THE CONVERSATION
2024 NFL DRAFT: Hosting in Detroit comes with opportunities, costs. PAGE 3
Jim Holcomb, a policy guy by nature, takes the reins at Michigan Chamber. PAGE 18 CRAINSDETROIT.COM I APRIL 4, 2022
Waiting on new rules Black business owners push Detroit to move on recreational cannabis BY ANNALISE FRANK
Dylan Johnson of Livonia (from left), Zack Jeziorski of Milford and Jesus Fuentes of Melvindale build an installation at the Detroit Union Carpenters and Millwrights Skilled Training Center in Detroit. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS
SKILLED LABOR
CRUNCH
Contractors left scrambling to meet demand
“IT TAKES LONGER TODAY THAN IT DID 20 YEARS AGO TO PERFORM THE EXACT SAME TASK. ONE (REASON) IS THE NUMBER OF PEOPLE AVAILABLE, BUT (ANOTHER) IS THE PRODUCTIVITY OF THE MEN AND WOMEN ACTUALLY WORKING, DUE TO LACK OF YEARS OF EXPERIENCE.”
BY KURT NAGL
There are not enough hands to keep up with the demand for development. That was true before the COVID-19 pandemic halted construction in metro Detroit and nationwide two years ago. It’s especially true now that development is just about back to full tilt in a tight labor market teeming with alternatives to manual labor. The consequence is less skill on job sites, according to metro Detroit’s largest general contractors. Factor in a supply chain crunch and inflation sending materials costs through the roof, and foremen are left scrambling to meet demand while explaining to customers why their projects are going to cost more and take longer to complete than anticipated. See LABOR on Page 16
— Todd Sachse, CEO of Detroit-based Sachse Construction LLC
NEWSPAPER
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Detroiters voted nearly 70 percent in favor of allowing recreational cannabis in 2018, but the biggest city in Michigan is still not benefiting from the state’s $1.3 billion annual adult-use industry. A tight-knit group of business owners who have long histories in Detroit and cannabis are among those who want that to change. And it may — soon. After years of delay, Detroit City Council is considering a revised ordinance to allow recreational cannabis sales in the city limits. Some members of the Black Cannabis Licensed Business Owners Association of Detroit have become outspoken in recent weeks at City Council meetings, advocating for the ordinance so they can apply to transition from medical to recreational sales. They have also been advocating for equity in the industry. “We’re in the medical (marijuana) industry. It’s a dying market,” said association organizer Kimber-
ly Scott, co-owner and founder of Chronic City on East McNichols Road near Van Dyke Avenue. With the proliferation of recreational cannabis, which is simpler for customers to obtain, medical sales are dwindling and there are fewer people renewing their medical cards. Detroit is behind — recreational sales in other communities around the state began in December 2019 — which has and will hurt its ability to compete. The medical marijuana business, with a winding history going back to its initial approval in 2008, has waned over the last couple of years while recreational dispensaries have opened across the state. With a barrage of adult-use cannabis shops popping up in nearby suburban cities, businesses in Detroit are “kind of at a breaking point” where they need recreational to survive, said former NBA player Al Harrington, who opened Viola Brands cannabis in southwest Detroit. See CANNABIS on Page 16
Jay Snipes (left) and her husband Mark Snipes own West Coast Meds in Detroit. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS
FINANCE
Crypto moves to the mainstream Cryptocurrency assets are moving out of basements and into the portfolio of everyday investors. PAGE 8
4/1/2022 2:08:02 PM
NEED TO KNOW
MALL MOVES
THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` MICHIGAN TO CUT COVID REPORTING TO ONCE A WEEK THE NEWS: The state plans to begin reporting Michigan's COVID-19 data just once per week as the numbers of cases and deaths continue to decline. Michigan's online COVID-19 dashboard will be updated on Wednesdays, according to the Department of Health and Human Services. Previously, data has been posted on Mondays, Wednesdays and Fridays.. WHY IT MATTERS: Case rates have declined sharply in recent weeks, and the change is also intended to smooth out daily inconsistencies in how the numbers are reported.
` DETROIT HOME PRICES RISE 14 PERCENT FROM JAN. 2021 THE NEWS: Double-digit growth in home prices remains the norm, according to a national index that tracks home sales, as the metro Detroit housing market continues to post strong increases. Detroit prices were up 14 percent in January from the prior year according to the S&P Case-Shiller Home Price Index, which tracks sales prices for homes sold in a month as compared to their last sale. A 20-city index showed a 19.1 percent year-over-year increase for January. WHY IT MATTERS: Among other Midwest
cities tracked by the index — Chicago, Cleveland and Minneapolis — Detroit had the highest year-over-year increase.
` MORTGAGE LENDING RISES IN DETROIT THE NEWS: Mortgage lending has increased in the city of Detroit, according to a recent report, and applicants are less likely to be rejected for loans than they were a decade ago. But discrepancies still exist between Black and white borrowers, including the rate at which they're approved for mortgages. There has been a nearly 10-fold increase in mortgage lending in the city since 2012. That year, just 220 mortgages were issued, while in 2020 there were 2,111. Detroit's lending activity is still far below what would be considered normal activity for a city its size, according to the study by Detroit Future City.
Stellantis NV late last week for "objectionable paint/solvent" odors at Detroit Assembly Complex on Mack Avenue. The violation issued Thursday was the result of a Michigan Department of Environment, Great Lakes and Energy investigator documenting odors of "moderate intensity" in neighborhoods near the Detroit plant, according to a copy of the violation notice. WHY IT MATTERS: It is the latest in a growing list of air quality violations for the automaker, which said Monday it is addressing the concerns "with urgency."
` GM, FORD TO IDLE 2 MICHIGAN PLANTS THIS WEEK
` STELLANTIS PLANT HIT WITH ANOTHER AIR-QUALITY VIOLATION
THE NEWS: Two local automakers will idle production at two Michigan plants this week because of parts shortages. General Motors Co. will cancel production at Lansing Grand River Assembly next week due to a temporary parts shortage, spokesman Dan Flores told Automotive News. Flores did not disclose the nature of the parts shortage, but he said it was not related to microchips. Ford Motor Co. on Thursday said it would halt production at its Flat Rock Assembly Plant next week, where it builds the Mustang, due to the global semiconductor shortage, according to Reuters.
THE NEWS: Michigan environmental regulators issued a violation notice to
WHY IT MATTERS: Parts shortages are continuing to bedevil automakers.
WHY IT MATTERS: Just more than 47 percent of Detroit residents live in owner-occupied homes, according to Census data. Before the foreclosure crisis, Detroit was known as a city where homeownership was prevalent, particularly among Black residents.
Oakland Mall sold, massive remodeling planned ` Oakland Mall in Troy has a new owner. Mario Kiezi, a real estate investor and developer based in Troy, declined to disclose the purchase price of the mall. There were no brokerage firms on the deal, he said. "This project will be different than anything I have ever done before," Kiezi said Monday morning in advance of the formal announcement. "I expect to rebrand the mall. We consider this to be an anti-mall project. We want to add art. We wanted to be community engaged. We are not looking to be intimidating with price points." Kiezi said he expects to request a planned unit development for the mall, which would allow him to fold several new uses into the site. He also described a social media campaign on TikTok where community engagement will be sought "on the simplest or most complex decisions" regarding the mall's future, which he described as one that involves a "massive remodeling." At least two other malls, Fairlane Town Center in Dearborn and Partridge Creek in Clinton Township, are also expected to be sold soon. KIRK PINHO/CRAIN’S DETROIT BUSINESS
PREMIUM LOCATION CENTRALLY LOCATED IN TROY, MICHIGAN
2 | CRAIN’S DETROIT BUSINESS | APRIL 4, 2022
248.644.7600 | KOJAIAN.COM
Organizers expect the economic impact of the 2024 NFL Draft in Detroit to meet or exceed that of the draft in Nashville in 2019, which saw 600,000 visitors. | EDWARD MAUER FOR CRAIN’S DETROIT BUSINESS
TOP PICK IS ... DETROIT Hosting 2024 NFL Draft in Detroit comes with opportunities, costs | BY KURT NAGL
THE 2024 NFL DRAFT is expected to bring a million people to downtown Detroit along with infrastructure improvements and an economic boost that will benefit the city during the weeklong festivities and beyond, according to organizers. With the rush of visitors for professional football’s second biggest event will come hundreds of millions of dollars in economic activity and a spotlight on the city set for a record year of hosting events, said Eric Larson, CEO of Downtown Detroit Partnership. “I would not be surprised if you see a cadence of activities throughout 2024 that generates all-time records in terms of economic impact and visitors,”
Larson said. The NFL’s announcement this week that Detroit beat out Green Bay and Washington, D.C., for arguably the league’s most lucrative event was the culmination of a five-year effort by state and city officials. Larson said he would expect Draft week in Detroit to meet or exceed the success of Nashville, which hosted the event in 2019 and generated $224 million in economic impact and 600,000 visitors, according to the state. Organizers anticipate “hundreds of thousands” of visitors in Detroit during the three-day Draft, expected to be at the end of April, and a total of 1 mil-
lion people throughout the week of events being planned, Larson said. Fireworks, live music and activations throughout Hart Plaza and Campus Martius are being planned, as well as activity at Ford Field, Huntington Place and Little Caesars Arena. Neither a budget nor economic impact study has been finalized for Detroit. “We should do very, very well, if not, I believe, better than Nashville, even though some of those cities are viewed as destination, convention, entertainment towns,” Larson said. “I think Detroit will do every bit as well as those towns.”
“WE’VE GOT THE STAMP OF APPROVAL FROM THE NFL, AND IT DOESN’T GET MUCH BETTER THAN THAT.” — Dave Beachnau, Visit Detroit
See NFL DRAFT on Page 15
'Talent is everywhere:' Techstars accelerator returns Monica Wheat to head up new version of program refocused on equity BY NICK MANES
When the first iteration of Techstars Detroit launched in 2014, Detroit — and its startup community — were vastly different. By the start of 2020, just before the COVID-19 pandemic took hold, the automotive-backed tech accelerator that funded more than 50 mobility-focused startups closed up shop as auto companies reprioritized. Just over two years later, as the metro Detroit startup and investment community has matured and
largely maintained during the pandemic, the Boulder, Colo.-based Techstars accelerator will again plant a flag in Detroit, this time with $80 million raised by financial services giant J.P. Morgan. Techstars and J.P. Morgan will also launch similar programs in Atlanta, Chicago, Miami and Washington, D.C., with cohorts launching next year in Los Angeles, New Orleans and Oakland. The programs are open to any startup founders but have "been designed to provide equitable access to funding and sup-
port for entrepreneurs who are Black, Hispanic and Latino, Indigenous American and Pacific Islander," according to a news release. Heading up the new Detroit effort will be Monica Wheat, a longtime venture investor in the area who most recently was heading up the Techstars Equitech program in Baltimore. The expansion of the Techstars brand into Detroit and the other cities represents a “game changer,” according to Wheat. "We're in the midst of (figuring out) how do we increase access and
opportunity to all the ideas that are out there," Wheat told Crain's in an interview last week, having just returned from a tech conference in Saudi Arabia. "During the pandemic, a lot of things changed," she added. "But I think Wheat one of the bigger things that became very much apparent (was) that good ideas can come from anywhere, and talent is everywhere." Techstars announced its initial launch in Detroit on Dec. 10, 2014. Ironically, it was the same day that
Michigan's biggest city exited from the largest municipal bankruptcy in U.S. history, pointed out Ted Serbinski, a veteran Detroit-area venture investor who served as the managing director for Techstars' previous go-around in the Motor City, investing in early-stage mobility-focused companies. That concept was all but unheard of at the time and was largely "experimentation," Serbinski told Crain's last week. See TECHSTARS on Page 15 APRIL 4, 2022 | CRAIN’S DETROIT BUSINESS | 3
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REAL ESTATE INSIDER
Construction is underway at the site of the fomer Joe Louis Arena.
Does Detroit have enough hotel rooms to host NFL Draft? Planners and developers have long said downtown Detroit has had a shortage of hotel rooms that has cramped the city’s ability to lure major events Kirk from the NFL, PINHO NBA, MLB and NHL and others in recent years. Until yesterday, apparently. But even though the city is hosting the 2024 National Football League draft, it will not have made a serious dent in what those planners and developers have said is a room shortfall to accommodate such affairs. This isn’t to say that the NFL Draft will be the Fyre Fest of the Midwest. There are some 4,500 or 5,000 rooms downtown not to mention more than 40,000 or 45,000 in the surrounding suburbs, Claude Molinari, president and CEO of Visit Detroit, said when asked how the city was able to make the case to the NFL regardless of the hotel situation. Let’s also not forget Airbnbs and other accommodations Those 40,000-plus suburban hotels could accommodate the tens of thousands of fans who are more budget conscious, Molinari said. In addition, heavily traveled and well-regarded Detroit Metropolitan Airport as well as the city’s proximity to Canada, which has a large contingent of NFL fans, were some of the key reasons the league didn’t pass on the city in spite of the downtown hotel situation. That, coupled with pairing Campus Martius Park and Hart Plaza as draft staging areas just a few blocks
apart, made a compelling case, Molinari said. That’s all well and good, and the city will be bonkers in two years when the draft is in town. But still, there are just a handful of hotels under construction or soon to be that have any chance of being completed by the time the draft — and its potentially tens of thousands of attendants — rolls into town. Those include the Godfrey Hotel in Corktown, the Cambria Hotel, the AC by Marriott (which hasn’t started construction yet) and the Temple Hotel in the former Standard Accident Insurance Co. building, which halted construction in 2020 and has not yet resumed, although substantial work has taken place. And although that’s several hundred rooms, it’s still not as many as planners would like, even though properties like the Shinola Hotel, Siren Hotel and the Element hotel, all downtown, have opened in recent years. “That added 500 hotel rooms which are on the nicer side of things, and the casinos have all gone through renovations and are nice products, so that’s another 1,200 rooms right there,” said Brandon Leversee, a Royal Oak-based vice president for hospitality research company HVS. That shortage and a trickle of supply, compared to what is desired, hasn’t stopped discussions from taking place on adding more as recently as yesterday, said Molinari, who is also Gov. Gretchen Whitmer’s appointee to the Detroit Regional Convention Facility Authority that oversees what is now Huntington Place. He told me on Monday, after it was announced that Campus Martius Park and Hart Plaza would host the
“SO IF THERE’S A DEVELOPER OUT THERE THAT’S WILLING TO PUT THE MONEY UP FRONT TO BUILD A HOTEL, THEN THAT WOULD BE FANTASTIC AND THEN THE STATE WOULDN’T HAVE TO GO INTO THE DEVELOPMENT BUSINESS.” — Claude Molinari, president and CEO of Visit Detroit
three-day April 2024 NFL draft, that the convention facility authority has had recent discussions with Detroit-based developer Sterling Group about its vision for the former Joe Louis Arena site next to Huntington Place, the former Cobo Center/TCF Center. Molinari said they are “progressing toward an MOU,” which is shorthand for memorandum of understanding, on building a hotel there. I’ve reached out to Sterling Group for comment. No response as of yet. “We’re working with the developers of that site to build a 750-room, upper upscale hotel on the southwest corner of the building, and we’d look to secure a developer — or perhaps even entertain building it ourselves — for an upper upscale hotel on the northwest corner of the convention center,” Molinari said. The northwest portion is land controlled by the convention facility authority, Molinari said, and that to extend Second Avenue to the Detroit River and build the hotel, Detroit City Council and state legislative approvals are needed. Clearly, a hotel or two of that size would take several years to complete and not be ready in time for the draft. But those are perhaps the most specific comments recently about
the hospitality component of the former JLA site, which used to house the Detroit Red Wings before the team moved north into Little Caesars Arena, made in recent years. While we’ve known for awhile about a planned 24-story apartment tower with 500 units on the property, which has quietly started the initial phases of construction, folks have generally been mum about the behind-the-scenes discussions on the remaining chunk of the large site west of Huntington Place. In the past it had been viewed as a mixed-use play with a heavy hospitality component, but that was under a previous agreement forged in federal bankruptcy court generally by lawyers to resolve city debts — not one formulated by developers and planners with a better eye for such things. Molinari said having a hotel — or, I guess in this case, two — attached so proximate Huntington Place is “critical to the success of the convention center.” “So if there’s a developer out there that’s willing to put the money up front to build a hotel, then that would be fantastic and then the state wouldn’t have to go into the development business,” Molinari said. “But in order to secure our place, it may be
necessary and I think that’s something we wrestle with.” Molinari said a situation like that would include the state owning the hotel, which would have a high-end flag, and hiring a private management company to run it. Although Sterling Group didn’t respond to my inquiry, Molinari said the company is “interested in developing a large hotel and we are thrilled to help the in any way we can.” Hotels of the convention variety are expensive prospects. I’ve heard estimates of $550,000 per room to build them, putting them at a cost of $412.5 million for 750 rooms; $440 million for 800 rooms; $467.5 million for 850 rooms; and $495 million for 900 rooms. Multiply that by two, and you get a ballpark feeling for the amount of cash at play.
The Build Up now available Fret not! The latest episode of The Build Up is now available. This week’s episode features an interview with Kevin Johnson, president and CEO of the Detroit Economic Growth Corp. My colleague Arielle Kass, who joined us last year from the Atlanta Journal-Constitution, and Johnson, who came to the DEGC from Invest Atlanta, trade some stories about The Big Peach, and I mock Michigan Wolverine football fans. Don’t worry, we also talk about really substantive issues. You can find it at crainsdetroit. com/podcasts. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB
4 | CRAIN’S DETROIT BUSINESS | APRIL 4, 2022
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She means business. And we’re here to help. Women-owned businesses power the American economy, employing more than 9 million people and creating revenue at nearly 5 times the average.* We’re proud to help them go even further by: •
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•
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*Source: The State of Women-Owned Businesses Report: Summary of Key Trends, American Express, 2019. Bank of America, N.A. Member FDIC. Equal Credit Opportunity Lender © 2022 Bank of America Corporation. All rights reserved.
COMMENTARY
We pushed no-fault reform; here’s what we think now BY JARED FLEISHER
Former Detroit police chief James Craig, who is seeking the Republican nomination for governor, toured the Better Made Snack Foods plant Dec. 12 on Gratiot Avenue in Detroit. | JEFF KOWALSKY FOR CRAIN’S DETROIT BUSINESS
COMMENTARY
Detroit alone can't get Craig past the primary F ormer Detroit police chief James Craig picked up the endorsement of Hillsdale Mayor Adam Stockford this week in his campaign to be governor. The two men talked via Zoom. "And while I haven't physically been to Hillsdale yet, my plan is to go there, meet with him personally, thank him for his support and, you know, I think Dow manufacturing is there and Hillsdale College," Craig said in an interview, referencing a former Dow Chemical facility that's now part of DuPont. "So I plan to make some campaign stops in that area." That Craig has been actively campaigning for the Republican Party's nomination to be governor for the better part of nine months now and still hasn't made the 100-mile trek down U.S. 12 to a town practically synonymous with Republican politics says a lot about a campaign that looks to be adrift. When he formally kicked off his campaign to unseat Democratic Gov. Gretchen Whitmer in September, Craig was the man to beat, the guy who was getting a lot of free exposure to conservative voters through appearances on Fox News with host Tucker Carlson. He had a story to tell about how he battled crime and kept Detroit from burning in 2020 during the nationwide protests over the police killing of George Floyd in Minneapolis. Now, six months later, he doesn't come across as someone with the mastery of
Chad
LIVENGOOD
Michigan's geographic details that would normally come with crisscrossing the state to reach Republican voters. During a recent speech at Lansing's downtown convention center, Craig stopped midsentence and asked a crowd of economic development leaders what county he was standing in. “Is this Ingham County?” Craig said at a Michigan Economic Developers Association meeting, causing some heads to turn among a group of professionals who sell Michigan to the outside world every day. Some may chalk this up as a candidate making gaffes amid grueling days of campaigning for statewide office, which normally entails 12-hour days on the road, on the phone and on a podium in multiple towns. But for all of the polling that has showed Craig leading a pack of a dozen GOP hopefuls, he doesn't appear to be running a conventional campaign of retail politics. "I am a neophyte in this whole political arena," Craig admits. See PRIMARY on Page 15
Nearly three years ago, Michigan enacted sweeping reforms to tackle our highest-in-the-nation auto insurance costs. The Rock Family of Companies was deeply involved in that effort, hoping that injecting an independent voice — beJared Fleisher is vice president of holden neither to the auto insurance industry, government nor to the legal and mediaffairs and economic cal provider community development for — could help break the Rocket logjam. Companies, the The reform law is now Detroit-based in full implementation. financial Predictably, the vested services interests continue to liticompany gate the effects of reform founded by in the press and in Lanbusinessman sing. Dan Gilbert. So, trying to harness the same spirit of objectivity, what does the evidence show? Looking across the board, how is reform really playing out? First, the evidence is clear that the fundamental reforms — giving drivers a choice in how much medical coverage to buy and instituting a fee schedule for medical services — are working to empower consumers and reduce costs. Prior to reform, Michigan was the only state that required drivers to buy unlimited medical coverage as part of their auto policy — regardless of whether they had other health insurance. The old law also required auto insurance pay for medical services at several times the rate of any other form of insurance. While Medicare pays $500 for an MRI, for example, auto insurance had to pay $3,000. Unfortunately, but inescapably, a system providing for unlimited payments at the highest possible rates led to systemic abuse and out-of-control premiums. So, what did the reform do? ` It allowed drivers to choose their coverage level — ranging from “opting-out” altogether if they have other health coverage to keeping unlimited medical coverage if they want it. ` It instituted a fee schedule to bring costs under control, with payments set at a rational but still robust 200 percent to 250 percent of what Medicare pays for the same service. ` It required these savings be passed directly onto drivers through mandatory rate reductions. And what does the data show? ` According to the Michigan Department of Insurance, consumers are receiving even greater savings than the law mandated. Consumers choosing $250,000 in medical coverage, for example, saved on average 48 percent on the medical component of their insurance. Even consumers choosing to retain unlimited medical coverage saved an average of 25 percent. ` According to insurance comparison site The
Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com. Please include your complete name, city from which you are writing and a phone number for fact-checking purposes.
Zebra, overall premiums in Michigan decreased by 18 percent between 2019 and 2020 (when the law went into effect) — the largest decrease in the nation. The Zebra’s latest report shows that Michigan no longer has the nation’s most expensive auto insurance. ` Consumers are increasingly exercising their choices as they become more familiar with the new law. In addition, 37 new insurance carriers have filed to enter the market post-reform. This means we can expect even greater savings in the future, as choice and competition accelerate. In our judgment, it is inarguable that these foundational reforms were right and are working. While the results listed above impact 7.2 million drivers in Michigan, coverage in Crain’s Detroit Business and other publications — along with the debate in Lansing — has focused on the approximately 6,600 individuals currently receiving long-term attendant care through the Michigan Catastrophic Claims Association. We now turn to this second — but unquestionably important — part of the reform story. Attendant care generally refers to nonmedical or nonrehabilitative care services that support an individual’s personal care needs. Under the pre-reform system, charges THE EVIDENCE IS for attendant care — either at a residential CLEAR THAT THE facility, by an in- FUNDAMENTAL home aide, or by a family member — REFORMS ARE were several times WORKING TO higher than under any other form of cov- EMPOWER erage, if other payers CONSUMERS AND covered it at all. For example, resi- REDUCE COSTS. dential facilities serving those with unlimited auto insurance coverage would regularly charge between $25,000 and $35,000 per month — not counting covered therapies, which would be charged separately. By contrast, the average skilled nursing facility charges $9,000 to $12,000 per month in total. During the reform effort, policymakers faced the question of how to address these costs, as they are ultimately passed directly onto every Michigan driver through the MCCA’s annual assessment. In the decade prior to reform, the MCCA’s annual assessment increased from $125 to $220 per vehicle as these long-term care costs ballooned. Lawmakers faced a particular challenge: because Medicare does not cover nonmedical or nonrehabilitative care, there was no fee schedule to rely on. Without that — but with ample information on payment differentials like the one cited above — the law set future payments at 55 percent of what would have been paid prior to reform (and up to 78 percent for providers serving more vulnerable communities). See REFORM on Page 7
Sound off: Crain’s considers longer opinion pieces from guest writers on issues of interest to business readers. Email ideas to Managing Editor Michael Lee at malee@crain.com.
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OTHER VOICES
In worker shortage, there is untapped talent BY BRENT MIKULSKI
W
h i l e t h i s pandemic has been rough on all of us, it has been especially challenging for people with intellecand Brent Mikulski is tual developmental president and disabilities. InCEO of Services creased levels of to Enhance isolation and dePotential, a have Michigan-based pression been reported nonprofit during the past seeking to make 24 months. a difference in There are the lives of individuals with roughly 2.3 mildisabilities. lion adults in Michigan living with a disability of some kind, according to the Centers for Disease Control and Prevention — about 1 in 3 adults living in Michigan today. And in 2016, 7.37 million of those Americans were living with an intellectual or developmental disability. While about 70 percent of those with an intellectual or developmental disability were able to live at home with the help of family and caregivers, about 681,000 are living in nonresidential settings, from sup-
ported-living apartments to group homes and, in 37 states, state institutions that can house dozens to hundreds of residents. March marked the unofficial second anniversary of the COVID-19 pandemic. March also is Disabilities Awareness Month, where we recognize and celebrate the achievements of individuals with disabilities in leading productive lives to achieve their full potential. If there is one thing we learned during the pandemic, we are all in this together, and we have the responsibility to help others emerge stronger and more independent. Every day we hear about employers struggling to find talent. Yet there is a talent pool of thousands of people capable of performing various functions if only employers would give them the op-
portunity and help lift those living in isolation out by giving them a job and recognizing the value they will bring their company. Businesses have long been the drivers of social change. Today, many companies claim to make diversity, equity, and inclusion a priority, but very few consider “disability” part of their DEI initiative. If companies are genuinely committed to reinventing their workforce and never returning to normal, they should prioritize disability inclusion in their hiring process. Success will be based on a company’s ability to live up to its values and action to stand behind its commitments. As a community, we need to eliminate the stigma that most people are living with a disability face. We all have limitations. We also need to understand the
barriers that discourage people from applying for a job within your own company and work to remove them. This starts with your application process and various job requirements. Then leverage existing programs and services such as partnering with community-based rehabilitation organization providers and vocational services agencies to help identify job-seeking individuals who may have lost their jobs due to the pandemic and are ready to start working. These organizations also can help with job training and assist in the transition. Our organization is not immune from employers’ challenges in finding qualified talent. But we know where we can go to find talented individuals who had a strong desire to work 50 years ago. These resources did not exist, so we created them, and today, STEP (Services to Enhance Potential) serves more than 1,400 persons annually. As executives look to the future of their workforce, I hope that they do more to look at one’s ability despite their disability. We as a community need to recommit to do more to promote inclusion and equity. The pandemic accelerated problems that already existed, and it is up to us to ensure we can find opportunities for everyone that seeks it regardless of their disability.
REFORM
From Page 6
The data shows that the combined reforms have in fact bent the MCCA’s cost curve: the annual MCCA fee on drivers’ auto insurance bill, otherwise on an inexorable trend upwards, has been reduced from $220 to $86 per car. Michigan drivers are also in the process of receiving an unprecedented $400 rebate check per vehicle. Of course, the MCCA savings are in addition to the premium reductions discussed in the first part above. Even more importantly, the data shows that most individuals with complaints about lack of appropriate attendant care post-reform are seeing their complaints resolved. DIFS created a rapid response hotline to make sure the 6,600 individuals receiving long-term attendant care continue to receive quality care. Through March 18, DIFS received a total of 106 formal complaints, 95 of which have been resolved. While media stories and lobbying campaigns may lead to one impression, the actual channel to raise and resolve concerns over care tells a very different story. I do not believe anyone would argue that the reform law is perfect. But it is our considered opinion, based on the data outlined here, that the law is fundamentally sound and delivering on its promise of empowering consumers, lowering costs and eliminating abuse. Lawmakers who have resisted changes that would take us backwards are right to do so.
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A LOOK AT WEB3 It may be ‘giant bubble,’ but there are practical uses, VCs argue.
FINANCE
PAGE 11
GETTY IMAGES
CRYPTO MOVES TO THE MAINSTREAM Experts advise engaging financial professionals to help manage risk in nascent industry `BY NICK MANES Cryptocurrency assets are moving out
of basements and into the portfolio of everyday investors. Venture capitalists in Silicon Valley are raising billions of dollars for crypto investments. Companies, in limited circumstances, are taking cryptocurrency for payment for goods and services. President Joe Biden in March issued an executive order around cryptocurrency that seeks “to reinforce American leadership in the global financial system and at the technological frontier,” although the impact of such regulations is unclear. Ad Age defines cryptocurrency as “a type of digital currency that is secured through a system of code-based processes called cryptography. Crypto typically exists in the form of ‘coins’ on a respective blockchain, and is therefore decentralized in the way that it is created and distributed.” Some of the best-known cryptocurrencies include Bitcoin, Ether, Litecoin and Dogecoin.
“THE KNOWLEDGE BASE IS HELD IN A VERY LIMITED AMOUNT OF PEOPLE.” — Max Benedict, managing partner, Accretive Management
Cryptocurrency and other digital assets surpassed $3 trillion in market capitalization late last year, up from $14 billion five years earlier, according to a recent fact sheet put out by the Biden administration. That market cap has since fallen back to around $2 trillion, as of late March. Some 40 million Americans, about 16 percent, are estimated to have invested in, traded or used various cryptocurrencies, according to the administration’s document. One can buy crypto on exchanges like Coinbase, and several financial technology companies including SoFi and Venmo have opened their platforms to crypto trading for consumers. As cryptocurrency moves from a hobbyist pursuit to something that some at least see as resembling a
stable investment asset class, some experts see the need to have more professionalized infrastructure in place to help manage risk and provide expert advice. That’s the business model for Accretive Management LLC, a cryptocurrency investment fund based in Ottawa County west of Grand Rapids. A federal regulatory filing last month shows the group aims to raise $3 million for an initial fund that will be invested in various digital currencies and professionally managed. The general partners in Accretive Management have been engaged with cryptocurrencies for years in various capacities, something that remains rare in the still-nascent industry, according to Max Benedict, a managing partner with the fund. See CRYPTO on Page 10
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The Facility for Rare Isotope Beams opens spring 2022 at Michigan State University The most powerful research facility of its kind will advance discovery and create positive impact in medicine, environmental science and material science – and generate economic development. By Michigan State University and other fields that continue to have a positive impact on the world. THE SCIENTIFIC IMPACT OF RARE ISOTOPE RESEARCH In 1958, the university set a course for excellence in nuclear science that materialized into the Cyclotron Laboratory, which became the National Superconducting Cyclotron Laboratory. Since 2010, MSU has been home to the No. 1 ranked nuclear physics graduate program in the nation according to U.S. News and World Report. While no one can predict which area of science will generate the next breakthrough, the research that will be conducted at FRIB is a priority for the nation’s nuclear science community. What discoveries will FRIB’s unique technology make possible? With access to more than 1,000 isotopes scientists will have insight into the physics that formed the universe and the way heavy elements came into existence on our planet. Research with the rare isotopes will accelerate innovation in everything from medicine to environmental science to nuclear security. One of the most immediate areas of potential impact is medicine. Finding new ways to treat challenging cancers is a prime example. The emerging field of theranostics — diagnostics and therapy combined — uses radioactive isotopes in hunting down malignant cells. With the discovery of new isotopes, FRIB will take the technology deeper, helping doctors find and destroy cells that had previously eluded detection. With all its potential, FRIB will attract nuclear scientists from across the nation and around the world, while inspiring Michigan-based students to pursue science careers. Artemis Spyrou, professor of physics at FRIB and in the MSU Department of Physics and Astronomy, knows the source of that inspiration well. “The motivation always comes from the stars,” she says, “ ... from understanding these big questions about the universe, where the elements were created, how stars evolve.”
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The DOE-SC selected MSU to establish and operate FRIB, entrusting MSU with creating priority research opportunities for the nation. FRIB is capable of producing 80% of the isotopes thought to exist in the universe. It’s a monumental leap forward from current technology that also uses powerful accelerators to create collisions of elements and their neutrons to produce isotopes. The difference is the power of the beam. As FRIB Laboratory Director, Thomas Glasmacher, explains, “One of the metrics of discovery potential is the intensity of the primary beam and FRIB will have the most intense primary beam in the world.”
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FRIB is another shining example of MSU’s continued national and international leadership in not only nuclear physics but medicine, education, plant science, agriculture
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FOCUS | FINANCE
K
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A illuminated Bitcoin icon during NFT LA in Los Angeles, Calif., on, March 29. | BING GUAN/BLOOMBERG
CRYPTO
viduals typically buy at the wrong time and sell at the wrong time. So ... it would be better to have someone professionally manage it than to do it on your own.”
From Page 8
“The knowledge base is held in a very limited amount of people,” Benedict said of the group of experienced crypto investment managers. “Whereas, there are college courses and college degrees for the people that eventually want to become equities fund managers.”
‘Very speculative place’ As nascent funds like Accretive Management’s seek investment dollars to put under management, traditional investment managers say they’re also fielding questions from clients as crypto becomes more mainstream. Nicholas Juhle, chief investment officer for Greenleaf Trust, a Kalamazoo-based trust bank with offices in Birmingham and around the state, said he tends to hear from clients just after a rapid spike in value, but those queries largely diminish fairly quickly and rarely pick up on the crypto news of the day. Juhle and other financial advisers to whom Crain’s spoke said they remain a long way from making a full-throated recommendation that their high-net-worth clients put their assets in Bitcoin, ethereum or other cryptocurrencies. Lyle Wolberg, the CEO and senior
Doing it wrong Juhle
Wolberg
financial life adviser at Southfield-based Telemus Capital LLC, said he relies on a fairly simple maxim when laying out investment strategies: “Our clients typically come to us to stay wealthy, not get rich,” he said. Juhle, similar to Wolberg, said he still views crypto as a not yet ready for prime-time investment. “Even though it may have come off the fringe, I think it is still a very, very speculative place to be investing capital,” he said. “Bitcoin could literally disappear tomorrow, so I don’t think you’d want to place all of your eggs in that basket.” Still, Wolberg said that professional management, possibly along the lines of what Accretive Management is proposing, would certainly be the preferred route for investors. “The downfall of most individual investors is that they let emotions dictate their actions,” Wolberg said. “Instinctively, you don’t want to make a bad decision, especially with your money. And so therefore, indi-
That there’s something of a divide between traditional financial planners and those like Benedict who seek to build a new business in the crypto sector comes as little surprise. Such a divide exists in the broader sector as well. “As it’s gone mainstream, crypto has inspired an unusually polarized discourse,” reads a recent explainer column published last month in the New York Times. “Its biggest fans think it’s saving the world, while its biggest skeptics are convinced it’s all a scam — an environment-killing speculative bubble orchestrated by grifters and sold to greedy dupes, which will probably crash the economy when it bursts.” Benedict, the managing partner with the Accretive Management crypto fund, touted his and his partners’ multiple years of experience in crypto investing, as well as some adjacent business ventures. The experience of the general partners in the fund will help investors secure better positions in different coins at more ideal times than a retail investor would be able to achieve on their own, Benedict said.
“We’re sitting there saying, ‘you’re not doing it right,’” Benedict said of conversations with many would-be hobbyist crypto investors. Knowing the different moves to make in bullish versus bearish markets is one example, Benedict said. “Basically, it goes back to the old adage (that you could) buy just one share of Google, or you could get an ETF (exchange-traded fund) that (has) an active management company that lives in the world every day ... and adjusts the portfolio accordingly,” he said.
Feds take notice As crypto has moved closer to the forefront of the everyday investor community, as well as more accepted by institutional investors, regulators have increasingly taken notice. To that end, the Biden administration last month initiated “the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology,” according to a Biden administration fact sheet. As part of the affiliated executive order, federal agencies will be requested to research: ` Maintaining financial stability. ` Promoting global competitiveness. ` Ensuring financial inclusion.
` Providing for “responsible” innovation. “The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate,” the fact sheet states. Moreover, hackers stole about $600 million from gaming-focused blockchain platform Ronin Network, which is connected to the popular Axie Infinity online game, in one of the biggest crypto attacks to date, the company announced last week. Even as regulators start to take notice and try to put some guard rails in place, cryptocurrency by its nature is difficult to regulate, said Juhle of Greenleaf Trust. Currencies, whether hard or virtual, and commodities like gold don’t have the same type of transparency requirements as investing in public companies, for instance, he said. “So it just makes it very difficult, I think, to find the point in time where you could time a crypto market effectively and say, ‘this is the time where it’s got enough credibility that you should go into it,’” Juhle said. — Bloomberg contributed to this report. Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes
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FOCUS | FINANCE KEY TERMS
A F e e - O n l y We a l t h M a n a g e m e n t G r o u p
Here’s a look at some of commonly-used terms in the rapidly developing new technology and finance space: ` Cryptocurrency: A type of digital currency that is secured through a system of code-based processes called cryptography. Crypto typically exists in the form of “coins” on a respective blockchain, and is therefore decentralized in the way that it is created and distributed. Examples of cryptocurrencies include Bitcoin, Ether, Litecoin and Dogecoin. ` NFT: A non-fungible token is a certificate proving the authenticity and uniqueness of a digital asset. It is not the asset itself, but rather a unit of data that proves ownership of the asset and is ideally stored on a blockchain to ensure that data is incorruptible.
` Ethereum: The most popular blockchain for NFTs, accounting for roughly 80 percent of the market share, per a JPMorgan study cited by CoinDesk. Ether is the platform’s cryptocurrency, which is the second-most popular crypto behind Bitcoin. Different from the Bitcoin blockchain, however, is that Ethereum is more than a platform for sending and receiving digital currency, namely via its ability to support smart contracts and thus NFTs, DeFi and more. `Web3: The vision for the next iteration of the internet. As opposed to the current system (Web2), which is controlled by walled gardens like Google and Facebook, Web3 emphasizes user ownership — of data, content and assets — through the interoperability of metaverse platforms and the decentralized nature of blockchain technology. SOURCE: AD AGE
Web3 may be ‘giant bubble,’ but practical uses are there, VCs argue BY NICK MANES
Few things have exposed rifts among technology leaders like the rapid emergence of Web3. Those bullish on the so-called next generation of the internet view it as a move away from the centralized power held by tech giants such as Google and Facebook, and will mark a move toward greater democratization and transparency within our increasingly digital lives. They argue that the technology is powerful enough to withstand any possible bubble, as many claim we’ll soon see burst, and the next crop of companies are being built with the philosophy of decentralized power being top of mind. The start of the Web3 era is already underway, as technologies like cryptocurrency and non-fungible tokens, or NFTs, increasingly gain popularity within mainstream consumer circles. Web3 technologies are largely based on existing blockchain platforms, defined by Ad Age as a “digitized database for keeping record of transactions, which are stored as units of data in groups called ‘blocks.’” As the technology has become mainstream, capital has also begun to flood the market seeking deals in the Web3 and decentralized finance — or DeFi — spaces. In just the fourth quarter of last year, total venture capital deal value for DeFi technology reached $2.4 billion, double the amount in the previous quarter, according to recent data from industry publication Pitchbook. Competition for those deals appears fierce. The Financial Times reported last month that VC investors are passing on board seats and other items that typically go along with the infusion of capital, just to get the chance to make the investment. Locally, however, that kind of deal value has been slow to materialize, as many Southeast Michigan VCs still remain skeptical of the space. “The area of Web3 is somewhere between leading edge and ‘bleeding edge’ right now,” Chris Rizik, the CEO and fund manager of Ann Arbor-based Renaissance Venture Capital, wrote in an email to Crain’s. “There is no doubt that some elements, such as blockchain technology, will play an important role in the future of business, particularly as the negative environmental aspects of it
Rizik
Fortino
are addressed. Other elements of Web3 are now solutions looking for a problem, and we don’t know yet what will become essential. So, as in every technology wave, there will be a lot of money made and a lot lost — some based on true understanding of future applications of the technology, and some based on luck or timing.” To that end, even investors within the same fund take vastly different approaches to the utility and opportunity — or lack thereof — that Web3 offers. Adrian Fortino, an Ann Arbor-based managing director with Mercury Fund, which focuses investments on software and data companies largely within Middle America, points out the massive amount of capital that VC funds are raising, which last year hit a record-breaking $128.3 billion, according to the National Venture Capital Association. That capital must go somewhere in order for VCs to fulfill their duty of bringing a return to investors, he pointed out. “It can’t sit still,” Fortino said of the money that’s specifically flowing into Web3 investments. “It’s going lots of places and those places might not be as sensible as they have in the past.” But in Houston, where Mercury Fund also has an office, one of Fortino’s colleagues takes a different view. Samantha Lewis, a principal with the fund, fully acknowledges that there may very well be a “giant bubble” surrounding Web3 companies, particularly within the cryptocurrency space. “So there might be another crypto winter,” Lewis told Crain’s. “But that doesn’t mean that this super, super powerful technology (blockchain) that now actually has use cases won’t survive that crypto winter.” Blockchain technology is hardly new, and has been the foundation of cryptocurrencies like Bitcoin for more than a decade. But what’s hap-
pening, Lewis and others say, is a maturing point — commonly being referred to as Web3 — that is now allowing for economically feasible companies to be built using Lewis the technology. “And so there’s this rapid iteration going on,” Lewis said. “Because there’s enough of the infrastructure and enough of the technology ... for people to start building companies on top of these blockchains that are relevant to anyone.” Topl LLC, based in Texas, is one such company. A portfolio company of Mercury Fund, Topl owns its own blockchain and uses its technology for the supply chain and energy sectors, according to co-founder Chris Georgen. Within those industries, and many others, now more than ever, “trust is at a premium,” Georgen said. As companies increasingly make claims around environmental, social and corporate governance, consumers want to be able to verify those claims, Georgen said. Blockchain technology, such as what Topl uses, allows for that, he said. One reason for that is the “democratization” that blockchain allows for, “where everyone can now directly — and in a censorship-proof manner — participate in sending this information and having it all stored together.” The other part is that information stored on a blockchain is there, theoretically forever, and any changes will be recorded, Georgen said. Similar to Lewis with Mercury Fund, who has invested in Topl, Georgen said blockchain technology and the emergence of Web3 is hitting an inflection point. “That change in terminology is a sign of maturation,” Georgen said. “I think really what has been driving a lot of that is, there’s been a breakdown in a lot of assumptions ... over the last two years that really do drive people towards looking for new models of trust, or looking for new models of coordination.” Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes
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ENTREPRENEURSHIP
ISAIC, Michigan Women Forward team up to spur businesses Pilot program to launch, grow women-owned fashion brands in Southeast Michigan BY SHERRI WELCH
Michigan Women Forward and the Industrial Sewing and Innovation Center are teaming up to launch and grow women-owned fashion businesses in Southeast Michigan. The two organizations in May will begin a pilot program aimed at helping 10 local fashion brands launch or grow their businesses. “Fashion Forward: Advancing Entrepreneurs” will prepare designers and entrepreneurs with the skills needed to manufacture their product, coaching on operating a business and low-rate financing to support business growth. If successful, the pilot could serve as a model to help launch women-owned businesses in other industries, as well, MWF leaders say. There’s often a gap between the art of designing and the realities of production and understanding the business, ISAIC President and CEO Jen Guarino said in a statement. “There are so many gifted individuals who excel in the creativity of their visual designing but are unprepared for how to design for manufacturing or with business principles in mind,” she said. Those entrepreneurs are unable to secure manufacturing partners given their lack of familiarity with technical parameters and protocols of fashion systems. This pilot program will better prepare them to succeed, she said. Women often struggle to break into the fashion industry due to a lack of access to financing and expertise, MWF President and CEO Carolyn Cassin said. The new program will pair ISAIC’s industry knowledge with MWF’s expertise in starting and growing a business. “This is a match made in heaven we both have skills and ability,” Cassin said. “We thought if we work together, we could launch more (fashion) businesses.” The William Davidson Foundation is supporting the pilot program with
Jen Guarino, ISAIC president and CEO. | ERIN MARIE MILLER
Cassin
Fitzpatrick
a $50,000 grant. The grant will pay for the entrepreneurs to participate in basic industrial sewing and business education programs with both ISAIC and MWF and also provide them with a $1,500 stipend for entrepreneurs stepping away from their fledgling businesses or other jobs to take part in the program.
Participants in one of four seven-week cohorts will go through ISAIC’s “Fundamentals of Industrial Sewing and Production” curriculum addressing the fundamentals entrepreneurs need to take their product to manufacturing. They’ll also take part in a one-day workshop covering the basics of owning their own fashion business and providing a road map for the steps they need to take to prepare. “We can provide technical assistance and guidance on where to take their business, but we’re not here to provide financial information or training” and don’t have the resources MWF has, said Ann Fitzpatrick, communications consultant to ISAIC.
After entrepreneurs complete the educational programs offered by ISAIC, MWF will take it from there, providing the entrepreneurs with basic business education. They’ll learn things like cash projection and other financial knowledge needed to become a competent business owner, Cassin said. At the end of the program, the fashion startups will be eligible for low-fee microloans of $5,000-$50,000 from MWF to help launch their businesses. “We think it will take 6 weeks to three months to get these businesses up and running,” Cassin said. Applications for the first cohort of “Fashion Forward: Advancing Entrepreneurs” are due by April 15.
The pilot could serve as a model to grow women-owned businesses in other industries, Cassin said. “If you think about it, what prohibits women from getting their business out of their kitchen?” she said. “Just because they make a mean cookie doesn’t mean they know enough about the food production or distribution system.” If the pilot can help propel the launch and growth of local fashion brands “we’re going to do it again and again and ... use it as a model with other industries like food businesses (and) health and beauty,” Cassin said. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch
MARKETING
Lambert takes minority stake in Van Dyke Horn PR firm Announcement comes after CEO resigned from firm; former owner returns as interim CEO BY CRAIN'S DETROIT BUSINESS
Two of Michigan’s top public relations and communications agencies are joining forces in a strategic partnership. Lambert Global, the holding company for Grand Rapids-based PR, investor relations and integrated marketing firm Lambert & Co., is taking a minority stake in Detroit-based Van Dyke Horn Public Relations. Financial details of the new partnership were not disclosed. The announcement late last month came three weeks after CEO Peter Van Dyke resigned from the firm bearing his name. On March 7, President and CFO Marilyn Horn became the sole shareholder in the state’s largest minority-owned and managed PR agency. At the time, Van Dyke said he and
Horn
Muirhead
Horn had “different visions about the future of the company,” but declined to elaborate on why he left the company. Lambert Global is taking on Van Dyke Horn’s minority stake in the company, and former owner Georgella Muirhead has returned to serve as the agency’s interim CEO. Moving forward, the daily operations and management will be controlled by Horn and Muirhead, while
Lambert
Olson
the joint go-to-market plan and growth strategy will be co-led by Lambert CEO Michelle Olson and Chairman Jeff Lambert. The partners said in a news release that the two firms, both founded in 1998, complement each other and have already shared clients and campaigns over the years. “In the communications field, where innovation and adaptation are essential to serve our clients, the
credibility our agency has earned with clients and communities is an asset that we work constantly to develop and grow in new ways. That means being open to bold collaborations and the possibilities that they create,” Horn said in the release. “This partnership with Lambert strengthens the foundational values of this agency, as they were established by Georgella Muirhead and Bob Berg, to serve the region we call home, and it amplifies our ability to apply the lessons we’ve learned along the way to new challenges, new methods and new relationships across Michigan and beyond.” Services include community engagement; internal and corporate communication; environmental, social and governance and diversity consulting; organizational development, communications, and
cause-marketing; fractional diversity equity and inclusion officer services and recruiting; and multi-cultural marketing spanning PR, digital, advertising, and integrated marketing focused on people of color, women, and underrepresented stakeholders. “We’ve been minoring in DEI consulting and multi-cultural marketing, but this is an opportunity to major in it and to help the Van Dyke Horn team scale their services nationally and into fast growing sectors like private equity, public companies and ESG mandates,” Lambert CEO Olson said in the statement Lambert is already a partner and minority equity owner in Hispanic-owned brand strategy, consulting and multicultural marketing firm 9thWonder, which has an office in Detroit.
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OBITUARY
‘Legend in the orchestra field’: DSO president Parsons dies She guided DSO through musicians’ strike, move into local community concerts, webcasts BY SHERRI WELCH
Anne Parsons, longtime president and CEO of the Detroit Symphony Orchestra, died March 28 after a long battle with lung cancer. She was 64. Named president emeritus of the orchestra in late 2021, Parsons shared her diagnosis in November 2018 and had been undergoing treatments since that time. She stepped down from the DSO in late December after returning from medical leave just months earlier to work toward her initial plan to retire in fall 2022. During her 17-year tenure leading the DSO, Parsons guided it through a musicians strike and the orchestra’s subsequent move into the local community with concerts around the region and the orchestra field’s first live HD webcasts that enabled people worldwide to enjoy to its performances. She “led the orchestra with grace, courage, and conviction, never wavering from her strongly held belief that the DSO is the best in the world, and that Detroit is a vibrant and resilient city that deserves an orchestra to match,” current DSO President and CEO Erik Rönmark and board Chair Mark Davidoff said in a joint statement. “Anne’s accomplishments as our president and CEO are immeasurable and will resonate deeply within our organization, across our local communities and in the orchestra industry for decades to come.” Parsons was “a legend in the orchestra field,” whose impact was almost impossible to overstate, League of American Orchestras President and CEO Simon Woods said in December after Parsons stepped down from the DSO. “She has not only been an inspirational leader of the DSO with a huge civic footprint, but she has been a mentor and example to so many of us,” Woods said. “Anne has shown us the way on how to transform a cultural organization’s relevance and meaning in the community and beyond, and how to lead change through culture and humanity. What a tremendous debt we all owe her.” During her tenure, Parsons helped bring internationally acclaimed conductors Leonard Slatkin to the DSO as music director in 2008 and Italian conductor Jader Bignamini in 2020. In between, she led the DSO through a six-month musician strike in 2010-11. New contracts with musicians set the stage for the orchestra and its musicians to take their music into the community through full orchestra and chamber music performances, senior engagement concerts, music therapy sessions and in-school appearances. With a goal to make the DSO “the most accessible orchestra on the planet,” Parsons oversaw the 2011 launch of “Live from Orchestra Hall,” a series of live HD webcasts that enabled people worldwide to listen to the DSO. By late 2021, the series had reached well over 2 million views. The series was expanded with “Classroom Edition” in 2014, educational concerts by the DSO that reached tens of thousands of students in Detroit schools and around the world online each year. The DSO’s early adoption of digital technology and archived webcasts of
Anne Parsons, longtime president and CEO of the Detroit Symphony Orchestra.
every Classical Series subscription concert enabled it to pivot quickly to virtual programming during the COVID-19 pandemic. In July 2017, the DSO toured Japan and China, performing its first international concerts in 16 years. Under Parsons’ leadership, the DSO invested in the Detroit Neighborhood Initiative, a community-driven process to create unique musical experiences throughout Detroit while aligning with the priorities of the city’s neighborhoods, and Detroit Harmony, a collaborative project to provide an instrument and music education to any interested Detroit student and create hundreds of related jobs through workforce development partnerships. The DSO also launched a multiyear process to develop a comprehensive diversity, equity and inclusion strategy and a task force to re-examine and reinforce the organization’s cultural evolution during her tenure. Parsons worked to ensure the DSO attained financial stability. Over the past decade, the organization paid off about $18 million in obligations, including the $12 million mortgage for the Orchestra Place building. The orchestra said it expects to be debt-free as of June. Its endowment, which will help to ensure future sustainability, grew significantly under Parsons’ watch. By the end of fiscal 2021, it had reached $71.4 million, up from $18 million in 2012, spokesman Matthew Carlson said. The DSO raised another $36.6 million in pledges during Parsons’ tenure that were outstanding as of late 2021. The orchestra expanded its donor base, diversified its audience and achieved eight consecutive operating surpluses through fiscal 2021. Peter Cummings, a Detroit-based real estate developer who is chairman emeritus of the DSO, said in a Tuesday interview that nearly 20 years ago when the search for a new leader started, he met up with former DSO executive director Deborah Borda, who is now president and CEO of the New York Philharmonic but at the time had that role in Los Angeles. A consultant had created a tiered grouping of candidates: An A List, a B List and a C List. “I wanted to get her views on the A List and she put her finger on Anne Parsons’ name and said, ‘Get Anne.
Don’t take anyone else. She is perfect for the job and is at the right moment in her career,’” Cummings recounted Borda as saying. “From my standpoint, she is the best leader and manager of a cultural institution I ever met,” Cummings said of Parsons. “She was inspirational. You look at the condition the institution is in today, that is due in no small part to decisions she’s made the last 15-18 years.” Prior to joining the DSO, Parsons served in management positions for a variety of major arts organizations, including the New York City Ballet, the Hollywood Bowl in Los Angeles, the Boston Symphony Orchestra and the National Symphony Orchestra in Washington, D.C. She earned a bachelor of arts de-
gree from Smith College in Massachusetts and was among the first class of American Symphony Orchestra League Fellows. Parsons was a founding board member of the Cultural Alliance of Southeast Michigan (now CultureSource) and previously served on the boards of New Detroit, Sphinx Organization, the League of American Orchestras and Eastern Market Partnership. To recognize Parsons’ many contributions to Detroit, in June the city added a secondary street name, Anne Parsons Way, to the existing Parsons Street between Woodward and Cass avenues in Midtown next to Orchestra Hall. Parsons Street was originally named for Detroit landowner Philo Parsons (no relation) in 1867. In announcing her retirement plans last spring, Parsons said that everyone in the DSO family had been “a source of critical strength and sustenance, from our dedicated and passionate governance and staff to our extraordinary DSO musicians and music director Jader Bignamini — whose performances together have filled me with so much happiness. I can never give enough recognition for all we have accomplished together.” Bignamini said in a news release that he was honored to have been appointed music director during Parsons’ tenure and to have been able to grow close with her and her family. “I will never forget Anne’s smile, strength, professionalism, deep humility, and innate sensitivity. Her love for the orchestra and Detroit is our guide as we lead the Detroit Symphony Orchestra,” Bignamini said. Parsons was optimistic about the
future of the DSO under Rönmark when he was introduced as her successor in early December. “I hoped that when he became a CEO it would happen here, because I knew that he would be invited to be someone’s CEO,” she said at the time, adding that he was “incredibly” talented, smart, intuitive, a musician, a strategic leader, great collaborator and nationally and internationally respected in the field. She was touched by the DSO board of directors honoring her with the president emeritus title in perpetuity, in recognition of the transformational impact she had on both the DSO as an institution and on the community it serves. “I love this orchestra, and I love this city,” Parsons told Crain’s in December. “I think the world of this place. It’s our home.” Parsons instilled the core values of excellence, collaboration, diversity, innovation and resilience in DSO, Rönmark said when he succeeded Parsons, his mentor. “Anne’s leadership has put the Detroit Symphony Orchestra in a position of artistic, financial, and organizational strength,” he said, “and we are so grateful to her.” Parsons is survived by her husband, Donald Dietz, and daughter, Cara Dietz. Plans to celebrate Parsons’ life and legacy are forthcoming, the DSO said. Crain’s Senior Reporter Kirk Pinho contributed to this story. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch
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APRIL 4, 2022 | CRAIN’S DETROIT BUSINESS | 13
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REAL ESTATE
A reading nook in Barbara Timmons’ parents home on Grosse Ile.
Barbara Timmons suspects her parents had 10,000 books in their Grosse Ile home library. The home was featured recently on Zillow Gone Wild.
This Grosse Pointe mansion features a “Beauty and the Beast” style library.| SIGNATURE SOTHEBY’S
Home libraries garner interest, but not everyone wants one BY ARIELLE KASS
Barbara Timmons suspects her parents had 10,000 books in their Grosse Ile house. With shelf space at a premium about a decade after they first bought the home, they added a university-style library that soon overflowed, too. “I don’t think it was anybody’s intention to run out of space,” Timmons said. “There were books everywhere.” The library, designed by builder John Filkins, was added in 2000 to the house that was built in 1988 and purchased by Ernest and Barbara Kitzner in 1998. Like everything her parents did, Timmons said, it was a project they worked on together. The library recently gained attention after being featured last month by Zillow Gone Wild, an account that curates interesting and unusual Zillow home listings. More than 72,000 people liked the post on the $575,000
house, which Timmons said also featured a “secret room” where her mother stored her jewelry. It was behind what looked like a spice rack inside a closet, but was really a hidden door. Timmons was surprised to see the attention the listing got when someone forwarded it to her, but was thrilled that most of the comments were positive. Her mother collected cookbooks, Timmons said, and a whole wall of the massive library was filled with them. It’s not the first Detroit-area house whose library has turned heads on the site. In the fall, a Grosse Pointe Park home listed for $4.75 million garnered comparisons to the library in the Disney movie Beauty and the Beast. That home’s listing was pulled in January. The sale of Timmons’ parents’ house is pending. At a certain price point, Anita Boyajian said, people are looking for a library.
“Especially with a fireplace in it — what could be better?” asked Boyajian, a Realtor with Coldwell Banker Weir Manuel in Birmingham. “Up in the higher price range, they definitely expect it.” Boyajian said she’s become an expert in staging libraries. The key is to remove the book jackets, she said, as she did in the library of a Bloomfield Hills home listed for $3.3 million. She also removed the cookbooks — “It didn’t belong in the library,” she said. “They were not beautiful books, they were just books that you would use.” — and cleared other clutter from the shelves. “You just have to make it a warm room,” she said. “You simplify it from what we usually live in.” Over the course of the pandemic, everyone has sought out more recreational space in their home, said Steve Katsaros, managing broker at Keller Williams Metro Royal Oak.
While Katsaros said he hadn’t seen people specifically request libraries when they looked for homes, one of his prominent listings — the Book mansion — features a third-floor library next to the ballroom. Jeffrey Brikho, who’s selling a $700,000 house with a library in Troy, said the family who lived in the home used it as a place for kids to do homework and study. He said a library’s success often depends on the furniture and the shelving. Nowadays, the broker/owner of Brikho Properties said, people are more likely to want a den that they can easily use as an office. Timmons, whose parents’ library caused a social media storm, said her mother’s mystery novels, books about birds and yes, cookbooks, all took up space in the massive room. Having such a library “was a dream of my mother’s,” Timmons said. Her collection included a 1930 edition
of “Moby Dick” illustrated by Rockwell Kent that was sold by the auction house DuMouchelles in December, as well as several lots of art reference books. Timmons recalled the library’s construction, and helping her mother first shelve the books — only to have her pull them down to rearrange them. With 20 years of acquisitions after the library was built, she said, there was more reading material than shelf space, even in the room that measured 38 feet by 24 feet. The listing says it will leave a buyer speechless. She couldn’t keep most of the books, but Timmons said she valued the time she spent in the library. “I would sit on the couch in front of the fireplace and have tea,” Timmons said. “It was a great place to be.” Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB
14 | CRAIN’S DETROIT BUSINESS | APRIL 4, 2022
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NFL DRAFT
PRIMARY
ber, which is not entirely unusual. Whitmer went through three campaign managers over the course of her nearly two-year campaign for governor. "I would respectfully disagree when people say, 'Well, the campaign is disrupted, it's fledgling,'" Craig said. Craig also lost veteran GOP strategist John Yob, who concluded Craig did not want to put in the long days on the campaign trail in places like Hillsdale that are normally needed to win. "Being a leading candidate for governor is more than a full-time job; it is one of the most difficult endeavors in American life," Yob wrote in his Nov. 19 resignation letter to Craig. "It requires laser-like focus and around the clock, 12+ hours per day, 6 days per week workload. It also requires constant communication with your key supporters; to keep them inspired, engaged and willing to allocate their capital — time, financial and political — to you." After quitting Craig's campaign, Yob quickly latched on to the gubernatorial aspirations of businessman Perry Johnson, one of the two multimillionaire self-funding candidates in the race. Yob released his resignation letter to Crain's and a statement that claimed Craig "has rarely campaigned outside of his favorite Detroit restaurants." After serving as police chief for eight years, which is about twice as long as any predecessor has lasted
From Page 3
From Page 6
This year's draft will take place in Las Vegas late next month, while Kansas City will host in 2023. Last year, the Draft took place in Cleveland but was scaled down because of the COVID-19 pandemic, which forced the cancellation of the event scheduled in Las Vegas in 2020. The official hosts of the 2024 event are Visit Detroit and the Detroit Sports Commission, which put together the bid with help from the Detroit Lions and DDP and cooperation from the state, county and city government. Dave Beachnau, senior vice president of sales, services and sports at Visit Detroit, said the Draft event will benefit the entire region as visitors will also stay and spend outside of Detroit city limits. Organizers have said the lack of hotel space downtown drives some visitors to the suburbs during big events. Above all, Beachnau said, being selected to host a prestigious event puts Detroit in a betLarson ter position to land future events. “I kind of relate it back to the early 2000s when we were awarded the Super Bowl and it just kind of snowballed,” Beachnau said. “The NFL gives you instant credibility, so if you look at some of the other governing bodies or rights holders that are considering Detroit, we’ve got the stamp of approval from the NFL, and it doesn’t get much better than that.” While there have been efforts in the past to create a state fund dedicated to attracting sports events, officials said no incentives were offered in Detroit’s pitch to host. Staging a large-scale event does come at a cost, though. Organizers in Nashville budgeted around $3 million for its event, according to the Nashville Business Journal.
During a 40-minute telephone interview, Craig gave a lot of mixed messages on how he thinks he can win this jam-packed Republican primary that features two millionaire self-funders (Perry Johnson and Kevin Rinke), a Michigan State Police captain (Michael Brown), a West Michigan financial adviser (Michael Markey Jr.), a conservative commentator who's caught the attention of ex-President Donald Trump (Tudor Dixon) and a guy who was spotted moving police barricades at the Jan. 6, 2021, U.S. Capitol insurrection (Ryan Kelley). At one point, Craig said he believes his path to the governor's office leads through winning over Black voters and others in urban areas who typically vote for Democrats. But then he criticized a former campaign manager who quit after concluding the former Detroit police chief was spending too much time in his hometown where fewer than 10 percent of the general election voters typically cast ballots for Republicans. "My former campaign manager writes in his resignation letter that my focus has been in Detroit, which is absolutely insane because my focus has been everywhere but Detroit," Craig said. But Craig, whose biggest outstate endorsement is Upper Peninsula congressman Jack Bergman, also expressed concern about ignoring Detroit while trying “ANYONE RUNNING IN A to woo Republican voters. He recently held a fundraiser REPUBLICAN PRIMARY KNOWS at Detroit's Eastern Market THERE’S NOT A LOT OF VOTERS with a group of supporters he described as "mostly IN FLINT, SAGINAW AND URBAN Chaldean businessmen." CORES.” "If I disappear off the face — John Truscott, CEO, Truscott Rossman of the earth (in Detroit) until I get through a primary ... not seen or heard from in urban areas ... in recent memory, Craig sees Deand now I'm popping out of a little troit as his political base. box and they say, 'Well, where have "I think we have an opportunity to you been for a year?" Craig said. "A do something that's never been lot of it has to do just principally done," Craig said of winning votes in who I am." Democratic strongholds like DePrinciples are one thing, a win- troit, Flint and Saginaw. That may be true. ning strategy is another. But first Craig needs to win an un"Strategically, anyone running in a Republican primary knows there's predictable Republican primary. And that usually starts with not a lot of voters in cities like Flint, Saginaw and urban cores," said John spending almost every day between Truscott, a Republican consultant now and Aug. 2 campaigning where and CEO of the Truscott Rossman Republicans actually live — and public affairs firm. "That's not where vote. you campaign in a primary." Craig's campaign has lost two Contact: clivengood@crain.com; campaign managers since Decem- (313) 446-1654; @ChadLivengood
TECHSTARS
From Page 3
In 2014, there were questions such as, "Can you build a startup community in and around Detroit?" and "Can you invest in startups in this hyper-competitive automotive world?" Serbinski said. "And eight years ago, it wasn't really clear if that was even achievable," he said. "And so the first-generation Techstars Detroit program was around experimentation, very entrepreneurial." Now, it's a very different story. In 2014, there were 24 venture-backed startups in Wayne County, according to the findings of a report last year by Ann Arbor-based nonprofit EntryPoint, which tracks startup economies around the Midwest. By 2020, that figure had increased to 38, according to the same report, and venture capital funding has grown by 333 percent. Nearly one-quarter of all venture-backed companies in Michigan are located in the city of Detroit, according to the EntryPoint report. "I think that the first iteration of Techstars that started in Detroit, about seven years ago, came at the
Super Bowl XL at Ford Field in 2006. | BLOOMBERG
Detroit's big sports events wins ` 2005: MLB All-Star game at Comerica Park ` 2006: Super Bowl XL at Ford Field ` 2007: WrestleMania 23 at Ford Field ` 2008: NCAA men's basketball regional at Ford Field ` 2009: NCAA Final Four men's basketball at Ford Field ` 2010: NCAA Frozen Four men's hockey championship at Ford Field ` 2017: International Champions Cup at Comerica Park ` 2018: NCAA men's basketball first-round games at Little Caesars Arena ` 2019: Rocket Mortgage Classic at Detroit Golf Club (through 2027) ` 2022: NCAA wrestling championships at Little Caesars Arena ` 2024: NFL Draft downtown and NCAA men's basketball regional at Little Caesars Arena
The 2024 Draft will be funded by the NFL, individual and organizational giving, earned revenue and investments by municipalities, Larson said. The funding mix has not been determined. Larson said the goal is to make as many long-term investments as possible. “Yes, we see this as an opportunity to do some longer-term infrastructure improvements where it’s needed,” he said. “Those have not been defined.” Following the Draft weekend will be the Chevrolet Grand Prix, to be held on the streets of downtown
Detroit, adding to the city’s list of big sports events, including the Rocket Mortgage Classic PGA Tour event at the Detroit Golf Club in northwest Detroit. "What people are seeing in Detroit is Detroit is at a point in its history where it can be relied upon," Larson said. "We are known as a sports town, but equally as important is the progress that we’ve made in terms of turning the city around."
perfect time where there was a lot of growth happening in the tech community," said Emily Heintz, founder and managing director of EntryPoint. "A lot of new people moving back to the city and a lot of people decided to start tech companies locally. And so it kind of gave a really nice atmosphere for networking and resources." The return of the Techstars brand to Detroit, with a focus on investing in diverse founders, is "really exciting," Heintz added. With Wheat running the program, "there pretty much is no better person to lead a program like that." Whereas the previous iteration of Techstars in Detroit was focused on mobility and the automotive sector, Wheat said the new program will be more industry agnostic. Moreover, Wheat emphasized that the $80 million being deployed by J.P. Morgan across the cities is true investment capital the bank raised from limited partners who will be seeking a return. The New York City-based financial company, Wheat said, "is really focused on where do they think that they can get the best return for their clients' money, and they think that Detroit is one of those places." Typically, 10-12 companies are
accepted into each Techstars class, and the Detroit cohort will have two classes per year for three years, coming to roughly 72 companies, according to a J.P. Morgan spokesperson. Companies can receive up to $120,000 in investment. “Together with Techstars our goal is to improve access to the capital and other resources needed by underrepresented entrepreneurs to start, fund, and then scale their businesses,” stated Kristin Kallergis Rowland, global head of alternative investments at J.P. Morgan Private Bank. Wheat acknowledged that the investment amount per company is fairly minimal, but highlighted that the dollars can be "significant" for pre-seed and seed-stage companies. "This is a starting point, (and) some companies will come in having already raised some funds, some will have come in having raised no funds whatsoever," she said. "But ... it's not just the funding. The value for most founders who come into the program really is being a part of the Techstars network. And it really is then getting a chance to be exposed to dozens of mentors."
Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl
Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes
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CLASSIFIEDS To place your listing, contact Suzanne Janik at 313-446-0455
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LABOR
CANNABIS
From Page 1
From Page 1
Recreational cannabis is for those 21 years old and up, while medical is approved for 18 and older but has a barrier to entry: an identification card with paperwork, a $40 application fee and the cost of a doctor visit. In February 2020, $25.7 million in medical cannabis was sold in Michigan, according to state records, compared with $14.8 million in the adult-use industry that was just months old at that time. In that month, 11,022 people either applied for a new medical card or to renew it. In February 2022, just 5,947 people applied for a medical card or renewal while medical marijuana sales were a fraction of recreational: $26 million compared with $129 million, respectively. Detroit also is not benefiting from the tax revenue other cities and counties are. Michigan is distributing a total of $42.2 million to 163 localities for their share in earnings from cannabis taxes in fiscal 2021, the state announced March 24. That’s up from $10 million in 2020.
“I cannot think of another industry in the country where productivity over the last 30 years has actually gone down,” said Todd Sachse, CEO of Detroit-based Sachse Construction LLC. “It takes longer today than it did 20 years ago to perform the exact same task. One (reason) is the number of people available, but two is the productivity of the men and women actually Sachse working due to lack of years of experience.” Take for example The Scott at Brush Park, completed in 2014, and Woodward West, which is in development. Both are Sachse-led projects in Detroit, right across Woodward Avenue from one another. Woodward West will take about 35 percent longer to complete than The Scott even though it’s less complex and 100,000 square feet smaller, Sachse said. A lack of skilled workers is to blame. “It’s gotten way worse,” Sachse said. “I don’t know how much worse it’s going to get, whether we’ve reached a new floor.” The number of construction workers in Michigan — 179,000 — has climbed back to pre-pandemic levels but is still down nearly 20 percent from 20 years ago, before the Great Recession of 2007-09, according to the U.S. Bureau of Labor Statistics. That number is not growing fast enough to meet anticipated demand, according to labor experts. Skilled trades are expected to account for 47,000 annual job openings through 2026, according to state data. Marquee projects in the city such as Bedrock’s Hudson’s site, set to be complete in 2024, are less impacted by the worker shortage because contractors want them in their portfolio and shift resources to them, said Dannis Mitchell, director of community engagement at Southfield-based Mitchell Barton Malow, which is the general contractor for the Hudson’s project. Even so, the big developments are feeling more pressure as some smaller would-be projects are being Luther squeezed out entirely. “The impact is real,” Mitchell said. “Hudson is a mega-project here in the city of Detroit, but the reality is we have other projects going on. It helps that a project like Hudson’s is a big shiny object, so a lot of people want to work on the project, but we are competing against other projects.” One of them is Michigan Central Station, whose construction is being led by a joint venture of Lansing-based Christman Co. and Detroit-based Brinker Group. The sweeping Ford Motor Co. project, scheduled to be delivered mid-2023, has run into some supply-related delays, but is still on track to meet that deadline, said Joe Luther, vice president and general manager of Southeast Michigan for
Association comes together If recreational cannabis is approved in Detroit, it could bring success, finally, to businesses that have invested so much of their lives in the industry and education around the product, Scott said. These businesses’ needs came together in the summer as they formed the Black-owned cannabis business association. “We got together and our main common goal was that many of us were struggling, because of what was happening in the industry,” Scott said. “That more so pushed us to bond together even more, because we have this common goal in mind and that’s to push for recreational in Detroit.” The city was in litigation over a previous ordinance’s rigorous equity program and it felt like a “standstill.” “In the meantime, I could see that not just Black businesses, but all businesses were suffering from what was happening,” said Scott, who started as a caregiver in 2014. She founded Chronic City in 2015. There were five member businesses to start, and Scott sought others. Now they’re at 10, including Chronic City, West Coast Meds on Lyndon Street near Livernois Avenue and Remedy on Eight Mile Road at Evergreen. They’ve been meeting monthly on Zoom. Other Black-owned Detroit businesses include Harrington and former NFL player Ron Bartell’s Kahn Cannabis Co. at the Russell Industrial Center. Some members of the association declined to be named. Scott and the others have had a lot to talk about: Many medical customers have been absent, opting for recreational shops. Yet others have continued to visit medical dispensaries, becoming confused and sometimes angry because they don’t realize Detroit is still medical-only. “Now it’s to the point where we decline more than actually come through the door,” Mark Snipes of West Coast Meds said. People want to shop in their communities, Scott said, but it’s difficult when they have to go through a lengthier process.
Labeled containers of cannabis sit on a shelf at at West Coast Meds in Detroit. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS
Scott said the city is working “diligently” to create a program that allows opportunity for people underrepresented in the cannabis industry. She said she believes officials like Detroit City Council President Pro Tem James Tate, who has been championing the recreational cannabis ordinance, see what the industry can do for Detroit. The support Snipes has found in the association has been a “bright spot” in a tough time, he said. “It puts us together where we can do some good for each other by working together,” he said, like collaborating on advertising and advocacy. And as Scott points out, forming the association was not just about the city cannabis ordinance. “It was important to me to create this group … I wanted to create Black ownership, I wanted to show others that we do exist, that Blacks can have ownership in business and especially within the cannabis industry,” said Scott, who also helped shape Michigan’s social equity program. People are profiting off a plant whose prohibition disproportionately hurt Black and Brown communities in Detroit and elsewhere, she said. Fair opportunity is fundamental, she added. “There’s an injustice on Black people in cannabis right now,” Scott said. “This is the industry we have created and we are not benefiting off of. And no one helped us to get into this industry. There was no assistance ... We are pioneers.” She plans for the association to grow into a “pillar” for others navigating the cannabis industry, directing them to a collective of resources and education. Harrington of Viola Brands said he’s been offering advice and insight to the association, having worked on pot equity in other states. “... My biggest advice is telling them every day, every month, every year we’re out of (the recreational) business is going to make it that much tougher for us to compete,” Harrington said. After litigation, delays and amendments, a second version of proposed recreational rules from Tate could potentially be approved Tuesday. The ordinance allocates an equal number of licenses to “social equity” applicants and, separately, the general pool of applicants — 50 each for the limited, highly
sought-after retail licenses, for example. Though City Council members appear largely in favor of recreational, they have differed on specifics. There’s been debate as to whether the new version of the ordinance will help Detroiters benefit enough from the cannabis industry, and how more cannabis will affect neighborhoods. While there’s been a lot of public support for recreational weed sales in Detroit, some fears were brought up during public comment about proliferation of consumption lounges and consumption events, and not enough time given for residents to understand how the ordinance affects them.
‘Like this every day’ On March 7, Snipes of West Coast Meds sat down at a table on the 11th floor of Detroit’s City Hall, directed by security personnel to a space between clear COVID-19 safety dividers. He wore a black polo shirt emblazoned with his business’ logo. Though much of Snipes’ face was obscured by a white mask, he was opening himself up before the nine members of City Council. The cannabis entrepreneur flipped his smartphone toward the lawmakers on the other side of the room, showing a live feed of West Coast Meds’ lobby. It was empty. “It’s like this every day,” Snipes said, adding that he hopes council will approve the cannabis ordinance soon — nothing is perfect, and it can be amended later if needed. He continued: “I just need y’all to recognize what’s happening on the other side of Eight Mile is killing me.” Snipes, who also started as a medical marijuana caregiver around 2015, opened West Coast Meds in October with his wife Jay. They had funding from family and friends, buying materials and building as they found money to continue. Business was good for West Coast at first, but the decline has intensified as Detroit is surrounded by an increasing number of recreational shops. A good day now is around 2025 customers, which is “just basically paying the employees,” and “it’s even getting worse,” he said. They’ve cut hours from 9 a.m.-9 p.m. to 10 a.m.-7 p.m., and are now
closed on Sundays. But Snipes is still planning for expansion. He aims to build out 4,000 square feet of cultivation at his current site and expand to 20,000 square feet at an estimated investment of $1 million or more. “It’s a situation where now (we’re licensed), but need the funding to complete it now, because of what’s happening with this recreation situation, and how slow the business is,” Snipes said.
The facts on equity As the industry in Michigan matures, the state government says it wants to address disparities and be a national leader on equity in cannabis, Michigan Regulatory Agency Executive Director Andrew Brisbo wrote in a letter as part of a racial equity advisory workgroup’s recommendations for the industry. Yet, the MRA found through a demographic survey that as of December 2020, despite its social equity program, just 3.8 percent of people with ownership interest in recreational businesses in Michigan were Black and 1.5 percent Hispanic or Latino. It’s not much better than 2 percent, the national Black cannabis business ownership figure reported in 2021 by Leafly, a Seattle-based online cannabis business platform and information resource. That’s while Black Americans are four times more likely than white to be arrested for cannabis crimes despite the same amount of use, per Leafly. “The systems of discrimination built into 80 years of prohibition won’t be erased by hope and wishful thinking,” Leafly wrote in the report. Michigan ranked 14th out of 19 states in Leafly’s 2021 equity rankings. Illinois, despite starting recreational cannabis sales a month after Michigan, ranked third after Colorado and California. Scott said members of the association are in this industry for their love of the plant and commitment to creating generational wealth not just for them, but for their city. “We have cultivated this cannabis industry on our backs. We’re not against anyone. We are solely standing on the right of Black equity,” Scott said. “I definitely want to change my community and cannabis can change that.”
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Supply kinks With demand still booming, inflated material costs and unreliable shipping continue to hurt builders. At Michigan Central, a medium voltage switch gear recently failed to arrive on time, preventing workers from installing conditioning air in the building, which then delayed work such as painting and drywall finishing, which relies on a conditioned space, said Beth Yorke, project director for Michigan Central. It’s Yorke yet another example of how the absence of one small part, be it in manufacturing or construction, can cause so much disruption. “We build a schedule around a lead time, and all of the downstream activity needing to take place, and then very close to the delivery date, we’ll find out that it’s two or three months The Woodward West project in Detroit will take about 35 percent longer to complete than The Scott — both Sachse-led projects across Woodward Avenue from each other — even out,” Luther said. “Our teams quickly though it’s less complex and 100,000 square feet smaller. A lack of skilled workers is blamed. | KIRK PINHO/CRAIN’S DETROIT BUSINESS have to scramble and make a plan.” Qualified hours Christman. At the same time, the big Residency requirements The pandemic made a lot of develare on the job is an added challenge shiny projects are sucking up all the in an already strained labor market, opers think twice about starting a resources. but it’s still a priority, said Mitchell, of project, but the soaring cost of materiJust about 20 percent of the total Certain projects in Detroit are required “The Hudson’s site, the train station work hours spent on the $950 million to have 51% of hours worked by Detroit Barton Malow. About 46 percent of als has left many regretting their hesi— those are attractive,” Luther said. redevelopment of the Michigan Cen- residents, but most fall short. Following project hours have been worked by tancy. “All those peripheral projects are tral complex in Corktown have been are some examples of projects and Earlier in the pandemic, Christman Detroit residents, and the developer struggling because of the impacts of logged by Detroit residents, accord- hours worked by Detroiters. has paid $60,000 in fines for the was engaged in a $65 million developPercentage of hours worked these great mega-projects that we ing to city data. ment of a 13-story student housing shortfall. by Detroit residents have going in the city.” “It’s critical,” she said. “We’re the complex in Ann Arbor, but the develThat’s well below the 51 percent reA few weeks ago, Christman tried to quired for projects receiving tax inlargest employer of skilled trades in oper decided to pause. They restarted Worked by Non-Detroit residents bid out work for a Redford Union centives by the city, which fines dethe state. We want to make sure that the same project, with the same Schools building. The company invit- velopers depending on how short our projects are being reflective of trades, one year later, and the cost Michigan Central* ed 31 electrical contractors to submit they come up, and then uses those the communities that we’re building went up by $10 million, Luther said. for the job — “personally called each funds for workforce development “The building cost index for Southin.” one,” Luther said — but not one put in programs. To date, the Ford-directed Barton Malow, along with Christ- east Michigan is roughly 15.5 percent a proposal. project has paid more than $500,000 man-Brinker, Sachse and others in year-over-year, which is unheard of,” Luther said the lack of workers has in fines going toward workforce dethe industry, have beefed up their he said. “We would typically be build22% forced Christman to turn away at least velopment. own training programs in hopes of ing 2.5 to 3 percent inflation into our one $10 million-plus project per Michigan Central is by no means strengthening their pipeline of work- estimates.” month. In the past, it never had to the only one failing to meet the The reason for cost hikes and supers. leave money like that on the table, he threshold. In fact, most major develOther organizations are also tack- ply issues doesn’t always get through said. Earlier this month, it declined to opments in the city that are ongoing ling the labor shortage with more clearly to customers, Sachse said. Hudson’s site* take on a new union-owned skilled or recently completed have fallen “I’ve got all my clients training. The Union Cartrades training facility in Howell, short, many by a wide margin. who are sitting there at their penters and Millwrights’ though it was the general contractor desk behind their Zoom, Of 34 active or recently completed new 150,000-square-foot on the $30 million Union Carpenters commercial developments tracked by saying ‘I don’t know what training center along I-96 and Millwrights training center that the city, just four have met the rethe problem is. Why can’t has capacity to train 1,400 44% opened in Detroit last month. you get these projects done students per year, which quirement, a recent analysis of the “We can’t put the staff together data shows. Of the 11 million work ...?’,” he said. the union hopes to hit in right now to be able to go after it,” Lu- hours spent on those 34 projects, less Same goes for explaining the next three to five years, the labor shortage. ther said of the project in Howell. “I than a third were logged by Detroiters. said Tod Sandy, director of “At the end of the day, our think it’s getting worse. I think that training for the union. The struggle to find qualified Declients don’t want to hear COVID just amplified a problem that troit residents to participate in projSandy said the facility Williams Lear Plant at former that the workforce is not we already had in the industry and ects within the city underscores the was built in response to the Cadillac Stamping site* available because they have pushed it to a whole new level where broader skilled labor shortage and labor shortage bemoaned set a schedule in place and a folks decided not to come back or re- need for training, said Dana Wilfar and wide by contractors deadline,” Mitchell said. visited their work-life balance and de- liams, chief strategy officer for Dewho generally agree on the There is a solution to cided they either didn’t want to work troit at Work, the city’s workforce deroot cause of the problem: some of the madness, said 45% in the trades or wanted to work less velopment agency. the de-emphasis of manual Mike Haller, CEO of Dehours.” labor following the Baby “As both private and public projThe problem has gone beyond just ects are coming, we know we’ve got Boomer generation. troit-based Walbridge, manual labor, with GCs having a hard to be geared up to train more folks as “It seems to be that evwho’s been with the compatime filling their management level well, so we’re planning for that right ny nearly 50 years: planning eryone wants to put them ranks, too. ahead. With demand as now,” she said. on a four-year (college) de- Sandy Detroit Pistons Training Center “We’re struggling to find profeshigh as he’s ever seen it, the Since the city began tracking adgree path,” Sandy said of sionals to work with the Christman herence to residency requirements high school students. “Some people wisdom rings true for developers, Co. to manage the entire project, and in earnest around 2016 — during prefer to work with their hands and general contractors and trades workwhen we go to bid the project, we’re construction of Little Caesars Arena find they can do just as well or better ers. struggling to get bidders because of — it has collected $12.3 million in In the scheme of things, general with the wages and benefits that are 10% the lack of skilled trades,” Luther said. fines from developers, according to contractors tend to agree that being offered.” “It’s kind of at all levels right now that the city’s Civil Rights, Inclusion & Around 700 students were brought too busy is a good problem to have. the construction industry is chal- Opportunity Department. That monto the training site in Detroit through Both Walbridge and Barton Malow lenged.” ey was funneled to Detroit at Work the consolidation of other sites in the have that in common as they gear up Feeling the same pinch, Barton Ma- for training residents. region, Sandy said. The goal is for to head south with Ford on a couple of FCA/Stellantis Mack Assembly Plant low recently hired three human reSince 2018, the agency has directly around 25 percent of each incoming huge transformational electric vehicle sources employees to focus on re- trained 2,000 residents for construcclass — typically 60-80 people per projects. cruitment and retention, as well as tion jobs, with more than 1,700 “In general, for a large project of quarter — to be Detroit residents, diversity, equity and inclusion, Mitch- placed in jobs within the industry, Sandy said. Training courses are tui- that magnitude, what’s needed is very ell said. That has meant offeri ng high- Williams said. She expects the city to tion-free, and the union helps match detailed planning,” Haller said. “Up20% er salaries, signing bonuses and more soon earmark at least $10 million of front planning has to happen much students with employers. chances to move up the ladder. federal American Rescue Plan Act “Moving it into Detroit proper is earlier than previously done in the “You have to be aggressive because money for more training. part of the strategy as well to help the marketplace.” there are so many opportunities that At the Hudson’s project, which is people in that community find their have been born out of the pandemic,” just short of the residency work re- *STILL IN PROGRESS way into these construction trades,” Contact: knagl@crain.com; SOURCE: CITY OF DETROIT she said. (313) 446-0337; @kurt_nagl quirements, making sure Detroiters Sandy said. CRAIN’S DETROIT BUSINESS GRAPHIC APRIL 4, 2022 | CRAIN’S DETROIT BUSINESS | 17
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THE CONVERSATION
Jim Holcomb, policy guy by nature, takes reins at chamber
crainsdetroit.com
MICHIGAN CHAMBER OF COMMERCE: Jim Holcomb, the new president and CEO of the Michigan Chamber of Commerce, is no stranger to Lansing. He's been in town since 1992, working his way up from entry-level legislative aide jobs to the head of one the most powerful business lobby groups in the capital city. In January, he officially become the Michigan Chamber's CEO following 14 years as the chamber's chief lobbyist, succeeding longtime CEO Rich Studley. Holcomb recently chatted with Crain's Senior Editor Chad Livengood about his career path and the issues he's focused on now that he's in charge of the 4,000-member business advocacy organization. | BY CHAD LIVENGOOD ` Tell me about your career trajectory, how you got to the chamber and ultimately why did you want to be CEO of the Michigan Chamber? I've been in town since 1992, I was an intern in the state House and I was in law school (at the University of Dayton) at the time ... and I decided to transfer law schools and come to Cooley to finish up just because I enjoyed the legislative process so much. My career started off like a lot of people around town, just working in the Legislature. I worked for a great state rep from Southwest Michigan, his name was Bob Brackenridge. My first time in the Legislature was under shared power, so [Curtis] Hertel and [Paul] Hillegonds were sharing the speakership — it was a great learning experience. I worked in the House for several years. Then I went over and worked for Sen. Joanne Emmons in the Senate, who was a great mentor me. Another really good legislator, someone who really listened to their district, got things done. I practiced law for a few years and then came back to be policy director in the House, I was a legal counsel in the House ... chief of staff for [Speaker] Craig DeRoche. After that (2006) election, where Republicans were in the minority, I stayed around for a year. And then I've been at the chamber for now my 15th year. ` What drew you to work for the chamber? I like how it's the focus on the members. It's not about personalities. I get politics. I like politics. But my heart is really into policy and it's working to find solutions. And I always viewed the chamber as that. They were a strong voice for their members. And I also like the consistency in position. Because we are memberdriven with a policy focus, well before I got here and it will be that way well after I leave, it's a great place to work because you feel like you're doing work that really
helps people back in their communities. We hear from our members daily about the challenges and problems that they face. And anytime we can enter into a conversation with them and help figure out what they need, then deliver to them, it's a great feeling. You're helping people to make sure that their business is running well, their employees are served and their community is bettered. ` Under your two predecessors, Rich Studley and Jim Barrett, there has been consistency in positions. How do they maintain that? And what's management of members look like at the Michigan Chamber? We maintain it because we just stay true to our core principle that we're going to be member-driven and policy-focused. It's never about who sits in the CEO seat. I'm only the fourth one, and we're going to continue down that road. It's really because we have active policy committees and a really strong, active board. We're a diverse membership, with members in all 83 counties. Our board reflects that, reflects the vast industries here in Michigan. And it's one company, one vote. Whether you're a single-person shop or the biggest multinational corporation. ` In some of the election year talking points, I'm hearing a lot of discussion that Michigan's business environment isn't as competitive as other states'. Are there specific areas where we are lagging that you think should be the main focus of policymakers? It's hard to say because it goes by industry. ... I think where Michigan is making great strides and where we can continue to improve is we need a solid regulatory structure that really helps people comply. It's not just putting up a hurdle and making businesses jump through hoops.
` From a tax standpoint, are we competitive with the states we want to compete with in our principal industry? I think we are making progress, but we can always be better. Like I said, it depends on the industry — what works for one may not work for the other. Our premise will always be is the best tax system is the simplest, the broadest and the least intrusive for the taxpayer. But I do think we have made progress. Under Gov. Snyder, we made a lot of progress. With Gov. Whitmer, there's a lot of people talking about tax cuts now. ... The best thing is, let's make sure we're talking about it and we have a sensible tax structure that can be stable so business can operate efficiently and competitively in a global marketplace. ` At the outset of the pandemic, there were several billions of dollars that went out the door from the Unemployment Trust Fund two years ago during the big mass layoffs. What does the chamber think should be done going forward to build back that fund to a healthy balance so we're ready for the next recession that will come along eventually? First and foremost, we think any shortfall to the fund that was not due to employers laying off people but was the result of fraud should absolutely be covered by the state (general fund). ... We don't believe businesses should bear that brunt of paying that back through increased
assessments. It was through no fault of their own. COVID was, hopefully, a onetime issue — and I think we've learned a lot from that. But one thing we know we learned is you can't turn off the fraud detection measures and you have to still make sure the process works. ... What do we need to do to streamline this? There are a lot of good people within state government, and I don't think anybody was purposely trying to create a problem. But there were a lot of people out there who were purposely committing fraud to try to rip off the system. ... But going forward, how do we make sure that we don't have this same problem in the future? If we don't do that, we're missing a tremendous opportunity to make government work better.
Jim Holcomb, president and CEO of the Michigan Chamber of Commerce
REPORTERS
Jason Davis, small and emerging businesses. (313) 446-1612 or Jason.davis@crain.com Annalise Frank, city of Detroit. (313) 446-0416 or afrank@crain.com Arielle Kass, residential real estate, (313) 446-6774 or arielle.kass@crain.com Nick Manes, finance and technology. (313) 446-1626 or nmanes@crain.com Kurt Nagl, manufacturing. (313) 446-0337 or knagl@crain.com Kirk Pinho, senior reporter, real estate. (313) 446-0412 or kpinho@crain.com Dustin Walsh, senior reporter, health care. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter, nonprofits and philanthropy. (313) 446-1694 or swelch@crain.com MEMBERSHIPS
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QLine to remain free through 2022 as it tries to build ridership THE QLINE WILL REMAIN FREE to ride through at least the end of the year in an effort to boost ridership on the 5-year-old streetcar that was shut down for a year-and-a-half as a result of the coronavirus pandemic. Since service restarted in late September with a fare-free pilot program, ridership has averaged 7,350 people a week, though spokesman Dan Lijana said that the past two weeks have seen an increase in ridership to more than 12,000 a week. Ridership for the 3.3-mile line was 1.35 million annually when it opened in 2017, but fell to 1.1 million by 2019. While the service was shut down, the nonprofit operator M-1 Rail canceled a contract with Lombard, Ill.-based Transdev Ser-
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The QLine is partnering with stores and restaurants in Detroit to offer discounts for those who use public transit.
vices Inc. and brought the service in-house. The QLine still has reduced hours
as compared with before the pandemic. It now operates until 8 p.m. Sunday through Thursday and until
10 p.m. Fridays and Saturdays. Lijana said work is also being done to make the service faster and more reliable: a portion of the road near Little Caesars Arena is now a transit-only lane; 26 intersections along Woodward Avenue are getting technology that will give the streetcar priority to pass through; a new system on station monitors will provide accurate streetcar arrival times; and M-1 is working with the city so the rail operator can tow vehicles that are blocking the streetcar’s path. The transit service costs $11 million to operate annually, Lijana said, the bulk of which is paid for by a state convention development fund and private contributions. Tickets brought in about $600,000 annually.
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Chairman Keith E. Crain Vice Chairman Mary Kay Crain CEO KC Crain Senior Executive Vice President Chris Crain Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except no issues on 1/3/22, 7/4/22, 11/21/22 nor 12/26/22, by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Contents copyright 2022 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is prohibited.
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