Crain's Detroit Business, April 11, 2022 issue by Crain's Detroit Business

THE CONVERSATION: Village Green CEO Diane Batayeh on mentorship. PAGE 18

NEW VENTURES Magna, Lear plan new minority-owned JVs in Detroit. PAGE 3

CRAINSDETROIT.COM I APRIL 11, 2022

A TOWN REBORN

Northern Michigan’s Evart was a hard-luck town. Now, between pot, potash and plastic, the city of less than 2,000 is at the crossroads of some big developments. PAGE 8

The massive Lume Cannabis Co. production facility in the northern Michigan city of Evart is one of several huge developments in the small town. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

Rehab program set to expand

Pandemic boaters put strain on marina space

Project adds new neighborhoods

Demand brings new influx of investors, too

BY ARIELLE KASS

BY KIRK PINHO

The houses on Saint Marys Street fit in neatly with the rest of the block, and that’s the point. In the Greenfield/Grand River neighborhood, where houses were selling for $47,369 on average in 2018 — but went for $150,000 before the Great Recession — the team at the Detroit Land Bank Authority’s Rehabbed & Ready program wanted to raise prices on

homes that were typical for the neighborhood. So among the Land Bank’s inventory, they pulled several allbrick houses on the same street. They gutted them, put about $90,000 worth of work into them — including new electrical, plumbing, windows and landscaping — and sold them to new buyers. The Land Bank took a loss on the homes, See HOMES on Page 16

NEWSPAPER

P001_CD_20220411.indd 1

Rehabbed & Ready renovated several of these all-brick houses on St. Marys Street in the Greenfield/Grand River neighborhood. When finished, the houses that had been selling for an average of $47,369 in 2018 are now selling for an average of $127,000. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS=

Jason McGuire’s Detroit-based marina operation company saw a 22 percent increase in revenue during the pandemic, growing to $2.2 million from $1.8 million prior to the onset of COVID-19. The kicker: His ABC Professional Enterprise LLC has only about a third as many wet slips available for rent to boaters in 2021 as he did the year before.

The counterintuitive revenue growth is reflective of an industry that has, much like activities such as golf and running, seen increased interest as a global pandemic pushed more people outdoors onto the state’s and nation’s golf courses, roadways and paths, and lakes, rivers and streams. “We would do an average of $600 a day at $10 a car for people launching their vessels,” McGuire said. “We went from $600 to $2,500 a day during COVID. Cars were parked down the street because it was the only thing to do.” See MARINAS on Page 16

NEW WORLDS Should smaller businesses take a look at metaverse marketing? PAGE 5

4/8/2022 2:15:37 PM

NEED TO KNOW

AWARDS

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` WHITMER SUES TO PROTECT ABORTION RIGHTS THE NEWS: Gov. Gretchen Whitmer has sued, asking a Michigan court to recognize a right to abortion under the state constitution and to overturn a 176-year-old ban in the state that may take effect if the landmark Roe v. Wade ruling is vacated. The lawsuit, which was filed in Oakland County against prosecutors in 13 counties with an abortion clinic, came as the U.S. Supreme Court’s conservative majority considers allowing states to ban abortion much earlier in pregnancy and potentially overturning the right. WHY IT MATTERS: Michigan is among eight states with an unenforced abortion ban that was enacted before the 1973 Roe decision legalized abortion nationwide.

` FORBES NAMES MICHIGAN BILLIONAIRES THE NEWS: A handful of Michigan billionaires rank among the world’s richest, according to a new ranking from Forbes. Dan Gilbert, the chairman of Rocket Companies Inc., is at the top with a net worth of about $22 billion, making him the 71st richest man on the planet. At 106th richest in the world are Hank and Doug Meijer, co-chairs of Meijer Inc., with an estimated net worth of $16.5 billion.

Crain’s wins national Best in Business journalism honor

Others on the list: Ronda, Jon and Pat Stryker, heirs to the Stryker Corp. fortune, with net worths between $3.1 billion to $6.8 billion; Mat Ishbia, CEO of United Wholesale Mortgage LLC, with a net worth of $4.9 billion; Marian Ilitch, founder and chairwoman of Ilitch Holdings Inc., with a net worth of $4.4 billion; and Roger Penske, chairman and CEO of Penske Automotive Group Inc., with a net worth of $2.9 billion. WHY IT MATTERS: Many of the billionaires on the list have seen their net worths increase in the last year, and that includes the Meijer brothers, Stryker heirs and Ilitch. Gilbert and Ishbia, however, have most of their wealth tied to the share price of their publicly traded companies, and the markets have given a cold shoulder to mortgage companies.

` PACKARD PLANT ORDERED DEMOLISHED THE NEWS: Demolition on the Packard Plant could start as soon as next month. A Wayne County Circuit Court judge ruled earlier this month that owner Fernando Palazuelo must demolish the long-decrepit plant he owns on Detroit’s east side at his own expense, applying for demolition permits within 21 days of the March 31 order, beginning demolition within 42 days of the order and completing demolition within 90 days of the order.

` Crain’s Detroit Business was selected the winner of the General Excellence award for 2021 from the Society for Advancing Business Editing and Writing. The SABEW award honors the Crain’s newsroom for excellence across a range of breaking news, enterprise journalism and other areas. Crain’s won the category against all newsrooms nationally with fewer than 50 journalists. It is the first time Crain’s Detroit has won the general excellence award. Crain’s was given an honorable mention in the category in 2018. “Beyond great storytelling, breaking news, features, analysis, what struck us most about Crain’s Detroit Business was its total commitment to tackling difficult issues in an honest way and without concern for the negative light it may cast on its local subjects,” judges for the competition said. “Crain’s Detroit doesn’t shy away from holding those in power accountable, whether

WHY IT MATTERS: It’s the end of Palazuelo’s vision to redevelop the site, which includes 30 properties on East Grand Boulevard and Concord. It’s also a victory for the city of Detroit, with Mayor Mike Duggan vowing to get the Packard Plant torn down as part of his election promises.

` FIREWORKS HEADED BACK TO DETROIT THE NEWS: The Parade Co. is bringing the Ford Fireworks back to the Detroit River between the city and Windsor, Ontario, on June 27. WHY IT MATTERS: The show is back in person after running as a televised-only event the past two years from Harrison Township due to the coronvirus outbreak.

Crain’s Detroit Business earned the SABEW award for excellence across a range of breaking news, enterprise journalism and other areas.

it’s government officials and plastics manufacturers, like in ‘Great Lakes Pollution,’ or government-funded preschool programs, like ‘Child Care Conundrum’.” “This kind of reporting is so vital right now as local news is shrinking or disappearing from so many areas of the country,” the judges wrote.

FEATURED LISTINGS

• • • • •

1 0 1 6 L A K E PA R K D R | B I R M I N G H A M

400 MARTELL DR | BLOOMFIELD HILLS

HOME FEATURES

4 BEDROOMS | 4.2 BATHS | 6,208 SQ. FT.

5 BEDROOMS | 6.1 BATHS | 7,635 SQ. FT.

Charming French Normandy style designed on private corner lot Quarton Lake Estates Gorgeous landscaping and stone walkways Elevator, home theater, wine cellar, yoga/exercise area, au pair suite and state-of-the-art AV systems Expansive master suite with dreamy ensuite bathroom, heated marble flooring and large custom closets with mirrored dressing area.

442 S Old Woodward Birmingham, MI 48009 AN INDEPENDENTLY OWNED AND OPERATED LICENSEE OF UMRO REALTY CORP.

2 | CRAIN’S DETROIT BUSINESS | APRIL 11, 2022

• • • •

Art deco home with impeccable finishes Quality millwork and stunning fixtures throughout Premiere location, steps from Cranbrook House and Gardens Private 1.5 acres delivers a perfect setting for outdoor entertaining with lush landscaping that surround tennis courts and a gunite in-ground pool

T O L E A R N M O R E , VI S I T C R A I N - H O M E S .CO M

HEALTH CARE

MANUFACTURING

‘GOLDEN OPPORTUNITY’

Blue Cross offers DNA testing for prescription accuracy BY DUSTIN WALSH

LAN Manufacturing plans to open next year a plant in Southwest Detroit at the former site of Sakthi Automotive. | KURT NAGL/CRAIN’S DETROIT BUSINESS

Magna, Lear look to new Detroit plants, minority JVs for growth BY KURT NAGL

Two of the largest automotive seating suppliers are building out new plants in Detroit and looking to joint ventures to capture more business from OEMs increasingly conscious of their spending with minority-owned companies. Magna International Inc. formed a joint venture with LAN Manufacturing Group LLC called LN Manufacturing LLC, which plans to open a plant in southwest Detroit next year to make seats for Ford Motor Co. trucks and SUVs. On the city’s east side, Lear Corp. is expected to open its plant at the former Cadillac Stamping site later this year to make seats for General Motors Co. and is exploring a joint venture.

“It’s competition, in one word,” said Michelle Sourie Robinson, president and CEO of the Michigan Minority Supplier Development Council, which certifies minority companies and JVs. “They’re all trying to prove that they have the greatest competitive advantage and can do that work and provide the most value to the customer, and (minority certification) actually just adds to that level of value.” John Wyskiel, president of Novibased Magna Seating, said its new joint venture with Detroit-based LAN Manufacturing aligns with the company’s diversity and inclusion initiatives and provides an avenue for more business at the same time. “From a bigger picture, for us it’s a way to give back to Detroit in a

sense, to be a good corporate citizen,” Wyskiel said. “All of the OEMs are active in this space. I would think having this set up would hopefully lead to other opportunities.” Southfield-based Lear declined to comment on specifics related to discussions about minority JVs but said in a statement that it is committed to spending with minority suppliers. “Lear Corp. is always considering ways to expand our business with minority suppliers,” the company said in the statement. “While Lear has no specific announcement regarding a minority JV, we remain committed to doing business with minority suppliers.” See VENTURES on Page 15

“WHEN THEY’RE DONE WELL, MINORITY BUSINESS ENTERPRISE CERTAINLY WINS.” — Michelle Sourie Robinson, president and CEO, Michigan Minority Supplier Development Council

For some Blue Cross Blue Shield of Michigan members, the days of trial and error with new medications is over. The Detroit-based insurer launched a precision medicine pilot program with 500 Medicare Advantage patients last month that uses pharmacogenomics, or genetic testing, to determine which medications will be successful based on genetic predisposition. The program provides a self-administered swab test to the patients and their physician uses the results to determine which medications will work for various common diagnoses including depression, high blood pressure, etc. Results will be delivered to the patient and their physician within three to five days of taking the test, said Julie Hessik, senior director of business development for OneOme, the third-party vendor that will be providing the tests and analysis. “What this opportunity affords us is to provide the physicians what drug will work the best,” said Scott Betzelos, chief medical officer for Blue Care Network and vice president of HMO strategy and affordability for the Blues. “The value is in the reduced complications that can occur. The trial-and-error approach to prescribing medications is alleviated once you have a PGX (pharmacogenomics) test. Your DNA never changes, so the test stays with you for the balance of your life. BCBSM will not be privy to the genetic testing results, and testing results will not be used for underwriting purposes or to deny or increase the cost of coverage Betzelos said. See DNA on Page 15

NONPROFITS

Catholic pilgrimage site taking shape as part of larger community plan BY SHERRI WELCH

A second Catholic pilgrimage site is taking shape in Detroit. The Cathedral of the Most Blessed Sacrament, the “mother church” for the Catholic Archdiocese of Detroit, is launching a multimillion-dollar plan to establish the church and surrounding campus on Woodward Avenue as a center for arts and culture for the surrounding community. The plan will include the installation of historic statues and authenticated relics of the 12 apostles to provide hope and healing to those seeking comfort and the chance to personally experience the miracles of faith, the church said. Relics of saints held by the cathedral could be added in the years to come. Organizers are calling it the “Journey With the Saints Pilgrimage,” and

The Cathedral of the Most Blessed Sacrament on Woodward Avenue is the “mother church” for the Catholic Archdiocese of Detroit. | WIKIMEDIA COMMONS

say it will be the only experience of its kind in the world. Its development comes as a similar project to enhance and expand another Catholic pilgrimage site, the Solanus Casey Center on Detroit’s lower east side, moves forward. An increased number of people have visited the center from around the U.S. and Canada since November 2018 when Father Solanus Casey was beatified by the Roman Catholic Church, putting him on a path to sainthood. At some point, there could be a collaboration between the two sites, said the Rev. J.J. Mech, rector for the cathedral. The pilgrimage is part of a three- to five-year plan the church is developing that will also create spaces within the cathedral and on surrounding lots it owns to serve the surrounding

neighborhoods. Projects envisioned include:  A 53-unit affordable apartment development across from the cathedral in the city’s Boston Edison/Arden Park area.  Renovations to the church’s gymnasium (where former NBA and MSU star Magic Johnson once played, Mech said) to house Head Start programs and wedding receptions.  A new atrium for post-Mass fellowship, art displays, meetings and special events.  A sculpture garden with religious and nonreligious art and benches.  Recreation areas and a dog park. Mech said the plan got its start when Archbishop Allen Vigneron, who leads the parish at the cathedral, asked him to make it an “apostolic center.” See PILGRIMAGE on Page 14 APRIL 11, 2022 | CRAIN’S DETROIT BUSINESS | 3

P003_CD_20220411.indd 3

4/8/2022 2:18:54 PM

REAL ESTATE INSIDER

The Jefferson Chalmers neighborhood on Detroit’s east side is now in a federally designated floodplain. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

Jefferson Chalmers floodplain designation may hurt funding The Federal Emergency Management Agency’s determination last year that virtually all of the Jefferson Chalmers area sits in a floodplain may Kirk cause problems PINHO for more than just homeowners in the east side Detroit neighborhood bordering Grosse Pointe. It may also make developer access to federal funding programs like Community Development Block Grants and HOME Investment Partnership funds, which are U.S. Department of Housing and Urban Development dollars doled out by the city, trickier to get and add more red tape to things like Low-Income Housing Tax Credit awards from the Michigan State Housing Development Authority. Although those HUD dollars won’t be technically frozen out of the neighborhood, officials generally agree that at the very least they will be more difficult to come by. In part, that’s due to the federal Executive Order 11988, which requires “federal activities to avoid impacts to floodplains and to avoid direct and indirect support of floodplain development to the extent practicable.” Chad Benson, director of rental development for the Michigan State Housing Development Authority, said a HUD eight-step evaluation for its funding in floodplains is “designed to sort of pause the process and really look and say, ‘Is this the right place for this? Do we have federal money in a floodplain and is that wise?’” That could pose problems for development and redevelopment efforts in the Jefferson Chalmers neighborhood, particularly south of Jefferson Avenue, in the immediate future, said Josh Elling, CEO of Jefferson East Inc., a nonprofit that serves neighborhoods including Jefferson Chalmers as well as Lafayette Park and Elmwood Park.

A Federal Emergency Management Agency map shows an area on Detroit’s east side highlighted in blue, including the Jefferson Chalmers neighborhood, that is designated as a national flood hazard area. That means properties there with federally backed mortgages are required to buy flood insurance. | FEMA FLOOD MAP CHANGES VIEWER

“That means that if the city of Detroit wanted to issue an RFP for Guyton school, an RFP for Parcel 492 next to Riverbend Plaza, or some RFPs around Jefferson Village on some of the (Detroit Economic Growth Corp.)owned land there,” Elling said. “Those are all on hold, because we were going to need to use CDBG and HOME funds to entice developers to bid on these sites. I was like, ‘Well, OK, say goodbye to any substantive economic development in JC (Jefferson Chalmers) and Marina District until they can get these neighborhoods out of the floodplain.’” Getting out of the floodplain is going to be tricky, Elling and others have said, requiring a massive infrastructure investment perhaps costing tens of millions of dollars. Whether that involves raising the seawall a couple feet or some other fix, it will likely be years down the line. So in the interim, commercial real estate development projects could be forced to pursue other layers of financing, which are without fail needed in Detroit to make them financially viable. Derric Scott, CEO of East Jefferson Development Corp., said a green stormwater infrastructure lot for the apartments at 910 S. Marlborough as

well as two other such lots south of Jefferson can’t receive federal funding, and the Century Lakewood Apartments is not eligible for HOME funding. For its part, the city isn’t ruling out HUD funding in Jefferson Chalmers. “We believe that HUD funds can still be invested in floodplains, but understand that regulations require additional review,” Julie Schneider, director of Detroit’s Housing and Revitalization Department, said in an emailed statement. “We are seeking more guidance from HUD on this matter. Regardless, we want to assure residents that the flood designation has not stopped our efforts to revitalize these neighborhoods through the use of non-HUD sources, such as the Strategic Neighborhood Fund.” Aside from commercial development, let’s not forget the pain that the floodplain designation — and of course the flooding itself — has on homeowners, also. Residents and building owners in the area are being required to have flood insurance on their federally-insured mortgages within a year of the Oct. 21 designation of the new floodplain maps, and that insurance could add up to thousands of dollars more

per year to the already expensive cost of buying, insuring and paying taxes on Detroit property. In addition, there could be added complications to the CDBG-funded no-interest home loan repair program, Elling said. The city said Tuesday it is still able to issue the loans in the neighborhood because the restrictions kick in one year after the designation is made. MSHDA says there is no prohibition on its 9 percent low-income housing tax credit funding going to new construction or redevelopment projects in floodplain zones, but the designation complicates the matter. New construction in floodplains has to contend with increased building code requirements, such as being a foot above the base flood elevation and having parking ingress and egress a foot above the base flood elevation, which increases time and cost to build, said Daniel Lince, environmental manager for MSHDA. “The money, like HUD HOME funds or project-based vouchers, they would trigger a different set of laws and that would be more difficult to do,” Lince said. “It’s not our only source of funding, and not even the major one, so deals could still get done, but they are definitely going to become a little more complicated ... It’s more difficult, and it is especially more difficult for CDBG funding for sure.” Lince said that in order to receive CDBG or HOME funding if a project is in a floodplain, it has to undergo an eight-part evaluation, which the project is unlikely to pass because there will likely be what are referred to as “practicable alternatives” for the project. The determination that the overwhelming majority of Jefferson Chalmers is in a floodplain came after years of FEMA study involving more precise mapping and topographical technology deployed not just along the Detroit River, but also the Great Lakes and the states that border them. As of 2016, the neighborhood had some 7,900 residents spread across

what has been described as a bowllike topography bottoming out at Essex Avenue. Varying points of it sit as much as several feet below the Detroit River. The neighborhood — which French settlers named “Grand Marais,” or “Great Marsh” — is bordered in approximate terms by Clairpointe Street to the west, Jefferson Avenue to the north, the Grosse Pointe Park border to the east and the river to the south. As a result of climate change causing rising water levels in Lake St. Clair spilling over into the Detroit River, residents have endured and will likely continue to endure regular flooding absent a costly and permanent infrastructure fix. FEMA does not look at a particular community’s infrastructure to determine its flood hazard status, but it might be time to change that, James Sink, regional flood insurance liaison for FEMA’s Region 5 in the Midwest, told us late last year. The October updates in Detroit were made while assessing coastlines in Wayne County along Lake St. Clair, the Detroit River and Lake Erie, John Wethington, regional engineer for Michigan at FEMA Region 5, told us at that time. Part of a wider Great Lakes update that started around 2011, it took into account new data that hadn’t been used in prior maps on things like wind, waves and storms, as well as updated topography and newly available methods for analyzing all the data. Hakim Berry, the city’s COO, told us in November that the most obvious fix for the flooding issue is to raise the seawall in Jefferson Chalmers up almost 2 feet. The seawall to the west in Grosse Pointe Park has already been raised, which kept that community from being designated a floodplain. That fix is complicated not just by the multimillion dollar cost but also by property ownership, which along the Detroit side of the river is largely private. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

4 | CRAIN’S DETROIT BUSINESS | APRIL 11, 2022

P004_CD_20220411.indd 4

4/8/2022 11:49:40 AM

TECHNOLOGY

‘Pipe dream’ or wave of the future? Marketers navigate the metaverse as a way to offer some new opportunities for commerce BY NICK MANES

Facebook co-founder Mark Zuckerberg late last year declared that the era of the “metaverse” was beginning, as he rebranded the social media giant as Meta Platforms Inc. Since that time, the interest of technology evangelists, advertising and marketing industry executives — and even small business owners — has certainly been piqued. And while Zuckerberg laid out his vision for a future in which the real and virtual converge in the metaverse nearly six months ago, there’s still little consensus on just what is the metaverse, when it could be a reality or what the practical business implications are going forward. The term “metaverse” is said to have been coined by Neal Stephenson in his 1992 science fiction novel “Snow Crash,” which was set in a place where people use virtual reality headsets to interact in a digital game world. While a specific, agreed-upon definition remains elusive, Zuckerberg and others see the metaverse as combining the virtual world with the everyday real world. A place where you can virtually work in an office setting without leaving your living room, or make your home’s setting a beautiful tropical beach, such as Zuckerberg did in a video last year outlining the company’s rebranding. While sure to offer some new opportunities for commerce, some practitioners in the marketing and advertising space say the metaverse stands as little more than a pie-in-the-sky idea at the moment, something most small business owners would be wise to avoid for the foreseeable future while big business experiments. But some companies say the notion of the metaverse presents a compelling idea: the opportunity for small, lifestyle businesses to optimize a new digital presence that frees up owners to focus on actually running and growing their businesses. For Nick Meyer, director of social media strategy for Detroit-based advertising firm Campbell Ewald, the metaverse — at least as proposed by Zuckerberg — consists of connecting existing technology. For example, he pointed to how furniture stores can virtually place a couch in a prospective customer’s living room, or how eyeglass company Warby Parker al-

In October, Facebook founder Mark Zuckerberg gave a presentation announcing the social media giant’s new name, Meta Platforms Inc., amid a metaverse home environment. | SCREENSHOT

lows consumers to virtually try on a pair of new frames. “But those things aren’t necessarily connected to each other yet, and I think the overall vision is that the metaverse, or whatever does come to be, is the thing that kind of connects all of those digital touchpoints that customers can have,” Meyer said. “So for me, the metaverse — I won’t call it a pipe dream — but I’m not sure it will be fulfilled in the vision of Zuckerberg. I do think that connection will happen, but whether it’s through a Facebook technology or not is yet to be seen.” It will hardly just be Facebook’s rebranded parent company that helps build out the metaverse, according to remarks Zuckerberg delivered last month to attendees of the annual South By Southwest technology and music conference in Austin, Texas. “Metaverse isn’t a thing a company builds. It’s the next chapter of the internet overall, “ Zuckerberg said, according to a March 16 report in the Austin American-Statesman. “Our goal is to help build the fundamental

tech to bring the metaverse to life.” To that end, TAG Multimedia, a Clawson-based digital marketing agency founded in 2019 has pivoted toward working to help small businesses around Oakland County dip a toe into the metaverse. TAG’s model revolves around offering a conversational AI platform that can use digital avatars of the owners, and computer re-creations of their stores, in an effort to bolster e-commerce. “We’re going to have this conversational AI and this marketing platform that is going to make their experiences and interactions online completely usable (and) practical,” TAG President Michelle Armstrong told Crain’s. “And that’s a big step for small businesses. They’re not afraid to invest in software. What they’re afraid of is the commitment that they have to make to understand what they bought, and then implement it and train people how to do it.” Armstrong said the company is working with nearly two dozen clients seeking to develop the platform for their businesses, which would live on

their company’s website. The avatars and AI functionality allow for business owners to run their company in a whole new way, according to Armstrong. “This allows them to train something that can live online where they can’t be (all the time),” she said. “It allows them to be in two places at once.” Costs for the service can vary greatly, Armstrong added, depending on the specifications the businesses are seeking, but an “average” platform can cost $4,500-$6,000 to build out.

Differences arise Other metro Detroit advertising executives, however, take a different view of the metaverse, saying it goes beyond traditional e-commerce that has become ubiquitous over the last few decades. “To me, (the metaverse) is more of that virtual reality space,” said Ellyn Davidson, CEO of Ferndale-based advertising and marketing firm Brogan & Partners. “If I want to reach the younger population where they’re at, which

is gaming and doing all these things in virtual reality, then what kinds of collaborations do I need to be doing from a national standpoint?” So given the various definiMeyer tions and uncertainty, how should everyday business owners — who continue to struggle with supply chain issues, staffing shortages and all other manner of challenges — be Davidson thinking about the metaverse? By and large, they shouldn’t — at least not yet, Davidson said. Social media took years to evolve as a business communication tool and the Armstrong metaverse is likely to play out the same way, she said. “I think small businesses ... need to focus on the here and now and definitely look to national brands to go there first. Because you’re not going to build your business right now in the metaverse,” Davidson said. To that end, a variety of large, wellknown corporations, from Disney to Nike to Gucci, have begun experimenting with metaverse opportunities ranging from virtual reality experiences to NFTs to shopping, according to reports. Meyer, with Campbell Ewald, also suggested that small business owners largely focus on what they do best. Most brands, he noted, are not known for their social media presence as a whole. Rather, some brands are known for their use of Twitter and others are lauded for using Instagram in a meaningful way. Simply trying to jump into the metaverse at this point would be unhelpful, he said. “Doing it just to do it is a terrible strategy,” he said. Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

REAL ESTATE

Westin Book Cadillac penthouse hits market in Detroit for $2.3M BY ARIELLE KASS

A penthouse unit at the downtown Westin Book Cadillac is on the market. The three-bedroom, three-bathroom bi-level unit is listed for $2.295 million — less than the $3.541 million a larger penthouse unit sold for at the end of 2020. Hannah Hoppough, a Realtor with @properties Detroit who listed the home, said the 2,900-square-foot unit was put on the market by owner Brian Ferrilla, who had been renting it to another Book Cadillac owner whose unit was being renovated, because he “didn’t need that much space anymore.” Ferrilla also owns another unit in

Inside the Westin Book Cadillac penthouse on the market. | @PROPERTIES DETROIT

the building, Hoppough said, and spends time Up North and in Florida. “They’re now motivated to sell,” she said. She said Ferrilla completed extensive renovations on the unit, which has a steam shower in the main bathroom, a full bar and seating area in the second-level loft and a climate-controlled storage area for wine or other items. The penthouse also has “pretty much 360(-degree) views,” Hoppough said, including views of Comerica Park and the river. “There are very few buildings in the city that currently offer that,” she said. “In my opinion, among current buildings, there’s no better place to live

than the Westin Book Cadillac.” The building dates to 1928 and has a pool that’s shared with the hotel and two dedicated parking spots. Hoppough said the building’s owners are renovating the residential lobby and hallways. Residents also have access to hotel amenities, like room service and housekeeping. “It’s pretty much like living in a hotel,” Hoppough said. “It’s a beautiful space with a lot of modern upgrades.” Other amenities include custom window shades and crown molding, an integrated surround-sound system and custom tile.. Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB APRIL 11, 2022 | CRAIN’S DETROIT BUSINESS | 5

P005_CD_20220411.indd 5

4/8/2022 12:53:14 PM

COMMENTARY

Remembering Mike Finney, a friend to small business BY MARK S. LEE

DANIEL SAAD FOR CRAIN’S DETROIT BUSINESS

EDITORIAL

Workforce education isn’t making the grade T he grades are in for Michigan’s ability to create, attract and retain an educated workforce. The nicest thing you can say is they’re an “Incomplete” — at least when it comes to getting students to college graduation. The Detroit Regional Chamber’s 2022 State of Education report released this week makes clear that our school-to-work pipeline isn’t just leaking, it’s gushing. The problem is particularly acute for young people of color. If state policymakers don’t take concrete steps to fix it now, it could stunt our ability grow the diverse workforce Michigan so desperately needs. Consider some of these key findings from the report: `Overall post-secondary attainment levels for the region are still lagging other best-in-class regions that have also been making incremental gains. Nearly half of college students in metro Detroit have not earned a degree within six years. For city of Detroit residents, that stands at an even more alarming 74 percent. `Total post-secondary education attainment, including certificates in programs such as welding, reached 50 percent across an 11-county Southeast Michigan region in 2019. That compares with about 60 percent for bestin-class cities examined by the chamber, like Seattle and Minneapolis. `Job needs and talent education levels here in Michigan are out of sync. Fifty-seven percent of jobs require a four-year degree, but less than a third — just 32 percent — of the state’s residents hold a bachelor’s degree. `Of 100 tracked students from around the region who were on a path to graduate in 2018, only 81 did, according to the report. Of those, 60 enrolled in college, and just a third of the entire cohort or 22 earned a degree or post-secondary credential by 2020. The Detroit chamber a few years ago set a goal of 60 percent attainment of a college de-

gree or other postsecondary credential by 2030. There are some encouraging programs underway, including the Detroit Promise tuition guarantee for high schoolers in the city, and a national internship program called YearUp that’s designed to connect college-age students with major companies. That program is coming to the Detroit area soon. And there was one bright note: first-time freshman enrollment at four-year colleges in Michigan was up 1.7 percent for fall 2021, according to the report, but overall enrollment still remains below pre-pandemic levels. That will not be enough to overcome other systemic issues that only state lawmakers — in partnership with educators and business leaders — can address. They include better funding for the state’s colleges and universities, many of which are struggling to regain post-pandemic enrollment losses. Also critical: a recognition of the barriers that keep young adults from pursuing higher education or certificate programs, such as transportation, affordable housing and child care. Short of a total rework of Michigan educational system and funding, there remains low-hanging fruit that could help. Some states have turned to requiring families of graduating high school students to fill out the federal financial aid application known as the FAFSA or explicitly opt out of it. That would go a long way toward helping students and parents realize that opportunities and help do exist. We recognize that bachelor’s degrees aren’t the only path to good jobs. But it’s also incontrovertible that the cities that have the most also have the strongest economies. Much has been made in recent months over the need for Michigan to grow its “knowledge economy” to keep high-tech investment in the state. There is no one answer to that dilemma — but making education a priority is a start.

’m still stunned. I received a call at approximately 9:30 last Monday morning from a friend. I didn’t give it a second thought because we talk all of the time; however, it was a bit unusual since we normally chat later in the Mark S. Lee is day. And this call was relfounder, atively early. president and “Did you hear?” CEO of The Lee “No.” Group. “Mike Finney died. Just Google the Miami Herald …” And I did. I was stunned and speechless upon hearing the news. I paused, collected myself and asked again about the news, in disbelief. Mike and I were not lifelong friends. He grew up in Flint and I was born and raised in Detroit. But our paths crossed doing during our adult years doing what we both loved doing: supporting the business community in Detroit, across Michigan and beyond. I first met Mike through mutual friends. We quickly developed a bond on the golf course, became golfing buddies and would

See FRIEND on Page 7

COMMENTARY

Finney’s leadership lessons BY JENNIFER OWENS

lways stay calm, keep up on the latest technology, and never stop innovating. These are a few of the many lessons shared by my mentor Mike Finney. Mike, CEO of the Miami-Dade Partnership and former CEO of the Jennifer Owens Michigan Economic Deis president of velopment Corp., unexLakeshore pectedly passed away Advantage, an last week from a sudden economic heart attack. But his development organization for leadership lessons will live on in me and so Allegan and Ottawa counties many others. Our working relationin West Michigan. ship goes back 20 years. We worked together in his first role at MEDC and at Ann Arbor Spark. Mike always had this calm, cool demeanor that made you want to work with him. I don’t think I ever once heard him raise his voice. Mike loved to mentor up-and-coming talent. I remember Mike proudly sharing that five of his former employees went on to lead their own economic development organizations. I would be the sixth when I accepted my current position as president of Lakeshore Advantage seven years ago. My go-to

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. 6 | CRAIN’S DETROIT BUSINESS | APRIL 11, 2022

play the sport anywhere and everywhere across metro Detroit. At the time, he was president of Ann Arbor Spark, where he was charged with leading that community’s economic development arm focused on tech-based and other entrepreneurFinney ial-related businesses. He would invite me to his Ann Arbor office and share with me his vision and thoughts on what needed to be done. He invited me to events and, quite frankly, to just exchange ideas. Through rapid ascension, Mike later became CEO of the Michigan Economic Development Corp., where he led the state’s economic development efforts for retaining and attracting new businesses. Needless to say, Mike was fearless, and simply put, he was good. And he always looked out for others and had an affinity for small businesses. To wit, Mike called me about about a business opportunity. I had just launched my business and was looking to attract new business during the economic recession of 2008.

when I faced a career opportunity or challenge, Mike was one of the first people I called when I got my job offer. In his first MEDC role, he headed the technology development sector. Always making news, Mike created MEDC’s Life Sciences Corridor Initiative and developed innovative tools like the SmartZone program. At the time, I was the media gatekeeper charged with monitoring and coaching staff on all media engagement. Mike sometimes made that role a bit challenging. He was always giving the media his cell phone number to call him directly. Even if I wasn’t listening in or setting up his media calls, he always delivered great information. His innovative mind helped make MEDC one of the best economic development organizations in the country. Even though he didn’t always follow the rules, I knew if I worked with Mike again, I would continue to grow. I jumped at the chance to lead the business development efforts at Ann Arbor Spark as part of Mike’s team in 2003. It was then I learned that Mike was a technology aficionado. He was always the first to get the newest iPhone, wearable device, or find some new app to save time. When I was having issues with my phone or Mac, he would say, “Bring it in here, I’ll fix it.” When Mike was in the office, it was like having our own Apple Genius Bar. See LESSONS 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.

FRIEND

From Page 6

I picked up the phone and on the other line was Mike’s voice. He said he had a business opportunity for my company, and went on to explain that he was asked to work with Detroit-based CEOs in collaboration with SBA’s Detroit office, as part of an executive leadership, MBA-style program, if you will. The concept was simple: Work with small business owners as part of an intense monthslong program during which they would develop strategy-based growth plans. But because of his expanding responsibilities, he couldn’t do it and he recommended me for this effort. It started out as “e-200” and has since evolved into the Emerging Lead-

ers Program, which is still in existence. Bottom line, Mike’s recommendation became my company’s first client. And without Mike’s support and confidence, I would not be in business 14 years later. He and his wife Gina moved to Florida in 2017 to expand his horizons while continuing to focus on economic development opportunities in South Florida. We periodically kept in touch and recently exchanged text messages. I expressed how proud I was of all he was doing. And he replied in kind. While Mike moved to Florida, his heart always remained close to his beloved Flint and the state of Michigan. In fact, he attended the recent College Football Playoff game between Michigan and Georgia, which was played in Miami. Rest well, my friend, rest well. And thank you!

LESSONS

From Page 6

Mike taught me so much about leadership. He had a completely open-door policy in that his office literally didn’t have a door. He didn’t want one, as he preferred our team members talking to him when in the office versus sending internal emails. Even someone like Mike who embraced technology knew the tremendous importance of face-toface communication. This approach created a family-like environment amongst the Spark team members. There was nothing we couldn’t do together. We attracted major wins like Barracuda Networks, a Google expansion, and launched a return home to Michigan talent attraction campaign, MI-

CHAGAIN, which extended statewide. In 2014, my heart broke a bit when Mike told me he was leaving Ann Arbor Spark to head the MEDC. He made a hard press for me to come along with him, but my heart was in local economic development. Even though I declined his job offer, Mike always took my calls, consistently there for me personally and professionally. We both have the privilege of having three boys. He regularly gave me advice on living in a house with three sons. One of the best was, “don’t buy new furniture until they are out of the house. They will just wreck it.” He loved his wife, Gina, and his boys with all his heart, even if it meant new furniture would have to wait. When we last met up in Septem-

ber, he shared an update on his boys. They were all thriving which made him proud. He was loving his next great role as grandfather. He was starting to plan for what he and Gina would do in his retirement. He had plans to travel, work on his golf game, and spend as much time as possible with his grandkids. Sadly, his retirement plans won’t become reality. I know Mike is looking down, so proud of the legacy he left behind. The lessons he imparted to me, and many others will continually be paid forward. The impact he made on the communities he helped to lead is lasting. Most importantly, the thriving family that he and Gina built together stands strong. Now it’s up to us to support his family, embrace today, and carry Mike’s leadership lessons forward.

FINANCE

Startup Livegistics raises $6M seed round BY NICK MANES

A Black-owned Detroit software company has closed on $6 million in venture capital funding to help further scale its logistics technology, primarily for the construction sector. The seed round for Livegistics Inc., which last year won a $1 million grant through a pitch competition backed by musician Pharrell Williams, comes amid a greater push to bolster the capital available to minority founders. “My father and grandfather once owned and operated Michigan’s largest minority-owned asphalt company,

“MY FATHER AND GRANDFATHER ONCE OWNED AND OPERATED MICHIGAN’S LARGEST MINORITY-OWNED ASPHALT COMPANY, SO CONSTRUCTION IS IN MY DNA.” — Justin Turk, CEO and cofounder, Livegistics

so construction is in my DNA,” Justin Turk, CEO and co-founder of Livegistics, said in a news release. “My ambition to achieve and restore system integrity to the industry is still fueled by their legacy. Every business deserves to be unstoppable, and by deploying our technology to work in the field, which is mutually exclusive and profitable, businesses and communities are able to see immediate benefits.” The $6 million seed round was led by Refinery Ventures out of Cincinnati and BlackOps Ventures, a Miami-based venture capital firm focused on investments in Black-owned startups. Other investors include Detroit Venture Partners, Tappan Hill Ventures and Reinventure Capital. The company’s technology is a cloud-based material management system with GPS tracking, which it says minimizes the use of paper and decreases fraud, revenue loss and lawsuits by utilizing real-time data analytics.

CRAIN’S THOUGHT LEADERSHIP FORUM MACKINAC POLICY CONFERENCE EDITION

HIGHLIGHT YOUR AUTHORITY AND EXPERTISE Share expert commentary in a special Thought Leadership Forum devoted to the 2022 Mackinac Policy Conference theme: the Michigan business community’s changing role in polarizing times. Align with one of four thematic areas:  Advancing diversity as a strength  Utilizing civility and facts in public discourse  Building a culture of empathy  Advocating for the fundamental tenets of American democracy

This special section in Crain’s May 30 Mackinac Policy Conference issue offers high-profile exposure plus bonus distribution on the island.

Contact Associate Publisher Lisa Rudy at lrudy@crain.com to learn more. Hurry – the window closes on May 3!

DETROIT

Other Mackinac issue advertising opportunities are also available, including your full-page ad on the back cover.

APRIL 11, 2022 | CRAIN’S DETROIT BUSINESS | 7

P007_CD_20220411.indd 7

4/8/2022 10:38:12 AM

Lum art

PAG

CRAIN’S MICHIGAN BUSINESS: EVART

RIDING A REBIRTH

How a tiny Michigan town attracted some big investments in a few short years BY DUSTIN WALSH Evart is a hard luck city.

The former logging community 20 miles northeast of Big Rapids is one of the poorest municipalities in Michigan with an average household income of $25,000, well below the state average of about $64,000. Dilapidated homes, paint peeling from their pine fir siding, surround Main Street. Amenities in its aging downtown are few. Burger joint Jerry’s College of Knowledge drew a small lunchtime crowd on a cloudy day in mid-March. Polaris and John Deere UTVs filled parking spaces in front of the post office. But beyond the decay is a town in rebirth. The state’s largest cannabis producer calls Evart home. Its defunct milk processing plant now makes automotive plastic parts, and a $1.1 billion potash mine is in the works. Evart’s economic development is organized and succeeding — largely thanks to a state program under former Gov. Rick Snyder and a wealthy metro Detroit benefactor organizing the purse strings.

A new sluice The logging industry arrived in the fertile timberlands of Osceola County in the late 1800s. Eschewing the indigenous tribes and the pelt trappers, loggers rode booms down the Muskegon River to the sawmills in Big Rapids. A new community was created in Evart, built on the logging industry’s wealth. Clothiers and lawyers and farmers set up shop on Main Street. The region became known as “The Land of Green Gold.” But as is common among rural Michigan’s communities, poor resource management led to the logging industry’s decline. Dairy farming and manufacturing filled in some of the economic gaps but not all. Then those industries went away, too, and the economic vitality of Evart and Osceola County fell into disrepair. Evart entered the 21st Century as one of the poorest communities in Michigan.

In 2015, Evart was named one of 10 communities in the state to participate in Rising Tide, a program created under former Gov. Rick Snyder that taught economic develGREEN BAY GREEN BAY opment framework to at-risk communities. E var In 2017, Evart’s economic develEVART MI H G opment plan created by Joe BorgS I A SAGINAW strom, principal of East Lansing MILWAUKEE economic development advisory L G LANSING firm Place and Main Advisors, foDETROIT cused on the city’s resources — D OT land. “Evart doesn’t have a lot of bu-CH TOL reaucracy; they literally have one TOLEDO person for each department, so red “THEY HAVE LAND. tape is limited,” Borgstrom said. “They have land. Available land and AVAILABLE LAND AND plenty of it. They were also proac- PLENTY OF IT. THEY WERE tive in organizing an industrial park. We had to go through a re- ALSO PROACTIVE IN branding process, create a profes- ORGANIZING AN sional website and add sophistication to their economic development INDUSTRIAL PARK.” processes.” — Joe Borgstrom, principal, Evart graduated from the Rising Place and Main Advisors

CLEVELAND CLEVELAND

8 | CRAIN’S DETROIT BUSINESS | APRIL 11, 2022

P008_P009_CD_20220411.indd 8

4/8/2022 10:41:11 AM

YOU

Vent

GROWING SUCCESS Lume operates state-of-theart cannabis facility in Evart.

A mural along Seventh Street in Evart in March.

Tide program in 2018 and the newly organized economic development strategy was able to recover what the town had lost. Liberty Dairy, a milk processing plant for Dean’s Dairy and Evart’s largest employer, shuttered in 2013. But city officials were able to attract tier-one auto supplier Flex-N-Gate, which acquired the plant in 2019 with a planned $3.5 million investment through local subsidiary Ventra Evart LLC. The Flex-N-Gate subsidiary received a $350,000 Michigan Business Development Program performance-based grant and a 50 percent property tax abatement from the city. Representatives from Flex-NGate declined to discuss the plant in Evart or confirm employment information, but Plastics News reported more than 1,000 employees.

CLEVELAND CLEVELAND YOU

The green rush Ventra in Evart is a subsidiary of Flex-N-Gate. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS)

The blossoming of Evart’s eco-

NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

PAGE 10

nomic attraction strategy couldn’t have happened at a more ideal time. Michigan voters legalized recreational marijuana use in October 2018 and created a new gold rush. Green gold. Lume Cannabis Co. opened a 50,000-square-foot marijuana grow facility in Evart’s newly minted industrial park in 2020, ahead of the first legal recreational marijuana sales set to begin in December 2020. The company was founded by Bob Barnes Jr., retired CEO and co-owner of one of the nation’s largest tire dealers, Belle Tire. Barnes, an avid bird hunter, acquired 80 acres in Evart in the early 2000s. He’s since transformed more than 1,400 acres into Meemo’s Farm, a luxury sportsman ranch complete with a lodge, cottages, hunting and fishing grounds and plenty of guided sporting trips around mid-Michigan. See EVART on Page 10

APRIL 11, 2022 | CRAIN’S DETROIT BUSINESS | 9

P008_P009_CD_20220411.indd 9

4/8/2022 10:41:28 AM

CRAIN’S MICHIGAN BUSINESS | EVART

Lume grows success with Evart cannabis facility State-of-the-art operation plans 150,000-square-foot expansion in 2024 BY DUSTIN WALSH

Marijuana prices have collapsed across the state — down 40 percent year-over-year to $160.12 per ounce of recreational cannabis. The long-predicted price drop, thanks to increased supply as more and more growers come on line, is likely smashing the margins of many in the industry. But Troy-based Lume Cannabis Co., the largest single-state operator in the U.S., continues to grow rapidly. Lume opened its 31st retail outlet in Michigan last month with plans to open 13 more this year alone. It will also complete a more than 150,000-square-foot expansion in 2024 of its already 250,000-squarefoot grow operation in Evart — which currently houses 28,000 plants worth a market value of about $40 million. “We were prepared for prices to drop,” Kevin Kuethe, Lume’s chief cultivation officer, said last month while working in one of the Evart operation’s 20 flower rooms filled with a strain known as Uncle Bruce. “We invested heavy in the grow op up front so we could make the best product at the cheapest cost possible.” Andrew Livingston, director of economics and research for cannabis law firm Vicente Sederberg LLP in Denver, said falling marijuana prices will shake out companies with smaller

Chief cultivation officer Kevin Kuethe at the Lume Cannabis Co. production facility in Evart. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

margins, creating stronger companies when federal legalization occurs and opens up interstate trade. “While Michigan is facing price compression faster than its neighbors in Illinois, it is important to consider the benefits and not just the drawbacks of this competitive pressure,” Livingston said in an email to Crain’s. “Michigan entrepreneurs are forced to be more efficient and resilient. Cannabis companies that thrive within the crucible of intense competition will be much better equipped to win once the walls of state markets fall and

American cannabis becomes a truly national market.” The U.S. House of Representatives last week passed a bill to decriminalize marijuana federally, but it’s unlikely to gain much traction in the U.S. Senate under President Joe Biden. But federal legalization appears to be gaining momentum in recent years as 18 U.S. states have legalized recreation use and another 13 states have decriminalized marijuana. Kuethe said many small growers, those under 10,000-square-feet of grow space, have been in contact with

EVART

a $1.1 billion project in a county of our size is unfathomable. Maybe this is the middle of nowhere, but we sure do have some good stuff going on.”

From Page 8

“Fifteen years ago, (Evart) was losing its reason to exist,” Barnes said in late March from a family gathering at his ranch. “This was a farming community on hard times. Businesses were closing and budgets were going down. The population was shrinking.” Barnes recruited Warrior Sports founder David Morrow and others to invest and run Lume. Morrow, who sold Warren-based Warrior to New Balance in 2004, serves as Lume’s CEO. A growing list of investors has poured $65 million into what is now a sophisticated 125,000-square-foot marijuana grow operation. Lume propelled to the top of Michigan’s booming cannabis landscape. In March, Lume opened its 31st retail outlet in the state and employs more than 1,000 statewide with 350 in Evart. Now Lume plans to double its presence in Evart with a carbon copy of its existing grow operation, expanding its square footage to more than 250,000. “We can sell as much as we grow,” Kevin Kuethe, chief cultivation officer and the first employee Barnes hired at Lume, said during a tour of the facility. Lume employs scientists but mostly hires locals to work at its grow operation. The company pays $15 per hour, but employees also get full health benefits and, unsurprisingly, free marijuana, Kuethe said. A full-time entry-level job at Lume exceeds the average income of an entire household in Evart. Barnes has become uniquely positioned as a leader in the community. In 2020, the Evart Promise Plus was

Lume in hopes of a buyout. Livingston said dropping prices will force consolidation in the industry. “As the market continues to expand companies have two main options for growth — either they apply for and build new licenses organically or they acquire existing assets in the form of purchasing their competitors,” Livingston said. “Rather than just going out of business, companies unable to handle tightening margins may be acquired by more efficient or more well capitalized operators.” But Lume isn’t interested in acquiring smaller, unprofitable operations, Kuethe said. Instead, it will focus on organic growth. Its investors — who include Bob and Don Barnes, co-owners of Belle Tire, and Dave Morrow, founder of Warrior Sports — continue to fund the expansion. Lume opened its first 50,000 square feet in Evart in 2019 and opened a $65 million addition to the facility last year. (KC and Chris Crain of Crain’s Detroit Business parent company Crain Communications are small investors in the company.) Kuethe, Lume’s first hire in 2018, isn’t a farmer. He earned a communications and exercise science degree from the University of Montana. Yet Lume’s success is largely on his shoulders. He’s succeeded in produc-

Good problems

U.S. 10 cuts through rural fields in Evart. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

established. The program provides a $10,000 college scholarship to every single graduate of Evart High School. Barnes is the largest funder. Even so, Barnes deflects credit when asked about his role in the community, arguing Evart’s political leadership is the reason behind its success. “This is the story of the community, and I’m just part of that community,” Barnes said. “My role in the community is self-serving. I operate an outdoor family recreation retreat. You need government services to have a safe environment. If the government is going out of business, you’re in trouble. If something goes wrong at my ranch, I need someone to answer 911.” Pepper Lockhart, Evart’s city manager, called Barnes “part of one of the major employers in town” and downplayed his role in the community. Still, Barnes has a hand in many

developments in Evart. A project 12 years in the making is finalizing an eye-popping $1.1 billion capital raise to construct a white potash mine operation just outside of Evart. The project says it has a major customer signed up and received a $50 million grant in the state budget passed last month. The Michigan Potash and Salt Co. is projecting to break ground on the mine infrastructure by mid-year and supply 650,000 short tons of potash and 1 million tons of food-grade salt by 2025. MPSC owns the 500 acres over the deposit but has mineral leases on 5,000 acres from 450 different land owners — Barnes being one of them. “That’s a god-given resource,” Barnes said. “I’m not a poor man, but I don’t have a billion dollars. That’s way beyond my capacity. But the town, the team, did recognize there’s an opportunity there. I mean,

Jobs may have come to Evart, but it’s the living — not working — in the city that remains a problem. Evart is home to three diners and a couple of fast-food restaurants. Its housing stock is old and in disrepair. “Housing development is something we’re going to take a hard look at,” Lockhart said. “Lume workers need housing. The potash mine workers will need housing. Housing is just not available right now.” Kuethe currently lives in one of the cabins on Barnes’ ranch, unable to find an “acceptable” place to live in Evart. Borgstrom said the COVID-19 pandemic created a lot of opportunity for Michigan’s rural communities, those with either growing jobs or those attractive to the growing horde of remote workers. “For these towns, it’s not just about whether they can create the jobs, but whether they can build housing,” Borgstrom said. “You have to have housing stock to support workers.” Last year, homes for sale in rural areas of the U.S. dropped nearly 45 percent over 2020, compared with a 17 percent decline in urban areas, according to a report by real estate brokerage firm Redfin. “The scarcity of rural and suburban homes for sale is driving the overall housing supply shortage,” Daryl Fairweather, Redfin‘s chief economist, said in the report. “Homes in rural and suburban areas remain popular as the pandemic

North Main Street in downtown Evart. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

and remote work continue to motivate buyers to prioritize indoor and outdoor space over commute times and urban amenities.” Per Borgstrom’s 2017 economic development plan: “Prospective businesses that would locate in the industrial park would also look at the condition of downtown and the neighborhoods. The neighborhoods have a significant amount of blight. Rental housing now makes up roughly half of the housing stock within the city. While there are some

10 | CRAIN’S DETROIT BUSINESS | APRIL 11, 2022

P010_P011_CD_20220411.indd 10

4/8/2022 11:17:01 AM

qua the to b L to b ly co “W sion that we’r brin ing the E

otiand mes

mic tive the k at the ods ght. up tock ome

CRAIN’S MICHIGAN BUSINESS | EVART

Employees weigh out half-ounce jars of cannabis products at the Lume Cannabis Co. production facility in Evart. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

ing more than five pounds of marijuana flower per light. An industry standard is at least two pounds of cultivated flower per 1,000-watt light to generate any profit on the operation. “No one is hitting five pounds per light in Michigan,” Kuethe said. “Our investments, our beefed up infrastructure, is the difference.” Lume’s Evart operations use nearly no dirt. It’s all hydroponic. Venting, electrical and lighting systems are built into the ceiling and walls. Airflow is critical, as Lume’s plants receive near constant air pumped over their leaves. The building has a negative pressure isolation lab to contain any diseased plants, an analytical testing lab to develop new strains and a tissue culture lab to clone plant genetics. There are more than 100 genetic strains in the culture room, many of which are cryogenically frozen to prolong use. Lume’s grow team mixes its own nutrients for the plants using research-grade salt and other ingredients. “This facility is optimized to produce the best plants in the cleanest environment and to process them as quickly as possible,” Kuethe said. In its processing area of the facility, 40,000 pre-rolled joints are packed daily and a machine packages an eighth of an ounce of marijuana every two seconds when in use. Lume’s cannabis-infused drink line is hitting shelves this month and the company is installing a $3 million bottling line. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

GRIT: STORIES OF GREATNESS FROM THE STREETS TO THE SUITES SPECIAL GUEST

quality landlords and tenants within the city, enforcement of blight needs to be a top priority.” Lockhart said the city is working to build new housing and potentially condos in Evart. “We have a new housing commissioner and we’re advancing toward that goal,” Lockhart said. “I feel we’re at a blooming point. We’re bringing industry here. We’re creating jobs but now we need to create the housing.” Evart is also looking to secure

funding for a $6 million redevelopment of its airport, which lost federal funding in 2017. The plans include building a hangar and adding fueling stations in the hopes of re-establishing funding. The city is also trying to secure funding from Michigan State University to build an indoor sports training facility that could be another attraction. Barnes is in contact with MSU’s athletic director. “The City Council and city manager have been actively in step for

futuristic change,” Barnes said. “Everything stops if they stop. They are not afraid to take a risk, and it’s been very beneficial.” Lockhart, who has only been the city manager for five months, is confident in the community’s future as her team leads developments. “The economy is good right now,” she said, “so we’re looking to fill every crack.”

Watch for the latest episode of Grit coming April 18 on Apple Podcasts and Spotify.

Cydney GardnerBrown, social activist, podcaster and University of Michigan graduate

HOST

Margaret Trimer, Vice President of Strategic Partnerships at Delta Dental

Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh APRIL 11, 2022 | CRAIN’S DETROIT BUSINESS | 11

P010_P011_CD_20220411.indd 11

4/8/2022 11:17:14 AM

CRAIN'S LIST | MICHIGAN'S LARGEST EMPLOYERS Ranked by full-time employees January 2022 COMPANY NAME LOCATION

TOP EXECUTIVE

MICHIGAN EMPLOYEES JAN. 2022/ 2021

WORLDWIDE EMPLOYEES JAN. 2022/ 2021

TYPE OF BUSINESS

GENERAL MOTORS CO.

Mary Barra chair and CEO

49,733

157,526 154,854

Automobile manufacturer

FORD MOTOR CO.

James Farley Jr. president, CEO & director

47,750

NA NA

Automobile manufacturer

BHSH SYSTEM 1

Tina Freese Decker president and CEO, BHSH System

44,745 2

NA NA

Health care system

STATE OF MICHIGAN

Gretchen Whitmer governor

44,145

NA NA

State government

STELLANTIS (FORMERLY FCA US LLC) 3

Mark Stewart COO, North America

41,634 40,843 e

85,400 89,000

Automobile manufacturer

UNIVERSITY OF MICHIGAN

Mary Sue Coleman 4 interim president

36,342

51,979 5 51,426 6

Public university and health system

U.S. GOVERNMENT

30,014 7

2,093,961 7 2,070,440

Federal government

TRINITY HEALTH MICHIGAN

Robert Casalou president and CEO

20,769 e

NA 123,000 8

Health care system

U.S. POSTAL SERVICE

Richard Moreton district manager

20,000 7

NA 640,000

Postal service

HENRY FORD HEALTH SYSTEM

Wright Lassiter III 9 president and CEO

19,954

32,609 33,189

Health care system

MCLAREN HEALTH CARE

Philip Incarnati president and CEO

19,914

19,914 24,453

Health care system

ASCENSION MICHIGAN

Kenneth Berkovitz MD, FACC, senior VP Ascension and ministry market executive, Ascension Michigan

19,282

19,282 20,290

Health care system

ROCKET COMPANIES INC. 10

Jay Farner vice chairman & CEO Dan Gilbert chairman & founder

17,000

26,000 24,000

FinTech platform company consisting of personal finance and consumer technology brands

AMAZON.COM INC.

Jeff Bezos executive chair

12,200 11 e 11,155 11 e

NA 1,298,000 12

Ecommerce, tech and telecom

MICHIGAN STATE UNIVERSITY

Samuel Stanley Jr. president

11,719 13

11,849 13 11,743 14

Public university

DTE ENERGY CO.

Jerry Norcia president and CEO

10,601 15

NA 11,298

Energy company

MAGNA INTERNATIONAL OF AMERICA INC.

Swamy Kotagiri CEO

10,050 16

NA 158,000

Mobility technology

BLUE CROSS BLUE SHIELD OF MICHIGAN/BLUE CARE NETWORK

Daniel Loepp president and CEO

9,499

11,416 10,548

Nonprofit mutual insurance company and subsidiary companies

CMS ENERGY CORP.

Garrick Rochow president and CEO

9,152

9,186 8,982

Energy company

CITY OF DETROIT

Mike Duggan mayor

8,478

8,478 8,478

City government

UWM HOLDINGS CORP. (UNITED WHOLESALE MORTGAGE) 17

Mathew Ishbia chairman, president & CEO

8,058

8,058 7,567

Mortgage lender

SPARROW HEALTH SYSTEM

James Dover president and CEO

7,580

NA 8,961

Health care system

DETROIT MEDICAL CENTER

Brittany Lavis CEO 18

7,294

7,294 8,338 8

Health care system

DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT

Nikolai Vitti superintendent

7,081

7,081 6,932

Public school system

BRONSON HEALTHCARE

Bill Manns president and CEO

6,881

8,288 8,320

Regional not-for-profit health system

300 Renaissance Center, Detroit 48265 313-667-1500; gm.com 1 American Road, Dearborn 48126 313-322-3000; ford.com formichiganbymichigan.org

3042 W. Grand Blvd., Cadillac Place, Suite 4-400, Detroit 48202 313-456-4400; michigan.gov 1000 Chrysler Drive, Auburn Hills 48326-2766 248-576-5741; stellantis.com Ann Arbor 48109 734-764-1817; umich.edu

477 Michigan Ave., Detroit 48226 313-226-4910; usa.gov 1600 S Canton Center Road, Canton 48188 734-343-1000; trinity-health.org, .stjoeshealth.org 1401 W. Fort St., Detroit 48233-9998 313-226-8678; usps.com 1 Ford Place, Detroit 48202 800-436-7936; henryford.com

One McLaren Parkway, Grand Blanc 48439 810-342-1100; mclaren.org 28000 Dequindre Road, Warren 48092 866-501-3627; ascension.org/michigan 1050 Woodward Ave, Detroit 48226 313-373-7990; rocketcompanies.com

150 West Jefferson, Detroit amazon.com 426 Auditorium Road, East Lansing 48824 517-355-1855; msu.edu One Energy Plaza, Detroit 48226 313-235-4000; newlook.dteenergy.com 750 Tower Drive, Troy 48098 248-631-1100; magna.com

600 E. Lafayette Blvd., Detroit 48226 313-225-9000; bcbsm.com One Energy Plaza, Jackson 49201 800-477-5050; cmsenergy.com

2 Woodward Ave., Coleman A. Young Municipal Center, Detroit 48226 313-224-3700; detroitmi.gov 585 South Blvd. E, Pontiac 48341 800-981-8898; uwm.com

1215 E. Michigan Ave., Lansing 48912 517-364-1000; sparrow.org 3990 John R, Detroit 48201 313-745-5146; dmc.org

3011 W. Grand Blvd., Fisher Building, Detroit 48202 313-240-4377; www.detroitk12.org 301 John St., Kalamazoo 49007 269-341-6000; bronsonhealth.com

47,940

46,746

44,462

35,892

30,014

20,334

18,000 e

20,428

23,330

20,290

19,000

11,682 14

10,600

9,065

9,176

8,510

8,478

7,567

7,188

8,338 8

6,932

6,929

Researched by Sonya D. Hill: shill@crain.com | This list of Michigan employers encompasses companies with headquarters in the state. Number of full-time employees may include full-time equivalents. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analyses and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. NA = not available. NOTES: e. Crain's estimate. 1. Beaumont Health and Spectrum Health merged as an integrated health system with the temporary name, BHSH Health on Feb. 1. 2. Includes numbers for Spectrum Health, Beaumont Health and Priority Health. 3. Fiat Chrysler merger with PSA Group was completed on Jan. 16. 4. Succeeded Mark Schlissel after he was fired on Jan. 15. 5. Includes approximately 15,600 in-state part-time employees. 6. Includes approximately 15,000 in-state part-time employees. 7. As of July 1, 2021. 8. Figures are FTE counts. 9. Wright Lassiter serves as CEO of Henry Ford Health System and president of Henry Ford Health System Foundation. 10. Became a publicly traded company on Aug. 5, 2020. 11. Estimate from MWPVL International Inc. 12. As of Q4 2020. 13. Fall 2021 counts. Employee counts as of Oct. 1, 2021. 14. Employee counts are as of Oct. 1, 2020. 15. As of July 2021. 16. Q4 2021. 17. Became a publicly traded company in January. 18. Named permanent CEO on Jan. 31. Became interim group CEO after Audrey Gregory's departure on Oct. 22.

Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data 12 | CRAIN’S DETROIT BUSINESS | APRIL 11, 2022

P012_CD_20220411.indd 12

4/8/2022 10:34:24 AM

CANNABIS

Recreational cannabis cleared to move forward in Detroit

Ordinance is city’s second attempt after 2021 version was held up in litigation for nearly a year BY DUSTIN WALSH AND ANNALISE FRANK

Detroit’s long-anticipated recreational cannabis industry is set to materialize now that City Council has passed an ordinance allowing sales to begin. The lawmaking body approved the new rules in an 8-1 vote Tuesday, with member Mary Waters casting the lone “no” vote. Ordinance sponsor James Tate, City Council president pro tempore, asked that the legislation be made effective April 20 — 4/20, a significant date in marijuana culture — but City Council has not yet determined when businesses and individuals can apply for licenses. The city’s Civil Rights, Inclusion and Opportunity Department said it will need about 90 days to set up a program to score and process limited licenses for retail and consumption lounges. Tate The city has long allowed medical marijuana businesses, but it has been slow to adopt an ordinance to start up the more widely lucrative recreational side since Michigan voters approved adult use in 2018. Tate said the approved ordinance is a good first step and the goal is “to do everything we can to ensure that we’re bringing the best to the table and bringing back as much as we can for the residents in the city of Detroit.” This is the city’s second try. Detroit adopted a previous recreational ordinance in early 2021 but it got held up in litigation for nearly a year over a rigorous Legacy Detroiter preference program for long-term residents looking to get involved in the industry. Tate decided to remake the rules in a

Cannabis at West Coast Meds in Detroit in March. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

way he and the city’s law department expect to pass constitutional muster. He says he still believes the ordinance is equity-driven and gives enough opportunities for Black and Brown Detroiters to become owners of Detroit cannabis businesses. “This is providing the best opportunity possible for equity applicants and Legacy Detroiters to compete for these licenses,” Tate said March 7 during a public hearing on the ordinance. “For me it’s important for us to strategically go in and identify how this industry can and should go in Detroit” instead of a more “shotgun” approach where whoever wants a license gets one. Waters earlier said in a written statement that she believes the city should

have continued to pursue its first ordinance, saying it shouldn’t “cave” and take the case to trial. Tate previously said he doesn’t want to go through a trial, which is why he remade the ordinance. “Let’s take these structural and systematic inequities to court. If a pathway is not made, how many people will continue to frequent the black market? ... Let’s move historically underserved black businesses from the back of the bus,” Waters wrote. Existing medical cannabis businesses in Detroit have said that while recreational cannabis has been in limbo, they’ve been floundering, losing out on customers to nearby suburban cities including Ferndale and Hazel Park that

have recreational shops where Detroiters can go buy edibles or flower without needing to renew their medical cards. What’s in the newly passed ordinance? The new set of rules for licensing adult-use cannabis businesses widens the Legacy Detroiter program, calling those applicants “equity” applicants instead, and putting them on a separate “track” so they’re not competing with nonequity applicants anymore. “Equity” applicants in Detroit would follow the state’s social equity program as described in its adult-use cannabis law, instead of the rules Detroit came up with. The state’s program is meant to pro-

mote and encourage participation in the marijuana industry by people from communities that have been disproportionately impacted by marijuana prohibition and enforcement and to positively impact those communities, according to the Michigan Marijuana Regulatory Agency. The licenses for retail establishments, microbusinesses and others in Detroit would be separated into phases. There is a total of 100 retail licenses available. The phases will be separated by 120 days. A lottery would award licenses to applicants that don’t yet have a space for their business. Equity and nonequity applicants will be scored separately, by a third party, based on rubrics with some similarities and differences. They would be scored the same on their business plans, site control, due diligence, “good neighbor” plans and “documented community leadership” in the last five years. However, the scoring criteria diverge when it comes to several social equity components. Equity applicants would get points for living in areas designated by the state as being “disproportionately impacted” by the war on drugs and with a certain percent of population living below the poverty line. Nonequity businesses, meanwhile, get extra points for creating a joint venture with an equity applicant or selling or leasing an equity applicant space for their business below market rate. Other cities have been sued over their scoring criteria and it’s possible the same could happen in Detroit. Cities in Michigan have the right to come up with their own rules, within limits, on who they give cannabis licenses to, how many licenses they give out and why they’re selecting some applicants over others. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

OBITUARY

Former Michigan Economic Development Corp. CEO Mike Finney dies BY NICK MANES

Mike Finney, a longtime economic development official in Michigan, died April 3 in Florida. He was 65. The news of Finney’s death was confirmed to Crain’s on Monday morning by Maria Budet, the chief marketing officer for the Miami-Dade Beacon Council, a South Florida economic development agency where Finney had been president and CEO since 2017. Budet said the cause of death was a heart attack. Finney held the top leadership role at the Michigan Economic Development Corp. during the first term of Republican Gov. Rick Snyder, and previously was president and CEO of Ann Arbor Spark. Finney left the MEDC in 2014, at the end of Snyder’s first term, and went on to serve as a senior economic adviser to the governor before moving to Florida. Friends and colleagues remembered Finney as a trailblazer in the economic development world who sought to move beyond simply writing incentive checks. Finney and Snyder, specifically,

Mike Finney | THE MIAMI-DADE BEACON COUNCIL

had a history dating back decades, something the former governor noted in a Facebook post Monday morning. “Yesterday, we lost an amazing individual who (made) a positive impact on many people, including me,” Snyder wrote. “... I had the honor of working with Mike three times. At the MEDC in the 1990s, at Spark in the 2000s, and the MEDC in the 2010s,” Snyder’s Facebook post continued. “Each time, it was a wonderful experience that

helped me grow. Mike brought together a great combination of common sense, intelligence, caring and fun. I was disappointed when he left Michigan; but still excited for (Finney’s wife) Gina and him. I knew he would help Miami Dade a lot; but I also knew his golf score would improve since he could play year round. Mike and his family are in my thoughts and prayers. Thank you, Mike, you will be missed!” The MEDC, in a statement to Crain’s, also mourned Finney’s passing. “As a proud Michigan native, Mike served this state with distinction for many years, three of which were spent pursuing his passion of building a brighter future for Michigan while at the helm of MEDC,” said the statement from the quasi-governmental organization. “Our organization — and all of Michigan — are no doubt better off today because of Mike’s tremendous service, care and commitment to making sure our work to create upward economic mobility was felt by every resident throughout our state.” Chris Rizik, the CEO and fund

manager of Ann Arbor venture capital firm Renaissance Venture Capital and who chaired an MEDC committee during Finney’s tenure, noted that the former executive took a “holistic view” of economic development. Finney sought to look at “what are the important elements for job creation, and it’s more than looking in the short term of some body opening a plant or somebody opening an office,” Rizik said. Rizik pointed to the MEDC’s Pure Michigan Business Connect program, which aims to provide procurement opportunities for small businesses, as a successful endeavor Finney helped launch. Finney was also CEO of the Washtenaw County economic development organization Ann Arbor Spark in 2005 when pharmaceutical giant Pfizer Inc. closed its Ann Arbor facility. At the time the closure was seen as devastating, with about 2,100 employees laid off. However, as Crain’s has reported, the move helped turn Ann Arbor into the hot bed for startup activity that it is today. Finney embraced “open source

economic development,” in which he “welcomed everyone’s role and ideas in making our community more prosperous for all,” Paul Krutko, the current president and CEO of Ann Arbor Spark, said in a statement to Crain’s. “Mike was able to inspire passion and commitment, and his philosophy of bringing in the very best people for the task at hand and getting out of their way is still a value of Spark’s today. From attracting Google to downtown to bringing together a coalition of partners to form the Michigan Life Science and Innovation Center, there is no question on the positive, long-term impact Mike had on the Ann Arbor region.” Finney earned a bachelor’s degree from Saginaw Valley State University and a master’s from Central Michigan University, according to his LinkedIn profile. Finney is survived by his wife Gina, sons Michael Jr., Marcus and Austin, and his grandchildren, according to a Miami Herald report. Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes APRIL 11, 2022 | CRAIN’S DETROIT BUSINESS | 13

P013_CD_20220411.indd 13

4/8/2022 10:29:44 AM

PILGRIMAGE

From Page 3

“We believe Christ has sent us on a mission to bring the good news,” Mech said. “That’s not simply talking about it. We’re actually helping people, getting our hands dirty, listening to people, having them use their gifts ... to be better people.” Through the master plan, “We are trying to provide things that are engaging to people like arts and culture, education and service opportunities,” he said. “We want to have people be transformed, physically, spiritually, emotionally… meet all their needs (as) the Lord has asked us to do.” Over the past several years, Mech and a group of about 20 local lawyers, architects and others — Catholics and

A rendering shows the planned Cathedral Arts Apartments, across Woodward Avenue from the Cathedral of the Most Blessed Sacrament, which are set to open in summer 2023. | KEM-TEC & ASSOCIATES

PEOPLE ON THE MOVE

others — studied historic land use, green space and accessibility of neighborhoods within a half-mile of the cathedral. The group also talked with residents of those neighborhoods — Boston Edison/Arden Park, North End, Piety Hill, the Gateway Community, Woodward Village and Highland Park — about needs in the area, hosted neighborhood cleanups and invited people in for community events. “We wanted to make sure we were less of a fortress … to reach out and be a draw for folks,” Mech said. The resulting plan developed with Detroit-based architecture firm Rossetti will seek to meet community needs and open the campus to the public, he said. The cathedral is still finalizing much of the plan and assessing the costs associated with it, project man-

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

CONSULTING

FINANCIAL SERVICES

INSURANCE

TECHNOLOGY

Seraph

Vigi Wasserbaech Private Wealth, UBS Financial Services

Peabody Insurance Agency

ChoiceTel

Peabody Insurance Agency is excited to announce that Kate Peabody has graduated number one in the national sales program PaceSetter. This is one of the largest training programs for insurance producers. The interview process to be accepted is rigorous, but the results are undeniable. Pacesetter graduates have a 200% success rate over other insurance producers. This program provides knowledge and guidance to give expert advice which helps clients with making better insurance decisions.

ChoiceTel is pleased to announce that Philip Eassa has joined the team as a Senior Business Consultant. Bringing more than 18 years of sales and technology experience, Phil will be guiding new customers through their technology and telecommunication lifecycle and bringing the consultative ChoiceTel approach. Since 1994, ChoiceTel has been helping mid-market to enterprise clients select, manage & ensure their telecommunications/IT products and services are clearly meeting their needs.

Supply chain, restructuring and manufacturing turnaround consultancy Seraph has named Thomas Kowal as President, following his 3-year tenure at the firm preceded by close to 20 years in the automotive manufacturing space. Thomas leads a solutionsfocused team in taking Seraph’s trusted data driven, operational, hands-on approach to problem solving that improves its clients’ performance across a range of vertical markets, at an extraordinary time for manufacturing. www.seraph.com

Vigi Wasserbaech Private Wealth Management announced Courtney Kaplan Bizzis has joined their UBS team. Courtney’s intellectual capital and commitment to service excellence will broaden the team and support clients’ pursuit of the goals that matter most to them. A graduate of Kalamazoo College she served as Community Impact Manager for the Detroit Tigers. An Ann Arbor native, she earned a Master’s from the University of Michigan. Courtney, Ryan and their daughter, Charlotte, live in Royal Oak.

FINANCIAL SERVICES

DFCU Financial

INSURANCE

Oswald Companies Oswald Companies pleased to announce the promotion of Catherine Kosin to Managing Director of Property & Casualty. Kosin joined Oswald in 2006 and has served as as Michigan Market Leader since 2016. She will continue to provide leadership to the Michigan market from Oswald’s Bloomfield Hills office. She is a past co-chair of Oswald’s Women’s Leadership Council, and current strategic leader of the Oswald Engagement committee, and Diversity, Equity & Inclusion initiatives.

SOFTWARE / SERVICES

BeneSys BeneSys, Inc. is pleased to announce that Tom Shaevsky has joined us as General Counsel based in our Troy, MI headquarters. Tom was graduated from the University of Michigan (J.D. 1992, B.A. 1989) and has 30 years of law practice with the last 20 years focused on ERISA/employee benefits law. His extensive experience includes counseling on compliance, prohibited transactions, reporting and disclosure, merger and acquisition due diligence, QDROs, as well as COBRA, HIPAA, and other benefit issues.

NEW GIG? Preserve your career change for years to come.

Plaques • Crystal keepsakes Frames • Other Promotional Items

C O N TA C T

DFCU Financial welcomes Ryan Goldberg as its new President and CEO. An experienced business leader, Ryan succeeds Mark Shobe, who is retiring after 22 successful years as President and CEO. Ryan brings 30 years’ experience in retail and commercial banking, wealth management, and retirement services. He comes from Alerus Financial Corporation where he served as EVP, Chief Revenue Officer. Previously, as Head of Retail Banking for Flagstar, his team doubled its customer base with the purchase of 52 offices from Wells Fargo, the largest acquisition in the company’s history. As EVP, Regions Financial Corporation, he ran the Branch Small Business and Priority Banking segments throughout the South, Midwest and Texas.

Laura Picariello Reprints Sales Manager lpicariello@crain.com (732) 723-0569

ager Mark Garascia said, but two pieces of it are set to begin in the months ahead. To create the pilgrimage, the cathedral will install historic statues of Jesus’ 12 apostles, along with relics from each. Those bone fragments have been authenticated by representatives from the Vatican in Rome, Mech said. They are part of more than 80 relics the cathedral has, including one from Casey and others from saints, Mech said. “Down the road, it’s planned to exposition more of them, but that’s probably going to be beyond the twoto three-year plan,” Garascia said. In the near term, the apostles’ relics will be encased in reliquaries and placed near the corresponding statues. The cathedral rescued and refurbished the wooden, 8-foot-tall statues representing each of the apostles and two statues of angels from the former St. Benedict in Highland Park, which closed in 2014. The works were commissioned for St. Benedict circa 1927 and created in the city of St. Ulrich Groeden, in what was then Austria and is now within Italy, according to the archdiocese. The cathedral will be looking to raise just less than $500,000 from individual donors, foundations and other churches to install the statues and reliquaries by spring 2023, Garascia said. When completed, the statues and relics “will be a place of pilgrimage for self-guided tours as well as other events,” Mech said.

A welcome home Nonprofit developer MHT Housing Inc. has teamed with the cathedral to construct the Cathedral Arts Apartments and a parking area on a 1.25-acre site across Woodward from the cathedral between Calvert Avenue and Glynn Court. MHT expects to break ground on the project by August, said Director of Development Peter Tallerico. The four-story building will total 56,721 square feet and offer two-bedroom units. The ground level will include 8,000 square feet of mixed retail space aimed at serving the surrounding neighborhoods, he said. The church purchased the property for about $450,000 from the archdiocese, Mech said. MHT will purchase it from the church for $500,000 when construction is completed, Tallerico said. Like another nearby affordable development MHT is doing, the Rev. Dr. Jim Holley Residences for seniors, the Cathedral Arts Apartments project will include 4 percent and 9 percent low-income tax credits. Mortgages provided by the Michigan State Housing Development Authority are also part of the financing mix, Tallerico said. The apartments are set to open in summer 2023. MHT Management will manage the property and the lease-up, opening a waiting list once ground has been broken, he said. “MHT is honored to partner with the Archdiocese of Detroit and the Cathedral of the Most Blessed Sacrament to provide a new, $17 million mixed-use investment in the neighborhood,” MHT President T. Van Fox said in an emailed statement. “MHT is committed to developing state-of-the-art affordable housing for families and seniors throughout the state of Michigan.” The cathedral is looking to complete the rest of the projects within two-five years, Garascia said. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

14 | CRAIN’S DETROIT BUSINESS | APRIL 11, 2022

P014_CD_20220411.indd 14

4/8/2022 11:36:32 AM

VENTURES

From Page 3

In 2020, the diversity, equity and inclusion practices of corporations across industries were put under a microscope amid heightened racial tensions resulting from the police killing of George Floyd in Minneapolis and Black Lives Matter protests. Executives pledged to create more inclusive companies. Whether or not that materialized in the way that was promised is up for debate, but Robinson believes many executives are missing the target of having a long-term, sustainable impact on communities. “Many of them overlooked that right in their wheelhouse, the best way to do that, to create jobs in communities that ensure all people get to thrive, is through supplier diversity,” she said. Since the MMSDC’s inception in 1977 as an affiliate of the National Minority Supplier Development Council, the number of minority businesses has increased by 1,000 percent, but gross revenues among those companies have remained largely stagnant, according to the council. A study commissioned by the council last year asserted that at current growth rates, it would take Minority Business Enterprises more than 330 years to achieve revenue equity with white-owned businesses. In the past couple of years, Ford, GM, Stellantis NV and other automakers and suppliers have faced general scrutiny of spending practices, prompting many of them to emphasize procurement diversification. “And that’s why I think companies like Magna are seizing the opportunity to say, ‘If you want to make a difference, we can help you make a difference. Now, we’re certainly going to benefit from it, but we’ll make sure that communities of color also bene-

Lear plans to open later this year a seating plant on the east side of Detroit at the former Cadillac Stamping site. | KURT NAGL/CRAIN’S DETROIT BUSINESS

Wyskiel

Hester

fit,’” Robinson said. The key to a successful joint venture is mutual benefit, Robinson said, and when the arrangement stops working for either side, it’s time to dissolve the partnership and make room for the next one. Minority business enterprises must also be legitimate on paper and in practice, she added. What constitutes a legitimately certified MBE is a question that came into focus last year when Vinnie Johnson’s Piston Group, the largest Black-owned automotive supplier in the U.S., was stripped of its MBE status by the MMSDC. A judge has since reinstated the lucrative certification as the legal battle

works its way through the court. Robinson declined to comment on the Piston Group case due to ongoing litigation. “When they’re done well, minority business enterprise certainly wins,” Robinson said. “Typically in JVs, the issue is the control. Many companies don’t go down that path because they don’t want to relinquish that control.”

LAN Manufacturing plans Magna called on automotive and logistics veteran Sylvester Hester to lead the joint venture with LAN Manufacturing because of his expertise in manufacturing and engagement in Detroit, Wyskiel said. Hester has been president of LM Manufacturing since 2019 and spent the past two decades in the C-suite of procurement and logistics provider Global Automotive Alliance. He will have a 51 percent ownership stake in LAN Manufacturing and oversee operations, while Magna provides funding for the $18 million build-out of the seating plant.

REAL ESTATE

Region’s fifth Amazon Fresh appears headed for St. Clair Shores site BY KIRK PINHO

The St. Clair Shores City Council has approved a site plan for what appears to be the region’s fifth known Amazon Fresh grocery store. In addition, plans appear to be in the works for another location in the city of Grand Blanc in Genesee County as the Seattle-based brick-and-mortar grocery chain heads toward what one source familiar with the matter said is possibly 10 planned Amazon Fresh locations in the region. It is also considering locations in Lansing and other portions of the state, the source said. St. Clair Shores City Council briefing documents do not identify Amazon Fresh as the ultimate user for the former Kroger Co. store at 22322 E. Nine Mile Road, but renderings of the property look similar to Amazon Fresh locations that have opened elsewhere around the country. The site plan approval was first reported by the Macomb Daily. The city documents say that the developer plans to remove about 5,000 square feet of the existing building to give the grocer about 44,500 square feet. The parking lot is to be repaved with about 190 parking spots on the site, which is 3.76 acres.

Hester said the JV is an opportunity to put his broad manufacturing skillset to work while also providing 390 new jobs paying an average of $900 per week plus benefits. “The transition, the pivot that (Magna) made, which I thought was brilliant in terms of, ‘Hey we’re not just manufacturing car parts, we’re actually a mobility company’ — that aligned with my vision and how I think the city and also the state is trying to maintain its leadership position in those areas,” Hester said. “So to me, I saw a golden opportunity.” The new jobs are expected to come with union representation, Magna confirmed. The company is not required to prioritize Detroit residents for the roles, but it has worked closely with Detroit Mayor Mike Duggan and Detroit at Work to recruit residents, Hester said. “It’s not a requirement, but it’s something we value,” he said. “We feel very strong, very pro-Detroit. We believe that we can go get the talent we need from Detroit.”

DNA

From Page 3

The test is free to the current patients in the pilot program and will expand to many more patients in January 2023. It’s unknown yet how many will be involved in the full rollout of the program. For the Blues, the program has the opportunity to eliminate expensive complications from prescribed medicines and therapies as well as eliminate additional prescriptions for drugs that won’t work with the patients’ DNA.

Additionally, Magna and LAN Manufacturing are hosting robotics clinics at a handful of Detroit public high schools and aiming to create a manufacturing entrepreneurial club, Hester said. Detroit has become a more attractive place to do manufacturing because of Duggan’s courting of automakers and suppliers, access to a large talent pool and some localization of supply chain in light of disruptions from the COVID-19 pandemic to war in Ukraine, Wyskiel said. “I don’t think anyone would have predicted all that to happen the way it has,” he said. “It’ll probably reshape to some extent the supplier community. It’ll always be a balance between cost, making sure you have a stable supplier, and one that can maintain quality. But the equation could change and perhaps the advantage for Detroit is the proximity of really good tier ones and tier twos, really good leaders, really good people.” Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB “There is a value in the program in patient responsiveness, reduced complications and reduced ER visits,” Betzelos said. “The patient will also not have to go on multiple medications to find the right one.” Adverse drug reactions are the fourth leading cause of death in the U.S., according to BCBSM, and are estimated to cost $136 billion annually. Adverse reactions also account for roughly 7 percent of all hospital admissions. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

Advertising Section

CLASSIFIEDS To place your listing, contact Suzanne Janik at 313-446-0455

A shuttered Kroger in St. Clair Shores that could get new life as an Amazon Fresh. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

The property is owned by Bingham Farms-based St. Claire Retail Management LLC. The Grand Blanc location would be part of the proposed Grand Blanc Marketplace development at the site of the former Kmart Corp. and Farmer Jack stores at South Saginaw and Holly roads. The property is owned by Birming-

ham-based Grand Blanc Marketplace LLC. An Amazon Fresh spokesperson declined to comment. Four other known locations locally are believed to be in Shelby Township, Troy, Rochester Hills and Livonia. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

REAL ESTATE COMMERCIAL PROPERTY

C O R K T O W N Fa c i l i t y fo r L e a s e Te m p e ra t u r e & H u m i d i t y Monitored P h a r m a c e u t i c a l / F D A G ra d e TA B P r o p e r t i e s

ADVERTISE TODAY

313-712-1656

APRIL 11, 2022 | CRAIN’S DETROIT BUSINESS | 15

P015_CD_20220411.indd 15

4/8/2022 11:57:31 AM

MARINAS

HOMES

From Page 1

Couple that increased demand with a favorable ruling from the IRS in 2019 and industry roll up, and in marinas, you have a niche real estate class that has drawn increased investor interest. This is particularly true locally as Southfield-based real estate investment trust Sun Communities somewhat quietly became the largest marina operator in the country, spending nearly $3.4 billion acquiring properties in the last 18 months in several different transactions, including the acquisition of the Safe Harbor Marinas LLC portfolio. Among them: Belle Maer Harbor in Harrison Township; Grand Isle Marina in Grand Haven; Great Lakes Marina in Muskegon; Jefferson Beach Marina in St. Clair Shores; and Toledo Beach Marina in La Salle and the former Kean’s Marina at 100 Meadowbrook in Detroit.

which had fire damage, asbestos to be cleared and other challenges that would have been difficult for other buyers to fund. But even with the losses, the home sales helped lift prices for the neighborhood. “The Land Bank’s goal is to restore existing value into homes,” said Tamika McLean, the program’s sales research coordinator. “We were able to increase the value.” In 2021, when Rehabbed & Ready packed up and left that neighborhood, values were up to $111,000. Now, with a bustling housing market, homes in the neighborhood are selling for $127,000, according to Land Bank data. Now, the program — which has sold nearly 100 homes since it started in 2015 — is expanding further. Veronica Johnson, property rehab operations manager for the program, said over the next three years, 200 additional Rehabbed & Ready houses are due to be completed in the 10 Strategic Neighborhood Fund communities, a key piece of plans to continue adding residences to the city and raising property values. “If we could do more, we would do more,” Johnson said. “Nobody has done this before. We’re kind of writing this story as we’re going.” The original goal was 100 homes in five years, but she said supply chain issues and other holdups slowed down the initial program. So far, 94 homes have sold, with one more listed and another three nearly ready to go on the market. The program is starting to move faster, she said, as the processes and materials become more streamlined. The sped-up version will help make faster impacts in neighborhoods where the assistance will be welcome, said Antoine Bryant, Detroit’s planning director. He said fixing up and selling blighted homes makes both a visual and a social difference for long-term residents who have seen years of disinvestment in their communities. And while he said there’s plenty of work to do in the Strategic Neighborhood Fund communities, Bryant said the Rehabbed & Ready portion is key because it will have direct impact on residents and where they live. “The primary thing is we really want to continue to highlight this program,” he said. “It’s one of the best in the country.”

Consolidation continues Sun Communities Inc. (NYSE: SUI) has bought 125 marinas — including putting down an initial $2.1 billion for the Safe Harbor Marinas LLC portfolio of 99 owned properties — since October 2020 and now has 19 percent of its rental income coming from marinas, according to a March investor presentation. The company, which did not respond to an email seeking comment, owns approximately 45,000 wet slips and dry dock storage spaces in 24 states and Puerto Rico. A separate presentation from November 2020 after the Safe Harbors acquisition says that the top five marina operators in the country own just 4 percent of the approximately 4,000 marinas in the country, leaving ample room for industry consolidation like has been seen in self-storage, manufactured housing and other sectors. In addition, not many new marinas are being built nationwide for a variety of reasons including regulatory hurdles, scarcity of available land and cost to build, the presentation says. So because of the high barriers to entry, it made sense for Sun Communities to start buying existing marinas rather than developing new ones. Sun Communities would have been considering a variety of factors as part of its expansion into the space, including increasing demand as well as the implications of a private-letter ruling from the Internal Revenue Service, said a corporate taxation attorney who wasn’t involved in the company’s marinas deals. Allison Stelter, a partner with Detroit-based law firm Honigman LLP, said that in that ruling, the IRS determined that rental revenue earned from things like wet slips, dry docks and floating docks count toward the service's requirement for REITs that 75 percent of their revenue come from rents to maintain their REIT status. In turn, that meant that marinas count toward the IRS's requirement that 75 percent of their assets, by value, are in real estate, Stelter said. “I think it’s fair that they would probably have looked at this (ruling) and drawn comfort from it,” Stelter said.

Infrastructure issues For McGuire, who operates the city-owned Riverside Marina (which has 374 slips but only 217 currently available) and Erma Henderson Marina (which has 244 slips but none are available) on the Detroit River, the increased demand is forcing an16 | CRAIN’S DETROIT BUSINESS | APRIL 11, 2022

Riverside Marina in Detroit. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

other issue. And even though COVID-19 vac“We went from having slips avail- cines and boosters are widely available to having a waiting list of about able for those who want them and 130 people,” he said. much of everyday life has resumed In part, that’s due to wet slips be- with few remaining restrictions on ining unavailable. door activities, Nicki Polan, executive “Erma Henderson has been closed director for the Commerce Townfor two years and needs seawall re- ship-based Michigan Boating Induspair, the electrical is shot, sewer sys- tries Association, said she believes boating activities that surged in poputems are bad,” McGuire said. “That system needs $20 million to larity in part because of those restric$22 million worth of work that when tions will continue to remain popular. “Previously, our industry struggled it’s open brings in $500,000 a year. The only people with that is the gov- to bring new people into boating,” she ernment. We need to change the said. “The pandemic brought thoubusiness model of Erma Henderson sands of new people to boating, and it so it’s more viable. It’s exploding in is the industry’s opinion that most will the Great Lakes. There is a $250 mil- continue to boat even with the lifting lion marina being built in Muskegon, of indoor recreation restrictions. Once but Riverside Marina has not had any you fully experience the benefits of significant investment since it was the boating lifestyle — quality time, face to face with family and friends, first commissioned in the 1980s.” McGuire and others are trying to away from the screens and stresses of find a way to secure some of the $1 the world — it is difficult to give it up.” That speaks to the demand for boat billion in funding for the Great Lakes Restoration Initiative through the space. In addition, said Matt Putnam, the federal infrastructure bill from earlier this year that U.S. Sens. Gary Peters Tampa, Fla.-based managing director in the Leisure Properties Advisors diand Debbie Stabenow secured. Even with the capital improve- vision of Colliers International Inc., ment needs, McGuire said, things interest rates have been low so borkeep churning along at Riverside, rowing has been inexpensive, and which sits on a huge swath of land low cap rates in other asset classes that was at the time it was devel“WE WOULD DO AN oped envisioned AVERAGE OF $600 A DAY AT as having things like condos and $10 A CAR FOR PEOPLE restaurants as LAUNCHING THEIR well. “A lot of people VESSELS. WE WENT FROM don’t know what’s $600 TO $2,500 A DAY going on over here because you can’t DURING COVID.” see us from Jeffer— Jason McGuire, ABC Professional Enterprise LLC son,” McGuire said. “But we have a good time over here, we just need such as multifamily and industrial some help, some infrastructure help. have driven investors to other sectors. “You started to see people chasing We are doing this right now with nothing. Imagine what we could do if we yield and looking for other avenues to invest,” he said. had some investment.” And although some industry consolidation started happening in the In rising demand years leading up to the COVID-19 Sales of both new and used boats pandemic, the influx of new boaters have hit recent highs. According to has heightened marina investment data from the National Marine Manu- interest even more. “Everybody hit the panic button facturers Association, there were 320,000 new boats sold in 2020, a 13- for two or three weeks there in the year high and up 13 percent from 2019 middle of March 2020 and said, ‘Oh — and 415,000 of the 1.3 million-plus my gosh, the world’s ending. What’s new and used boats sold in 2020 were going to happen?’,” Putnam said. “All the stuff you would generally to first-time buyers. In Michigan in 2021, there was $8.3 billion in new spend discretionary dollars on, peoboat, motor, trailer and accessory sales. ple said, ‘Well, we can’t do any of The NMMA says there are more that. What else can we do?’ And boatthan 800,000 registered boats in ing really became an answer to that. Michigan, behind only Florida and And there was availability and supply Minnesota, and boating has a $7.8 and people started saying, ‘Hey, let’s billion economic impact on the state just grab a boat.’” each year, making it the third-largest marine market in the country behind Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB only Florida and Texas.

‘A stabilizing force’ In the early days, Rehabbed & Ready took a scattered-site approach, improving homes and selling them without much regard to where they were in a neighborhood. But that philosophy soon changed when leaders figured out it was better to concentrate efforts. It made a block look different, for one, and it meant that appraisers looking for comparable sales in a neighborhood would find several that could point to rising prices in an area. Now, McLean and Johnson said, the program is deliberate about the order of sales, using one house to bridge to another and continue bringing prices higher. “We made a major impact,” Johnson said. “There was no blueprint when we started.” In the Strategic Neighborhood

Fund communities, there’s optimism about the Land Bank’s plans. Anna Thompson, a planner in the Detroit planning and development department who’s working in the Russell Woods/Nardin Park neighborhood, said there’s excitement about revitalization in the area as a result of Rehabbed & Ready’s presence. The program is working on nine buildings there, including two duplexes, and anticipated sales prices are already higher than were originally expected for the area. “People are encouraged when they see other activity,” Thompson said. “It lifts the entire community.” Paul Fontaine, the program director of the University of Michigan’s Engaging the Community Through the Classroom initiative, and co-author of a report on Rehabbed & Ready’s progress, said when he started his research, he was “happily surprised” the program had made a difference. The new push to fix up and sell more homes more quickly is “significant,” he said. “It’s a big enough mark that it’s going to have a lasting impact,” he said. “People see them as a stabilizing force.” There’s more money going into the effort from the Rocket Community Fund, where Laura Grannemann, the vice president of strategic investments for that group, said an additional $2.5 million each from Rocket and the city was allocated last year for new projects. That’s on top of Rocket’s initial $5 million investment. Grannemann said prior to Rehabbed & Ready’s involvement in their neighborhoods, many residents felt stuck because their home values were still low. Higher property values allow for greater social mobility, she said, and give residents more options in their lives. She said the program has succeeded at thoughtfully selecting homes to have the greatest impact in a neighborhood.

Sal

The in m

SOURC

Detr Reha

optians. the ment the ighment as a presg on two ales were . hen pson nity.” dichiunity tive, Resaid , he proThe more ant,”

t it’s ” he biliz-

Sales price growth in neighborhoods where Rehabbed & Ready has been active The Detroit Land Bank Authority’s Rehabbed & Ready program has contributed to rising average sales prices among homes in more than a dozen neighborhoods in the city. Change from time the program entered market to 2022 Bagley

356%

College Park

147%

Crary-St. Mary’s

307%

East English Village

124%

Evergreen-Outer Drive Fitzgerald-Marygrove

326% 84%

Grandmont

177%

Greenfield-Grand River

168%

Islandview

478%

Martin Park Morningside Rosedale Park Schulze

161% 96% 76% 93%

Entered market

Exited market

2015

Active

2017

2015

2020

2018

2020

2016

2017

2020

Active

2017

Active

2018

2021

2017

Active

2017

2020

2018

Active

2017

Active

‘We just take a leap’

SOURCE: DETROIT LAND BANK AUTHORITY CREATED WITH DATAWRAPPER

Making mortgages work

into muaura nt of that milcity projnitial

Rent in resiome ropocial resiives. eedmes in a

PHOTOS BY NIC ANTAYA/SPECIAL TO CRAIN’S DETROIT BUSINESS

Detroit Land Bank Sales Research Coordinator Tamika McLean outside of a Rehabbed & Ready home along Archdale in Detroit.

the neighborhoods. The mortgage market started working in the way the mortgage market was supposed to work.” A recent report by Detroit Future City shows mortgage lending has increased tremendously over the last 10 years, though there is still work to do and Black borrowers are still rejected at a higher rate than white borrowers are. Rehabbed & Ready was cited in the report as one of the drivers of improvement. Mueller said the program is most effective in neighborhoods where home values hover around $50,000. That’s a tipping point for mortgage access, he said, and Rehabbed & Ready’s ability to use philanthropic money to sell homes for higher than existing prices — but at a loss — can help elevate neighborhoods on the brink, so lenders are willing to reengage. While the goal is to break even on sales, Johnson said the program can absorb losses of up to $30,000. A decade of inaction after the recession showed the problem would not fix itself without help, Mueller said, but the Land Bank’s participation has changed area trajectories. “I can very emphatically say the market would not have done that on its own,” he said of the improvements. “We know what happened with no intervention.” In the Bagley neighborhood, where Rehabbed & Ready has had some of its greatest success, the program helped stabilize values that have since skyrocketed, said Austin Black II, the broker/owner of City Living Detroit. Black said he thinks Rehabbed & Ready’s 2015 entry in the neighborhood helped jump-start price increases there. Then, the average home sold for $36,706; now, according to Land Bank data, it’s $167,422. Other investment in the area has drawn buyers and Black, who said one buyer he worked with bought a house through the program, has encouraged others to look in Bagley, as well. He said the Rehabbed & Ready homes are of higher quality than other flips, and sellers in the neighborhoods where Rehabbed & Ready is active often seek to emulate their work. “They created a level expectation for the consumer of what a rehabbed home should look like,” Black said. “When you have the comps to support rehabs, it gives opportunity for other investors who want to match the quality that Rehabbed & Ready has done. They get the return on investment they’re looking for.”

Detroit Land Bank Property Rehab Operations Manager Veronica Johnson outside of a Rehabbed & Ready home along Archdale in Detroit.

In the neighborhoods Rehabbed & Ready has already exited — College Park, Crary/St. Marys, East English Village, Evergreen/Outer Drive, Greenfield/Grand River, Martin Park and Rosedale Park — there’s less vacancy and more demand, and private investment is continuing to drive up values. Chris Mueller, a lecturer at the University of Michigan’s Ross School of Business who co-authored the report with Fontaine, said it’s not always easy to tell what effect Rehabbed & Ready had vs. any other area investment. But he said the research is clear on one thing: the intervention worked. “It proved sustainable to help lift values in the surrounding blocks,” he said. “It lifted mortgage lending in

Shannon Lowery had one buyer choose a Rehabbed & Ready home, and the Keller Williams Central Realtor said she liked that the house felt like it was “really a fresh start.” Mark Der Manulian, an associate broker with Metropolitan Real Estate Group who has directed three or four buyers to Rehabbed & Ready, said he makes it his business to know when they’re on the market. “I look for something my clients can move into,” he said. “They just do a nice job.” Jonathan Peregrino, the pastry chef at Oak & Reel, said he made offers on five homes before he won a Rehabbed & Ready house last year. Unlike many others, the home he bought in the Schulze neighborhood didn’t sell for a loss — it was listed at $125,000 and he paid $147,000 for it, slightly more than what it was appraised for.

Peregrino said he has mixed feelings about the program, which he worries could eventually make it harder for existing residents to afford to stay in their homes. But he said his new neighbors were glad to see that work was being done on nearby houses and that eyesores were being eliminated. And Peregrino said without the knowledge, funds or time to redo a house — or fix a bad flip — he was thrilled to find something move-in ready within his budget. “It’s been a great situation for me,” he said. “I think I still got a really good deal.” In the Grandmont neighborhood, where homes sold for an average of $57,062 in 2017 and are now up to $157,926, a three-bedroom, one-anda-half-bathroom bungalow on Archdale Street was still under construction last month. There, a small kitchen was expanded and a bathroom that had originally been in the basement was moved upstairs. A closet was added, too. Rehabbed & Ready tore down a garage that was in bad shape; a trade school partner is going to rebuild one. The original wood floors were sanded and stained; the upstairs was painted gray and carpeted. Shag carpeting was removed from the basement walls. Recessed lighting and new cabinets were added on the main level. The new owners are given a $1,500 Home Depot gift card to buy a stove and a refrigerator, and the buyer gets an alarm system for three months, as well as a yearlong home warranty. The air conditioner is ready, but the condenser isn’t put in. This allows homeowners to choose what they want in their appliances and prevents theft before the home is occupied. New sidewalks are poured in front of houses and landscaping is finished, too. McLean, with Rehabbed & Ready, goes through “before” pictures of the houses the program has sold; in this one, there was fire damage and a hole in the roof; in that one, there were broken windows and debris that had to be carted away. Rehabbed & Ready has rebricked fireplaces and rebuilt porches. It’s added more space to a house if the footprint allows it. The houses are in “great condition,” Der Manulian said, and if there are any problems, they preemptively fix them. He said the homes are often “in nominal areas, but I know that’s the whole point.” “Of course, it’s going to do nothing but good stuff for the surrounding neighborhood, absolutely,” Der Manulian said. But success comes with setbacks. There’s a limit to how many homes are in the pipeline, and as inventory wanes, there may be fewer options. The Land Bank estimates all of its eligible structures will be listed for sale by the end of next year. While some properties will continue to be transferred to the Land Bank, Bryant, the planning director, said programs like this one are designed to close. So the Land Bank is looking for other possible futures for Rehabbed & Ready, including multifamily options. In the meantime, the efforts continue to improve neighborhoods by raising values, so current homeowners can experience the benefits. “It always kind of starts off rocky, and we just take a leap,” said Johnson. “That’s what we do; we take on the risk.” Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB APRIL 11, 2022 | CRAIN’S DETROIT BUSINESS | 17

P016_P017_CD_20220411.indd 17

4/8/2022 1:30:02 PM

THE CONVERSATION

Diane Batayeh wants to mentor next generation of real estate leaders After spending more than 40 years working her way up ladder at Southfield-based apartment company Village Green Holdings, CEO Diane Batayeh oversees client services and property management of a $10 billion portfolio of about 43,000 units nationwide. She started out as a part-time leasing agent in 1980 while she attended the University of Michigan. Over the years, she’s worked in the company’s investment, development, finance and construction businesses, as well as in other roles in management. Batayeh is this week’s guest on Crain’s podcast “The Build Up,” where she spoke about the importance of putting employees first, how to handle rent strikes and what it was like to be a first-generation Jordanian-American making her way in a male-dominated field. Listen to the podcast at crainsdetroit.com/podcasts. | BY KIRK PINHO AND ARIELLE KASS What sort of issues did you face as a company through the pandemic with tenants struggling to pay rent? How did you approach those who were having difficulty? We actually did not see the number of delinquencies and the lack of the ability to pay rent to the degree that everyone feared. Did we see a downturn? Absolutely. But it was nowhere near what everyone had feared. I think, obviously, the rent relief programs that started to flood the market, albeit it was complicated on the front end to figure out how to access those monies, but we immediately set up a program to reach out to those residents who were kind of on the list of businesses and industries that had shut down and were experiencing massive layoffs to get in front of them early. To work through payment plans, to work through, ‘How do we keep you in your unit? Don’t fear,’ and become sort of on their side of the table. So having established that program right up front, we mitigated the risk of residents feeling fear and not approaching us and hunkering down. Whereas I think some operators did experience that, and that became problematic. You said at the beginning of the pandemic that you’ve seen rent strikes. Have you continued to see those? And how do you deal with them when they do happen? We actually had the threat of a rent strike. It happened only once, and it was in the Iowa market. A resident was essentially trying to garner support among the residents and had distributed a petition trying to encourage the rent strike. So we got wind of the petition, we actually met with that resident and we had a very dynamic dialogue. We were very transparent about the costs of operating the building. ... We said, ‘We’re going to show you, we’re going to open up the books. Here’s where your rent money

goes.’ And that was really effective. I think they had a misconception that they pay a dollar and a dollar goes into the owner’s pocket. What they didn’t realize is 95 cents of that dollar goes toward paying the staff, paying the utilities, paying the taxes, paying maintenance. So when you show them that level of detail and transparency, it was a 180, and we did not have that strike occur. Were you surprised it was that easy to deal with? Yes, I was pleasantly surprised. Because when I think emotions come into play and you get riled up, when people are talking to one another and there’s a false narrative, they can absolutely get traction, and the irrational side of people can come out. Frankly, there were some people who went dark and did not communicate and chose not to pay rent when they were still employed. Just taking advantage of the situation. That was a minority, fortunately. But I was pleasantly surprised how easy (the organizer of the rent strike) was to talk to, how rational. I think they just want to be communicated with. When you took over Village Green, what have you done to change the corporate environment? The focus was not necessarily on talent retention and culture, and I knew that when I came in. We decided we wanted to pivot the business to being pure third party. We splintered off the asset side of the business into a sister company and so I was given the helm of the service company. And I knew in order to be a great service company, it started with great people. ... We wanted to pivot the culture from being assetfocused to be more people-focused, put people first. ... The way we measure that is with employee feedback and employee retention. So we had to look at compensation and benefits. We had to look at recognition and rewards. We had

a band instructor. He taught me a lot about earning my place. ... He was the person who pushed me to attend college. When I was accepted at UM I was actually thinking about not going because I was afraid it would disappoint my parents. Their idea of success was getting married to a man with good health insurance and you’re done. He pushed me out of that comfort zone and ultimately I probably wouldn’t be where I’m at today.

to look at performance metrics. It took us about three years to firmly plant that culture shift. How would you describe your leadership style and how was that forged? I call it relational. It’s really more about empathy and building those relationships with trust and then inspiring people. Having been in their shoes for a number of years, I think that positioned me well as a CEO. ... Their voices are what drive me. I believe in transparency and building those relationships on a foundation of trust and confidence.

Diane Batayeh is CEO of Village Green Holdings

You have a big family — you’re third of seven siblings. How does that impact your leadership style and how you interact with people in the business? The word ‘survival’ comes to mind. ... I was the quiet one, the more strategic one. My sisters would come to me to problem-solve, to mediate. I think that was ingrained in me at a very young age. I didn’t want drama. I wasn’t in the middle of the fighting, but there was quite a lot of bloodshed, as you can imagine. I think having honed some of those negotiating skills and strategic critical thinking skills served me well later as a CEO. I’ll also say I come from an ethnic family, very traditional ... and as a female child, it reinforced being in the background for me. I grudgingly moved out of my comfort zone thanks to a high school teacher,

ADVERTISING/MARKETING

Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Director of Events and Program Content Kristin Bull, (313) 446-1608 or kbull@crain.com Events Director Samantha Flowers Senior Account Executives Maria Marcantonio, John Petty Advertising Sales Lindsey Apostol, Ainsley Burgess, Sharon Mulroy Content Marketing Specialist Allie Jacobs People on the Move Manager Debora Stein, (917) 226-5470, dstein@crain.com Marketing Manager Lynn Zott, lzott@crain.com or (313) 446-6762 Senior Art Director Sylvia Kolaski Media Services Manager Nicole Spell (212) 210-0230 or nspell@crain.com Classified Sales and Sales Support Suzanne Janik CUSTOMER SERVICE

Single copy purchases, publication information, or membership inquiries: (877) 824-9374 or customerservice@crainsdetroit.com Reprints: Laura Picariello (732) 723-0569 or lpicariello@crain.com Crain’s Detroit Business is published by Crain Communications Inc.

BLOOMBERG

Dan Gilbert involved in Chelsea FC soccer club bid

Roman Abramovich, a Russian billionaire who has denied reported links to Vladimir Putin’s regime, put the team up for sale in March shortly after the Russia-Ukraine war began, with heavy U.K. government sanctions on oli-

garchs impacting the business. Those sanctions prevented everything from selling match tickets to operating the team store, according to Yahoo! News. Sponsors had also started to bolt.

Jason Davis, small and emerging businesses. (313) 446-1612 or Jason.davis@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 CLASSIC $169/yr. (Can/Mex: $210, International: $340), ENHANCED $399/yr. (Can/Mex: $499, International: $799), PREMIER $1,299/yr. (Can/Mex/International: $1,299). To become a member visit www.crainsdetroit.com/ membership or call (877) 824-9374 Group and Corporate Membership Sales Deb Harper, (313) 446-1623 or dharper@crain.com

RUMBLINGS

Gilbert (left) and Chelsea FC stadium (right).

REPORTERS

MEMBERSHIPS

READ ALL THE CONVERSATIONS AT CRAINSDETROIT.COM/THECONVERSATION

DETROIT BILLIONAIRE DAN GILBERT is involved in what has been described as a serious bid to buy a storied English Premier League soccer team. People familiar with the matter confirmed reports in Sky News, The Independent and elsewhere saying Gilbert, through his Rock Entertainment Group, is part of a bid by the Ricketts family, which owns the Chicago Cubs, and Ken Griffin, the billionaire who founded hedge fund Citadel LLC, to buy the Chelsea Football Club. Sky News first reported that Rock Entertainment Group agreed to “invest a significant — though undisclosed — sum in the bid.” CNN reported that current owner

crainsdetroit.com

Editor-in-Chief Keith E. Crain Publisher KC Crain Group Publisher Jim Kirk, (312) 397-5503 or jkirk@crain.com Associate Publisher Lisa Rudy, (313) 446-6032 or lrudy@crain.com Executive Editor Kelley Root, (313) 446-0319 or kelley.root@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@crain.com Digital Editor for Audience Elizabeth Couch, (313) 446-0419 or elizabeth.couch@crain.com Creative Director Thomas J. Linden, tlinden@crain.com Digital Portfolio Manager Tim Simpson, (313) 446-6788 or tsimpson@crain.com Assistant Managing Editor Beth Reeber Valone, (313) 446-5875 or bvalone@crain.com Assistant Managing Editor Lauren Abdel-Razzaq, (313) 446-5800 or lauren.razzaq@crain.com Senior Editor Chad Livengood, (313) 446-1654 or clivengood@crain.com Special Projects Editor Amy Elliott Bragg, (313) 446-1646 or abragg@crain.com Associate Creative Director Karen Freese Zane, kfreese@crain.com Art Director Kayla Byler, kayla.byler@crain.com Design and Copy Editor Beth Jachman, (313) 446-0356 or bjachman@crain.com Research and Data Editor Sonya Hill, (313) 446-0402 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687 TIP LINE (313) 446-6766

The announcement that he would sell set off a flurry of interest to purchase the club — around 20 had considered it, Bloomberg reported — which was founded in 1905 and makes its home in west London at Stamford Bridge stadium. Abramovich paid $197 million for the team in 2003 and it is now believed to be worth $3.2 billion. Gilbert, who founded what is now Detroit-based mortgage giant Rocket Companies Inc. (NYSE: RKT), also owns the Cleveland Cavaliers, which won the NBA championship in 2016; the Cleveland Monsters of the American Hockey League; and the Canton Charge of the NBA’s G-League.

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.

18 | CRAIN’S DETROIT BUSINESS | APRIL 11, 2022

P018_CD_20220411.indd 18

4/8/2022 11:43:40 AM

CRAIN’S 2022

GIVING GUIDE OPPORTUNITY

ELEVATE YOUR VOICE. SHARE YOUR MISSION.

Crain’s Giving Guide provides nonprofits with diverse platforms to tell their stories and brings together nonprofits, businesses and individuals to advance the common good.

 Promote your mission  Highlight your executive team and board members  Reach Crain’s 23k+ subscribers and 500k+ monthly visitors

For more information on this advertising opportunity, contact Kristin Bull: kbull@crain.com ISSUE DATE: June 13 | CLOSE DATE: May 9

NEW THIS YEAR: Connect with volunteers and donors via our partnership with SHARE Detroit.

GG full pg.indd 1

4/5/22 10:37 AM

2022

In partnership with

CORPORATE COUNSEL SUMMIT Q&A

‘Path to the GC’ Tina Dekker

Senior Vice President, General Counsel and Corporate Secretary Meijer Inc.

Kelley Root

Executive Editor Crain’s Detroit Business

PANEL DISCUSSION ‘The Changing Rules and Risks of the Workplace’ Beth Hill

General Counsel and CCO FordDirect

Laura Lewis

Apr. 26 | 9am-12:30pm One Campus Martius

crainsdetroit.com/cc-summit

General Counsel StockX

Timothy G. Lynch

Vice President and General Counsel University of Michigan

Archana Rajendra

Vice President and Deputy General Counsel Health Alliance Plan

NETWORKING LUNCH Supporting Sponsors