furniture. at was a big component in attracting young families and giving the current members something to look forward to.”

Another thing Wabeek members can look forward to are upgrades to the golf course.

John Corvino (left) and Mark Lock in the living room of their home in Sherwood Forest | NICK MANES/CRAIN’S DETROIT

O cials with Bloom eld Township-based Wabeek Club have poured $10 million into renovations they hope will entice a new generation of prospective members to join. | WABEEK CLUB

The newer kitchen of the Sherwood Forest home. STYLISH DETROIT REAL ESTATE PHOTOGRAPHY

Sharkas

Joumana Kayrouz is watching more than just billboards

Joumana Kayrouz never liked looking at her billboards.

Only recently has the 58-year-old attorney started locking eyes with her image, which looms over metro Detroit’s main arteries, “always watching” and producing a mystique that drums up business for her Southeld-based rm.

“Who knows?” Kayrouz said of her hesitancy to embrace the billboards. “Maybe because I’m like a lot of women. We feel that we are frauds. I don’t know…”

Some of the insecurity stems from her unlikely rise to success in a male-dominated eld. Her newfound con dence comes from pausing to appreciate her journey from a Lebanese immigrant with broken English and one-time courtroom laughingstock to one of the most proli c personalities in the local law industry.

“I’ve come to a place where I’m very comfortable now, because behind that picture is a lot of blood, sweat and tears,” Kayrouz told Crain’s during a recent interview inside her palatial Bloom eld Hills home. “I didn’t inherit that rm from dad or from my uncle.”

Now, Kayrouz is confronting a new challenge. e size of her rm has been reduced by more than half since the COVID-19 pandemic began three years ago to around 30 employees and 10 lawyers. For years, the rm was burdened by unpro table departments and ine cient operations.

Kayrouz, a practicing attorney and self-described “brilliant rainmaker,” admits she knew nothing about running a business.

“Did you know that running a law rm is a business? ey didn’t teach us that in law school,” Kayrouz said while having her photo taken. “ ey don’t teach you numbers, they don’t teach you forecasting, they don’t teach you management. I don’t know what they teach you, but they don’t teach you any of that.”

Kayrouz looks back toward the camera and turns a warm smile into her stern, trademark gaze.

On any given day, Kayrouz said she is in her o ce 10-14 hours, poring over case les and meeting with

clients. But on this particular day, she is starring in a video shoot.

In the spirit of trying new things, Kayrouz hired a local advertising company to produce a new social media campaign. e plan is to roll out short video clips with geofencing and other highly targeted strategies.

She declined to name the ad agency, for competitive reasons.

“ ere are a couple of lawyers in town who watch me like a hawk, who try to copy and sabotage,” Kayrouz said.

e ad company’s owner packs up his equipment, and before heading out pledges his loyalty to Kayrouz.

“I appreciate that,” she replies. While Kayrouz has become the wallpaper of metro Detroit with just shy of 200 billboards, the attorney has no TV or digital presence — at least of her own doing.

she said. “I didn’t know then what I know now. You don’t need to be spending that kind of budget to grow your business.

Kayrouz is planning for a sub-$2 million ad spend this year, but that would change if she goes on TV, which she is considering, and if she takes her billboards beyond Michigan, which she might. e new local billboard campaign features her familiar done-up face, with the words “always watching” alongside.

“I felt it re ected who I am and who I am coming more into,” she said. “Aggressive, unapologetic, doesn’t care about ru ing feathers or what people think.”

wants to meet, she accommodates. When they call, they want to talk to Kayrouz personally and she obliges. Personal service is important to clients, especially those in the Middle Eastern community.

“It’s so easy as the lawyer of the rm to get sucked into it because you have a passion for it,” she said. “Spending 110 percent of the time tending to the les without paying attention to the operation at the o ce, that is a very, very big mistake.”

generates revenue by bringing leads to that rm.

Kayrouz said she will also branch out further by litigating a case or two in the near future, which she hasn’t done in 20 years. Most cases are settled out of court and other lawyers in her rm normally litigate the rest. Taking on more attorney duties runs counter to digging out of the daily grind, but at this stage in her career Kayrouz wants to soak up everything she’s been missing.

Her ever-present billboards have earned her a near cult-like following on social media, with clever memes shared from Twitter and Reddit to TikTok. Some have dubbed her the “Queen of Law,” and there was even a “Saint Joumana” candle being sold on Etsy and talks of Joumana billboards in the Metaverse.

Her new digital campaign aims to plug into that engagement, and Kayrouz said she is planning a way to “honor and thank” her fans but was not ready to share details.

“It has surprised me, and I am so humbled by these wonderful people, these very creative people who are constantly giving me free publicity and pushing me forward,” she said.

In 2014, with an ad budget over $4 million, Kayrouz secured her spot in local lore when she bought 750 bus wraps and 250 billboards from Outfront Media, marking what is believed to be the largest outdoor media ad campaign in Michigan history.

“Looking back, that was overkill,”

In the past, Kayrouz may have been more sensitive to criticism of how she portrays herself — and there’s been plenty of it — but the cutthroat world of personal injury law has hardened her. Plus, she has more important things to do, like revamping her business. Personal injury cases remain the bulk of the rm’s work. Kayrouz recently eliminated criminal defense, family law, worker’s compensation, Social Security and bankruptcy. Meanwhile, she is looking to grow her immigration law practice, which she started ve years ago and regrets not having from the start.

Most of her clients are Middle Eastern, an audience she caters to on her radio show, which airs Tuesdays and ursdays on CINA FM 102.3. She offers legal advice and answers questions on the show, which like her billboards helps generate leads.

Recently, Kayrouz bought an advertisement near the exit of the Ra c Hariri International Airport in Beirut. Soon, she said, she would like to advertise across the U.S. in a bid to re-create her metro Detroit magic and get a foothold in other markets.

“ ey have ignored maybe 50 names to put their trust in me,” Kayrouz said of her clients. “ at’s a big responsibility.”

Perhaps Kayrouz’s greatest attribute as an attorney has been her downfall as a businesswoman.

She spends nearly all of her time entrenched in les. When a client

She has tried to wean o case work to give herself a bird’s eye view of the business, but she needs help. Kayrouz, the sole owner of her rm, is on the hunt for the “perfect” managing partner and a chief nancial o cer. Her rm has relied on consultants for that work, but Kayrouz has realized that won’t cut it anymore.

At the same time, she is looking to add sta and attorneys, and she is reworking the pay structure by rewarding high performers and incentivizing more productivity. She said she is hiring for up to seven new lawyers but doesn’t expect the rm will ever be as big as it once was.

“Unless the systems are very tight and foolproof, it’s dangerous to grow very big because God forbid one error, one mistake, a bad review …” she said.

Kayrouz is looking at other ways of generating business, such as associating with larger, outside law rms.

She declined to name names, again for competitive reasons, but she’s working with at least one other law rm that has a breadth of specialties so she can assist clients who have needs beyond her rm’s scope.

“ ere is more to life than car accidents and immigration,” she said.

For example: plane crashes, helicopter crashes, Tesla car res, amusement park accidents, Camp Lejeune water contamination health issues, medical malpractice, general negligence, sexual abuse, plant explosions, police brutality and more.

“I get so many leads that have nothing to do with what we do here,” Kayrouz said. “I am able to help now even more people.”

She said the business arrangement with the other law rm allows her to co-counsel on certain cases and it

She will always remember one of her rst trips to court, about 22 years ago when a Wayne County judge, still in that position today, questioned whether she was a lawyer and demanded her P Number, which is used to identify lawyers.

“Normally, you don’t get asked questions like that. I felt extremely, extremely humiliated,” she said.

Kayrouz was a single mother of two daughters, fresh out of law school at Wayne State University. She had earned her undergraduate degree from Yale University and moved to metro Detroit with her then-husband. She was trying to make her way on her own when the judge cut her down.

“I remember looking at him and thinking: ‘I’ll make sure you will never forget my face,’” Kayrouz said.

If that judge drives to work, odds are he hasn’t.

While Kayrouz is embracing opportunities with other rms and looking for help managing her own, she said she does not intend to sell the rm or give up control, nor does she plan to retire soon.

Outside of learning the ins and outs of running a law rm, Kayrouz also dabbles in the restaurant business. She and her business partner Moni Ghosn own Bloom eld Hills patisserie Chez Pierre et Genevieve, named after two of her French bulldogs. In the works next door is Bistro Perrot — named after her third French bulldog — expected to open in the coming months.

Kayrouz no longer second-guesses her merits as a lawyer and expects that before long, she will have the same con dence running her rm.

“It’s all hard-earned,” she said. “Now I drive by my billboard, and I say, ‘You go girl.’”

Metro Detroit attorney Joumana Kayrouz in her home in Bloom eld Hills. | NIC ANTAYA/CRAIN’S DETROIT BUSINESS

KURT NAGL

“I’VE COME TO A PLACE WHERE I’M VERY COMFORTABLE NOW, BECAUSE BEHIND THAT PICTURE IS A LOT OF BLOOD, SWEAT AND TEARS.”

—Joumana Kayrouz

e rm’s goal appears to be claiming as much of the $56 billion personal injury law market as possible, and metro Detroit is a target. at has ratcheted up the pressure on local personal injury attorneys in one of the most lucrative and cutthroat segments of the industry.

While big billboards and ashy ads don’t win cases, they do win client leads, and leads are the lifeblood of personal injury law rms.

“Successful advertising here has to be authentic,” said Mark Bernstein, president and managing partner of e Sam Bernstein Law Firm PLLC. “ is town smells out bullshit really fast.”

Bernstein’s Farmington Hillsbased rm has among the largest advertising budgets in the local law industry, spending tens of millions of dollars each year and steadily increasing its presence to stay top of mind among accident victims.

Crosstown rival Mike Morse, whose relationship with the Bernstein rm was severed a decade ago, is upping his multi-million-dollar ad budget 20 percent this year, with more billboards and commercials with his mom on the way. He said he’s not worried about Morgan & Morgan.

“ ey’re coming into Michigan, trying to represent our clients with no presence here, no lawyers here,” Morse said. “ ey are a Florida rm trying to be the biggest in the country so that they can go get sold o for a billion dollars one day when people start buying big law rms. at’s their play.”

Morgan & Morgan could not be reached for comment for this report.

While many metro Detroiters have unwittingly memorized the names and phone numbers of local rms, their ramped-up ad budgets and one-upmanship by one another and out-of-towners is clearly making an impact.

“I think that we are in a new, much more competitive environment than we’ve ever experienced,” Bernstein said. is, of course, is great for the billboard business, which thrives when its clients compete.

“It’s a very ‘me, too’ business,” said Jodi Senese, CMO of New York Citybased Outfront Media Inc., one of the nation’s largest outdoor advertisers. “ ey see some big brand up and getting a lot of presence … and suddenly they’re kind of like, hey what are they doing? What do they know that I don’t know? And our phone rings.”

Outfront Media owns more than 60 percent of the outdoor ad market share in the Detroit area with 1,900 displays. ose consist of 900 billboards on freeways and major thoroughfares, 900 slightly smaller posters on surface streets and more than 70 digital billboards, plus bus wraps in Detroit and Ann Arbor.

A large chunk of the ad space inventory is sold to lawyers, said Mike Short, sales director for Outfront’s Detroit market.

“We’ve certainly seen an uptick in this category in the last couple of years,” Short said. “I think all of these

are very smart marketers. ey pay attention to what their competition is doing.”

Outfront’s uno cial Detroit poster child is Joumana Kayrouz, or the “billboard queen” as some have dubbed the South eld-based attorney.

Kayrouz made a splash in 2014 when she spent more than $4 million on advertising, buying 750 bus wraps and 250 billboards from Outfront, marking what is believed to be the largest outdoor media ad campaign in Michigan history.

Kayrouz has since dialed back her ad budget and refreshed her campaign, with new billboards featuring her familiar, stern pose and the words, “Always Watching,” an idea hatched by Outfront, which also does some of the creative work for Bernstein, Short said.

At the same time, Kayrouz is considering TV commercials and jumping into digital advertising for the rst time. She said she also recently began associating with outside law rms to grow business.

“I get so many leads that have nothing to do with what we do here,” Kayrouz said. “I am able to help now even more people.”

She declined to name the law rms or o er further details, for competitive reasons.

“ ere are a couple of lawyers in town who watch me like a hawk, who try to copy and sabotage,” Kayrouz said.

Kayrouz is an outlier in that her advertising has been almost exclusively on billboards. Despite the rise of digital, and TV continuing to dominate the ad spends of Bernstein, Morse and other competitors, billboards remain a xture in most of their budgets.

Maurice Davis, founder and managing partner of Detroit-based Davis Law Group PLLC, said he gured out early in his career that advertising would be key to his success.

“With personal injury, it’s all about

visibility,” Davis said.

e attorney started his rm in 2012. Inspired by the larger-than-life ads of other attorneys, DIAL DAVIS was born. e rm has about 10 billboards in metro Detroit and does TV and digital advertising, spending upward of $800,000 annually. Its budget has steadily increased in line with competitors.

“Competition is sti ,” Davis said. “It’s all about having that name recognition, that phone number that someone can easily remember if they’re involved in an accident.”

Senese said passersby often develop a sort of attachment to billboards, making them a strong marketing tool.

“It’s not just law rm advertising. We’re creating a brand for law rms,” she said. “People become hyper aware not just of the medium but of advertisers in their exact vertical.”

One of the most recognizable is Morse’s towering “vertacular” board at the busy intersection of Eight Mile Road and Woodward Avenue, which is believed to be the tallest in the market at 60 feet tall by 32 feet wide with a traditional 14-by-48-foot billboard underneath.

Morse said he has a deal with Out-

Billboard lawyers

Metro Detroiters are inundated with ads for personal injury law rms on billboards, the sides of buses and more. Here are some of the most frequently seen and their slogans:

The Law O ces of Joumana Kayrouz:

Always watching

Mike Morse Law Firm: 855-MIKE-WINS

The Sam Bernstein Law Firm: The Bernstein Advantage

Carl Collins III: 855-CAR-HIT-YOU

The Cochran Firm: Wronged? (313) The Firm

Davis Injury Lawyers: Injured? (888)

Dial Davis

front to pay for it permanently so it’s not taken by someone else.

Law rm advertising has come a long way since it was legalized. Lawyers were barred from advertising until 1977, when the U.S. Supreme Court essentially struck down the prohibition in Bates v. State Bar of Arizona. at opened the oodgates in Detroit, with attorneys including Bocko and Zamler PC and Larry Korn leading

the way. Sam Bernstein, patriarch of the Bernstein law rm, was also among the rst to start advertising. e Bernstein rm started advertising outdoors about 25 years ago and has 30-60 billboards in the market at any given time, Mark Bernstein said. Unlike TV and digital advertising, it is tougher to tell how well billboards are working, but he won’t risk getting rid of them.

“We try to be much more gut than money-balling in our advertising because it still remains more art than science,” he said.

Kayrouz has fewer than 200 billboards in metro Detroit and said she is aiming to keep her ad budget below $2 million this year, though that could increase. Morse has about 100 billboards and an ad budget over $2 million. e attorneys declined to disclose speci c budget gures.

Morse, who used to rely on auto crash referrals from the Bernstein rm before going it alone, said he isn’t hawkish when it comes to analyzing the competition, Bernstein or Kayrouz.

“I know that she must admire my stu because she put up an o ce half a mile down with the same exact font of a sign and colors of a sign,” Morse said.

Kayrouz said that while she did draw inspiration from Morse’s sign, the copycatting goes both ways.

“I put billboards, he put billboards,” Kayrouz said. “I get a toll-free number, he gets a toll-free number. I start putting safety tip messages on my billboards. All of a sudden, he starts doing exactly the same in his billboards ...”

For all the local law rm drama, the more formidable threat may be the outsider. Morgan & Morgan reportedly wields a yearly ad budget in the hundreds of millions of dollars and appears to be making inroads locally, or at least has had more staying power than other out-of-market rms that have come and gone.

“I don’t think they will ever be a dominant player in Michigan because they’re not Michiganders,” Morse said. “No matter how much they spend, no matter how many billboards they put up.”

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

A billboard for Joumana Kayrouz in Detroit. | PHOTOS BY NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

A billboard for Mike Morse in Ferndale.

Bernstein Davis

Morse

Approvals pending

Construction of the plant in West Michigan is on hold until a host of permits are approved, including from the Michigan Department of Environment, Great Lakes and Energy, for wetland mitigation and moving land.

“We’ve had long conversations with EGLE and we have a tentative agreement for the site layout based on minimizing any wetland impact,” elen said.

e company is also still awaiting approval of $715 million in state incentives. elen said he expects “ nal discussions” to take place next week.

Additionally, the project hinges on the ability to bring power and water to the newly con gured footprint. elen said he is in discussions with Consumers Energy Co. about securing utilities on the site.

Water hookup remains a hurdle, as the original plan relied on buying 115 acres from Big Rapids Township with a water tower and a pair of 12-inch, ready-to-use wells. Some in the township expressed concerns that the plant would suck up all of its water, but elen said that is not the case.

e executive said he believes he can eventually allay worries.

“I do owe them some more conversations about some of their concerns,” he said. “I think their concerns about water use might be misplaced.”

Construction, operation

If the plan moves forward, construction could start in the second or third quarter of this year, with a build duration of roughly two years.

“We wish to start quickly. It’s all dependent on the state and local governments,” he said. “But we do not have a nal obligation from either side yet.”

elen, who worked at Bosch for more than 20 years before joining Gotion, would serve as the plant manager. He recently moved from Oakland County to Mecosta County.

e plant would ultimately be overseen by parent company Gotion HighTech Co. Ltd, whose C-suite and board members are based mostly in China.

elen said he is in charge of hiring managing directors at the plant, which he hopes to complete by the end of the year. He said the goal is to have primarily American workers, with an emphasis on local recruiting, but some key positions will require multilingual speakers to coordinate with sites in China, Germany and India.

He said it is not known whether workers at the factory would be represented by a union.

Most of the product from the factory will be supplied to Gotion plants that make nal batteries, and the rest would be supplied externally, elen said. e company’s battery plants are in China, but it recently built its rst foreign plant in Germany.

elen did not detail the company’s overall U.S. investment plans or say if Michigan could be in play for future investments.

“We are looking to be an international player, bringing the expertise that’s already been de ned in the China market to the rest of the markets,” he said. “A lot of wonderful work has gone into many patents, not just for product but also process. We plan to bring that expertise and high-quality workmanship to the United States.”

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

‘A way to make money’

On earnings calls throughout last year, Rocket Companies CEO Jay Farner said the company’s strategy would be to maximize pro tability over volume.

Rival UWM had something of a di erent approach.

Starting last summer, UWM launched its so-called “Game On” pricing initiative, dropping mortgage lending rates by as much as 1 percent, or 100 basis points. CEO Mat Ishbia has described the maneuver as an investment in growing the company’s market share and the broader network of brokers.

To that end, it seems to have paid o .

UWM’s earnings report last week said it had achieved 54 percent market share in the wholesale channel and had 5.8 percent market share in the overall industry, just two-tenths of a percent behind leader Rocket Mortgage, according to data from Inside Mortgage Finance.

Cecala, the Inside Mortgage Finance executive, described the strategy like this: UWM cut pricing, kept up pro tability by selling o mortgage servicing rights (essentially the administrative tasks associated with a mortgage once it’s been closed) and gained market share in doing so.

“ at’s a way to make money,” Cecala told Crain’s last month. “But one of the challenges all lenders face now is, how do you make money in a declining market? One of the advantages of a rising interest rate environment is that servicing (loans) is highly valued.”

erefore, the UWM maneuver doesn’t make for “a long-term strategy,” Cecala added. “So far they’ve made it work.”

While the mortgage lender reported a net loss of $62.5 million in the fourth quarter due to a decline in the fair value of MSRs — which typically rise and fall with changes in interest rates — sales of servicing rights last year generated about $1.3 billion in net cash proceeds for UWM.

roughout 2023, the company will be “opportunistic” when it comes to decisions around selling MSRs or keeping them on the books, Ishbia said on Wednesday’s earnings call.

“We’re in exactly the position we want to be,” Ishbia said of UWM’s servicing portfolio. “Our MSR book is strong and produces a lot of liquidity and the things that we want to sell, we can sell.”

With regard to the cut-rate pricing the company o ered in the back half of last year, Ishbia indicated that could be in the rearview mirror.

“Our pricing is still extremely competitive,” Ishbia said. “But we aren’t going to be at that investment of 50 basis point margins as you saw for two quarters. I don’t expect that to continue. Unless I decide to do it again in the future.”

‘A challenging year’

Rocket Companies CEO Farner summed up last year like this on an earnings call Monday:

“2022 was a challenging year for the housing and mortgage industry, and one de ned by rapid change,” he said, pointing to a 400 basis point rise in mortgage interest rates over about 10 months.

“ is represents the largest and steepest rise in roughly four decades. With volatility and increased cost of nancing, demand for rate and term re nance transactions shrank signi cantly, while housing a ordability and consumer concerns about a looming recession weighed heavily on the home purchase market.”

As such, the two metro Detroit mortgage companies — the largest in the industry — took diverging paths to weather the storm, and with varying degrees of success.

At Rocket, the company’s “bread and butter” is selling mortgages directly to consumers. However, Rocket also operates in the wholesale space competing directly with UWM, though on a smaller scale.

By last summer, when mortgage rates had climbed to around 5 percent and going higher, Rocket’s pro ts started plummeting. At that time, talk turned to diversication. e company needed something more than mortgages, and that’s still the case today.

Rocket’s funnel

One of the primary vehicles for achieving that diversi cation, executives say, is Rocket Money. e personal nance app, previously called Truebill and which Rocket acquired for $1.275 billion in late 2021, works

$850 toward my closing fees with Rocket. I’ve got a verified approval, and I’m working with a preferred Rocket agent,’” Farner said. “They’re sitting there on a Saturday. Now the only call or text or email comes directly to us, not to another mortgage company. And so I imagine as we get into the spring and summer we’re going to see the continued increase in conversion.”

Despite all the optimistic talk by Rocket, which reported a loss of nearly $500 million in the fourth quarter, analysts are taking a view of “I’ll believe it when I see it.” And they mostly don’t see it happening this year.

“Times are tough for mortgage lenders — borrowers face steep rising mortgage rates that suppress renancings, while a depressed housing market limits originations,” analyst Kenneth Leon with CFRA Research wrote last week in an investor note. “We think RKT does not reach pro tability ... until 2024.”

Even if the larger diversi cation play by Rocket takes time to come to fruition, Farner — who is retiring from the company June 1 at age 49 after nearly 30 years with the Dan Gilbert-founded company — said he’s counting on the broader tumult in the industry to play in the company’s favor.

“Bank after bank has pulled back from the mortgage space,” Farner told analysts. “So there is an opportunity to actually grow market share in the mortgage space and (home) purchase (mortgages) in particular. But you’ve got to bring down the cost to acquire the client, you’ve got to increase conversion rate.”

Jay McCanless, an analyst with Wedbush, agrees.

with consumers to help them manage subscriptions, track spending and build budgets.

For the mortgage lender, the true value of Rocket Money lies in its ability to bring in new potential clients — particularly those who might soon be interested in a mortgage loan, according to Rocket CFO Brian Brown. e app allows the company to acquire clients for less than $100, Brown said, whereas traditional client acquisition is often upward of $1,000.

“Overall, we believe the ability to provide these clients with a fully integrated experience early in their homeownership journey and throughout their lifetime as homeowners will be a game changer in our industry,” Brown told analysts.

Still, Rocket is also eyeing its other corporate arms in the real estate space as mechanisms for future growth.

Rocket Homes, the company’s real estate listing portal and its relationship with preferred real estate agents, will also serve as another mechanism through which Rocket executives see future growth. Couple that with the company’s nascent rewards program allowing consumers to earn money that can go toward future transactions with Rocket, and Farner says it’s a recipe for success.

“So now our clients look and say, ‘Wait a second, I’ve already built

“2023 is going to be a tough year for mortgage, which we believe will weed out many of the weaker players in the space,” McCanless wrote. “(Rocket) and the other members of the big three (United Wholesale and Westlake Village, Calif.-based PennyMac Financial) should continue to grow share.”

‘Good business decisions’

As both companies — which collectively employ about 24,500 people, mostly in metro Detroit — look to 2023, they also do so against the backdrop of a seemingly never-ending feud.

Rocket, early last month, announced its “Bully Shield” initiative, aimed at what executives there say will remove handcu s of brokers who signed an agreement with UWM that they would not do business with the crosstown rival Rocket. Executives say Rocket will cover the legal expenses of any broker who wishes to defy the ultimatum by Ishbia at UWM.

e instance is just one of many in a long-running feud.

Cecala at Inside Mortgage Finance notes that the most recent shot across the bow by Rocket is in all likelihood a business strategy.

“Both of them, despite their rivalry and pettiness and everything else, what we’ve seen play out in their mortgage operations are based on actual economics and good business decisions,” Cecala said. “(Rocket) is doing (Bully Shield) because they need to nd a way to increase their mortgage originations and in the current market the easiest way to do that is to try to pick up more broker business.”

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

United Wholesale Mortgage, top, and Rocket Companies Inc. have taken di erent paths to weather a di cult year for mortgage lenders. | CRAIN’S DETROIT BUSINESS FILE PHOTOS

CRAIN’S DETROIT BUSINESS GRAPHIC

The bottom lines of Rocket Companies Inc., parent of Rocket Mortgage, and United Wholesale Mortgage are taking a hit as the residential real estate market cools.

Farner

Ishbia

talent possible, which has allowed us to do more complicated jobs and be a part of more projects,” the 65-yearold businessman told Crain’s.

Earning a seat at the table and becoming a respected voice in construction has been a lot of work in and of itself, according to Brinker Sr. As a Black-owned business, the company’s quali cations and abilities have been questioned over its 34 years, according to company President and CEO Larry Brinker Jr. Brinker Sr. said he’s lost out on jobs at various points because developers didn’t think a Black-owned business could handle the load.

Lack of opportunity could play into that skepticism exhibited by previous potential clients. According to the U.S. Census Bureau, only 3 percent of U.S. businesses as of 2020 were classi ed as Black-owned.

Skepticism as a motivator

Brinker has grown into a business that saw revenue of $203 million last year and projects $285 million in 2023. It operates out of a 41,000-squarefoot, three-story space at 3633 Michigan Ave., into which the company moved in the early 2000s after growing out of a 7,000-square-foot space at 815 W. Grand Blvd.

It’s worked on projects with budgets of as much as $200 million. At one point, though, the company was passed over for much smaller jobs.

e 43-year-old Brinker Jr., who in 2014 took over leadership of the business as his father moved to chair the company board, recalls being repulsed by one particular job o er.

“We’d shown them all the projects we had done to that point,” Brinker Jr. said without disclosing the o ending party. “After we’re done, the guy says he doesn’t think we’re quali ed to build a $2 million corn shell, which is just four walls and the roof, but we could do some other smaller jobs. We walked out of that meeting just purely disgusted. at was probably the best thing that ever happened. at job ended up a huge failure.”

Scenarios like that still happen to this day, according to Brinker Jr., but they are fewer and farther in between.

e Brinker CEO, a 2015 Crain’s 40 Under 40 honoree, took an interesting approach he felt was necessary to help the company.

“A lot of times, I was the only person of color in the room doing activities that I may not have cared to do. Skeet shooting and di erent things,” Brinker Jr. said. “But I was doing it so I could build my network and build genuine relationships where people could see me for who I was and not what I was.”

Brinker Sr. believes his company at times being pigeonholed as a minority entity limits what potential clients believe you’re quali ed to do and led to missing out on jobs he believes were a perfect t for the company.

Brinker Jr., though, said being a minority-owned company can have its advantages.

Developers in general establish or are mandated to meet diversity goals and implement outreach to minority-owned companies to open bid opportunities. Money is allocated toward meeting those goals, Brinker Jr. said.

“Our credibility and experience, along with our minority-owned business status leads to instances where companies come straight to us already knowing they want us as a partner,” he said. “But the volume and type of work often designated by cor-

porations for meeting their diversity spending isn’t always equivalent to the volume of bids solicited by and awarded to non-minority companies.”

One client who speaks very highly of the work Brinker does is Amy Robinson, the vice president, CFO and chief administrative o cer for the Kresge Foundation.

Brinker was the general contractor for the $1.4 million expansion of Kresge’s Midtown Detroit o ce at

3939 Woodward Ave. and Robinson credited Brinker’s attention to detail.

“I’ve had the pleasure of partnering

with Larry Brinker Jr. on several projects over the past 10 years. I can say without question that he is the most conscientious contract manager that I have engaged with during my 30-plus years as a nance professional,” she said in a statement. “His commitment to quality and service is unrivaled. And (Brinker Jr.’s) values of integrity, service, humility, kindness and deep commitment to the community very much align with my personal values and the work of my organization.”

Brinker Sr., like his son a previous Crain’s 40 Under 40 honoree, in 1994,

appreciates comments like those from the Kresge Foundation but said others’ unfounded skepticism has fueled him over the years.

“As time went on, because of the reputation we were building in the market, we were looked at as an honest out t — hardworking people who delivered quality projects,” he said. “ e big thing was companies started to see we could help their bottom line. ey started to see they needed to work with Brinker.”

Sustained growth

e same could be said for sta .

Since 2010, Brinker has seen its workforce grow by more than 400 percent, to nearly 500 employees. e COVID-19 pandemic didn’t slow that growth. Brinker didn’t lay o any sta during the pandemic, but the company, like so many others, saw scheduled jobs pushed back and canceled. It also saw prices for materials increase by 30 percent.

e early stages of the pandemic were especially rough for Brinker Group. Brinker Jr. was one of the rst 65 Michigan residents to contract COVID-19. He then unknowingly passed it on to his father.

“I was in the hospital a couple of days. My dad was out a while,” Brink-

er Jr. said. “In a way, it was good for the company because it forced us to discuss succession planning. We developed a plan in case something happened to myself or my father.”

Brinker took care of sta , too. Its ve companies received Paycheck Protection Program loans totaling about $5 million. All of the funds went toward keeping sta on board, according to Brinker Jr. e loans have been forgiven.

“Taking care of our people here is always priority one,” Brinker Jr. said. “ ey’re the reason we’ve been able to grow and we want that to continue.”

Planning for the future

At 43, Brinker Jr. plans to be around for a while to lead the company. But that wasn’t always the case.

He graduated from the University of Michigan in 2001 with a degree in civil and environmental engineering, with a concentration in construction management. He did his own thing after college, including owning Ti any’s restaurant and nightclub in Greektown, which sat in the spot that is now home to Harbor House. Brinker Jr. also ran a music production company.

In late 2004, he decided it was time to join the family business. Before taking over as president and CEO, the younger Brinker worked as a project engineer, superintendent, project manager and vice president.

“I’ve always wanted to build on the legacy of my father, but I’ve also wanted to have the respect of my peers in the industry because of my own skill set and who I am,” Brinker Jr. said. “Obviously it’s a great stepping stone, but that opportunity is an opportunity. You still have to come in and work.”

Brinker Sr. admires his son’s work ethic.

“He jumped in with both feet in, learned the business inside and out. He didn’t run from any heavy lifting,” he said.

“I recognized, too, that the business was changing. When I got in, you could do business with a handshake, bid on projects on the back of a napkin. It’s evolved. With (Brinker Jr.’s) background, and his ability to relate to the age group in construction now, he really took to it.”

Building a new market

Brinker Jr. will also oversee expansion that will take the company to North Carolina. Plans call for a main o ce to be set up in Raleigh, and satellite o ces in Charlotte and Greensboro. Brinker Jr. did not disclose thenancial investment into the move but said the North Carolina operation could be up and running later this year. Some of the Detroit sta will be sent to the new locations while Brinker hires for the new o ces.

“It’s going to take some time to build up a client base, but we want to get into the area to let people know we’re there,” Brinker Jr. said.

e father and son are excited about the future of the company — a future where the Brinker’s skill set and capacity for work won’t be questioned.

“We have the company structured in such a way that it can go on without me around,” Brinker Sr. said. “A lot of times, minority-owned businesses fall apart once that rst generation moves on. Succession planning hasn’t always been at the forefront of our thinking. Our future here is secure.”

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

A Christman-Brinker sign sits next to an under construction Michigan Central Depot. | HERNZ LAGUERRE JR. FOR CRAIN’S DETROIT BUSINESS

Larry Brinker Jr., left, and Larry Brinker Sr. have led Brinker Group for the last 34 years, building a strong reputation for the construction group.

Brinker Group second-generation president and CEO Larry Brinker Jr. looks over a project at District Detroit. BRINKER GROUP

Diana Sieger on dispensing with ‘donor knows best’ philanthropy

GRAND RAPIDS — At the beginning of her 35 years leading the Grand Rapids Community Foundation, Diana Sieger was often the only woman in the room. But during her tenure, the foundation sought out diverse voices to shape its philanthropic e orts, distancing itself from the “donor knows best” model common in many nonpro t circles.

Founded in 1922, GRCF is Michigan’s oldest community foundation. It provides grants to support nonpro ts, scholarships, and other forms of outreach, largely intended to ght racial, social and economic barriers to prosperity. Some of its committees and initiatives include the Black Legacy Fund, Our LGBTQ Fund, Somos Comunidad Fund, the Challenge Scholars Dream Fund, the Youth Grant Committee and the 100 New Philanthropists.Since joining GRCF in 1987, Sieger, who plans to retire this fall, has helped the organization grow its nancial assets from $38 million to $387 million and its sta from three to more than 30 people. The following conversation has been condensed and edited for clarity.

 What are the some of the things you’ve been re ecting on as you prepare to retire?

I don’t think I have ever been more optimistic about the future of this community than I am now, in large part because of the amazing, younger leadership that has emerged. My era was the civil rights era and women’s rights. In the last 10 years, with all of the things that have gone on in our community, in this country and around the world, I am really heartened by the fact that the voices of the people are not letting up. I don’t see any of the current activism settling down; I see it really continuing, and to me, it’s such a thrill to see that. It’s like, watch out, folks, the status quo is not okay. I see it in my sta team, I see it in the leadership on committees and various programs that I’m involved with, and in business leaders, and it makes me really proud of the future.

 What type of activism are you thinking of, speci cally?

Primarily of areas that involve racial equity, economic equity and social justice. We’ve been on a trajectory for years — our North Star was created back about six, seven years ago as a directional piece for us — and in part, due to the isolation of COVID in the beginning days and all that, we have strengthened our voice as it relates to equity and not just accepting things as they are. (We’ve) been casting that direction for this foundation and nding people to serve on our boards, committees and sta who really believe that, as well.

 How has the foundation’s approach to philanthropy evolved

RUMBLINGS

over the past 35 years?

Back in 2000, I was lucky enough to be selected to be (a fellow for the Transatlantic Community Foundation Exchange Program, and was paired with a foundation in Northern Italy).

What I learned from being immersed in another culture is the fact that there is philanthropy in existence everywhere, and it may not be like the American form of philanthropy. It may not always be nancial; it may be lending a hand, it may be sharing commodities, such as a home or food. I would say that the focus of philanthropy now, particularly for this foundation, is really giving heed to di erent ideas and di erent cultures that may not have been listened to previously and standing alongside people, versus saying, “I know how to approach this project.” What that means is, the answers aren’t always from my head. It’s listening to the experiences that people have had — their experiences with racism, their experiences with nancial support, their experiences with housing patterns — and really just saying, “This is what we think we can create,” and having the wherewithal to be able to say, “Let’s create that together." The biggest lesson for most funders is that we don’t know it all, and so philanthropy is, I think, recalibrating, in a good way. … We’re really working hand in hand with our donors by saying... ‘This is what we’re doing, you might be interested in doing it, as well.”

 Tell me about the Youth Grant Committee. How does it work?

Any student can apply to serve on our Youth Grant Committee. In general, there’s about 33 young people ranging from ninth grade to 12th grade, and

BY | RACHEL WATSON

they’re the ones who choose (their fund’s grant recipients). They do needs assessments, they do research. It’s just basically saying, “Here’s the template. You gure out how you want to proceed.” They’re on re, and they’ve been in existence now for 30 years. Many of the alums have continued to do work in Diana Sieger will be retiring as president of the Grand Rapids Community Foundation this fall.

 What is your hope for the Grand Rapids Community Foundation after you leave? Opening the doors further is really what I’m hopeful for. A focus these days is the parlance of “systems change.” But what does that mean? What it means is there are some

Marijuana top cop slams vendor for ‘clerical error’

AN ERROR THIS WEEK by a private “seed-to-sale” tracking service vendor for Michigan’s marijuana industry created pandemonium across the state and has the state’s marijuana agency rethinking its options.

METRC, a Florida vendor that provides tracking software that is monitored by regulators, noti ed the Michigan Cannabis Regulatory Agency on Monday that 85 percent of the system’s 3,178 active users in the state were more than 30 days past due on their $40 monthly service fee. METRC was going to revoke access to those users on March 1, e ectively shutting down marijuana sales in the state. However, it turns out METRC made what it told Crain’s was a “clerical error.” e actual number of METRC users in Michigan who were

more than three months past due on their fees was only 11 percent, which was revealed to Crain’s by METRC and CRA on Wednesday evening.

“ e fact of the matter is we had multiple datasets from METRC that were apparently inaccurate,” Brian Hanna, executive director of the CRA, told Crain’s. “For us, this is

concerning. e industry works very hard each and every day to use the system correctly. e industry is going through hardships right now with the prices being so low, and they don’t need inaccurate data and poor communication from METRC.”

Any movement — from cultivator to processor to dispensary to consumer — is tracked in the METRC system. Sales are illegal without being captured in METRC, under state regulations.

“ e $40 monthly fee is not new,” a spokesperson for METRC said in an email Wednesday night. “ is is a cost that has been in existence since the Metrc system was implemented in Michigan in 2018. Most licensees are in good standing and regularly pay the $40 fee.”

e company did not respond to additional requests for comment ursday.

Hanna said many companies have reported to him that METRC even overcharged many clients, along with not registering their payments.

To avoid a near total shutdown of the state’s industry, Hanna met virtually with representatives from METRC to negotiate a grace period until March 27 for all users to straighten out who and who doesn’t owe METRC fees.

“METRC needs to get their invoicing system gured out,” Hanna said. “With 3,178 active users at $40 a month, they are making $1.5 million in the state annually. ey have the cash to do a better job.”

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