Crain's Detroit Business, May 1, 2023, issue

A STATION FOR INNOVATION

Michigan Central Station neighbor wants to compete with the coasts for startups

| BY KURT NAGL AND KIRK PINHO

Detroit’s ambition to be a mobility tech hub is taking a big step forward with a new operator for the former Book Depository building that is looking to give the coasts a run for their startup money.

Brooklyn-based Newlab will oversee activity within Newlab at Michigan Central, as the redeveloped 270,000-square-foot building next to Michigan Central Station in Corktown will now be known.

Newlab co-founder David Belt said the Ford Motor Co.-owned campus has already made progress in becoming a new haunt for startups otherwise pulled to places like Silicon Valley and Austin, Texas.

O cials from Ford, Michigan Central and Newlab

Joe Louis Arena site to begin pre-leasing

BY KIRK PINHO

Residents are expected to start moving into the new residential tower on the former Joe Louis Arena site on the Detroit River next February after touring and pre-leasing begins this summer.

e developer behind the 25-story high-rise has long been mum about the project, which has been under construction for more than a year with little being revealed on the plan outside of public documents led with the city.

Danny Samson, chief development o cer for Detroit-based Sterling Group, said in an interview in the company’s headquarters at the Fort Washington Plaza high-rise that the 496-unit building is primarily comprised of studio and one-bedroom units on oors two through 24, and the 25th oor will have two-bedroom penthouses.

Rents in the building, referred to as e Residences at Water Square, have not been nalized yet, though they will be market rate with no units classi ed as a ordable under federal guidelines.

pulled the cover o the rst piece of the $950 million redevelopment project Tuesday.

Once a symbol of blight, the former Detroit Public Schools building that housed textbooks at 2231 Dalzelle has been completely reimagined for the future.

Newlab has secured 25 startups consisting of 150 members, which began working in the building gradually over the past couple months. Once full, it is expected to house 1,100-1,400 people, including 30 Newlab employees, Belt said. Construction inside the building is expected to be complete in June.

DRAWING A LINE OF SUCCESSION

Apartment tower expected to open next February

The redeveloped 270,000-square-foot Book Depository building next to Michigan Central Station in Corktown was renamed Newlab at Michigan Central. | PHOTOS BY KURT NAGL/CRAIN’S DETROIT BUSINESS AND BRIAN W. FERRY

The under-construction residential tower on the Joe Louis Arena site. KIRK PINHO/CRAIN’S DETROIT BUSINESS

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

 BILLS GIVE ASSAULT VICTIMS MORE TIME TO SUE

THE NEWS: People who were sexually assaulted as children would have decades longer to sue for damages and those for whom the statute of limitations has expired would have a two-year window to bring suit under bills announced Thursday in the Michigan House, where supporters are hopeful the legislation will no longer stall after a switch in power.

WHY IT MATTERS: Victims currently can pursue legal action until they turn 28, a cutoff that was raised from what was generally age 19 under a 2018 bipartisan law enacted in response to Larry Nassar’s abuse at Michigan State University. Supporters of the new measures say 28 is too low because the average age that victims of childhood report is 52. The two-year window to sue retroactively would help those who are 52 or older.

Corrections

 A Notable Leaders in Marketing pro le in the April 24 issue incorrectly listed Alicia Je rey’s title. She is chief marketing o cer of the Detroit Pistons.

 e pro le for Dan Zwolak incorrectly listed his title and the number

 STELLANTIS TO CUT HOURLY, SALARIED WORKERS

THE NEWS: Stellantis aims to cut about 3,500 hourly jobs in the U.S. by o ering buyouts and retirement incentives to workers ahead of negotiations with the UAW later this year.

e automaker also plans to o er buyouts to salaried employees in the U.S. e buyouts will be o ered to 31,000 hourly employees and 2,500 salaried workers.

WHY IT MATTERS: Mark Stewart, COO of the company’s North American unit based in Auburn Hills, cited the need to control costs as Stellantis invests heavily in electric vehicles in a rapidly shifting market.

of employees. He is CEO and executive creative director at seeds Marketing+Design and has 15 employees.

 e pro le of Kelli Ellsworth Etchison included the wrong year and the number of employees she oversees. She began leading marketing e orts

 UM PLANS $130M EV TRAINING CENTER

THE NEWS: e University of Michigan plans to use a $130 million state appropriation to train workers, develop next-generation electric vehicle batteries and pilot technology alongside automakers, suppliers and startups. Overseeing the University of Michigan Electric Vehicle Center will be Alan Taub, engineering professor and former auto executive, UM announced ursday.

WHY IT MATTERS: e university will spend $60 million to build a new training facility on its Ann Arbor campus, $50 million will be used for public-private research and development and $20 million will go toward training workers for future mobility, the new director said. e center will join the UM Battery Lab with additional technology and piloting capabilities for students, companies and workforce development programs.

at LAFCU in 2015 and manages ve employees.

 e quote in Jennette Smith Kotila’s pro le was inaccurately attributed. It came from Kevin Kiefer, director of communications and marketing at Honigman LLP.

ENTREPRENEURSHIP

Events business owner wins $100,000 Hatch Detroit prize

 e Comerica Hatch Detroit Contest by TechTown has served as a springboard for what are now some of Detroit’s most popular and notable businesses. In winning the 2023 competition, Cathryn Coleman hopes to be next on that list.

Coleman, owner of events business Bouncing Around the Motor City, bested three other nalists in the annual “Shark Tank”-style Hatch O event Wednesday night, winning $100,000 and other assistance toward that goal.

e other three nalists will also receive technical assistance, business coaching and other services designed to help their businesses succeed from TechTown Detroit and partners including IT company Accenture and business management consultant Ernst & Young. Hatch winners commit to opening a brick-and-mortar business in Detroit, Hamtramck or Highland Park.

e entrepreneur has a storefront at 13238 Fenkell Ave. in Detroit’s Bethune community. e property, which had been vacant for 26 years, was set to be demolished before Coleman purchased the 4,000-square-foot building for $1,100 from the city. e storefront will open in three months with retail and event space.

Bouncing Around The Motor City events business owner Cathryn Coleman (center) celebrates her $100,000 Hatch Detroit win with her family Wednesday night at the Wayne State University Industry Innovation Center.

Detroit sues developer for blight violations

Hospital, church, theater on M-100 list

BY ARIELLE KASS

e city of Detroit has led four blight-related lawsuits against longtime real estate investor Dennis Kefallinos and his son, Julian, part of a larger strategy to target commercial properties that remain in disrepair.

e suits, led in March and April in Wayne County Circuit Court, call the properties public nuisances and a danger to the safety and welfare of the community.

e properties are a church at 8236 West Grand River Ave., a cold storage warehouse at 1448

Wabash St., the former Southwest Detroit Hospital at 2401 20th St. and an old Civic eater at 12323 Kelly Road, all in Detroit.

Each of the properties is on the socalled M-100 list, a target list of blighted properties in the city that Mayor Mike Duggan has made a priority in an e ort to eliminate commercial blight.

“I like to preserve buildings and save them instead of demolish them,” Dennis Kefallinos said when reached by Crain’s. “I know it takes too long, but we’re going to continue working on it.”

Kefallinos owns eight properties on the list, Detroit Corporation Counsel Conrad Mallett said. ese are the ones in the most dilapidated state.

“ ey are very, very public,” he said. “ ey are very, very obvious.”

e city has been stepping up its legal response to blighted properties, ling suits against the un nished Perfecting Church, the owner of a proposed concrete crushing site, and the Packard Plant.

REAL ESTATE

Stellantis seeks higher emissions limits in Detroit, Warren amid string of violations

After racking up 10 violation notices and more than $500,000 in nes for air pollution at factories in Detroit and Warren, automaker Stellantis NV is asking the state to approve higher emission levels at both plants.

e requests are tucked in a pair of applications to the Michigan Department of Environment, Great Lakes and Energy for permits intended to correct emissions violations.

At the Warren Truck Assembly Plant, which produces Jeep Wag-

oneers and Ram Classic pickups, Stellantis wants to raise emission levels of volatile organic compounds and particulate matter, according to the permit. At the new Mack Assembly Plant in Detroit, where the new Jeep Grand Cherokee models are built, the automaker also wants to increase its release of particulate matter.

Proposing multiple unrelated permit changes in a single application is not unusual, according to EGLE. But residents and activists have slammed the automaker’s appeal for higher air pollution limits amid a long string of viola-

tions that have sparked community health concerns and a federal investigation into the state’s permitting practices.

VOCs and particulate matter are linked to a wide range of health issues, from eye, nose and throat irritation to more severe problems, such as liver and kidney damage and asthma, according to the U.S. Environmental Protection Agency, which cautions that much is still unknown about the health impact of air pollutants.

Homeownership by millennials is up, and Michigan cities lead way

It took millennials longer to achieve than their parents, but more than half of 27- to 42-year-olds in the U.S. now own homes. Grand Rapids and Detroit are among the cities leading the charge.

Millennials are the generation born between 1981 and 1996. As of 2022, greater Grand Rapids was the top metro area of 1 million or more residents for millennial homeownership, with 63% owning homes. Metro Detroit came in seventh, with about 55% of millennials owning homes, behind Grand Rapids, Minneapolis, Cincinnati, St. Louis, Pittsburgh and Indianapolis. e national average is 51.5%.

at’s according to a recent Apartment List report that examined Census data on the current homeownership rates of four generations.

Unsurprisingly, due to a plethora of factors led by the Great Recession of the mid-2000s, millennials have transitioned from renting to owning far more slowly than preceding generations.

Some of the factors the report cited are economic instability following the nancial crisis of 2007-09, the rise in appeal of “ exible lifestyles,” young people moving to cities with higher costs of living and the growing housing inventory shortage amid historically low interest rates.

“By age 30, 42 percent of millennials owned their homes, compared to

48 percent of Gen Xers, 51 percent of baby boomers, and nearly 60 percent of (the silent generation, born 192845),” the Apartment List report said. “ at gap persists through their 30s and into their early 40s.”

Grand Rapids, a millennial mecca

Daniel and Claire Molling, both 32, purchased their home in Grand Rapids’ West Grand neighborhood in July 2021 for $253,000, which is just above today’s median home value of $250,000 for the city. e couple had been dating since 2017 and closed on the home just months before their wedding.

Tanisha Burton poses for a portrait with her grandson, Zamir Wright, outside of her home that backs up to the Stellantis Mack Assembly Plant in Detroit.

KURT NAGL

RACHEL WATSON AND NICK MANES

Daniel and Claire Molling, both 32, bought their home in Grand Rapids’ West Grand neighborhood in 2021 after house-hunting for eight months. | DANIEL MOLLING

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Gilbert eyes converting part of Buhl Building for apartments

At least a portion of Dan Gilbert’s Buhl Building downtown may become residential space.

Several sources have told me of requests for architecture proposals for the project going out to national rms, and multiple o ce tenants not having their leases renewed to make way for units.

It’s not known how many oors of the 27-story high-rise are being considered for residential. Some or all of it could be in play.

Bedrock LLC, Gilbert’s Detroit-based real estate company, did not respond to emails seeking an interview and additional details.

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Converting the Wirt C. Rowland-designed tower into apartments would likely be the most substantial o ce-to-residential project in Detroit in the pandemic era. Its history, size and location make it one of the more prominent buildings in the city.

It opened in 1925, according to Historic Detroit, which tracks Detroit buildings and architecture history. At one point, it was the tallest in the city.

In 1982, a gunman opened re on the building’s eighth oor, killing a young woman in a law o ce and injuring dozens of others after he rebombed the oor.

Gilbert paid $38.5 million for the 400,000-square-foot building and its

REAL ESTATE

652-space parking deck in late 2017.

While Gilbert and his team have experience with such conversions — see: the former Detroit Free Press building and the David Stott Building, among others — this would be the most prominent to come to light in the last three years. In addition, Gilbert has plans to convert the Harvard Square Centre building on Broadway into residential, but those plans have been in the works since before the pandemic.

Many o ce landlords have been exploring what other uses they can put into their buildings as the COVID-19 pandemic sent many companies into a hybrid work mode where

employees come to their desks some days but work from home others. at dynamic has left gobs of o ce space either partially or completely unused. Developers in Detroit and the suburbs have seen multifamily conversions for certain o ce buildings as the most likely repurposing. Henry Ford Health in February said it was converting its One Ford Place property totaling some 610,000 square feet into an unknown number of residential units — the rst large-scale ofce-to-residential conversion in Detroit announced during the pandemic.

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

Detroit sues Leland Hotel owner for blight

BY KIRK PINHO

Troubles continue for the former Leland Hotel’s owner.

Michael Higgins and his a liates are facing a lawsuit from the city of Detroit alleging blight and improper building use at 400 Bagley St. is marks the latest legal complaint against him after a Detroit-based architecture rm sued last year for hundreds of thousands in unpaid work at the property. He also nearly lost it to tax foreclosure but has since redeemed it and is on a payment plan. And privately, some investors are asking for more accounting details for the property after a capital call.

In a lawsuit in Wayne County Circuit Court led in December, the city said Higgins, through his ownership companies 400 Bagley Corp. and Bagley Investment Co., has allowed the Leland to become blighted. City attorneys originally asked the court to order the 22-story building shuttered, but backed away from that when some of the emergency repairs were made.

Higgins said in an interview Wednesday that major issues with the building have been addressed, although some remain.

“We don’t have a certi cate of occupancy, but can’t until we renovate the building,” Higgins said.

“ ey’ve acknowledged we won’t be able to get one until we renovate it, but they’re still pushing it. ere’s a number of things that are unreasonable or can’t be obtained, and there

are a few other things. ey wanted some more scraping of paint and things. But we are doing a major renovation of the building, and all of this is gonna get taken care of. We are having people stay in the building, at the city’s request. e city didn’t want us to put anybody out, which is obviously costing us a lot of money because we have a very low occupancy and we are having to run the whole building, but we agreed to do that. I think it’s all going to be settled.”

It’s been more than ve years since Higgins’ vision to overhaul the tower with a $120 million renovation were revealed, although work on that broader project has not started. Higgins said he is still working on securing long-term funding for the project through the U.S. Department of Hous-

ing and Urban Development.

e city’s December lawsuit is still proceeding because “the work is not complete and the building is not in compliance,” Conrad Mallett, Detroit’s corporation counsel, said in an emailed statement.

Higgins said there are about 60 residents in the building currently.

In the complaint, the city called the Leland “not t for human habitation and not safe for human occupancy.”

e city continues to issue citations, of which there are at least 86 publicly identi ed in a city blight database. Several were issued in early February, and more were issued in late November and early December.

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

The Buhl Building at 535 Griswold St. downtown. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

Kirk PINHO

The Leland Hotel | COSTAR GROUP INC.

Parking lots are cash cows, but

downtown Detroit need so many?

BY KIRK PINHO

e city that put the world on wheels now has the dubious distinction of having among the highest percentage of its downtown dedicated to places to park cars.

A study by a Portland-based advocacy group called Parking Reform nds that 30 percent of downtown Detroit is devoted to parking spaces, making it one of the cities with the most of what urban planners would describe as underutilized land in the country.

at percentage — which counts things like surface parking lots and parking decks, although not underground parking — puts Detroit in front of other Midwestern cities like Columbus, Ohio (27%); Cleveland (26%), Chicago (4%), Indianapolis (25%), Minneapolis (18%), St. Louis (21%) and St. Paul, Minn. (16%).

What’s more is that only a handful of cities nationwide have a greater percentage than Detroit: Mesa, Ariz. (32%); Riverside, Calif. (34%); Lubbock, Texas (35%); Las Vegas (42%); and Arlington, Texas (42%), according to Parking Reform data.

Ranking high in this area doesn’t bode well for Detroit or those other cities, said Je Horner, an associate professor of urban studies at Wayne State University. at’s because surface parking, in particular, frays downtowns and destroys character, among other things, he says.

“A city is a collection of density that almost by de nition needs to be walkable in order to retain the character of being a city,” Horner said.

But for owners of surface parking lots in particular, parting ways with their real estate can be a di cult proposition for one reason: With little overhead, they are cash cows. The Detroit Free Press in 2018 estimated that privately owned surface parking lot owners generated $175 million in

revenue, based on an estimate of $10 per space per day, ve days per week, with some 67,000 surface parking spaces.

Some of the big parking lot and parking structure owners include the Ilitch family’s Olympia Development of Michigan, Dan Gilbert’s Bedrock LLC, General Motors Co. and Park Rite Inc. ere are also plenty of smaller operators.

Some developers have razed buildings in recent years to make way for what they contend is needed parking to sell or rent out residential units, including Fort Shelby condominiums on West Fort Street and the former United Artists Building on Bagley.

To be sure, some other surface parking has been developed since then — or is proposed to be developed in the years ahead, with visions ranging from o ce to residential space. And some of Detroit’s downtown parking have other uses on top, including e Griswold apartments on top of a Michigan Avenue parking deck and o ce space on the top oors of the new Huntington Bank building, which has bottom oors of parking.

But in a geographically large city and region still largely reliant on the automobile due to a public transportation infrastructure that many users and observers nd lacking, parking remains a necessity.

“ e percentage of land devoted to parking in Detroit is higher than average because public transit options have historically been limited and our city’s economy centers around the production (and ownership) of vehicles,” said Kevin Bopp, the CEO of Park Rite. “So, the number of parking spaces evolved to meet demand, which suggests there isn’t a meaningful oversupply.”

Bopp says he supports doing whatever creates the best version of the city, but that doesn’t necessarily require removing parking space.

A lot of lots

A study by an advocacy group called Parking Reform nds that some 30 percent of downtown Detroit is surface parking lots and parking garages, putting the city among those with the highest percentage of its central business district land used for those purposes.

“As land use continues to shift and transit improves, some parking supply will naturally be absorbed. I don’t think anything should be done to forcibly e ect change,” he said. “It would be better to continue promoting the healthiest, most vibrant urban core possible.”

But still, the Parking Reform study buttresses the narrative that at least some areas of Detroit’s central business district remain dominated by surface parking and other car-centered uses, even as the city for years has attempted to add density with new buildings downtown and elsewhere to varying degrees of success.

“For a city the size of Detroit, as well as its metro, it’s doing very, very poorly,” said omas Carpenito, who worked on the study for Parking Reform.

He said that following World War II, suburban sprawl became prominent as highways were constructed — destroying Black and Brown neighborhoods not just in Detroit, but in other cities — and a orded people the ability to live farther away from their places of employment.

“( is was) the whole idea of the commuter city where you have a big lawn in the suburbs, you commute in and the city is only for your o ce job, you leave and you’re done. at sort of mixed-use (environment) that we saw before World War II was then seen as obsolete,” Carpenito said.

For downtown Detroit, the reasons for the vast amount of parking are varied and complex.

ey can be traced to the emergence of the automobile as a primary form of transportation in the 20th century, white ight and declining population within city limits since 1950, dampened land values, freeway construction, property owners letting buildings rot and requiring demolition and any number of other factors.

“ ere’s a huge capitalist impulse

SOURCE: PARKING REFORM

that derives from all of that and that’s lower land valuations, which leads to lesser desired land uses, including lots of parking and lots of mom-andpop operations that can capitalize on that,” Horner said.

e end result, regardless, is a downtown — generally de ned here as between the freeways and south to the waterfront — pocked with surface parking, parking decks both new and old and land that is otherwise underutilized.

“If you bring in the things that make cities more densi ed, more walkable, if you bring in public transit and so forth, then the land valuations will rise enough to drive out those undesirable land uses, and the same thing is true for surface parking,” Horner said.

For Bryan Boyer, assistant professor of practice in architecture and the director of the bachelor of science in urban technology program at the University of Michigan, the prevalence of parking in Detroit is representative of how the region has failed on transit issues.

“It’s one of those face-palm mo-

ments,” Boyer said. “How many ways do we need to be reminded that not only the city of Detroit, but Southeast Michigan, is going to be held back until we have public transit.

“If we can’t get people moving around the region any other way than cars, this map — which is de nitely a map of the past — is also going to become the map of the future,” Boyer said, referring to the Parking Reform map showing swaths of parking space.

For urban planners, land that’s undeveloped or used as surface parking is generally seen as a missed opportunity to add density to a city, making it more vibrant with more restaurants, bars, apartments, o ces, entertainment and other uses.

“ e goal shouldn’t be to remake every block in the city so that you could come and park super easily, right,” Carpenito said. “It should be to remake our culture. It should be for us to ask whether cities should be built like this.”

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

does

A vast empty parking lot next to the Renaissance Center complex. LAURÉN ABDEL-RAZZAQ / CRAIN’S DETROIT BUSINESS

Lawmakers must address energy costs, reliability

EDITORIAL

Returning citizens, a job and second chance

So much comes down to employment. Having a good job that allows someone to sustain themselves and their family is so fundamental that it almost seems too obvious to state.

Yet, it’s important to say it out loud. at’s because we have a segment of society that wants to work — crucial at a time of low unemployment — yet struggles to nd a job. Why? Because they made mistakes in their past and have a criminal record.

ey are often referred to as “returning citizens,” meaning they are re-entering society after a period of incarceration.

A recent Crain’s Forum devoted to the topic found that Michigan has more than 30,000 people locked up in state prisons. ousands more are held in local or federal institutions. Ninety- ve percent of people incarcerated will come back to the community, Stephanie Hartwell, a criminal justice expert who is dean of the College of Liberal Arts and Sciences at Wayne State University, told writer John Gallagher.

“If we’re not open to employing them, we’re not going to have good outcomes,” Hartwell said.

We are talking about people who have paid their debt through incarceration, and they are now back to living among us. It is in everyone’s interest that they nd meaningful employment so they can support themselves and be productive members of society.

To be sure, returning citizens face challenges beyond employment. Barriers to nding housing, mental health issues and lack of education are all key issues for those trying to reintegrate into society.

But landing a meaningful job is a critical

stepping stone along the path to rebuilding a life.

Kevin Harris shared his story of struggle with Crain’s Forum about when he got out of prison nearly two decades ago. It took longer than needed for him to get on track because of problems with nding good employment.

Now he is the pastor of a church in Detroit where he helps young Black men facing challenges in a neighborhood with too many guns and drugs.

Harris has a message: “It’s vital that people that are in positions to help somebody give them a chance, if we’re going to have a better community out here.”

E orts are being made. Wayne State has a program called Educational Transition Coordination that helps recently released people get into job training and university classes. e city of Detroit o ers Skills for Life, a job training program available to returning citizens.

In mid-April, the state of Michigan sealed all or some of the criminal records of more than 800,000 Michigan residents under an automatic expungement process.

ese are important steps and, at the core, employment remains a vital building block. Employers can help.

Any employer is going to want to scrutinize new hires, and those who might have criminal records even more so. But many employers also report that returning citizens can be their most dedicated employees.

Tony Gant, policy director of Nation Outside, an organization dedicated to helping the formerly incarcerated, told Crain’s Forum that a good job is critical.

“People who have served long periods of time oftentimes are the most ambitious people you’re going to meet,” Gant said. “I just want employers to understand that.”

O ering an opportunity to a returning citizen can be good for business and good for the community.

Recently a seven-bill package from Michigan Democrats has been introduced that would update renewable energy standards, set a clean fuel standard, reduce building emissions and allow state regulators to consider climate factors when evaluating utility plans. However, these bills do not address some of the key problems driving higher and higher electricity rates and poor reliability.

According to the most recent year of data (2021) from the U.S. Energy Information Administration, Michigan has the 12th most expensive retail price of electricity in the country.

Let’s take a closer look at some of these energy laws.

Utility use of projected costs

When a utility seeks a rate increase, it les an application with the Michigan Public Service Commission. In that application, the utility will list all its costs and revenues over a 12-month period to support the notion that a rate increase is necessary.

at 12-month window is called the “test period” or the “test year.” For over 60 years, the utilities in Michigan were required to use a historical test year, based on actual costs and revenues, and only adjusted for known and measurable changes. However, the 2008 energy law authorized utilities in Michigan to utilize a fully projected future test year based on costs and revenues projected by the utility seeking a rate increase. e subjective nature of projecting costs and revenues — and the obvious inability to accurately predict what future costs and revenues will be — has resulted in higher rates for customers. However, even when the actual costs are lower than predicted, it is the utility — not the customers — which receives the bene t. Customers still pay the higher rates based on the projected higher costs. is system put in place by Michigan Legislators allows the utilities to collect the costs to improve reliability, then not actually spend the money on reliability but instead give it to their investors as an increase in dividends.

10-month rate cases

Instead of giving the MPSC and customers more time to scrutinize the utility projections, however, the legislators also passed a law to shorten the amount of time the MPSC and any interveners have to review a utility’s rate increase ling. In fact, the 2016 energy law shortened the time frame to an extremely fast 10 months. Not only did this law signi cantly reduce the

time to review the accuracy of utility projections, it also allowed the utilities to le rate increases more frequently. is one law passed by Michigan legislators thus limited the authority of the MPSC to determine how much time was necessary to review a utility rate increase ling and allowed utilities to le for rate increases more frequently — a compound impact on increasing electricity rates.

10.7% ROE for renewable portfolio standard

Another change in the 2008 energy bill was to require the utilities to have a certain percentage of the electricity supply come from renewable generation. is is a good thing. But what the 2008 energy law did was once again limit the authority of the MPSC to determine what is a reasonable pro t for the utility to make regarding investments in renewable generation and locked in a premium return on equity/pro t for the utility. What do I mean by premium pro t? Well in both Consumers Energy’s and DTE’s most recent electric rate cases, the MPSC approved a 9.9% ROE for all other capital investments made by the utility, still above the national average for electric utility ROEs. e law requires the MPSC to allow the utilities to earn a 10.7% ROE on the renewable energy investments which, you guessed it, results in unnecessary higher electricity rates.

Energy e ciency incentive

e 2008 energy bill also created an energy e ciency program. is law requires the utilities to collect money from all customers and then use that money to fund projects that reduce energy usage by customers. Using electricity more e ciently is certainly a good thing. However, the law also then authorized the utilities to collect millions of dollars of pro t as an “incentive” for running this energy e ciency program.

So, in summary, the MPSC’s authority to ensure reasonable rates and reliable service has been signi cantly limited by several prior laws passed by Michigan legislators. Michigan’s electricity rates and reliability are headed in the wrong direction. It’s time for legislators to do something to help customers and pass a 2023 energy law that changes some of these old laws that are not working, lower electricity rates and improve reliability.

WE HAVE A SEGMENT OF SOCIETY THAT WANTS TO WORK YET STRUGGLES TO FIND A JOB.

Rod Williamson is the executive director of the Association of Businesses Advocating for Tari Equity.

ROD WILLIAMSON

Tremayne Guin got job training from Southwest Solutions in Detroit after completing a prison term. “The program was a blessing,” he said. “I’m trying to change my life.” | NIC ANTAYA/CRAIN’S DETROIT BUSINESS

May Mobility to invest $18M, add 300 jobs in Ann Arbor

Self-driving shuttle company to add to its base of 197, focus on engineering with new hires

BY KURT NAGL

Self-driving shuttle company May Mobility is planning to grow its Ann Arbor headquarters with 300 new jobs and an $18 million investment for research and development and new autonomous eet vehicles.

e company, launched in 2017, will add to its base of 197 employees in Michigan with new hires focused on engineering, according to a project brie ng memo from the Michigan Economic Development Corp.

e jobs will pay an average wage of $67.31 per hour plus bene ts.

e expansion is being supported by a $3 million performance-based business development grant, and Ann Arbor Spark has also agreed to provide sta and nancial assistance.

e $18 million investment will go toward the purchase and assembly of May Mobility vehicles, IT equipment and leases, including for its headquarters at 650 Avis Drive as well as additional warehouse and testing space at 1050 Highland Drive, according to spokesperson Brittany Lockard.

e incentives are being o ered to compete against an alternative location being considered in Tokyo, where May Mobility’s lead backer Toyota is based, according to the MEDC. Boston, Silicon Valley and

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May Mobility also announced Tuesday the launch of its rst on-demand public transit service using AVs in Sun City, a retirement community in Arizona.

May Mobility also operates an on-demand shuttle service in Ann Arbor; Grand Rapids, Minn.; and Arlington, Texas. Last summer, it brought its Series C investment funding up to $111 million, bringing the startup’s total fundraising to around $200 million over the last six years.

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FAMILY-OWNED BUSINESSES

DRAWING A LINE OF SUCCESSION

Family businesses must plan now to succeed later

ily businesses for more than 25 years.

Accountability and equity among keys to managing family employees

Fans of the ctional HBO drama “Succession” have likely watched the relentless struggles between company founder Logan Roy and his children, who want control of the family’s global media and entertainment empire.

e narrative of squabbling heirs seeking power is not far from reality. Family businesses face unique challenges when it comes to succession planning.

“I have observed mediations where litigants have nearly come to blows and witnessed numerous shouting matches,” said Gerard Mantese, an attorney at Mantese Honigman PC in Troy. Mantese has handled shareholder and member disputes for fam-

“In one case, one party deposited a dead, gutted deer near their sibling’s (co-owner’s) driveway,” Mantese said.

Family business owners without a succession plan risk not only having to derive a plan amid a crisis — such as the unplanned disability or death of a family member — but also the business’s demise.

“If a family business really has the intention to succeed to future generations, having a strategy and plans in place to achieve that really is necessary,” said Rejeana Heinrich, director at the Stevens Center for Family Business at Saginaw Valley State University.

When a parent with the controlling interest in a family company passes away without a legal plan, siblings are often left to ght for control, which

Mantese said can lead to litigation and lack of direction at the company.

“What makes family businesses so complicated are these overlapping layers and dynamics — the mixture of blood and money — that can get in the way of either the success and profitability of the business or the family harmony or both,” said Heinrich.

According to a 2015 SVSU study of 61 family-owned businesses in the Great Lakes Bay region, 75 percent indicated they would pass their companies on to future generations, but only 26 percent said they developed a plan to guide them.

See SUCCESSION on Page 10

Family businesses aren’t just mom-and-pop stores that keep the lights burning. According to Family Enterprise USA, the 5.5 million family businesses in the United States employ about 59 percent of the private sector workforce and contribute $7.7 trillion to the GDP.

at’s why it’s just as imperative to establish employment policies among family member employees as for nonfamily employees — particularly when they work side by side.

“Transparency and clear rules get a workforce more committed

to the business, more engaged and satis ed with the job and motivated to work and grow along with the family business,” said Ana Gonzalez, director of the Family Owned Business Institute at Grand Valley State University in Grand Rapids.

Frankenmuth Bavarian Inn Holdings Inc. grew from the Zehnder family’s Bavarian Inn Restaurant, acquired in 1950, to a multi-business organization that also includes Bavarian Inn Lodge, Frankenmuth River Place Shops and Frankenmuth Gift Shop Inc.

See FAMILY on Page 10

Director Antonio Green and President Karla M. Cole pose for a portrait at James H. Cole Home for Funerals in Detroit . | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

Mantese Heinrich

RACHELLE DAMICO

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SUCCESSION

From Page 8

Heinrich said developing and implementing a formal succession plan that includes guidance is imperative for family businesses to survive and thrive. She said the lack of follow-through is a major factor in the decline of family-owned businesses.

According to Family Firm Institute Inc., a research group based in Boston, only:  30% of family-owned businesses survive to the second generation;  12% are still viable in the third generation; and  3% make it to the fourth generation and beyond.

“Without a plan, you often see dissension, confusion and a little bit of anarchy,” said Mantese. “Failure to plan is planning to fail.”

Make regular family meetings the norm

From the rst season through the fourth, family members in “Succession” habitually held one-on-one backroom meetings to vie for leverage. While that behavior may temporarily bene t one family member, it isn’t good for the company’s overall success.

Experts say regular family meetings can be an e ective tool for identifying future company leaders because they provide family members opportunities to discuss business strategies, short- and long-term goals, con icts of interest and other pressing issues. “Developing that dialogue will help with the natural selection of who the successor should be,” Heinrich said.

She advised adding new family members to the regular meetings as soon as they enter the company to understand their desired career paths and determine their roles in the business.

“Systematic, routine, open and candid communication will keep

FAMILY

From Page 8

“A family business is like any other business in the country. Except you also have to manage the family, and it has to be a priority,” said company Chair Bill Zehnder.

Bavarian Inn Holdings Inc. requires family employees to adhere to a “family creed” that de nes terms and requirements in areas such as education, outside work experience, stock ownership and voting control conditions.

“ e leadership of any organization has a responsibility to all the stakeholders that are impacted by that business,” Zehnder said.

Drawing on insights from experts and another fourth-generation family business, here are six tips for hiring and managing family member job applicants and employees in a family-owned company.

Set expectations

Attracting and retaining employees is increasingly competitive. In April, the U.S. Chamber of Commerce reported there were 9.9 million open jobs in the U.S. but only 5.9 unem-

ployed workers.

To compete, experts say family members interested in joining a family business should meet the same criteria for education, experience and training as nonfamily member job candidates.

Giving family job candidates preferential treatment damages credibility and makes hiring top-notch talent more di cult.

“If nonfamily employees see that someone without enough merit gets hired for positions that any other nonfamily employee would be capable of, you’re going to have a perception of unfairness, and you will not attract talent,” said Gonzalez.

Compensate fairly

Just as hiring requirements should be standardized across the company,

so should com-

pensation levels.

Gonzalez said basing family employees’ salaries on market-based compensation bolsters the perception of fairness.

James H. Cole Home for Funerals Inc., a fourth-generation family company established in 1919 and Detroit’s oldest Blackowned funeral home, is run by third-generation President Karla Cole. Cole works with her sons, funeral home directors Antonio and Brice Green. e company has 50 employees.

Antonio Green said Cole bases most sta pay scales on regional industry standards and follows Small Business Administration of Michigan-recommended guidelines for executive compensation.

“Having these measures in place ensures that we will not have to address such an issue amongst family members in the future,” he said.

Remain transparent

A commonly advocated best prac-

tice is routine family meetings.

Cole uses its monthly family meetings to discuss general business ideas and direction.

“ ese meetings not only help maintain an understanding amongst the family but also ensure that the sta receives a cohesive message and a reassurance of the direction that the company is moving in,” Green said.

He said family business meetings can help them work through disagreements that may arise.

“ e communication piece is what’s really critical,” Green said.

“Making sure that everybody understands the reasoning beyond a decision helps ensure everyone is on board.”

Have family employees gain outside experience

Business experience isn’t innate. Some experts say gaining employment experience at outside companies before joining the family business can be bene cial.

Detroit-based LoVasco Consulting Group, which provides insurance, employee bene ts, retirement products and communication services, typically advises companies to have family employees work elsewhere for three to ve years to gain knowledge and experience in the industry.

“ e worst thing you can do is have someone come right out of college or high school and come into the family business,” company President Gene LoVasco said. “It’s important that they

earn their stripes and don’t walk in from day one thinking that they own the place.”

One client brought his son into his manufacturing business right out of college and placed him in an executive role, LoVasco said. e plan backred.

Dorothy Zehnder (founder and matriarch of Bavarian Inn and 101 years old), Karen Zehnder (Bill’s wife), Bill Zehnder, Katie Zehnder Weiss (Bill’s daughter), and Amy Zehnder Grossi (Bill’s daughter). | FRANKENMUTH BAVARIAN INN

Gonzalez LoVasco

“THE COMMUNICATION PIECE IS WHAT’S REALLY CRITICAL. MAKING SURE THAT EVERYBODY UNDERSTANDS THE REASONING BEYOND A DECISION HELPS ENSURE EVERYONE IS ON BOARD.”

—Antonio Green, funeral home director, James H. Cole Home for Funerals Inc.

Theis

From Page 10

family dynamics on an even keel over time,” Heinrich said.

Involve outsiders in the decision-making process

When choosing a company’s future leader, external consultants — business advisers, attorneys and certi ed public accountants — can present objective views that alleviate tension in the decision-making process.

“Good succession planning engages all of these professionals to make a tight and well-thought-out plan for the future,” said Mantese.

Bill Zehnder, third-generation owner and chairman of Frankenmuth Bavarian Inn Holdings Inc., said nonfamily employees and consultants “take a lot of the emotion out of the process.”

“ ey’ve experienced all the good, the bad and the ugly in families,” he said.

Frankenmuth Bavarian Inn Holdings has about 1,000 employees spanning the Bavarian Inn Restaurant, Bavarian Inn Lodge, Frankenmuth River Place Shops and Frankenmuth Gift Shop Inc. e Frankenmuth-based holding company dates back to the Bavarian Inn Restaurant, known as Fischer’s Hotel when the Zehnder family acquired it in 1950.

The basic terms of succession planning

Legal agreements experts recommend including in a succession plan: Buy-sell agreement: A buy-sell agreement stipulates how an owner’s share of a business is transferred in the event of death, disability, retirement, termination of employment or other circumstances. This agreement establishes how the departing owner’s shares will be obtained by the remaining partners, which Julius Giarmarco, chair of the trusts and estates practice group at Giarmarco, Mullins & Horton PC in Troy, said can help assure a smooth transition of ownership and business continuity.

Voting share conditions: Anyone who owns stock in a company has a right to vote on business decisions. A succession plan can include certain conditions that must be met to dictate who has the right to vote. These conditions can include requiring a certain level of education or professional experience.

Employment contracts: These de ne each family member’s job responsibilities as well as their salary or wages, bene ts and other terms. Giarmarco said having these set prior to the next generation taking over can help avoid future con icts. Noncompete agreement: A noncompete agreement can dictate if, how and when owners and o cers can engage in other businesses. Gerard Mantese, an attorney at Mantese Honigman PC in Troy, who has had many clients litigate over noncompete agreements, said it’s a critical document.

cession planning. Eckrich helps the family facilitate discussions and set goals around current roles and responsibilities, as well as future goals for leadership roles and retirement.

As part of that process, he interviews family members and key nonfamily executives to assess their strengths and weaknesses. After he compiles the information, he helps the family develop a framework and roadmap to navigate a smooth transition of leadership and ownership over time.

“It’s important to have an unbiased, outside perspective involved in the process,” said Zehnder.

“He sees things di erently (from me) because it’s my (family).”

owner, Judy Zehnder Keller, became ill. (Zehnder Keller passed away last year from lung cancer).

Michael Zehnder, formerly general manager of the Bavarian Inn Lodge and Frankenmuth River Place, succeeded his mother, Zehnder Keller, as president of the Bavarian Inn Lodge.

Implement key agreements

As the rst episode of “Succession” begins, son Kendall Roy tries to close a deal as he frets over a public announcement that he will succeed his father as CEO.

Scenarios like this illustrate why company attorneys come in handy.

documents to include is a buy-sell agreement, which stipulates how an owner’s share of a business is transferred in the event of death, disability, retirement, employment termination or other circumstances.

Without a buy-sell agreement, Giarmarco said, the business is transferred to the bene ciaries in the owner’s will or trust, who may not be the desired successors. at could leave the company in the hands of people without experience or interest in running the business, he said.

“ ey can stay in there and potentially wreak some havoc on the business because they’re owners, and they’re entitled to certain rights under Michigan law,” Giarmarco said.

Explore outside leaders

Come to terms with the fact that heirs may not be ready or capable of running the family business.

can’t get along and come to terms, he said, “Sometimes selling the business is the best succession plan. Putting family members in charge of a business who don’t get along will probably lead to the destruction of the business over time.”

Keep things fair for nonemployee heirs

When all the heirs in a family-owned business can’t be active in the company, Giarmarco said owners can use other tools and assets to keep things equitable.

One of the easiest solutions is to make the children who won’t get ownership of the company life insurance bene ciaries. He also suggested handing down other assets, such as the buildings their businesses occupy, enabling nonemployee heirs to collect rent.

Zehnder said the family hired Christopher Eckrich, a senior adviser from e Family Business Consulting Group in Fort Wayne, Ind., in 2021 to assist the company with ongoing suc-

Zehnder said Eckrich was also instrumental in helping the company reallocate some of the roles and responsibilities of fourth-generation family members when former president and Bavarian Inn Lodge

Julius Giarmarco, chair of the trusts and estates practice group at Giarmarco, Mullins & Horton PC in Troy, said a succession plan should include legal agreements that set terms around areas such as job status, compensation and bene ts and ownership stakes.

“Having these terms set prior to the next generation actually having total control over the company will go a long way to avoid a lot of con ict,” Giarmarco said.

Experts say one of the most critical

“If you’re going to have a continuation of a family business, it’s important that you have good management. And if the genetic line doesn’t provide that, then you have to get them to improve. More businesses fail over management transitions than ownership transitions,” said Richard Segal, principal at Bloom eld Hills-based Segal Consulting Inc.

Sometimes, the next generation is too young or other relatives don’t have the right skill set. In those situations, Segal often recommends hiring a bridge executive to run the company for a limited period — perhaps 5 to 10 years — until potential heirs have the training and preparation to run the company properly.

However, when family members

FAMILY

From Page 10

“ e kid was resented (by the nonfamily employees) because he didn’t have the knowledge or the real-world sophistication to be in the role,” he said.

As a result, the son had to step back from his executive role and move into a subordinate position within the company. Eventually, he left the rm. Five years later, he returned more seasoned and experienced but was not placed in an executive position.

“I think the family learned a lesson,” LoVasco said.

Hold family members accountable

One way to ensure family employees add value to the company is to hold them to the same standards as nonfamily employees, including hiring and termination policies and performance meetings or reviews, said Dennis eis, principal with Lansing-based business consulting and public accounting rm Maner Costerisan. Boards of directors can help.

“An under-performing or disruptive family member can have a wide-

“I’m a firm believer that the business should go to those family members that are best suited to carry on the business and then figure out a way to do something for the children that don’t fit into it,” said Giarmarco.

“Succession” is classic example of how lack of planning can have a widespread negative impact on family relationships and wealth.

However, Giarmarco said owners who can get through these kinds of issues have a good chance of helping the family business survive and thrive.

“Family businesses need to remember that succession planning is a process, not an event,” Heinrich said. “Don’t delay the conversation because it’s uncomfortable.”

spread negative impact on company morale, productivity, pro tability and value,” eis said.

Requiring family members and nonfamily employees to follow the same employment policies improves morale, buy-in and motivation of nonfamily employees and leadership, he said.

Manage con ict

eis urges companies to deal immediately with family members who can’t get along.

“Ask yourself: What would you do if you were not limited by the family dynamic?” eis said. “ is will help expose the signi cant negative impacts your family members are having on the business, and that is the rst step toward resolving them.”

He recommends family companies develop and implement plans to resolve di erences within a speci c time frame.

“If the situation doesn’t improve over the timetable established, one or more of them may need to move out of their role or potentially out of the business,” eis said. “Making (the potential for leaving) real for them and holding them to it may be one of the most important issues you ever resolve.”

Brice Green (from left), Karla Cole and Antonio Green of James H. Cole Home for Funerals Inc. | JAMES H. COLE HOME FOR FUNERALS INC.

“SOMETIMES SELLING THE BUSINESS IS THE BEST SUCCESSION PLAN. PUTTING FAMILY MEMBERS IN CHARGE OF A BUSINESS WHO DON’T GET ALONG WILL PROBABLY LEAD TO THE DESTRUCTION OF THE BUSINESS OVER TIME.”

—Richard Segal, principal, Segal Consulting Inc.

“I’M A FIRM BELIEVER THAT THE BUSINESS SHOULD GO TO THOSE FAMILY MEMBERS THAT ARE BEST SUITED TO CARRY ON THE BUSINESS AND THEN FIGURE OUT A WAY TO DO SOMETHING FOR THE CHILDREN THAT DON’T FIT INTO IT.”

—Julius Giarmarco, chair, trusts and estates practice group, Giarmarco, Mullins & Horton PC

MICHIGAN FAMILY-OWNED BUSINESSES CRAIN'S LIST |

Ranked by 2022 revenue

president, CEO, grandson; Ben Maibach III, vice chairman, chief community o cer, son

president and CEO, Ilitch Holdings Inc., son100%Food,

Rakolta III, president, and member of the board of directors, grandson; Lauren Rakolta, president of DFM Solutions and member of the board of directors, granddaughter

son; Matthew Serra, president,

Jay Kaufman, chairman, president and CEO, H.W. Kaufman Group, son; Danny Kaufman, president, Burns & Wilcox, executive VP, H.W. Kaufman Group, grandson; Jodie Kaufman Davis, executive VP, granddaughter

248-855-5556;orleansintl.com

$872.9 e

chairman and CEO, grandson

Soave, VP, daughter; Andrea Soave Provenzano, VP, daughter; Christopher Provenzano, project manager, son-in-law

Max Tushman Earl Tushman, president/CEO, grandson; Larry Tushman, VP/ secretary, grandson; Reed Tushman, VP/director of operations, great-grandson; Marc Tushman, VP/director of logistics, greatgrandson

100%Meat importing and trading

BARRICK ENTERPRISESINC. Royal Oak48073 248-549-3737;barrickent.com $677.1

$674.1 e

Robert Barrick none

100%Petroleum wholesaler and retailer 21 PVS CHEMICALSINC. Detroit48213 313-921-1200;pvschemicals.com

1945 Floyd Nicholson James B. Nicholson, chairman, son; James M. Nicholson, chairman, grandson; David Nicholson, president, grandson; Tim Nicholson, COO, grandson; John Nicholson, VP, grandson

100%Manufacturer, marketer and distributor of industrial chemicals

22

JIM RIEHL'S FRIENDLY AUTOMOTIVE GROUPINC. Warren48093 586-979-8700;jimriehl.com

$575.8 e $608.8 1987 Jim Riehl Jr. Jim Riehl III, son; Joe Riehl, son; Je rey Riehl, son

100%Automobile dealership 23 BELLE TIRE DISTRIBUTORSINC. Allen Park48101 313-271-9400;belletire.com

$557.0 $494.0 1922 Don Barnes Sr. Don Barnes Jr., chairman, son; Bob Barnes, owner, son; Don Barnes III, president, grandson; Mike Barnes, director retail operations, grandson; Maggie Ratli , Dir. communications, granddaughter; Kelly Wilson, HR manager, granddaughter

$555.4

$270.7 1979 Frank Venegas Jr.

100%Retailer of tires and automotive services 24 THE IDEAL GROUP Detroit48209 313-849-0000;weareideal.com

25 LACKS ENTERPRISES,INC.

Grand Rapids49546 616-949-6570;lacksenterprises.com

$500.0

$500.0

1961 John P. Lacks and Richard Lacks Sr. (son)

Loren Venegas,CEO, brother; Linzie Venegas, president and CMO, daughter; Jesse Venegas, president, son; Marty Venegas, West Coast sales manager, brother

Richard Lacks Jr., executive chairman of the board, grandson; Kurt Lacks, executive VP, grandson; Ryan Lacks, director of sales, greatgrandson; K.V. Lacks, business development director, greatgrandson

100%General contracting, specialized miscellaneous steel manufacturing and distribution of protective barrier products, global supply chain management, other

100%Injection molding, plating, painting and assembly

ResearchedbySonyaD.Hill:shill@crain.com

|Thislistoffamily-ownedbusinessesisanapproximatecompilationofthelargestsuchbusinessesinMichigan.Itisnotacompletelistingbutthemostcomprehensiveavailable.Crain'sestimates arebasedonindustryanalysesandbenchmarks,newsreportsandawiderangeofothersources.Unlessotherwisenoted,informationwasprovidedbythecompanies.Forsomecompanies,thefounderswerelaterboughtoutbyanotherfamily. NOTES: e. Crain'sestimate.

1. From Forbes.com

3. GeorgeB.WalbridgeandAlbertH.Aldingerfoundedthecompanyin1916.John RakoltaSr.boughtthecompanyin1963withbusinesspartnerRobertRobillard.

2. Foundedin1924asC.O.BartonCo.byCarlOsbornBarton.TheMaibachfamilyacquiredmajoritycontrolin1961.

4. SerraAutomotiveInc.purchasedBu WhelanChevroletinFebruary2021.

5. From Crain'sGrandRapidsBusiness.

6. Changeditsyear-endfromDecembertoJune.The company has restated its scal year performance for 2020 and 2021 due to this change in its scal year.

7. Sold Detroit scrap metal business to Cleveland-Cli s in 2022. Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data

Yeo & Yeo: Business Success Partners

It is rare when a company is able to celebrate 100 years in business. What’s even more remarkable is that Yeo & Yeo is oosing to mark the milestone by looking toward the future and new opportunities ahead.

Yeo & Yeo began as a humble accounting partnership founded by James J. Yeo and his son, W.L. Yeo, in 1923. A third generation, Lloyd Yeo, provided the blueprint for Yeo & Yeo to become a leading accounting, tax, audit, te nology, medical billing, wealth management, and advisory rm with more than 225 employees in o ces throughout Mi igan. Its growth — both regionally and in its myriad capabilities — have the company poised for its next century. What sets Yeo & Yeo apart from other accounting rms? Its unique spirit and vibrant culture. As CEO Dave Youngstrom explains, “We are business success partners who help organizations and individuals thrive on their unique journeys. We solve allenges and ful ll the speci c needs of our clients — but more than that, we are relationship- and purpose-driven, helping our clients see what’s possible and a ieve their potential.”

At the heart of Yeo & Yeo’s culture are its people: welcoming and driven advisors who listen, discuss, and respond with a combination of expertise and empathy. ey invest time and resources with ea client to fully understand their business and bring solutions to complex problems based on their expertise. From tax needs to consulting to te nology solutions and beyond, Yeo & Yeo acts as a powerful extension of the businesses they serve, driving and supporting their success.

Although it has grown signi cantly throughout the years, Yeo & Yeo remains headquartered in Saginaw and has locations throughout the state: Auburn Hills, Ann Arbor, Southgate, Flint, Lansing, Kalamazoo, Alma, and Midland. It serves clients across a diverse set of industries including Agribusiness, Cannabis, Construction, Education, Financial Institutions, Government, Healthcare, Manufacturing, Nonpro t, and Real Estate. Yeo & Yeo serves its clients through four distinct and connected companies: Yeo & Yeo CPAs & Advisors, Yeo & Yeo Te nology, Yeo & Yeo Medical Billing & Consulting, and Yeo & Yeo Wealth Management.

“We have a ton of experience and capabilities, but our true mission is to create success stories for our clients,” Youngstrom explains. “Every situation is di erent, and ea path will vary, whi is why we take su a personal approa .”

Yeo & Yeo’s commitment to relationships and connections goes even further. rough the Yeo & Yeo Foundation, the rm’s dedicated team members have given their time, talent, and resources. Since its inception in 2020, the Foundation has donated more than $340,000 to 170 nonpro t organizations across Mi igan.

“We have an unwavering commitment to our state and our communities. We are grateful for their support, so we do whatever we can to give ba in meaningful and impactful ways,” said Youngstrom.

Looking ahead, Yeo & Yeo is well positioned to continue its legacy of business success partnerships for the next 100 years. e company is committed to investing in te nology and innovation to stay ahead of the curve and provide the best possible service to its clients.

As Youngstrom notes, “Our goal is to always be at the forefront, providing our clients with the resources they need to succeed in a rapidly anging world. Walking alongside them every step of the way.”

Dave Youngstrom Yeo & Yeo CEO

“ We don’t just provide a service; we provide a relationship. Our clients are truly our friends. We’re in it together.”

Vegan taco truck, dog park/bar among winners in Motor City Match

JAY DAVIS

e theme for the latest round of Motor City Match cash grant awardees was clear.

Each of the businesses who won a chunk of a total of $1.5 million in MCM funds Tuesday afternoon made it clear they’re proud to be a part of what they call the revitalization of Detroit’s neighborhoods.

e Round 22 winners range from a new dog park/brewpub and an educational program facility for Spanish language learners to a home and garden center.

More than three dozen Detroit businesses were awarded cash or restore funds for the launch of new brick-andmortar businesses and capital improvements for existing businesses. More than $1 million in cash grants will go to new businesses. Nearly $470,000 was awarded to established businesses, with funding coming from the American Rescue Plan Act.

Nepantla Cafe, operating as a food truck and pop-up restaurant, walked away with the top $75,000 prize. Chef and owner Rocky Coronado, who specializes in vegan tacos, plans to open a brick-and-mortar location at 5410 W. Vernor Highway in Mexicantown. e restaurant will o er vegan food and craft cocktails and host events.

“We want to keep it fun and light,” Coronado said. “A lot of people supported me. It lls my heart.”

Longtime restaurateur David Rich-

ter earned a $35,000 grant to help with the opening of his Corktown restaurant, Alpino. Richter on Tuesday said one of his goals with the venture is to give back.

“I left in ’99 to go to New York to learn the restaurant industry, but the goal was always to come back,” Richter said. “I want this to be a chance to provide jobs for people who may not think about hospitality because there is a strong career path in this industry.”

Vesper Books & Wine owners Rob Wilson and Samantha Duggan earned a $50,000 cash grant for their business, to be located at 5001 Grand River Ave. in the Core City neighborhood. Vesper is a combination book store, wine bar and bottle shop that is planned to open later this year.

“Vesper is my brainchild that I started 10 years ago in Austin,” Duggan said. “I’m glad we have the chance to do it here. Vesper will be a third space for people. We think people need those spaces to unwind, especially people in the city of Detroit. is will give them a place to do that, share some bottles and access literature.”

Jameela Simpson will put her $60,000 award toward opening a store for her Crumbs Cookie Station business. Simpson, who started the

business in 2018, plans to operate out of a storefront in the city’s Je erson-Chalmers section. Simpson’s cookies can be found in Rivertown Market in Detroit and Woodward Corner Market in Royal Oak.

“I started out as a single mother making the cookies. I got the idea to sell them and at rst sold them at my daughter’s school, at church,” Simpson said. “People would ask me when I was going to start a business. I’m excited to open my own location.”

For Round 22, 88 percent of the awardees represent minority-owned businesses, with 64 percent being owned by women and 81 percent owned by Detroit residents.

Motor City Match also awarded 48 other businesses in its business plan, develop and design tracks. ose grants go toward technical assistance, including business services, training and one-on-one advising.

Detroit Economic Growth Corp. President and CEO Kevin Johnson on Tuesday celebrated the winners.

“Today we celebrate entrepreneurship in Detroit,” said Johnson, whose group manages the Motor City Match program. “ e entrepreneurial spirit is the lifeblood of the city. at hard work and dedication drives economic growth in the city. e city is made up of a lot of neighborhoods. ose neighborhoods are vital to the success of the city. It’s good to see what’s going on downtown, but strengthening the neighborhoods is important.”

PEOPLE ON THE MOVE

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Truscott Rossman welcomes director of corporate communications, Kate Lauderbaugh. Kate’s passion is captivating storytelling conveyed through print, digital and lens-based media. Her expertise in PR, team leadership, project management, market research and analysis and campaign development complement her skills as a storyteller, producer and branding specialist. She’s a pro at engaging advocates and partners on behalf of her clients. TR: Michigan roots, national reach, winning results.

KLA Laboratories, Inc.

Nick Vettraino has been promoted to Vice President of Operations at KLA Laboratories, Inc. Nick started his career at KLA in 2010 as Warehouse Manager and was promoted to Executive Director of Operations, Planning & Strategy in 2020. In his new role, Nick is responsible for the operational oversight of the company and continued growth and expansion of KLA, including the new of ce in Irvine, California. Nick is part of the 3rd generation of KLA’s ownership family.

MANUFACTURING

Printwell Acquisitions Company, INC.

Conscientious leadership is a way of life for Mr. Ronjia Williams. He has devoted his personal and professional life to service of others. Most recently, Mr. Williams accepted the Senior Vice President role of Printwell Acquisitions Company, Inc. His responsibilities in include deploying strategies to help achieve nancial and operational goals while increasing ROI. His patentable technique is driving collaboration across the organization to identify opportunities and develop scalable solutions.

Motor City Match since 2015 has distributed $12.9 million in cash grants, with a total leveraged investment of $68 million.

It has awarded aid to close to 1,700 businesses, resulting in 148 new brick-and-mortar businesses currently operating across Detroit. The quarterly grant pool has been increased to $1 million for new businesses and $250,000 to existing businesses operating in the city for at least one year. Nearly 80 businesses that have received aid from Motor City Match are under construction.

Of all the Motor City Match winners, 81 percent of businesses are minority-owned, 70 percent are owned by women and 66 are owned by Detroit residents.

Integrating ARPA funding into the program represents a continuation

of the city’s e orts to support businesses in combating the negative economic impact of the COVID-19 pandemic. e DEGC administered more than $15 million in pandemic relief grants between March 2020 and March 2021 and introduced the Detroit Means Business platform to provide wrap-around services for businesses. ARPA funding distribution, approved last year by Detroit City Council, has allowed Motor City Match and the DEGC to continue those e orts and target support to underserved Detroit entrepreneurs. e city received nearly $827 million in ARPA funds.

Motor City Match Round 24 applications open June 1. Round 23 applications closed April 2.

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

TECHNOLOGY

Communications Professionals Inc.

Cordell B. Barker has been named Sr. Sales and Business Development Manager for Communications Professionals, Inc. As Sr. Sales and Business Development Manager, Barker is responsible for developing and implementing strategies that use the next generation of Cisco innovations to drive business and IT outcomes for customers. He is currently working with key customer executives and leaders identifying solutions for growth and developing customized solutions that meet their unique needs.

Communications Professionals is a leading Cisco partner and an Acceleration member in Cisco’s African American Cisco Partner Community (AACPC) which is a part of Cisco’s Social Justice initiative.

TECHNOLOGY

Communications Professionals Inc.

Kevin Johnson has been named the Director of Services for Communications Professionals, Inc. CPI is black owned and a proud member of the African American Cisco Partner Community. We specialize in managed services, professional services, and project management. Mr. Johnson will oversee all the integration and support activities. This announcement of Mr. Johnson’s appointment over the services department is recognition of both his leadership and breadth of knowledge in the technology arena.

Preserve your career change for years to come.

Chef Rocky Coronado earned a $75,000 cash grant for his Nepantla Cafe business. Coronado plans to open a restaurant in Mexicantown. | NEPANTLA CAFE

Coronado

BLIGHT

From Page 3

e Packard Plant’s Peru-based owner, Fernando Palazuelo, also faced a court battle with the city over the long-blighted property; some of it is now being demolished.

Mallett said much of the systemic e ort is a result of federal American Rescue Plan Act dollars, which have allowed him to hire seven attorneys to focus on blight cases in the city.

e attorneys are rushing to unmask individuals behind LLCs that own a number of the dilapidated buildings, he said, so suits can be led and the legal process followed before the ARPA money runs out. He called it an opportunity to “really, profoundly, do something about blight.”

“We’ve only got three years,” Mallett said. “We’ve got to get this started and done. Lawsuits take a long damn time.”

John Mogk, a distinguished service professor at the Wayne State University Law School, said it’s important that the city target blight to set the stage for redevelopment.

“ e only way to get landowners who hold blighted property to address the nuisance is to bring a lawsuit against them,” he said. “It’s good news that they are becoming aggressive. Blight is a major deterrent to being able to develop the city as a whole.”

ose being sued, though, aren’t as fond of the e orts.

Murray Wikol, who was sued in his personal capacity at the concrete crushing site, denounced the “new tactic” to Crain’s, saying, “I feel like we’re being persecuted, and it’s wrong and I don’t like it.”

Pastor Marvin Winans said in an emailed statement in February that he was “shocked and extremely disappointed that the city would take this course of action,” saying the church had been “in constant discussions” with the city about the property.

And Kefallinos, who told Crain’s he’d received notice on only the West Grand River suit, said he was “blown away” by the news of the lings.

Calling the West Grand River property his “favorite building,” Kefallinos said it was purchased in 2019, and is in considerably better condition now than it was at that time. He said he thinks it needs three to four more years of work.

“It’s unique, it’s got a personality, it’s one of a kind,” he said. “It’s like a landmark.”

e city has other descriptions. In its suit, it said a demolition deferral had been denied in April 2021 and the vacant building had parts that were likely to fall or become dislodged or detached from the rest of the structure. Additionally, the suit says, the property’s condition “directly threatens the health, safety, and welfare of neighboring residents and those who must pass the property when using public sidewalks and streets.”

“Really, the point we’re making to the judge is these buildings cannot be saved and need to be demolished,” Mallett said. He added if a licensed structural engineer said the buildings were salvageable, the city wasn’t opposed to them being rehabilitated.

“We’re not trying to injure Mr. Kefallinos,” Mallett said. “We want people to treat the city respectfully and to follow the law.”

Mallett said it was a “prayer” of bad corporate citizens that the city would never have the time and money to address issues of blight. But with ARPA, the opportunity is there and Mallett said he was con dent the administration was going to win every lawsuit it led.

“People are going to come at us and ght tooth and nail because they like the status quo,” he said. “It’s not being greeted with ticker-tape parades.”

Kefallinos, who has been buying Detroit real estate for decades, is no stranger to legal proceedings, and he has tussled with the city for years over the condition of his properties and other violations. His buildings, both commercial and residential, have long been concerns for tenants and others.

Detroit evicted all of Kefallinos’ Russell Industrial Center tenants in February 2017 over safety concerns in the 2.2 million-square-foot property (though some were later allowed to return). In June 2021, falling masonry from a building he owns on East Warren Avenue prompted the city to close the road. e Detroit Water and Sewerage Department sued him in 2017 over nearly $400,000 in unpaid bills at his buildings.

He has faced housing discrimination complaints and lawsuits over leasing in his residential buildings when he didn’t have certi cates of occupancy. He’s also been sued over how the dancers are paid at his Bouzouki strip club in the city’s Greektown neighborhood.

Kefallinos said he has plans and

permits for commercial development at the Wabash property (two massive sides have been ripped o the building for months), he has cleared out the Civic eater and plans to start exterior restoration in the coming months and the hospital is under contract with a broker for sale. (In May 2021, the city pushed to have the hospital demolished; two months later, Kefallinos put it on the market for $17.5 million.)

He said he understands what the city is doing — “Corktown is a vibrant area and we need to step up” — but that he thinks the buildings can still be redeveloped. None of them are open to trespassers, he said — though the lawsuits counter that claim — and crews patrol to ensure they stay that way.

“For the city to demolish any of these buildings would be erasing parts of Detroit’s rich architectural history,” Kefallinos said in an email.

“It’s important for the city to prioritize saving these buildings instead of demolishing them. ere’s been enough historic landmarks unnecessarily demolished over the years, and we would like to save these from future wrecking balls if possible.”

Kefallinos said he’s getting blight tickets “right and left” on the properties, but doesn’t feel they have a negative e ect on the city. Instead of inspectors looking at him like he’s the enemy, he said, the city could help with the process of saving the buildings. He’s willing to give them up, he said, as long as they remain upright.

But that’s not Mallett’s plan.

“Give us the property so we can knock it down,” he said, adding that if the city demolishes the buildings, it would likely sue to recoup the costs.

Mallett said none of the four buildings are historic.

“Once we knock it down and clear all that crap out of there, who knows what the economic development possibilities are?” Mallett said of the Southwest Hospital property. “It could be transformative.”

Mogk thinks so, too, saying more investors will be attracted to areas once the blight is clear.

“ e more aggressive the city can be, the better for the city as a whole,” he said. “ ey should move as quickly and aggressively as possible.”

Senior reporter Kirk Pinho contributed to this report.

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

The city of Detroit says the Civic Theater is blighted and should be torn down, according to a lawsuit. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

The old Southwest Hospital property is blighted and needs to be torn down, according to a city of Detroit lawsuit.| CITY OF DETROIT

The city of Detroit has sued investor Dennis Kefallinos, saying this property on Wabash Street is blighted. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

Restrictions should not be relaxed for a company unable to comply with state air regulations, said Andrew Bashi, attorney at the nonpro t Great Lakes Environmental Law Center, which is behind an air permitting complaint against EGLE to the EPA that is still being investigated.

“Stellantis submitted their permit application, and as part of that application, they also inserted this totally unrelated request to increase particulate matter emissions per vehicle,” Bashi said of the automaker’s Detroit plant permit.

Stellantis declined to comment for this story. e automaker has previously said the air around its plants is safe and that it is working with the state on a resolution.

Tanisha Burton, whose backyard abuts the factory on Detroit’s east side, said the noxious paint odors continue to harm the quality of life in the neighborhood. Fumes have been the main subject of violations against Stellantis for the past two years, though it has also been cited numerous times for violating emissions limits in Warren and Detroit, including at Je erson North Assembly Plant in Detroit, adjacent to the Mack plant.

According to Stellantis, the installation of a regenerative thermal oxidizer in June will mitigate the fumes spilling from its Mack paint shop. Burton said she was unaware that within the company’s permit application to install that equipment is the request to release more particulate matter, which is known to cause respiratory problems.

MILLENNIALS

From Page 3

Daniel Molling said their road to homeownership was “really di cult.” ey met and lived in Ann Arbor the rst several years of their relationship, where home prices were nearly double those of Grand Rapids.

He is a data scientist for San Francisco-based medication management platform Arine, and Claire is academic director for the Michigan Language Center, a private English language school based in Ann Arbor that serves international students and business executives.

ey shifted to remote roles during the COVID-19 pandemic, freeing them up to move to Grand Rapids, where Claire is originally from and where Daniel also lived before moving to Ann Arbor.

e Mollings are part of a wave of millennials in the past few years who have moved to Grand Rapids. As of 2021, two-thirds of the West Michigan city’s population was under 45 years old, and the median age was 31.

Claire Molling said one of the factors in their homeownership journey was getting to a point where their relationship was stable enough that they felt comfortable sharing real estate. And Daniel Molling’s career played a big role.

“For me, getting either a job in Grand Rapids or a job that was completely remote like my current job ... I think it would have been hard for us to commit to buying a house if we didn’t know we had that,” he said.

ey started their search while still living in Ann Arbor during one of the hottest periods for the Grand Rapids residential market — late 2020. At the time, the Federal Reserve was keeping interest rates arti cially low, between 2% and 3%, as part of its eco-

As part of the consent order reached with the state, Stellantis is required to begin operating the thermal oxidizer by June 30, even if the permit to install has not been approved by then.

Burton’s 1-year-old grandson Zamir, who regularly stays at her house on Beniteau Street, was diagnosed with reactive airway disease earlier this year, according to a copy of his medical report. It listed air pollution and “strong odors or fumes, such as from exhaust, paint, or chemicals” as contributing factors. His doctor recommended a nebulizer to help with the wheezing, Burton said.

“It do concern me because basically you not worried about our health and what we’re breathing in,” Burton said of the potential emissions increase. “It’s like our lives don’t matter, that’s how I feel. It’s like you don’t care how we live.”

In the permit to install at Mack Assembly, Stellantis is asking to more than double its output limit of PM10 (inhalable particles) to 12.24 tons per

nomic stimulus policy during the pandemic.

“It was a really tough time, because … everyone was looking for a house,” Daniel Molling said.

ey toured dozens of houses and put in more than 10 o ers in an eightmonth period before buying their place — a 1,547-square-foot, two-story house with a nice backyard built in 1924 that’s just a few blocks south of the busy Leonard Street business district.

“When we were looking, they didn’t always tell us how many other o ers there were, but I know a couple of times, they told us it was in the 20s — like, 20 other o ers,” Daniel Molling said.

Molling, whose bachelor’s degree is in economics and mathematics, said he’s acutely aware of the reasons millennials lag previous generations when it comes to homeownership. Housing prices, health care costs and the sticker price of a college degree have all increased at a faster rate than wages since the Great Recession.

“Millennials are coming out of college with a lot more debt from college or graduate school than previous generations,” he said. “So it’s very di cult to tack on more debt … to get a mortgage,” he said.

Culturally speaking, millennials are also less willing to stay in one job their entire careers. is can make career advancement and wage growth challenging.

e Mollings — who are about to become parents — said they were lucky to nd their house when they did. Friends of theirs who are looking now, when inventory is even lower, have not been as fortunate.

Daniel Molling said if he could o er one piece of advice to younger house hunters, it would be to try an unconventional purchase, like a condo. ey are less competitive to buy and can

year and nearly double the limit of the more hazardous PM2.5 ( ne inhalable particles) to 9.45 tons per year.

e emission changes at the Warren plant are “expected to be minimal,” with just a minor increase in particulate matter, according to the permit. However, the conversion of its 4-wet coating system in the paint shop will result in VOC emissions totaling 124.5 tons per year — an increase of 40 tons per year, which amounts to a “major modi cation.”

“Before a permit is issued, the company must demonstrate the nal proposal meets all applicable rules and regulations,” EGLE spokeswoman Jill Greenberg said in an email. “In addition, not all initial proposals in an application end up in the modi ed permit.”

Once the technical review of applications is complete, EGLE will begin a 45-day public comment period. Greenberg said it is di cult to estimate when the review will be completed.

work just as well for singles or childless couples who don’t need four bedrooms and a yard.

He also said now that interest rates are higher, competition is less intense, which means buyers can get away with using federal down payment assistance programs instead of the standard 20% cash down — or even all-cash o ers.

View from metro Detroit

While Grand Rapids stood at the top of the list for highest concentration of millennial homeowners, Detroit was just a few spots down the list, with about 55% of those in the generation owning their residence.

For David Johnson, becoming a homeowner has been a largely positive experience, albeit with some learning curves along the way.

Johnson, a 31-year-old public defender in St. Clair County, moved into his condo in Detroit’s red-hot Corktown neighborhood in October 2021. Having rented a small one-bedroom apartment in the city’s central business district during the early days of the pandemic, moving to a larger, new-construction home was appealing.

All told, Johnson said he’s loved the experience, but has also had to work to get up to speed on some of what goes into being a homeowner.

“ ere’s maintenance and there’s property taxes,” Johnson told Crain’s. “You’re on your own and learning as you go.”

While Johnson has no regrets about purchasing the condo, which he said totaled about $540,000 after some customizations to the unit, he

“When a facility requests emission limit increases through a permit application based on stack test results being above initial estimates, it must provide a detailed justi cation identifying what steps they have taken to meet the current emission limits (i.e., process/operational changes),” according to the department. “If the facility has evaluated what options are available to them and still cannot meet the current emission limits, then emission limit increases may be considered.”

EPA complaint

e state’s review of the applications comes as it is being investigated by the EPA for alleged “environmental discrimination” for the permitting of Mack Assembly, which launched production in March 2021.

e complaint, made by the Great Lakes Environmental Law Center in late 2021, said EGLE imposed “discriminatory harms” by allowing Stel-

said he does feel somewhat more tied down as a homeowner as opposed to a renter with more exibility.

e condo, he said, included a Neighborhood Enterprise Zone tax abatement, meaning that for taxes to remain low, he must continue living in the unit as opposed to being able to rent it out.

Age a de ning factor

Paul Carlson, 39, is president of Grand Rapids-based Five Star Real Estate, the top independent residential real estate brokerage in Grand Rapids and third-largest in the state of Michigan, with 21 o ces statewide.

His company did about $2.4 billion in sales across about 4,900 home sales last year. About 2,150 of those ($1.2 billion in sales) were in greater Grand Rapids.

He said the situation for millennial homebuyers depends on their age. He’s been working in real estate since 2006, before the bottom dropped out of the housing market and home values plummeted during the Great Recession.

e local market fully recovered by 2012 and has been in “hot” territory ever since, he said. A normal housing market has about ve to six months of inventory at any given time, but Grand Rapids has seen just 3.5 months of supply or less every year since 2013.

At the end of 2022, there was less than a month of inventory in greater Grand Rapids.

In 2007, the average home value for Grand Rapids was $107,500. By 2011, it was $119,000, and in 2012, it was $132,000. Today, the average home price in greater Grand Rapids is $338,000.

at’s all from a 2022 report by the Greater Regional Alliance of Realtors in Grand Rapids.

“On average, if you bought ve

lantis to o set an increase of air pollution at the Mack plant by reducing emissions at its Warren Truck plant.

According to the complaint, that resulted in “signi cant enlargement of air emissions in a low income community where nearly all residents within one mile are people of color already inundated by other industrial sources.”

Detroit’s east side had the highest asthma hospitalization rates in the city even before Mack Assembly and its nearby suppliers opened, according to the Michigan Department of Health and Human Services. Asthma hospitalization rates are at least four times greater in Detroit than Michigan as a whole, according to the most recent MDHHS data collected 2016-19. e EPA has “been investigating and working toward resolution of a Title VI complaint of discrimination,” EPA spokeswoman Macy Pressley said in an email.

“Due to the con dential nature of these discussions, EPA cannot comment on anything which relates to that case,” Pressley said.

EPA o cials visited residents living near the plant in late February. Burton is hoping for a positive outcome but plotting an exit strategy if the situation does not improve.

“Kids are small, and they need to be able to run around and play, and you can’t let them do it too long ’cause you don’t know if they gonna get sick or not,” she said. “I’d rather just sell my home or be somewhere else, where I could be in a neighborhood that my grandkids can enjoy and I can enjoy them.”

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

years ago, you’ve experienced a 94% increase in equity, or about $168,000 in cash,” he said.

“ e millennial story, it’s shifting right now, drastically. If you did not buy a home as a millennial (until now), you kind of missed the train. Because now, we’re looking at 7% interest rates, we’re looking at an incredibly high pricing … and we are seeing less and less inventory. Even though you’re seeing incredibly unfavorable lending conditions compared to the past 10 years, you’re not seeing relief in terms of supply.”

Most millennials who aren’t homeowners say they can’t a ord to buy right now, either because they don’t have the down payment or because they can’t a ord the monthly mortgage costs. About 67% of those who want to own a home at some point in their lives have no money saved for a down payment and 18% have less than $10,000, according to Apartment List. About 42% say one of their biggest obstacles to homeownership is bad credit, up from 39% in 2018.

One of Five Star’s biggest concerns about the market going forward, especially as Gen Z comes of age, is the adage of the “golden handcu s” that lock both the homeowner and prospective buyer in stasis, Carlson said.

“Who is going to move if you got a 2.99% interest rate?” he said. “Let’s say you sell your house for $300,000, and you want to buy the home across the street for $300,000. If you get rid of your current mortgage, and you buy that house with a new mortgage, that house will cost you $1,000 more per month just in interest.”

— Bloomberg contributed to this report.

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

Contact: rachel.watson@crain.com

(989) 533-9685; @RachelWatson86

The Stellantis Mack Assembly Plant in Detroit. NIC ANTAYA/CRAIN’S DETROIT BUSINESS

Carlson

“We’re doing the innovation, entrepreneurship and investment piece of the Michigan Central project,” he said. “We’re kind of the rst proof point for the larger project.”

Belt, who has overseen build-out of the Newlab building for the past two years, hopes to duplicate a successful model at the company’s New York base. e idea is to build a consortium of early-stage startups with a space for proving out technology, showcasing it and attracting investment for it.

It has elements of a tech incubator, co-working space and R&D facility, but bringing it all under one roof is what makes it unique, said Josh Sirefman, CEO of the Michigan Central Innovation District.

“ e membership concept is something we applied to the entirety of Michigan Central, the underlying theory being if you want to be a part of Michigan Central, we want you here for a day, a month, a year or whatever it is,” Sirefman said.

What it o ers

e building is designed with open working spaces, event areas, o ces and lab space. e Michigan Economic Development Corp., along with several other state agencies, are expected to be tenants, though leases have not yet been signed, Sirefman said.

ere is a 3D printing shop, a wood and metal shop and a robotics room, including a CNC milling machine from Ford’s closed Romeo Engine Plant. Startups can also use their spaces to display products, creating a showroom oor for executives of automotive companies looking to see the latest tech.

Originally opened as a post o ce, its proximity to the train depot allowed the two buildings to be connected via an underground tunnel, allowing for convenient mail transport. at will come in handy for Newlab because vehicles can be rolled in through the bottom level of the building to be put up for display or tinkered on with software and hardware startups.

“It’s really a hybrid of these studios where we interact with government and corporations, product realization and also physical space,” Belt said.

e membership cost in Detroit is $350 a month per person, and $1-$3 per square foot of space, depending on the needs and stage of a company.

e state plans to subsidize the cost for some members, but details are

APARTMENTS

From Page 1

“It’s a high-end building,” Samson said. “It’s really going to have beautiful nishes and amenities. But the rates will be commensurate with that kind of product.”

As for why Sterling Group has stayed so quiet about the project, Samson said: “ ere’s enough activity and there’s enough momentum, and it’s real in terms of the ability to walk through, for prospective residents to tour the building, to talk about leasing the property, to really see what’s there in terms of amenities.”

ose amenities include 24-hour concierge services, valet parking, an all-season pool with a patio deck overlooking the Detroit RiverWalk, a tness center, pet washing station, rooftop sports lounge and other features — including distinctive oorto-ceiling glass windows.

still being worked out, Belt said.

Newlab does not require equity from members but often does invest in startups it assists, according to the company.

Of the current member base in Detroit, half are from metro Detroit and others hail from California and New York and as far away as Israel and Norway. In total, the companies have raised more than $500 million.

Belt said he is unsure when Newlab will bring the building to capacity, but he believes the Detroit campus has a compelling draw.

“I’m not going to say it’s not going to be di cult to ll that building up and to make sure that people stay in Detroit, but I think that it’s getting a lot of positive feedback,” he said.

A historic building

It wasn’t always clear that the building could be saved.

e 1936 Albert Kahn-designed building was built with funding from President Franklin D. Roosevelt’s New Deal for the U.S. Postal Service, according to Historic Detroit, which tracks Detroit buildings and architecture.

It stayed a post o ce for a quarter-century until a new post o ce on West Fort Street opened downtown. Detroit Public Schools then bought the property to store school supplies and books. Another 25 years or so after the school system bought it, the building was heavily damaged in a 1987 re. e district abandoned it, leaving damaged and undamaged supplies inside, according to Historic Detroit.

ere had been some deliberation early on about whether to tear down the building, Sirefman said. Ultimately, it was saved and renovated, with part of the work including the restoration of a skylight and removing much of several oors to open the rst oor to the skylight.

“It’s such a powerful testament to the second life of buildings,” Sirefman said. “ e power of that decision is really evident.”

South eld-based Barton Malow Co. was the general contractor while the Detroit o ce of Gensler was the architecture rm.

e project’s budget was not disclosed, although it’s part of what most recently was estimated as a $950 million Corktown campus for autonomous and electric vehicle design and technology.

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

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

“It’s a unique product to anything that’s really been built in the city, ever,” Samson said. “We thought it was important to di erentiate ourselves from the rest of the marketplace, to bring something to the city that really doesn’t exist. What we are talking about is a skyline property that really changes the look and feel of this part of downtown forever.”

Farmington Hills-based Friedman Real Estate will be responsible for managing and leasing the building. Detroit-based Neumann/Smith Architecture is the architect while Macomb Township-based Colasanti Construction Services Inc. is the general contractor.

e apartment tower is just one phase of construction that may take place at the site, which is where the Detroit Red Wings played for decades before moving to Little Caesars Arena on Woodward Avenue.

Joe Louis Arena was demolished between 2019 and 2020.

These companies are up and running in Newlab at Michigan Central

 Airspace Link – Drone technology, data and software company striving to be the Google Maps of the skies for drones and future aerial mobility.

 Wheel.me – Norwegian robotics company that invented the world's rst autonomous wheel that can be attached to many di erent structures for movement.

 Grounded – Company providing customizable electric RVs for purchase and subscription use, all connected by a phone app.

 Cavnue – Company that combines technology and road infrastructure to unlock the full potential of connected and autonomous vehicles. It is developing a rst-of-its-kind connected corridor in Michigan.

 Canopy – Connected and intelligent vehicle security system focused on truck and commercial vehicle customer security.

 Intermode – Modular, autonomous robotic platform being used by a multitude of delivery platforms.

 Fermata – Company that is dedicated to accelerating the adoption of electric vehicles and the transition to renewable energy. Fermata enables utilities to enhance grid resilience and deploy renewable energy resources quickly by integrating EVs as a grid resource.

 Vela Bikes – Connected, electric bikes that recently moved manufacturing from China to Detroit.

e Detroit Regional Convention Facility Authority board earlier this year paved the way for a new convention-style hotel to be built connected to Huntington Place on the site, and sources have previously said that an o ce tower is also under consideration.

Samson said “subsequent phases could be at a later date,” but declined to go into detail about plans other than the residential tower.

“As we’ve developed the residential tower, we’ve had great conversations with stakeholders in the area, including the Detroit Metro Convention & Visitors Bureau, the convention center themselves, and other stakeholders, and whether it’s the Detroit Riverfront Conservancy or others, everybody’s been very supportive of the project and of future opportunities,” Samson said.

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

 Tubular – Autonomous, guided robotics system that utilizes tubes in manufacturing campuses and cross-facility logistics.

 Electreon – Provider of wireless charging solutions for electric vehicles built into streets for dynamic charging of electric vehicles and eet operators.

 JustAir – Startup providing data-driven mapping, visualizing and monitoring of the air quality in communities.

 Amogy – Sustainable energy startup decarbonizing heavy industry with ammonia-based powertrains for tractors, heavy trucks and maritime vessels.

 RoboTire – Robotics and automation company that engineers and deploys next-gen automated tire-changing solutions with built-in AI technology to enable faster and safer vehicle servicing.

 Pluck – Collaborative delivery service that splits delivery fees across customers.

 Biliti Electric –Three-wheeler electric vehicle intended for urban deliveries with quick swappable battery technology.

 Blue Flite – Cargo drone logistics provider piloting a pedestrian mobile illumination solution as part of studio work.

 Pliant – Marine and amphibious robotic propulsion system.

A rendering of the apartment tower being built on the former Joe Louis Arena site.

Newlab at Michigan Central has a 3D printing shop, CNC milling machine and a robotics room. KURT NAGL/CRAIN’S DETROIT BUSINESS

How Michigan’s infrastructure point person manages spending

Zachary Kolodin is Michigan’s point person on infrastructure, charged with leading state e orts to take advantage of billions of dollars that are available under the federal infrastructure law. The money is being used to repair roads, replace lead water pipes, expand high-speed internet and build up electric vehicle charging infrastructure. Kolodin, a graduate of Wesleyan University and New York University Law School, worked as a lawyer in Gov. Gretchen Whitmer’s o ce before she appointed him chief infrastructure o cer and director of the newly created Michigan Infrastructure O ce in early 2022. The o ce, which is based in Detroit, also has a role in marshaling billions in funding from two other big federal laws tied to infrastructure: one to ght climate change, the other to boost the semiconductor industry.

 What is your role in how Michigan spends its federal infrastructure aid?

The governor created the o ce because she recognizes that this is a oncein-a-generation opportunity — the passage of really three major pieces of legislation that are designed to revitalize American infrastructure and to reinvigorate American manufacturing, especially clean-energy manufacturing. She wanted to make sure we were using all the resources of government, from our state agencies to our relationships with business and philanthropic stakeholders to the governor’s bully pulpit, to make the most of these opportunities. So my o ce is designed to leverage those federal funds, leverage not just the funds themselves but the organizing power of having federal funding opportunities that we have to collaborate around, to drive toward the governor’s vision for the future of infrastructure. ... It’s No. 1, building infrastructure that makes life easier, better, safer for everyday Michiganders. At a basic level, you’ve got to be able to rely on clean water coming out of the tap, on safe roads, on reliable power. We’ve got a lot of work to do make sure that we’re delivering all those services consistently. Beyond that, (it is) building the clean energypowered, advanced manufacturing economy that the governor believes is the key to sustainable prosperity in Michigan. ... Our charge is broader than one piece of federal legislation.

 How much funding is Michigan receiving and how much discretion does it have on spending it?

We’ve received about $5.6 billion in Bipartisan Infrastructure Law funds, the majority of which is committed to transportation. We’ve also received about $1.5 billion in federal discretionary grant funding. That’s money that team Michigan went out and won because of the quality of our applications, not just because every state gets it. The funding available through the three acts together ... we’re eligible for up to about $50 billion. But much of that is in the form of national

RUMBLINGS

competitions and tax credits that rms investing in states like Michigan and our neighboring states will take advantage of. ... The state has a fair amount of discretion in the way that, for example, transportation funds are expended. What’s important to understand is that those funds are not necessarily, especially the formula funds, additional to formula funds that we were already receiving. The Michigan Department of Transportation has a set of commitments that they’ve made and passed as their ve-year plan. So to the extent that we want to go above and beyond what we’ve committed to doing already, we’ve got to do things like win competitive awards. That’s why it was so exciting to receive the $105 million for the conversion of I-375 into a boulevard and to receive the $73 million award to replace the Lafayette bascule bridge in Bay City. Those really let us do projects that we either wouldn’t get to do for a while or wouldn’t get to do at all.

 What are some other key projects that are underway or on the horizon?

One of the most signi cant projects, which is led by Army Corps of Engineers, is the Soo Locks project (to build a new lock). That’s an extraordinary endeavor. In the Lower Peninsula, we’ve got the project on Michigan Avenue that syncs up with Ford’s Michigan Central Station investment, which we won a $25 million award for. ... Kalamazoo has two separate grants to improve the walkability of its downtown. Kalamazoo leaders saw the speed of tra c going through downtown as a major impediment to building the kind of walkable community that they wanted to live in, and they worked with MDOT to sort of reacquire the downtown roads from the state and then were able to get federal funding to calm tra c on those roads and improve safety. It’s a great story that’s a model for communities across the state.

 What does your job entail?

It really varies. The infrastructure o ce and my role in particular are focused on all aspects of identifying federal funding, chasing it down, processing

BY | DAVID EGGERT

it so we can actually spend it and then explaining to the public what we’ve done. My day-to-day (is) making sure that we are pursuing the opportunities that have the highest ROI for the state so they help us deliver on our goals. If we have in fact received federal funding or won the right to spend federal funds, (it is ensuring) that we do so in compliance with the law and that we do so on time and on budget. There are some broader challenges that really all states face. Do we have the workforce to build these projects? Not only today when we’re really just kicking o the Bipartisan Infrastructure Law buildout, but will we have the workforce in 2026, which will be the peak of the broadband deployment alongside the peak of the deployment of clean water and wastewater funds as well as the Surface Transportation grant program? Are we going to be able to acquire the materials that we need to build these projects? Because the Bipartisan Infrastructure Law funds similar projects in states across the country, that naturally leads to increased competition for materials you need to build the projects. That comes at a time when many parts of the economy are struggling to produce enough stu to meet the demands that people have. Our o ce has been helping to analyze those problems and prepare state agencies to try to solve them. Another challenge is permitting. We’ve got a great state department in EGLE that processes environmental permits, but they were really built to process permits assuming a certain rate of infrastructure build, and that rate increases under the Bipartisan Infrastructure Law. So how are they going to handle increased ow of infrastructure projects ?

 What do you do when you are not working?

I play basketball every Monday at Iroquois Avenue Christ Lutheran Church. I have two kids ... so we do family stu . I’m a pretty big basketball fan. I watch sports and go to Piston games. We were pretty sad that Saddiq Bey got traded.

Rocket CEO Jay Farner gets big pay boost on the way out

ROCKET MORTGAGE BOSS Jay Farner received a big compensation boost in his last full year as CEO of the lender’s publicly traded parent company.

e annual report for Detroit-based Rocket Companies Inc. (NYSE: RKT), led Wednesday with the U.S Securities and Exchange Commission, shows that the outgoing CEO saw a 940% year-over-year boost in his compensation in 2022, fueled almost entirely by stock awards. He received none the previous year.

e rest of Rocket Companies’ C-suite also saw pay boosts largely tied to stock awards last year. Farner and the rest of the company’s top executives received no bonuses in 2022, although the ling says some saw extra money tied to work in past years.

Last year was tough for Rocket, along with much of the rest of the mortgage industry. Total net income, or pro t, fell by 88% year over year in 2022 to $700 million. at included a $500 million loss in thenal quarter of the year.

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Farner, a longtime Rocket executive who abruptly announced his upcoming retirement from the company in February at the age of 49, earned just less than $9.5 million in total compensation last year. at includes a base salary of $800,000 — the same as 2021 — as well as stock awards of more than $8.6 million. Farner’s total compensation last year was about 109 times greater than the median employee at Rocket, who earned $86,476, according to the ling.

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Zachary Kolodin is the state’s chief infrastructure o cer and director of the Michigan Infrastructure O ce.

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