Crain's Detroit Business, May 15, 2023, issue

Home Point sold in tough market

BY NICK MANES

As a company that was formed by private equity and grew via acquisition, the quick breakup and sale of mortgage lender Home Point Financial makes for an ironic nish.

But it was also something of an unlikely nish in today’s beleaguered mortgage lending climate, and provides an exit for large investors who made money via an initial public o ering at the top of the market but saw the value of their remaining stakes plummet by more than 80 percent.

Ann Arbor-based Home Point announced late Wednesday that it would wind down operations fol-

relinquish control to suppliers

lowing the close of a deal in the coming months to sell its remaining business to Texas-based Mr. Cooper Group for $324 million in cash.

e deal with Mr. Cooper comes just more than one month after the struggling Home Point announced a sale of its core mortgage lending business to e Loan Store Inc., based in Tucson, Ariz.

e deal to sell to Mr. Cooper makes for a win for Stone Point Capital, the Connecticut-based private equity rm that birthed Home Point and provided capital for M&A activity in the early stages of the company, which quickly grew via acquisitions prior to going public.

Funds connected to Stone Point hold around 90% of Home Point, and the proposed acquisition price of $2.33 per share makes for a premium of about 22% over the closing share price Wednesday of $1.91.

BY KURT NAGL

As automakers ramp up electric vehicle production and scramble to secure their battery supply chains, they are meddling less in the business of traditional parts suppliers, according to an industry expert and executive.

at’s because OEMs are faced with the once-in-a-century challenge of reinventing their companies, a capital-intensive task that leaves fewer resources for the legacy business.

An electric vehicle has a fraction of the total parts in a gas-powered car, which poses an existential threat for parts producers tied to in-

ternal combustion. But for some large suppliers, the consolidation of the supply base and outsourcing for traditional parts is a “golden opportunity,” said Mark Barrott, principal at Plante Moran who specializes in the automotive industry.

As a matter of necessity, automakers are letting tier-one suppliers take the driver’s seat when it comes to producing some parts of the car that won’t be eliminated with electri cation, Barrott said. At the same time, carmakers are more hawkish about controlling the future of the vehicle.

“As we move into this electric future, what OEMs have become very focused around is data, making sure that they continue to own the brains of the vehicles, which in the

Pam Weinstein (left) and Marsha Bruhn, residents in Detroit’s Grandmont-Rosedale neighborhood, fought back against an asphalt mixing and storage operation that they said would have blown the scent of asphalt miles away toward their homes.

In hunt for jobs, Detroit welcomed heavy industry to neighborhoods. Residents are

NEED TO KNOW

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

 PERRIGO CEO TO RETIRE BY END OF JULY

THE NEWS: Murray Kessler plans to retire this summer as CEO at Perrigo Co. plc after overhauling and better positioning the company for growth. A former tobacco industry executive, Kessler led and executed a plan after he took over as CEO in October 2018 that transformed Perrigo into what he labeled a “self-care” company focused on producing over-the-counter medications and products intended to help consumers maintain their health. e transformation included 14 mergers and acquisitions and recon guring Perrigo’s product portfolio.

WHY IT MATTERS: Under Kessler’s transformation plan, Perrigo’s acquisitions have included the $750 million deal in 2019 for Ranir Global Holdings LLC, a Grand Rapids-based maker of oral care products, and the $1.9 billion transaction for Paris, France-based HRA Pharma in 2022.

 A pro le in the Traverse City special section on May 8 of Amanda Danielson, the owner of the Trattoria Stella who had bought an abandoned 20-acre farm on Old Mission Peninsula, misstated her plans for the property. e story said she

 GM HIRES APPLE CLOUD SERVICES EXEC MIKE ABBOTT

THE NEWS: General Motors Co. said Tuesday that it has hired Mike Abbott, who led cloud services at Apple Inc., to be its executive vice president of software. Abbott, 50, will begin in the newly created role May 22, reporting to CEO Mary Barra, GM said. He will lead a reorganized software team focused on information and digital technology, software-de ned vehicle and operating systems, and digital business.

WHY IT MATTERS: Abbott’s hire comes shortly after GM said its upcoming electric vehicles would not o er Apple CarPlay or Android Auto smart-

wanted to build greenhouses and employee housing on land that was not plantable. at was her original intention but in the face of local opposition, she has dropped those plans. Michigan State University researchers will experiment by graft-

phone connectivity. e automaker instead plans to implement its own embedded software solution, developed with Google Inc.

 ESPERION REPORTS FIRST QUARTER LOSS

THE NEWS: Ann Arbor-based drugmaker Esperion continues to bleed cash as it battles in court with large pharmaceutical partner Daiichi Sankyo. Esperion (NASDAQ: ESPR) reported a net loss of $61.7 million for the rst quarter of 2023 on revenue of $24.3 million, compared to a net loss of $56.7 million on revenue of $18.8 million during the same quarter a year ago.

WHY IT MATTERS: Much of the decline was driven by rising research and development costs, which ballooned to $31.4 million in the quarter, compared to $24.3 million during the same quarter last year, due to testing of its cholesterol drug Nexletol in Europe and regulatory submission preparation.

ing two grape varieties onto four root stocks, not ve. e story referred to Danielson and her mentor, Madeline Tri on, as wine sommeliers. Danielson is an advanced sommelier; Tri on is a master sommelier.

PEOPLE

Nick Gilbert remembered as a ‘mensch,’ optimist

Detroit billionaire businessman Dan Gilbert, his wife Jennifer, as well as their children shared their memories of Nick Gilbert during a funeral service Tuesday at Temple Israel in West Bloom eld.

Nick Gilbert died May 6 at the age of 26 following a lifelong struggle with a rare genetic disorder called neuro bromatosis, or NF1. e disease causes tumors to grow in nerve tissue throughout the body.

Gilbert was remembered as someone who never let his disease interfere with his way of living; someone who constantly ate macaroni and cheese, and by Rabbi Jennifer Lader as a “mensch,” the Yiddish phrase for someone viewed as being of high integrity.

“In a world of mistrust and con ict, Nicolas Gilbert was an example of authenticity and sincerity,” said his father, the founder and chairman of Detroit-based Rocket Companies Inc., the parent company of Rocket Mortgage and several other consumer nancial service companies.

“Comfortable in his own skin, the con dence of an Olympic athlete, zero insecurities about his physical condition and sometimes debilitating and physical e ects. You never got 50% of Nick or 75% or even 99%. If you engaged with him, you got 100% all Nick all the time. Even when he bordered on boasting, it was done in a funny, humble and charismatic way.”

“In a world of mistrust and con ict, Nicolas Gilbert was an example of authenticity and sincerity,”

Dan Gilbert said Tuesday of his son, who died May 6. |

Signs of life at former Uniroyal Tire Co. site

New consultant brought in on project in the works for 18 years

KIRK PINHO

On June 15, a land purchase and development agreement for the former Uniroyal Tire Co. factory site will become old enough to vote.

When the 2005 Kwame Kilpatrick-era deal was inked with a Detroit-born NFL star and a Pittsburgh developer, it was seen as a step forward for the 42-acre property that nestles up to the Belle Isle Bridge. But like virtually all development in Detroit, nothing comes easy.

Or quick — although this site is a

rare breed when it comes to development proposals.(Donald Trump reportedly pondered it in the mid 1980s.)

Bookended to the west by Mount Elliott Park and the bridge, it still has no housing or retail. More than four decades after its most recent use as a heavy manufacturing

site, even though the most serious contamination has been recti ed, some low level contaminants remain and need to be addressed, the Detroit Economic Growth Corp. says.

ere has been progress, however. e Detroit Riverfront Conservancy is nearing completion on the remaining $11 million, 0.42-mile leg of the Detroit RiverWalk, set to be nished in October. at project itself was a deceptively complicated uphill climb, said Mark Wallace, president and CEO of the Detroit

Riverfront Conservancy.

“You might look at it and say, ‘Oh, that’s a nice sidewalk,’ but there’s a lot that goes into a project like this,” he said.

And on the private development side, Jerome Bettis — the NFL Hallof-Famer tapped 18 years ago — has made moves of his own, bringing on a new consultant on the project, which remains the largest unrealized mixed-use development on the books.

300+

housing units in works in

Eastern Market Area has long sought more residential space

KIRK PINHO

Eastern Market executives say more than 300 units of housing are in the works in the food-centric district that has long sought more residential space to densify the area on a more regular basis.

ere are ve known housing projects in varying stages of the development process, according to a document submitted last month to the Detroit City Council. Some have been in the works for years while others are just within the last few months coming into clearer focus.

Earlier this year, Eastern Market Partnership hired Dietrich Knoer, formerly of e Platform LLC, to run Eastern Market Development Corp., the partnership’s development arm.

“From Midtown to downtown to Corktown, there is a market push for those three general areas and Eastern Market has been sort of left behind in that,” said Craig Willian, vice president of real estate for Develop Detroit Inc., one of the developers working on Eastern Market area residential buildings.

Among the projects in the works, according to the Detroit City Council document:

 Cincinnati-based Pivotal is working on a two-phase, 100-unit project consisting of both workforce and senior housing, with a ordability levels at 30% to 70% of the federally designated Area Median Income, a federally designated gure that is controversial because it includes suburban incomes and therefore skews upward what is considered a ordable to residents of a city that is one of the poorest in the nation. Crain’s has previously reported that at least some of the housing would go on St. Aubin Street.

Savvy Sliders is suddenly everywhere. Now it’s expanding to Texas

Savvy Sliders restaurants seem to be everywhere these days, quickly popping up around metro Detroit. Now the Commerce Township-based fast-food chain is expanding to the Lone Star State.

e chain serves an array of “gourmet” slider sandwiches made with Angus beef, cod, chicken and a falafel vegetarian option with a variety of toppings. Hand-battered chicken ngers and hand-spun custard shakes round out the menu.

Savvy Sliders bills itself as America’s fastest-growing slider brand, opening two restaurants a month, according to Vice President of Business Development Mark Wolok.

Later this month, it will open its rst Texas location in San Antonio. By the end of the summer, it plans to

have three restaurants in Houston, two each in San Antonio and Dallas, and one in the Houston suburb of Katy.

Savvy Holdings Texas CEO Milton Trevino, the area representative work-

ing with the Texas franchisees, said providing ownership opportunities is a part of the company’s mission.

“It’s vital that we collaborate with talented operators and o er them the opportunity and support to become

restaurant owners within this rapidly growing market,” Trevino said.

Savvy Sliders was founded in 2018 by Happy Asker, the founder of Happy’s Pizza, which lists more than 55 locations in Michigan and Ohio, including some co-branded with Savvy Sliders. Asker was convicted of federal tax charges in 2015 and has completed his sentence.

e company currently has 34 locations — 32 in Michigan and two in Columbus, Ohio. e move into Texas is just the rst leg of Savvy Sliders’ expansion plan. It plans to open more Michigan locations, along with restaurants in Ohio, Florida and Tennessee, Wolok told Crain’s in an email. He declined to disclose where in Michigan more Savvy Sliders restaurants are planned.

Savvy Sliders began franchising in 2019 and has six franchisees so far,

Wolok said. e investment needed to open a location ranges from $411,000 to $850,000, according to Wolok. Potential franchisees must have $180,000 in liquid assets to proceed.

Each location ranges from 1,600 square feet to 3,000 square feet, with seating for 30-50 guests. Each restaurant employs 15-25 people and brings in about $1.8 million in annual revenue, according to Wolok. He declined to provide details on the company’s overall total revenue.

e secret to the company’s success and growth is simple, Wolok said: “We pride ourselves on great service and a high-quality product. Savvy Sliders is reimagining the slider experience for consumers across America.”

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

Workers on the Detroit RiverWalk extension running across the former Uniroyal site. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

JAY DAVIS

Savvy Sliders has 34 locations — 32 in Michigan and two in Columbus, Ohio, with more coming in the state plus Texas, Ohio, Florida and Tennessee. | SAVVY SLIDERS

Wallace

Bedrock outsources o ce leasing for more than 15 buildings

Dan Gilbert’s real estate company has outsourced much of its o ce leasing to a pair of brokerage houses.

Detroit-based Bedrock LLC tapped the local o ce of New York City-based Newmark and Farmington Hills-based Friedman Real Estate to market more than a dozen of the billionaire’s o ce properties for lease.

It’s a marked departure for Bedrock, which prior to retaining Newmark and Friedman has almost exclusively handled office leasing in house, although one notable exception is the Hudson’s site. For awhile, that was run by the New York City-office of Chicago-based brokerage JLL. Those duties are now handled by Newmark.

e buildings now marketed by Newmark and Friedman — run by Gilbert’s childhood friend David Friedman — range from the under-construction Hudson’s o ce building to the century-old First National Building on Campus Martius Park. Other trophy assets like Ally Detroit Center and One Campus Martius are outsourced now, too. ere are also smaller lower Woodward buildings, Capitol Park buildings and east riverfront buildings in the mix.

e two companies were selected in the last several months, although the precise time frame is not known.

I sent emails to Bedrock spokespeople seeking additional information on the decision. Newmark declined to comment. I emailed Friedman Real Estate seeking comment, as well.

Here are the listing assignments for both rms:

 Newmark: e Hudson’s site at 1208 Woodward Ave.

 Newmark/Friedman Real Estate:

Chrysler House (formerly the Dime Building) at 719 Griswold St.

 Newmark: e Traver Building at 1217 Woodward Ave.

 Newmark: e Fowler Building at 1225 Woodward Ave.

 Newmark: Book Tower at 1265 Washington Blvd.

 Newmark: e former Detroit Free Press building at 321 West Lafayette.

 Newmark: e Kresge Building at 1201 Woodward Ave.

 Newmark: e Arts League Building at 1528-1530 Woodward Ave.

 Newmark: e Bamlet Building at 1265 Griswold St.

 Friedman Real Estate: Ally Detroit Center (formerly One Detroit Center) at 500 Woodward Ave.

 Friedman Real Estate: e First National Building at 660 Woodward Ave.

 Friedman Real Estate: e One Woodward building at 1 Woodward Ave.

 Friedman Real Estate: One Campus Martius at 1000 Woodward Ave.

 Friedman Real Estate: 1001 Woodward Ave.

 Friedman Real Estate: A former Comerica Bank branch at 201 W. Fort St.

 Friedman Real Estate: 300 River Place Drive on the Detroit riverfront.

Another award for Mosey

Sue Mosey, executive director of Midtown Detroit Inc., was honored earlier this month with the Urban Land Institute Michigan chapter’s Lifetime Achievement Award.

An event honoring Mosey — the rst woman to earn the award — was held recently at the Fisher Building in Detroit’s New Center area, raising what a spokesperson said was a record-breaking $600,000-plus for ULI.

Mosey has headed up the in uential Midtown Detroit Inc. nonpro t for more than 35 years.

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

City of Detroit les suit against owner of abandoned shopping center

e city of Detroit, in its continued push to clear the city of blight, has led suit against the owners of a prominent abandoned shopping center on West Grand River Avenue.

e Mammoth Building, the suit contends, has been abandoned for more than 20 years after Mammoth Department Store closed in 2000. e three-story, 135,000-square-foot former Federal Department Store building at 15401 West Grand River Ave. opened in 1949; it has a pedestrian bridge over the road connecting it to what was then the Montgomery Ward Department Store.

City Council President Pro Tem James Tate said it’s long past time when the dilapidated structure should continue dragging the community down.

“We’ve seen the building steadily decay over the years,” he said. “ is parking lot used to be full.” e lawsuit, led April 25 in Wayne County Circuit Court, names three people and three companies; the city said in its ling it was not completely clear who the owner of the building is.

e individuals sued are Herbert Strather, Christine Strather and Carlotta Duraine Jackson, while the businesses are Grand River Place LLC, Green eld Penthouse Manor LLC and Park High Apartments — Phase I Limited Partnership.

Herbert Strather, who came to a press conference May 5 announcing the suit, said he was the building’s owner and is in support of its demolition. None of the other parties could be reached for comment or returned messages seeking comment about the suit.

Strather said he planned to announce a new project on the site, called e Experience. He said it would include about 100 apartments; he also forwarded a February email that included information about two planned buildings on the space, which would have a combined 197 studio, one- and two-bedroom apartments.

An attached brochure said the project would also include retail, an entrepreneurship center and other resources that would help strengthen the community and be a hub for innovation. Strather said the plan is a continuation of other work he’s done in the area.

“We’re happy for them to tear it down,” Strather said of the Mammoth Building. “You don’t have to sue me.”

He agreed with a resident who said he had failed to keep the building clean and questioned the administration’s assertion that property owners were ghting back against the lawsuits, interjecting “Not me,” as Corporation Counsel Conrad Mallett spoke about the nearly two dozen suits the city has led.

“I’m not running from anything, let’s get that straight,” Strather said. “I am fully in support of this property being redeveloped and torn down.”

Mallett said the shopping center, which is on a list of the most blighted properties in the city, is “an example of the kind of degradation we’ve had to live with for 20, 30 years.” at level of disinvestment is unique in the city of Detroit, he said.

“ is is not how major cities ought to be operating,” he said. “I hope there is change. I hope there is progress. I hope there is compliance with the law.”

e lawsuit says the building and the pedestrian bridge are both in disrepair and present a “signi cant hazard” to drivers and pedestrians, as well as to those who might try to access the building.

e city has asked the court to appoint a receiver over the bridge and building, and asked that it authorize

the receiver to demolish the property.

Mallett said there are holes in the ownership chain for the building, and said the title changes were obviously done with the “intent to confuse” people, a charge Strather disputed. Mallett said the city will continue to le blight-related suits, even if the ownership of a building isn’t completely clear.

“You can run, but you cannot hide,” he said, adding that potential owners are free to dispute their responsibilities in court.

Robert Hamm, who owns the Tower Center across the street from the Mammoth Building, said he’d like to buy the building and clean up the block. He applauded the city for its action.

“God bless them,” he said. “ at’s the right decision. Why would you allow it to just sit like that?”

Other community members lauded the lawsuit as well, saying the possibility of improvement in the area was great news.

e ling comes on the heels of a series of blight lawsuits led by the city of Detroit. In March and April, the city led four blight-related lawsuits against longtime real estate investor Dennis Kefallinos and his son, Julian. ose followed suits against the un nished Perfecting Church, the owner of a proposed concrete crushing site, and the Packard Plant.

“So far, property owners are resisting,” he said.

Mallett told Crain’s previously that the systemic e ort is a result of federal American Rescue Plan Act dollars, which 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.”

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

The First National Building is one of the downtown Detroit buildings in Bedrock’s portfolio that now has o ce leasing outsourced. | COSTAR GROUP INC.

Kirk PINHO

ARIELLE KASS

The Mammoth Building, a lawsuit contends, has been abandoned for more than 20 years after Mammoth Department Store closed in 2000. | CITY OF DETROIT

Mallett Tate

Bettis, a product of Mackenzie High School, selected Detroit developer Roderick Hardamon, who has projects on West Grand River, Livernois and other key corridors in the city, to consult on the Uniroyal site.

C.J. Betters, a Pittsburgh-based developer, was originally part of the development team but at some point parted ways with the project.

But the time frame for any private development on the site remains in the air.

e DEGC declined to make an executive available for an interview.

But in response to emailed questions, the quasi-public economic development agency said the development team is “ nalizing their programming” for the rst phase of the property, the westernmost chunk abutting Mount Elliott Park. Once that happens, the DEGC says, a new development agreement would be executed and City Council approval of an amended land transfer agreement would be sought.

ose changes to be sought would include dividing the property into three distinct parcels: One of 10.2 acres, another of 14.3 acres and a third of 11.6 acres.

Terms of the agreement include up to $100 million in private mixed-use development with at least 400,000 square feet on the 10.2-acre rstphase site; the 14.3-acre second-phase site requires at least $175 million in mixed-use development of at least 800,000 square feet; and the third phase on the 11.6 acres requires at least $125 million in investment with at least 500,000 square feet.

In terms of square footage, that would make it among the largest mixed-use projects in Detroit.

Some early proposals dating back to the Kilpatrick era include more than 1,800 residential units, 350 lofts/ live-work units, 285 hotel rooms and close to 400,000 square feet of retail space across the various development blocks under consideration, according to documents obtained through the Freedom of Information Act. Taller buildings would line Jefferson Avenue, with streets north of the thoroughfare — Beaufait, Bellevue, Concord, Canton and Helen — brought southward toward the river, and smaller buildings would be near the water.

e speci cs behind any current development plan are not known. e development team declined comment.

Connecting to the river

It’s been a long slog to get the RiverWalk extension to where it is today, just a few months from completion. Plans to have the Detroit RiverWalk run through the site date back two decades, Wallace, of the Detroit Riverfront Conservancy, said. But obstacles were rampant.

ere were lawsuits between various companies and the state over who should pay for cleanup of the site, contaminated by decades of industrial use.

Even after designs of the project had been submitted, contaminants found in the sediments in the water around the site caused the U.S. Environmental Protection Agency to require additional remediation in 2020 — at a $3 million additional cost, with a required 20 percent match — so work could begin. Ultimately that was covered with Great Lakes Restoration Initiative funding, Wallace said. And dating back to the early days of the vision, the eventual private development on the site was up in the air.

“ e DEGC was talking to a lot of people about what the future of that site would be,” Wallace said. “If it includes a marina or if it includes boat docking, that would impact what we build on the site, so it made sense that we were postponed,” Wallace said.

But eventually, with the help of tens of millions of federal funding the late U.S. Sen. Carl Levin secured, work on the broader eastern riverfront got done. at ranged from Mt. Elliott Park to the bridge at Robert C. Valade Park — and the Uniroyal site.

During community meetings leading up to the implementation of the 2017 East Riverfront Framework Plan, Wallace said the question he received the most was about when the Uniroyal section would be complete. e new section — which is to have a 20-foot landscape bu er from the private development site — in areas spans some 65 feet through an

easement granted by the city. It passes under the Belle Isle Bridge and connects with Gabriel Richard Park east of the bridge and Mount Elliott Park on the site’s western edge, said Darrell Greer, project manager on the Uniroyal extension.

When complete, it’s hoped that the RiverWalk extension serves as a catalyst for the broader private-sector vision for the bigger site.

“ e investment in public space de nitely stimulates development in the adjacent areas,” Wallace said. “Every project that’s built on the RiverWalk is focusing on the RiverWalk and the parks as a key part of the value proposition.”

History of the site

It took more than a century for the land to be primed for mixed-use development.

From 1941 to 1978, the site was home to a Uniroyal tire manufacturing plant and a Michigan Consolidated Gas Co. coal-gasi cation plant. It had also been home on the eastern side to Detroit Stove Works, perhaps the rst major manufacturing operation in the region, according to the Detroit Historical Society.

“ at was our rst manufacturing facility basically anywhere in the region, the moment we shifted from trapping beavers to building stu out of metal,” Wallace said.

Crain’s reported in 1985 that demolition on the 50 or so buildings that were on the site began in the fall 1984.

Demolition was just the start of a long process to get the site ready for redevelopment.

HOUSING

From Page 3

 Harper Woods-based American Community Developers is working on an a ordable and workforce housing project aimed at households earning 40% to 120% of AMI. e project would also include 4,000 square feet of commercial space. Half of that would be reserved for minority-owned businesses. ACD declined comment.

e state declared in July 2014 that remediation of the westernmost chunk of the site was completed after more than 700,000 tons of dirt and other materials were removed. e cleanup, which began in September 2011, involved 150 workers and resulted in the installation of a 740-foot-long seawall going 115 feet deep — more than double the depth of the Detroit River.

Remediation of just that alone cost Detroit-based DTE Energy Co., which owns MichCon; E.I. du Pont de Nemours & Co.; and Michelin USA Inc. around $35 million.

e middle parcel, with Michelin responsible for cleanup costs, was expected to cost around $6 million several years ago. rough a series of mergers and acquisitions, Detroit Stove Works came to be owned by Enodis plc, which was responsible for cleanup on the easternmost chunk of the site.

e city bought the land from Uniroyal in 1981 for $5 million and spent another $3.6 million razing structures and clearing the site.

Jill Greenberg, a spokesperson for the Michigan Department of Environment, Great Lakes, and Energy, said there is a four-step process for nishing cleanup on the middle portion of the site, and the rst phase — a preliminary screening — of that work is nearing completion.

EGLE would then further work to better understand the results of the preliminary screening and wait for private development plans so the department can “pinpoint the remediation or excavation at the site that would need to be done,” Greenberg said.

 Economic Growth Corp., a Rock Island, Ill.-based developer, also is working on another project several years out. e conceptual vision is for housing for refugee farmers.

 Develop Detroit, a nonpro t developer, continues to work on a housing project aimed at residents earning 30% to 80% of AMI. Willian said the project in the district’s south end along Gratiot Avenue would include 78 units as part of an approximately $20 million rst phase, and another $35 million to $40 million would be

Nearby developments

e property could bene t from the recent development and investor activity in the area, said Joshua Elling, CEO of Je erson East Inc.

Dan Gilbert’s Bedrock LLC real estate company has been acquiring land and buildings on the other side of Mount Elliott Park during the COVID-19 pandemic, forging a large portfolio costing over $100 million not far from the Uniroyal site.

Gilbert’s team, at one point, had also been involved in the discussions over the site’s future, but it’s not known when Bedrock bowed out of those. An email was sent to spokespeople for the company seeking additional details on its previous involvement.

It’s important, Elling said, for there to be easy public access from Je erson Avenue to the waterfront, as well as a mixture of a ordable housing at the 50 to 60 percent Area Median Income level as well as market rate units.

“If you can have a design that’s really dense with a good mix of all housing types, maintaining public access through the site to the RiverWalk and to Belle Isle, I think those are some of the North Stars that we’re looking at,” Elling said.

But still, Elling and his team have been waiting for years for a vision.

“ ere has not been many public discussions at all about the Uniroyal site,” Elling said. “We’ve also not been asking because it’s been going on for almost a generation now. And it’s sort of like, wake me up when something happens, you know?”

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

spent on a second phase with 136 units. Construction on the rst phase could start early next year, contingent on solidifying nancing.

 Firm Real Estate, run by Sanford Nelson, continues to work on a 25unit redevelopment of the Atlas building on Gratiot Avenue. at project was announced in September 2020 but has not yet started. Crain’s emailed Nelson seeking details.

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

There are ve known housing projects in varying stages of development, according to a document submitted to the Detroit City Council. | KURT NAGL/CRAIN’S DETROIT BUSINESS

A host of issues caused creation of the former Uniroyal site portion of the Detroit RiverWalk to take years to come to fruition. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

Want growth? Give business a break on investment now

them the tax cut is only good until January discourages job growth.

EDITORIAL

Remembering Nick Gilbert’s inspiring life

Six years ago, when Nick Gilbert was a business student at Michigan State University, Crain’s Detroit Business’ then-Publisher and Editor Ron Fournier interviewed him for a pro le of the young man and his father, Dan.

What emerged was the portrait of a courageous 20-year-old who embraced life to the fullest despite battling a nerve disorder that left him legally blind.

“You live the life you’re given,” Nick Gilbert said at the time. “ at’s just the attitude I was born with. You gotta do what you gotta do.”

It was an attitude clearly shaped by his father, Detroit billionaire business titan Dan Gilbert, who told Fournier he wanted to help his son make sense of his rare condition, saying, “You drew a card, and it was just an unlucky card. You can’t really have a say in the cards you get. You just get a say in how you play them.”

Nick Gilbert died May 6 at the age of 26. By all accounts, he played his cards with resilience, optimism, persistence and passion.

To hear his family and friends share stories at the funeral, which was carried via livestream, Nick Gilbert’s life was one well-lived, despite its challenges and abbreviated span. And it carried lessons many of us could learn from.

Nick Gilbert had a lifelong battle with neuro bromatosis, a nerve disorder that causes tumors to grow anywhere in the body. For Nick, those tumors grew on his brain and left him nearly blind. At age 10, he required emergency brain surgery. By age 20, he’d been on and o chemotherapy for about 15 years.

Yet, Nick never complained or felt sorry for himself or asked, like so many us might, “Why me?” instead, he kept pushing forward and

did so with humor, compassion and kindness.

“Although Nick had many obstacles, he was able to look at his life in its entirety, not identifying or naming each moment as good or bad, but accepting his reality while considering it in the grand scheme of things,” his mother, Jennifer Gilbert, said at his funeral. “He understood and appreciated his blessings and chose to focus on the silver lining in any situation, rather than on the challenge.”

She added, moments later, “Nick lived and loved fearlessly and unapologetically, wanting to experience everything the world had to o er and embraced every simple moment as if it was his last.”

Sure, his family is fabulously wealthy, with Dan Gilbert chairing Rocket Companies Inc., owning an NBA basketball team and redeveloping large swaths of downtown Detroit. He is perhaps Detroit’s single most important business leader of our time. Yet, as Henry Ford learned when he lost his grown son, Edsel, to cancer 80 years ago, money can’t buy everything.

It can, however, help fund research and, thanks to the millions the Gilbert family has donated, and the awareness Nick’s story has raised, we can all hope that one day there can be a cure for NF1, as one form of neuro bromatosis is known. at would be an incredible legacy, alongside Nick’s bravery, passion and resilience.

Donations in Nick’s memory may be made to NF Forward, 1074 Woodward Ave., Detroit, MI 48226, or at n orwarddetroit.org.

Michigan’s economy has fallen behind, and state policymakers have made it worse. But there is a small change they could make to business taxation that would help improve economic competitiveness.

e state has had the fth-worst recovery from the pandemic, and we are still down 101,400 jobs from where we were before Gov. Gretchen Whitmer’s lockdowns.

e state’s population loss is the eighth-highest in the nation.

Look not to Lansing for leadership out of these trends. “We’re trying to make Michigan a place where every business can thrive,” Whitmer told a fawning Daily Show interviewer recently. But the new Democratic trifecta’s priorities have been consistently unfriendly to growth.

e elimination of the state’s right-to-work law in March allows unions to take their own members for granted and hurts state growth. Residents will say goodbye to the boost the law has given to manufacturing, population growth, and labor force participation.

Lawmakers also re-imposed prevailing wage practices that require taxpayers to pay more for government construction regardless of quality. is is good for construction unions but ensures that people don’t get the best deal for their money. Infrastructure is vital to improving economic competitiveness, and the poor condition of Michigan’s is holding the state back.

Whitmer even ghts to water down the few recent improvements in policy.

After failing to prevent a modest automatic reduction of the state income tax rate, Whitmer refuses to update state withholding tables to let people keep more of what they earn. She also argues that the tax-cut trigger created by a 2015 law is temporary, a faulty interpretation of the statute that will mitigate the broader economic bene ts of cutting taxes. Businesses invest when they can make more money over the long term, so telling

In lieu of improvements to the state business climate, policymakers’ approach to growth is to subsidize select businesses at the public’s expense. ey’ve already authorized $2.9 billion in new business subsidies so far this year. e state could a ord to get rid of its entire corporate income tax for more than a year for that much.

Corporate welfare is the wrong way to improve an economy. Select subsidies are ineffective at creating jobs, unfair to the businesses that don’t get them, and expensive to the state budget. Although headlines about these subsidies give the impression that Michigan is adding jobs, the results of selective business subsidy programs indicate that handing out favors to selected corporations does not grow state economies. e economic policies that work improve the state for everyone.

Here is one policy that lawmakers ought to consider. It’s a change in a corporate income tax rule that hinders growth, and it can be changed without costing the state government money over the long term.

Corporate income taxes are assessed on pro t, or the di erence between a company’s revenues and expenses. is means the state has to make rules to de ne expenses. Current Michigan rules discourage business growth by not giving the same tax treatment to long-term investment that they do to current spending. at is, if a business spends money on advertising, it gets a full tax advantage and write o of the expense. But if a business spends money on a new o ce, it has to defer that expense over the useful life of the asset. It’s good accounting, but it’s bad tax policy and can be changed.

Some lawmakers may be hesitant to make this change because, although it would not reduce tax hauls over time, it would lead to a short-term loss of cash to the state treasury. e state has to let the business recognize the cost of long-term assets eventually, however, so the state collects just as much cash over the long term. To the extent that this encourages more business development, the state comes out ahead in tax collections, too. It’s a win-win that elected o cials ought to look at.

Indeed, too much policy entails picking winners and losers, through selective business subsidies and other policies. Michigan has better options.

DANIEL SAAD/CRAIN’S DETROIT BUSINESS

JAMES HOHMAN

James Hohman is the director of scal policy at the Mackinac Center for Public Policy, a free-market research and educational institute in Midland.

IMAGES/ISTOCKPHOTO

Nick Gilbert

Two prominent Detroit social services nonpro ts to merge

Southwest Solutions, Development Centers to begin operating under a new name by Oct. 1

BY SHERRI WELCH

Detroit social services agencies

Southwest Solutions and Development Centers are set to merge and begin operating under a new name by Oct. 1.

The deal, approved by the two boards in late April, will create a $55 million organization serving 24,000 people across Detroit, said Southwest Solutions CEO Sean de Four, who will lead the combined organization.

The two boards will merge into one, with equal representation from each.

The organizations’ C-suite, administrative and clinical assessment teams will be consolidated, but no job cuts are planned. Instead, employees will be redeployed within the merged organization, de Four said.

“This was a strategic merger, not driven by financial need,” but the larger scale will help ensure the combined nonprofit remains stable and able to continue serving the community, he said.

“Especially in the behavioral health space, the number of lives that you serve and your size makes a big difference for your stability and for staff recruitment and retention.”

The two organizations had worked together through multiple joint ventures providing behavioral health services for 20 years, de Four said. Development Centers has the same holistic approach to services that Southwest has, he said, noting the expanded services beyond behavioral health and workforce development the combined organization will be able to offer clients.

As it approached its 40 years of service, Development Centers took a close look at options for how best to continue meeting its mission, “as the realities of meeting the needs of our community have evolved quickly in recent years,” said Catherine Liesman, CEO of Development Centers, in an emailed statement.

By combining with Southwest Solutions “there will be more resources and know-how to continue to help children, adults and families in and around Detroit live healthier, happier lives,” said Liesman, who will retire late this year.

“We were able to find a partner that shares our long-term commitment to diverse human services, including mental health, workforce development and early childhood.”

To the combined behavioral health and workforce development, Development Center will bring early childhood education (an area Southwest exited in 2017 as part of a turnaround plan), developmental assessment and child care with 10 sites in northwest Detroit.

It’s operating on an annual budget of about $23 million with 260 employees.

Southwest Solutions will bring affordable housing and programs like foreclosure prevention, financial coaching and adult education at six sites in southwest Detroit, which are served by 230 employees on a $33 million budget.

Research shows providing those services pulls people out of poverty, improves their health and their

agencies since 2020.

Easterseals Michigan and Macomb Oakland Regional Center merged last fall.

Livonia-based Hegira Health Inc. and Lincoln Park-based Community Care Services announced their plans to merge in October 2021, and CNS Healthcare in Detroit merged with Northeast Integrated Healthcare in November 2020.

oversight and payment for Medicaid-funded services to those companies from community mental health agencies in the state did not pass last year, de Four said.

quality of life, de Four said.

The merger of Southwest Solutions and Development Centers is the fourth among behavioral health

Proposed legislation that would have integrated behavioral health and acute care under the Medicaid insurance companies and shifted

Still, “we do expect that in the future there will be changes to the way funding is funneled and distributed. We do believe that larger organizations will be better positioned to survive whatever is coming,” he said.

Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

The Modern Law

de Four Liesman

“ESPECIALLY IN THE BEHAVIORAL HEALTH SPACE, THE NUMBER OF LIVES THAT YOU SERVE AND YOUR SIZE MAKES A BIG DIFFERENCE FOR YOUR STABILITY AND FOR STAFF RECRUITMENT AND RETENTION.”

—Sean de Four, CEO, Southwest Solutions

BREAKING DOWN NONCOMPETES

How employers should prepare for potential FTC ban of restrictive contractual agreements

A federal ban on noncompete agreements would either catalyze economic growth or stunt it, depending on one’s perspective.

Regardless of what comes of the Federal Trade Commission’s proposal to ban noncompete agreements, which have become ubiquitous in corporate America, employers in Michigan should be taking a hard look at their employment policies, said Zainab Hazimi, an attorney with Grand Rapid-based Warner Norcross + Judd who specializes in employment and supply chain litigation.

“We know that the tides are changing with respect to noncompete agreements, and we know that states have started to enact laws that are banning or restricting the reach of noncompetes,” Hazimi said.

e FTC’s proposal in January to ban the contractual clause, which binds employees from “competing” against employers for a set amount of time, sparked debate over the e cacy and ethics of the agreements.

Proponents say it helps employers protect trade secrets, while critics argue they handcu employees. e proposal, which accepted public comment until April 19, also sent some employers into panic mode over the potential rami cations of a ban.

Hazimi said she was ooded with inquiries from local employers, particularly automotive suppliers, which have been hit hard by labor and retention challenges from the manufacturing lines up to the C-suite. Companies in other sectors where noncompete agreements abound, such as tech and health care, are also watching closely.

“It would essentially undo approximately 30 million noncompete agreements that currently bind employees nationwide,” Hazimi said. “It is very broad, it’s unprecedented and it’s sweeping.”

e potential ban is based on a preliminary nding that noncom-

pete agreements are an unfair method of competition, therefore violating Section 5 of the Federal Trade Commission Act, according to the FTC.

Business groups don’t agree. e Michigan Chamber of Commerce said it is “strongly opposed” to the ban in a letter to the FTC dated April 19, Crain’s Grand Rapids Business reported.

“First, non-compete clauses are, and for more than a century have been, an issue of state law, not federal regulation,” the letter said.

In Michigan, a 2019 survey by the Economic Policy Institute revealed roughly 55 percent of the state’s more than 4 million workers were subject to noncompete agreements. Michigan is among the states that enforce the clause, though only to a certain extent. A federal ban would supersede inconsistent state laws.

Skymint, which primarily operates under the parent company of Green Peak Innovations Inc., remains in receivership. A dispute stems from Skymint’s $78 million acquisition of Birmingham-based competitor 3Fifteen Cannabis in April 2022.

SKYMINT

Skymint, 3Fifteen continue battle in court over earnings in receivership

DUSTIN WALSH

Lawyers entangled in the court-ordered receivership of Lansing marijuana giant Skymint continue to battle over the company’s nances.

e alleged trouble stems from Skymint’s $78 million acquisition of Birmingham-based competitor 3Fifteen Cannabis in April 2022.

Skymint, which primarily operates under the parent company of Green Peak Innovations Inc., owes more than $127 million to Canadian investment rm Tropics LP tied to the acquisition. Tropics has since come on as the primary funder of operations as Skymint works through receivership. But the minority lender in the acquisition, New York-based cannabis investment rm Merida Capital Holdings and a majority shareholder in 3Fifteen, is challenging whether its stores should be involved in the receivership at all.

Its lawyers have sought on several occasions to disjoin the company from the court-ordered receivership, despite the acquisition closing more than a year ago.

In the days prior to Skymint entering receivership, 3Fifteen Cannabis retook control of several stores acquired by Skymint, including dispensaries in Hamtramck, Grand Rapids, Camden and two in Battle Creek, according to court records.

But the circuit court judge in Ingham County ordered 3Fifteen to cede control back to Skymint, according to court records, as well as return control of bank accounts with nearly $500,000 in funds to Skymint.

Lawyers for Skymint and the receiver argued in a court hearing two weeks ago that 3Fifteen had not returned the bank accounts and should be held in contempt of court. 3Fifteen’s lawyers argued the order should be reversed and control of those stores and accounts should remain in 3Fifteen’s control.

“( e March 29 order) … required a return to the status quo, required return of money that was improperly taken, and so if you were to enter a stay of that March 29 order, it would reignite the chaos and the smashand-grab tactics that we sought this court’s intervention and protection for,” David Dragich, partner at e Dragich Law Firm PLLC and attorney for the receiver in the case, argued in the hearing to the judge.

NONCOMPETE

From Page 8

In its rule change proposal, the FTC argues that noncompetes reduce worker wages, exploit workers and generally sti e new ideas and innovation.

“By preventing workers across the labor force from pursuing better opportunities that o er higher pay or better working conditions, and by preventing employers from hiring quali ed workers bound by these contracts, noncompetes hurt workers and harm competition,” according to an FTC factsheet.

Indeed, a ban would give employees far more freedom to roam, but it could cost employers signicant investment in talent, and it could also drain the value of a company, said Bernard Fuhs, director at Detroit-based Butzel Long. In a world with noncompetes, a company could sell only to have its top management split to form a competing company, for example.

Hazimi Fuhs

Pros and cons of noncompetes

Noncompete agreements have been under increased scrutiny since the beginning of the year when the Federal Trade Commission proposed a sweeping ban on them.

Business groups have spoken out against the proposal, while proponents have rallied it as a win for workers’ rights. The positive and negative impacts they have in the workplace and on the economy are the subject of debate:

Pros

 They protect company trade secrets and proprietary information.

According to arguments in the hearing, 3Fifteen had used more than $600,000 from the accounts in question at Live Life Credit Union to pay leases and payments linked to the acquisition.

“What we want from the stay pending appeal is these locations to be shut down,” Max Newman, partner at law rm Butzel Long and attorney for 3Fifteen, argued in the hearing. “Smashand-grab is what the other side is doing, and particularly how we see Tropics and Skymint. ese operations under Skymint’s management, and I’d call it mismanagement, are losing hundreds of thousands of dollars a month …”

3Fifteen and Merida accused Skymint’s former CEO Je Radway of several misdeeds, including using the company as his personal piggybank in several extramarital a airs. Radway left the company on an “inde nite leave of absence” on April 7, according to an email to employees from Je Donahue, Skymint’s executive vice president and general counsel, that was obtained by Crain’s.

e Ingham County judge, however, did not buy into 3Fifteen’s claims that it should be separated from the receivership or authorize an appeal in another court and refused to reverse the March 29 order, according to the transcript from the May 3 hearing. “ e March 29 order restored the status quo and, again, 3F teen isn’t asking for a stay that would just stop this case from proceeding, they’re asking to reverse parts of the March 29 order,” Judge Joyce Draganchuk said in the hearing. “So I think in balancing harms, there would be greater harm in granting the stay than in not … in my view, businesses should not be thrown into upheaval and the order appointing a receiver and the March 29 order stabilizes the businesses and allows them to continue in smooth operations.”

self and expenses for the operations it believes it controls.

3Fifteen’s attorneys argued those expenses needed to be paid and the receiver would have done it anyway. e receiver’s attorney disagreed.

“It’s like robbing a convenience store and saying, ‘Well, we paid the wages of the employee because we gave the guy a $100 on the way out the door,’” Dragich said. “You don’t get to make that decision. You’ve taken the money from the receivership estate and all we’re asking for, again, is that those funds be returned and they be returned promptly.”

3Fifteen’s lawyer, Newman, argued the use of those funds was done because the order appointing a receiver was “ambiguous, vague, overwrought, verbose.”

Draganchuk reminded Newman her signature was on that order.

“I know, but it’s got typographical errors in it, misuse of apostrophes, literally repetition of the same phrase twice in a row that suggests that nobody proofread that order and the reason nobody proofread that order is, quite frankly, it’s unreadable,” Newman replied.

“It could chill and thwart innovation on a massive scale,” Fuhs said. “People and companies invest millions of dollars in research and development, talent, et cetera, and go to great lengths to protect that investment and the trade secrets. ey make this investment assuming they’ll be a orded some protections.”

Even if the ban doesn’t happen now, it could eventually, so employers should be prepared, Hazimi said. ey should also understand that not all noncompete agreements are created equal, and a poorly written clause could spell trouble.

“Michigan has the more general approach — a noncompete is enforceable as long as it’s reasonable in duration, geographic scope and narrowly tailored to the competitive business interest,” she said.

“You can’t impose something that’s so overly broad that it restricts employees from working at all.”

 They encourage employers to invest in employees without fear of losing that talent and investment.

 They help employers retain labor.

 They help prevent a departing employee from taking business with them or creating a direct competitor.

 They help preserve the value of a business by protecting its human capital.

Cons

 They “handcu ” employees to a job.

 They can suppress wages by not allowing employees to move freely in the job market.

 They are often too broad in scope and not narrowly focused, which does a disservice to employers and employees alike.

 They can sti e innovation by stemming the ow of ideas and information in the marketplace.

 They can be subject to legal action by employees who deem them to be unfair.

THE INGHAM COUNTY JUDGE DID NOT BUY INTO 3FIFTEEN’S CLAIMS THAT IT SHOULD BE SEPARATED FROM THE RECEIVERSHIP OR AUTHORIZE AN APPEAL IN ANOTHER COURT.

And with that, the judge denied 3Fifteen’s request. e judge also denied 3Fifteen’s request to enter arbitration over the purchase agreement with Skymint.

e plainti and defendant lawyers also argued over the $600,000 in funds 3Fifteen took from accounts to pay it-

e judge ordered 3Fifteen to repay the more than $600,000 to Skymint, including the repayment of $375,000 within 24 hours of the May 3 hearing and the remainder by May 17. e judge, however, declined to hold 3Fifteen in contempt of court over the ordeal.

Tropics, which rst sued Skymint resulting in the court-ordered receiver, is now funding operations as the receiver looks to stabilize nances. In that lawsuit, Tropics alleged Skymint was burning through $3 million in cash per month and generated only $110 million in revenue in 2022, $153 million below its forecast of $263 million in sales for the year.

Skymint, like many others in the Michigan marijuana industry, was crushed by fast-falling recreational marijuana prices in the state.

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

With the decision on a federal ban looming, the state is considering changes to the Michigan Antitrust Act of 1984, which allows for the enforcement of noncompete agreements. House Bill 4399, introduced a week before public comment on the FTC proposal ended, calls for more restrictions on the clauses, such as banning them for minors and low-wage employees.

Often, the agreements are targeted toward company executives who deal with privileged and proprietary information, but in recent years, they have been extended to employees at virtually every level. In some cases, employers have used them not just to protect information, but as leverage to retain talent amid a tight labor market and the “Great Resignation.”

“If this rule comes about and is adopted, that’s going to make it even harder to keep people where they are because it’s one less thing they have to think about it before they jump ship,” Hazimi said.

A noncompete agreement can be as broad and restrictive as a company’s legal counsel wants to write it, but blanket noncompetes that are deemed too burdensome to employees won’t be held up in a Michigan court.

Other contractual tools employ-

SOURCES: FTC, MICHIGAN CHAMBER OF COMMERCE, LEGAL EXPERTS

ers can use to protect themselves include nondisclosure agreements, con dentiality agreements and nonsolicitation agreements. ose would still be allowed under a federal ban of noncompetes, but only if they were narrowly tailored and did not function as noncompetes, Hazimi said.

“I tell people to think about what business interests they’re really seeking to protect,” she said.

Fuhs recommends that companies conduct an immediate audit of their employment agreements to make sure noncompetes are reasonable and that trade secret provisions are updated, adding another layer of security. O cials should also pay attention to which employees have access to privileged information.

“If you can’t enforce a noncompete contract, you need to make sure the trade secret, say, the Coca-Cola recipe, is truly secret and protected,” he said.

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

Oxford getting $35M freestanding emergency department

McLaren Health Care building facility to capitalize on scarcity of health care in community

BY DUSTIN WALSH

As populations continue to push farther into the suburbs, health systems are expanding as well.

McLaren Health Care broke ground last month on a $35 million rebuild of its McLaren Oakland operations in Oxford, 17 miles north of its main hospital in Pontiac, and is constructing a freestanding emergency department.

e Grand Blanc-based health system is attempting to capitalize on the scarcity of health care in the Oxford community. Patients seeking hospital or emergency care have to travel north to Lapeer and Flint or south to Pontiac.

“For us, looking at the Oxford location, there is a much-needed increase in level of care and access to higher acuity services,” Tracey Franovich, president and CEO of McLaren Oakland, said in an interview. “A freestanding emergency department made sense to us, because it’s more comprehensive than the existing urgent care we have there. We see patients come from the Oxford area to our main campus in Pontiac, so it really seems to make sense to provide a higher level of care.”

e construction of freestanding emergency departments has risen in popularity in recent years as health systems compete for more patient populations and aim to keep them within their networks.

“It’s an access point into the health system,” said Franovich. “ ere’s not a lot of access to care in Oxford and the population is growing fairly

quickly, so having those ambulatory access points is really important, especially after the pandemic. People don’t want to go to the hospital, so we can provide them with better care with some type of diagnostic procedure or imaging and create an established relationship.”

Sparrow Health, which was acquired by University of Michigan’s Michigan Medicine last month, opened a freestanding emergency

department in Okemos last year. e goal was to access patients who may be routed by emergency medical services to competing hospitals, such as McLaren Greater Lansing Hospital.

A freestanding emergency department is much cheaper to build than a hospital. Franovich pegged a freestanding emergency department at roughly $1 million per bay. A new hospital build in 2023 costs as much as $4 million per inpatient bed, ac-

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cording to John Bodine, managing director of Chicago-based advisory rm Huron Consulting Group.

“Adding capacity is really expensive,” Bodine said.

In Oxford, McLaren Oakland will replace parts of its existing facility, which include an urgent care, and add more services, including more primary care operations as well as specialists in cardiovascular, gastrointestinal and orthopedics. Franovich

ENVIRONMENT

called them the “bread and butter” of specialties.

e emergency department build will result in a 54,000-square-foot facility that can accommodate upwards of 20,000 emergency visits annually.

e new facility is expected to be open in fall 2024.

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

Jeep plant in Detroit hit with another air quality violation

BY KURT NAGL

Stellantis NV has been hit with another air violation notice from the state — it’s 11th for air pollution in metro Detroit in the past two years.

e violation notice was issued ursday for objectionable paint odors from the Mack Assembly Plant in Detroit, where the new Jeep Grand Cherokee models are built, according to a copy of the notice issued by the Michigan Department of Environment, Great Lakes and Energy’s Air Quality Division.

“During the investigation performed on May 9, 2023, AQD sta observed persistent and objectionable paint/solvent odors of moderate to strong intensity” that constituted an “unreasonable interference with the comfortable enjoyment of life and property,” the notice said.

“We are investigating this occurrence and will respond to EGLE as required,” Stellantis spokeswoman Jodi Tinson said in an email.

For violations in Detroit, Stellantis entered into a consent order with EGLE last year, which called for a $270,203 ne and the installation of a regenerative thermal oxidizer by next month. e automaker has said that piece of equipment will solve the odor issues, which arose shortly after pro-

duction started.

“We have been working to complete the installation of the new regenerative thermal oxidizer and have it operational as quickly as possible to permanently resolve the odor issue,” Tinson said. “Even as that work is ongoing, we are operating interim odor controls, which have reduced odors.”

e violation comes as o cials consider approving permit requests by the automaker to increase pollution levels at its Detroit plant and Warren Truck Assembly Plant. At the same time, the U.S. Environmental Protection Agency is probing EGLE for alleged “environmental racism.”

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

A rendering of the planned McLaren Oakland freestanding emergency department in Oxford. | MCLAREN HEALTH CARE

A violation notice was issued Thursday for objectionable paint odors from the Mack Assembly Plant in Detroit. | NIC ANTAYA/CRAIN’S DETROIT BUSINESS

Van Dyke’s new PR, creative agency overcomes bumpy start

BY JAY DAVIS

Detroit-based public relations and creative rm VVK PR & Creative overcame some early hurdles to end with a solid rst year in business.

e company launched April 25, 2022, following co-founder Peter Van Dyke’s March 2022 departure from Van Dyke Horn Public Relations LLC, where he had been CEO for six years and a partner for a decade prior to that.

A lawsuit led in May 2022 by executives of Van Dyke Horn accused VVK PR & Creative principals Jamie Kaye Walters, Michael Sherman and Van Dyke of stealing trade secrets and clients after Van Dyke was unable to buy out partner Marilyn Horn. A settlement was reached earlier this year.

“ at issue has been settled,” Van Dyke said.

Horn and Georgella Muirhead rebranded Van Dyke Horn as 98Forward. O cials there did not respond to requests for comment.

VVK PR & Creative, operating out of Detroit event and co-working space Chroma, said it surpassed revenue projections and expanded its team and client roster. e principals of the company expect that growth to continue.

“You set high expectations, but there’s also probably a little bit of trepidation, too, with any kind of startup,” Van Dyke said. “We’ve been super fortunate. It’s really the trust of the team and trust our clients have placed in the three of us. e first year went wildly beyond our expectations.”

VVK in its first year posted $2.4 million in revenue, about $400,000 more than it projected, and is on track to hit $2.8 million in revenue this year, according to Van Dyke. The company, which started with a staff of seven, is now up to close to 20 employees. Among the staff VVK added over the last year are Laura L’Esperance, senior vice president; Stephen Jones, senior account executive; Evan Webb, account executive and digital specialist; PR coordinators Ciara White and Zakiyyah Wade, and video editor Dyan Bailey.

VVK has also grown its list of clients from eight to more than 40, including the Ralph C. Wilson Jr. Foundation, Invest Detroit and Somerset Collection. VVK aims to broaden its client base beyond nonpro ts, insurance companies, real estate, hospitality, corporate and legal clients.

e agency o ers services in public relations, video production, digital media, media relations, public a airs, issues and crisis management, stakeholder and community relations, event production, and organizational and executive positioning. It plans to add to its services in the next year and expand into other markets in Michigan and the U.S., Van Dyke said.

e co-founders tout the diversity of the company as a strength. Walters said diversity of thought is what

sets VVK PR & Creative apart from other agencies in the same space.

“ ere’s diversity of thought in this partnership and there’s diversity of thought with the new people we’ve brought in, people we brought over from Velocity Cow, and people (Van Dyke) has worked with in the past,” Walters said. “In starting a new company, there’s a lot of guring things out, planning things out, things that just come up. I think that’s been really helpful on the internal operations side with how we run and work as a team.”

e group came together with years of experience in their respective elds. Van Dyke is a 20-year PR veteran. Walters spent more than 18 years with WDIV-TV as a senior programming producer, and creative services and programming director. Sherman before starting Velocity Cow worked as a freelance video editor and spent two years with WDIVTV as a freelance editor and motion graphics designer.

VVK PR & Creative includes Velocity Cow LLC, the video production company Walters and Sherman started in 2008. Sherman, who lives in South Carolina but comes to Detroit when the need arises, said the move made sense but there were some concerns to be addressed.

“We had some clients who had some questions about the move. ey wanted to know if they’d be getting the same level of service we had provided,” Sherman said. “ ere was some reassurance. Jamie and Peter have known each other for years. A lot of my clients were in Detroit and the metro area and they know Peter. We’d been working with a lot of our clients for six or seven years, so it was natural for them to want to know that things weren’t going to change.”

e latter part of the year will be big for VVK, Walters said.

e company has plans to move into a new, larger undisclosed Detroit space. Van Dyke said the change will help VVK PR & Creative better serve its customers and its sta .

“ e goal is to expand services.

ere’s so many more states out there we can go after,” Walters said. “We have to make sure we’re sta ed in the right way and make sure our sta looks like the community we serve, and to be a little more targeted as far as going after the certain types of clients we want.”

VVK is also using its success to help shape the next generation of PR pros and creatives.

Van Dyke, a graduate of Wayne State University, and his partners have developed the VVK PR & Creative Student Scholarship at WSU.

e needs-based scholarship is open to students studying video production, graphic design, digital design and public relations. e company made a three-year commitment of $7,500, giving one $2,500 award each year.

“We want this scholarship to be reflective of this company,” Van Dyke said. “I think it reflects the integrated nature of our company and it allows us to give back to students who have a need and a barrier to graduating in multiple disciplines.

“Usually in the rst year, all the money goes back into the business. A lot of money has gone into the business. But we got into a position where we could start to give back in a way that was really meaningful and longer lasting.”

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

Co-founders expect continued growth in 2023

VVK PR & Creative co-founders Michael Sherman, left, Peter Van Dyke and Jamie Kaye Walters in the company’s rst year exceeded revenue projections by about $400,000. The company also added to its sta and client list. | MARVIN SHAOUNI

Cleaning clothes is just one mission of new laundromat

Business o ers community services, support

Already an entrepreneur, Dr. La Cesha Brintley is concerned about much more than her bottom line as she launches her newest business.

Last month, the Detroit native opened Our Community Laundromat at 15429 Schaefer Highway on the city’s northwest side with a purpose. Alongside washers and dryers, the Bethune Community neighborhood business o ers services supporting youth, seniors and small businesses.

It’s equipped with 46 washers and 43 dryers, and each machine costs between $3 and $10 to operate.

Brintley gives some quarters back through a “Wash and Read” program she’s implemented. Children who participate in the program earn coins for nishing books from a small library inside the laundromat which go toward their family’s laundry services.

“I just remember seeing how kids su ered during the pandemic, particularly kids in our community,” Brintley said. “Literacy rates and test scores were already not so great, but the pandemic made that worse. Focusing on reading is important to me. It’s a very basic thing that honestly not a lot of people can do. I want to see these kids succeed and that starts with reading.”

e laundromat has priority service hours for seniors 7 a.m.-noon each Tuesday, during which seniors can also participate in social activities such as exercise classes and enjoy food and entertainment.

Brintley also uses a section of the building as a pop-up shop where small business owners can showcase their o erings at no charge.

e small business owner also plans to implement a Community Conversations series that will focus on a variety of topics. e rst, on sleep apnea, is set for 10 a.m. June 24.

“You have to pay it forward,” Brintley said. “I’ve been blessed to have what I have, so I’m going to bless someone in front of me. at’s what I’ve been called to do. Doing something like that comes at no cost.”

Giving back

Making a di erence is what Brintley tries to do in all of her businesses.

e Farmington Hills resident is a general surgeon by practice. e graduate of the University of Michigan Medical School owns L. Brintley MD PLLC and Delphine Home Aide Services LLC at 2617 W. Grand Blvd. in Detroit. e 50-year-old also runs a nonpro t called Galaxy Puri ed Water, selling bottled water to fund scholarships for students interested in STEM and space exploration.

“I’ve been able to at least try to help a lot of people,” she said. “ at’s the focus of all of my businesses. I know I’m one person, but I believe one person can make a big di erence.”

Detroit resident Ron Pruitt shares Brintley’s vision.

Pruitt manages Our Community Laundromat and has performed a lot of the renovation work of the space. He also worked on the construction

Entrepreneur La Cesha Brintley last month opened Our Community Laundromat on Detroit’s northwest side. In addition to having nearly 90 washers and dryers, the business o ers enrichment programs for children and seniors. JAY DAVIS/CRAIN’S DETROIT BUSINESS

For the community

Our Community Laundromat o ers more than clothes cleaning services. Following is a look at some of the enrichment programs it o ers: Wash and Read: The program promotes reading by o ering youngsters coins for nishing books. The coins go toward their family's laundry services.

Senior services: The laundromat o ers dedicated wash times for seniors from 7 a.m.-noon each Tuesday. Seniors can also participate in activities such as exercise classes.

Community Conversations: A series of talks focused on subjects affecting the Black community. The first, on sleep apnea, is set for 10 a.m. June 24.

of Brintley’s medical practice.

Pruitt said Brintley’s newest business has the potential to be a beacon of light for the community.

“(Brintley) is all about giving back to the community,” Pruitt said. “We haven’t been open too long, but we get kids in here reading the books all the time. e older residents like the exercise classes. is can be a beautiful thing.”

Eggs in one basket

Brintley purchased the 8,600-square-foot space in June for $230,000 and so far has put about $1.2 million into the business, installing a new roof and making it over.

Brintley said to fund the business she’s used her retirement and life insurance accounts, in addition to taking out personal loans. Brintley also earned a $75,000 cash grant from Motor City Match last year.

“When I started to see my money

go down in the (stock) market, I decided to take it out and invest in something with a better (return on my investment),” Brintley said. “I grew up in the Highland Park area. I had a conversation with the Lord one night about a laundromat at Woodward and Six Mile. I’d been there a lot and I remember it being dilapidated and needing work. I wanted to change the outlook of that neighborhood, but it didn’t work out.

“ en I found the space on Schaefer. e previous owner had a commitment to sell to a Black entrepreneur and keep the business in the Black community. We bonded over that. ... is isn’t just a laundromat. It’s an investment in the community.”

Fail-proof business

Brintley has entered an arena in which it is di cult to fail.

e laundry industry has about a 95% success rate, with businesses av-

eraging 20%-35% ROI, according to Martin Ray Laundry Systems LLC. Brintley’s is one of about 35,000 laundromats in the U.S., a network that brings in about $5 billion in annual revenue.

Brintley did not provide speci c revenue gures or projections for her laundromat.

“With the space we have, the amount of washers and dryers we have, the capacity for high earnings potential is great,” she said. “As we generate more revenue, we can pour more into the city through various programs like what we o er now.”

Detroit o cials share that hope.

Sean Gray, Detroit Economic Growth Corp. vice president for small business services, said Our Community Laundromat has the potential to be a mainstay in the area.

“Laundromats have been a mainstay in communities for decades, but not all are created equal. Our Community Laundromat is not only pro-

viding an essential service for Detroiters but giving back to the community substantially,” Gray said in a city news release in March. “We hope its opening will inspire others to make a di erence in their neighborhood.”

Brintley believes the laundromat can be a place that helps Bethune Community residents grow.

“I remember as a kid seeing neighbors all the time, just people being around celebrating one another, protecting one another,” Brintley said.

“We all have the potential to help one another — take each other’s hand and guide each other. at’s generational. I know that’s why I’m here. It would have been easy to just open a business and try to make money o of it, but this is more than that for me. is is something that I think can transform the neighborhood and the people in it.”

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

DAVIS

Entrepreneur La Cesha Brintley so far has invested about $1.2 million into Our Community Laundromat. The business, in Detroit’s Bethune Community neighborhood, is equipped with 46 washers and 43 dryers. | JAY DAVIS/CRAIN’S DETROIT BUSINESS

2 Michigan Big Brothers Big Sisters a liates to merge

Detroit, Washtenaw County organizations to combine, triple number of children

SHERRI WELCH

Two Michigan Big Brothers Big Sisters a liates have agreed to merge in a move they expect to enable them to triple the number of children they serve each year.

Big Brothers Big Sisters of Metropolitan Detroit and Big Brothers Big Sisters of Washtenaw County, two of the state’s largest chapters for the national mentoring nonpro t are coming together to create Big Brothers Big Sisters of Southeast Michigan.

e merger, expected to benalized in the third quarter, will create an organization with 25-30 employees at ofces in Detroit and Ypsilanti, operating on an annual budget of about $2.3 million. No employee cuts are planned.

Jennifer Spitler, CEO of the Ypsilanti-based Washtenaw County a liate for more than 20 years, will lead the merged organization.

e two organizations’ decision to join comes just shy of six months after Spitler took on oversight of the Detroit-based a liate when its former CEO departed within months of taking the role.

“ e next chapter for Big Brothers Big Sisters in the southeast Michigan region is exceptionally bright — and most importantly, it will result in even better, truly life-changing experiences for thousands of Bigs, Littles and families a liated with both of our organizations,” Kathie Patterson,

HEALTH CARE

chairperson of BBBS of Metro Detroit, said in a release.

Patterson will lead the new 29-member merged board for the combined nonpro t, while Gregg Hammerman, president of BBBS of Washtenaw County’s board, will serve as vice chair.

“Each organization has an amazing group of volunteers, sta , and supporters with a strong history of youth mentoring,” Hammerman said

Izzo name to adorn new medical center in Lansing

MARK SANCHEZ, CRAIN'S GRAND RAPIDS BUSINESS

e developer behind a new medical center in Lansing is naming the facility after longtime Michigan State University men’s college basketball coach Tom Izzo and his wife, Lupe.

e $25 million clinic on McLaren Health Greater Lansing’s new health care campus will carry the name “Izzo Family Medical Center” in recognition of Tom and Lupe Izzo’s support for numerous causes and charities in the Lansing area, and for what Gillespie Group founder and CEO Pat Gillespie calls their “positive contributions to the region.”

e Izzos also are investors in the project.

“ ey do so many things in this community that go unrecognized. We just thought it would be a great way to celebrate what they’ve done, what they do and continue to do on a daily basis here in our community,” said Gillespie, who graduated from MSU in 1992 with a degree in construction management.

“It was tting,” Gillespie told Crain’s Grand Rapids Business. “Peo-

served

e Detroit a liate had, over the last couple of years, used contractors to do marketing and development, she said.

“Our goal is to bring a lot of the work in house so we are sharing centralized, full-time employees.”

e merger “will allow us to bring back-end services together and be able to do more with those centralized positions,” while also leveraging best practices at each, Spitler said.

By merging, the organizations expect to triple the number of mentoring matches between adult mentors and children between the ages of 8 to 18 in Macomb, Oakland, Washtenaw and Wayne counties to 1,500 within the next few years, she said, marking a return to pre-COVID numbers and then some.

ple just don’t realize what they do besides basketball for the community. For the kids, for philanthropy, for charities, and just for people that need support, they are there.”

e 68-year-old Izzo, who was inducted into the Naismith Basketball Hall of Fame in 2016, has served as head coach at MSU for 27 years and has been with the university for 40 years. When Gillespie approached Izzo about naming the new medical center after his family, he responded, “We don’t need to do that.”

“It took a little convincing,” Gillespie said.

Gillespie Group is developing the medical center through a partnership with McLaren Health, MSU Health Care and Corewell Health’s Helen DeVos Children’s Hospital.

e project is located on the $600 million health care campus that McLaren Health Greater Lansing opened a year ago in the University Health Park, adjacent to Michigan State University.

Targeted to open in June, the 63,000-square-foot Izzo Family Medical Center will house medical services that include medical imaging

in the release.

“Bringing the two organizations together will greatly expand our ability to provide mentoring relationships to more children in the region.”

e two a liates had been looking for ways to work better together to serve more kids for the past couple of years through things like joint grant submission, Spitler said.

“ is was just the right time to nalize a partnership,” given the leader-

ship transition and cost-savings opportunities coming out of COVID that will allow the combined organization to expand programming, she said.

While both a liates have had fundraising challenges during COVID, both have had solid cash ows, Spitler said.

Financials for 2022 for both are still being nalized. But both showed an operating excess after covering costs in 2021.

BBBS of Metropolitan Detroit operates on a budget of about $1.3 million with nine sta members who have worked remotely and from ofce space at Durfee Innovation Society center in central Detroit since the nonpro t exited longtime leased space in the city in 2021. As of last fall, BBBS of Washtenaw County has 13 employees and a $700,000 annual budget, Spitler told Crain’s. e merger comes just over two years after Big Brothers Big Sisters of Lower West Michigan and South Bend, Ind.-based Big Brothers Big Sisters of St. Joseph County joined in January 2020. Following the merger of the two Southeast Michigan a liates, there will be 12 total BBBS a liates in the state, Spitler said.

Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

such as CT, MRI, X-ray and ultrasound, plus provide room for medical research and education through MSU Health Care.

For DeVos Children’s Hospital, the development provides an opportunity to expand care in Lansing through an existing partnership with McLaren Health that goes back to 2007. e collaboration will alleviate the need for patients and their families in the Lansing area to travel to Grand Rapids for specialized pediatric care.

“ e collaboration of expertise be-

tween McLaren, MSU Health Care, Corewell Health and Gillespie Group is a great example of the work needed to advance and secure our community’s well-being,” Izzo said in a statement.

Dark green signs for the Izzo Family Medical Center were to go up last week on the south side at the building’s main entrance and in the lobby. Naming the clinic after somebody of Izzo’s stature ts well with the strong health care brands that will occupy the space, Gillespie said.

“ ose are all great brands for our community. How tting is it to have Tom and Lupe and the Izzo family medical facility be in keeping with that? ( ey are) all great brands doing great things for the community. We just thought it all went hand in hand,” he said.

Greater McLaren Lansing President and CEO Kirk Ray said that naming the medical center after the Izzos should “enhance the visibility of these services, and we’re thankful for their association.”

Gillespie Group is naming a new McLaren Health medical building in Lansing after Tom and Lupe Izzo. | GILLESPIE GROUP

Big Brother Mike of Comcast-NBC Universal, and “little” Tameya, a fellow third-grade classmate, take a break from basic budgeting activities to celebrate Sincere’s birthday during a recent program day hosted at McIntyre Elementary in South eld by Big Brothers Big Sisters of Metropolitan Detroit. The organization does not disclose last names of participants. | BIG BROTHERS BIG SISTERS OF METROPOLITAN DETROIT

Spitler

PEOPLE ON THE MOVE

CONSTRUCTION

Brinker

Larry Brinker Jr. announces strategic changes to further strengthen and diversify its leadership. “This is not a topdown change. It’s one that culminated from listening to our employees, customers, partners, prospects and competitors,” says Larry Brinker, Jr. “Each move is purposeful in reinforcing the strong foundation my father built 34 years ago and expanding on it for generations to come.” Larry Brinker, Jr., continues to serve as Brinker’s CEO, while Brinker, Sr., continues to reside as Chairman.

CONSTRUCTION

Brinker

Trey Zackery joins Brinker as Vice President and member of the Executive Team to help drive Business Development and future growth. Zackery is an entrepreneur whose roots and values are a natural t with the Brinker family of ve companies. With deep experience in sales, leadership, business ownership, and consulting, he understands the client perspective and how the company’s industry-unique service offerings can bene t and bring greater value to clients and partners.

CONSTRUCTION

Brinker Brinker names Brian Farhat Chief Administrative Of cer. Farhat joined Brinker in 2019 as CFO and most recently served as COO. He has played a pivotal role in partnership with CEO, Larry Brinker, Jr. to operationalize the One Brinker approach, helping drive collaboration, process, and compliance across their general contracting/ construction management company and four independent self-perform companies. In his new role, Farhat will take these efforts to the next level.

CONSTRUCTION

Brinker

CONSTRUCTION

Brinker

CONSTRUCTION

Brinker

L.S. Brinker, the general contracting/ construction management company of Brinker, promotes Scott Oikarinen from Operations Manager to Vice President, Operations. Oikarinen will provide management to eld teams from project award to close-out monitoring performance as it relates to quality, schedule, cost, and safety, as well as subcontractor, joint venture and owner relations. A builder by trade, he joined the company in 2007 and is known for his strong, steady, resultsdriven leadership.

CONSTRUCTION

Brinker

Brinker announces

Justin Krebs as Executive Vice President of Universal Glass and Glazing, one of its four self-perform companies. A 20-year industry veteran, Krebs learned the business from the ground-up, building a depth of experience in Detroit and the Midwest. In 2021, Krebs joined the company for its longstanding reputation for quality work and in this role implemented even more quality control, ef ciency, and integration in the manufacturing process from the facility to the eld.

As Brinker implements changes across its leadership team, Domenic Maiuri is promoted from Controller to Chief Financial Of cer. Maiuri has been a part of the Brinker family for more than 20 years helping institute cost-saving methods for the company and its clients.

After 17 years of managing day-to-day operations of Brinker Team Construction, a Brinker company, Paul Bitar is named Brinker’s Chief Operating Of cer. A 35-year industry veteran, Bitar will integrate his eld and business expertise across all ve companies, bridging eld and of ce operations, optimizing ef ciencies, and implementing changes for an evolving market. He will also oversee the award-winning safety team managed by Dan Gadbois. As Bitar steps into his new role, Howard Morrow becomes Executive Vice President, Brinker Team Construction. Morrow worked alongside and under Bitar’s leadership for many years. He started as a carpenter apprentice in 2002, earned a coveted industry award in 2008 and held every position to date.

Agnes Arbuckle recently joined L.S. Brinker, a Brinker Company, as Executive Vice President.

Arbuckle has 30 years of general contracting and construction management experience, including in the eld and on the owner side of the business. She’s worked in multiple states, across many markets, including healthcare, education, and building technology. Arbuckle also joins the Brinker Executive Team and is passionate about her team and driving diversity and inclusion in the construction industry.

CONSULTING

Ducker Carlisle

The Board of Directors of Ducker Carlisle is pleased to announce the appointment of Paul Gurizzian as President and CEO, effective May 5th, 2023. Paul has most recently served as Ducker Carlisle’s President in North America and was CEO of Carlisle & Co., prior to the merger of Ducker and Carlisle in 2022. Paul brings over 40 years of experience leading consulting teams and organizations as well as operating business experience across automotive and industrial sectors with multinational rms.

PROFESSIONAL SERVICES

ASG Investigations

ASG is proud to announce the addition of Greg Suhajda to our executive team. Greg brings an astonishing level of experience and investigative expertise derived from his career in both the public and private sectors. He specializes in corporate investigations, intelligence gathering, M&A due diligence, corporate espionage, cyber threats, physical security, threat assessment and surveillance. He was a Former Special Agent with the FBI and Former Special Agent with the U.S. Secret Service.

Maiuri

Farhat

Morrow

Bitar

AUTOMAKERS

EV world is battery management systems,” Barrott said. “ ey are being very protective about that. But what that means is their focus and their capital to support other areas of development of the vehicle and components lessens.”

An automaker typically purchases about 70 percent of a vehicle from suppliers and provides 30 percent of the value in house. Automakers have tightly controlled the supply chain since the Great Recession, which sent them on a survival mission to drive down costs wherever possible.

But micromanaging is no longer a viable strategy when speed and innovation are now the keys to survival.

e seating business is a prime example of how the automakers have shifted their parts supply strategies over the decades, Doug Del Grosso, CEO of Adient plc, told Crain’s in a recent interview.

“It’s almost gone full circle. When the seating business started, the seating suppliers had very little capability,” Del Grosso said. “Over the course of time, they built that competency to be a complete seat supplier. A lot of it was done through divestitures and acquisitions of what was formally in-house capabilities of the OEs.”

After the economic downturn in the late 2000s, which hit the auto industry especially hard, automakers tightened the leash on suppliers and began directing sourcing strategies for better visibility on costs, Del Grosso said.

“Prior to the Great Recession, a seating supplier like Adient would be sourced kind of black box, and we would control the supply chain, some of which was vertically inte-

HOME POINT

From Page 1

Shares of the company ursday morning were up nearly 20% right after markets opened.

Home Point’s workforce has dwindled signi cantly over the past year and more following multiple rounds of layo s and the sale to the Loan Store.

Remaining employees were informed that the deal with Mr. Cooper means their “end dates” with Home Point will be communicated “in the coming days,” according to a letter from Home Point President and CEO Willie Newman that was included in a U.S. Securities and Exchange Commission ling ursday morning.

“Additionally, there may be potential opportunities for you to apply for new roles at Mr. Cooper, and those details will be made available in the coming days and weeks,” Newman wrote.

“I think Home Point did pretty well,” Guy Cecala, executive chairman of industry trade publication Inside Mortgage Finance, told Crain’s on ursday morning. “ ey’re not going to exist (any longer) ... but to nd buyers, that’s not easy in this environment.”

e environment mentioned by Cecala consists of elevated interest rates that have hammered the renance side of the business and left many a home buyer waiting to see if rates stabilize or come down; as well as a di cult residential real estate

grated, some of which was bought on the outside,” he said.

Wrestling over control of the supply chain created friction between suppliers and OEMs, which boiled over when the pandemic sparked a supply chain crisis. Suppliers bore most of the pain, but it also gave them more negotiating power with customers.

Now, the transition to EVs provides new opportunity for suppliers, particularly large tier ones that are either insulated from the EV shift — such as seat makers — or those that have strong engineering capabilities and can adapt quickly, Barrott said.

“ e emphasis that we’ve seen mainly on the bigger suppliers is that they’ve been encouraged by the OEMs to bring in more of a complete solution, more of a design aspect to the component,” he said. “ e OEM is less interested in maintaining complete control over a lot of these aspects.”

Del Grosso will gladly take that work o their hands. Pacing for $15 billion in revenue this year, Adient is among the world’s largest auto suppliers. It has invested signi cantly in research and development in recent years, evidenced by the newly renovated, 365,000-square-foot Plymouth Technical Center, which serves as the supplier’s North American base. e company has 3,000 engineers globally working on seating design.

Adient and other suppliers, including competitors Lear Corp. and Magna International, are aiming to position themselves as cutting-edge designers and tech companies instead of merely just manufacturers. Even for parts as primitive as seats, those companies are looking for an edge with sleeker design, thermal comfort and more environmentally sustainable material — aspects automakers are now happy to outsource, Barrott said.

market where limited inventory keeps home prices high.

Indeed, executives at two of Home Point’s leading rivals — Pontiac-based United Wholesale Mortgage and Rocket Companies Inc. in Detroit — say they have little to no interest in jumping on the M&A train, even as more distressed opportunities are likely to pop up.

“I’m so big on culture here ... it’s hard to not have anyone that’s not in our four walls,” Mat Ishbia, chairman and CEO of UWM, said recently in a roundtable discussion with reporters.

“So acquiring companies ... I look at everything, but I’m not going to do that right now,” Ishbia said. “My belief system is we have the business model that everyone wants. I don’t need to go get someone else’s business model and add it to mine. If I wanted to build their business model, I could do that, too. We’ve chosen the best business model — the perfect business model — that dominates in purchase (lending), that’s got the upside of re nances, when they come, and the upside (is that) the broker channel is growing.”

Likewise, executives at Rocket Companies, the parent company of Rocket Mortgage, say they are “opportunistic” when it comes to exploring mortgage M&A, but very few deals are of interest.

“We have to ask ourselves, what would we be buying?” Brian Brown, CFO at Rocket Companies, told analysts on an earnings call earlier this month.

“ ey just don’t have the capacity to manage all aspects of the vehicle,” Del Grosso said. “Some of our customers have gone fully back and said ‘no, I’m just going to source you the complete system. You’ll present us how you’re going to source the subcomponents, but I’m ultimately going to leave that decision to you.’”

e seating CEO said its customers around the world, including in North America, have either adopted that strategy or are warming up to it. Crain’s reached out to Stellantis NV, Ford Motor Co. and General Motors Co. for comment.

“We just move faster than when the customer is trying to navigate all of that,” Del Grosso added. “It just shorts up that decision-making tree, and it allows us to get things done quicker for them.”

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

“On the positive side, valuations have come down,” Brown said. “But we’re not interested in buying loan o cers. Of course we can take a look at technology, but in almost all cases, we nd that our technology is much more advanced than what we’d be buying.”

Brown added that acquiring portfolios of mortgage servicing rights, such as what Home Point is selling to Mr. Cooper, could be of interest, and the company has done so.

Put the comments from Ishbia and Brown together, and you’ve got the two biggest players in the mortgage industry close to ruling out any signi cant acquisitions during a period of tumult for many players in the space. And indeed, pro tability has remained elusive for multiple quarters for both of those companies.

Home Point is unlikely to be the only mortgage lender seeking buyers as the industry remains contracted. With a dearth of buyers, many might just simply turn o the lights, according to Cecala.

So what does that mean for companies like Rocket and UWM who are more equipped to weather the storm?

Most likely, the big get bigger, Cecala said.

“To the extent that a third or a quarter of their smaller competitors go out of business or get acquired, that’s likely to bene t them,” he said. “ ey’ll pick up the business.”

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

PATH (Partnership. Accountability. Training. Hope.) employment program, Food Assistance Employment and Training (FAE&T), Wagner-Peyser Employment Services (ES), and other public and private funding. The Corporation enters into contracts with qualified entities to provide workforce development programs and services to job seekers and employers. American Rescue Plan Act (ARPA) and Midwest Urban Strategies - Growth Opportunity Grant funding may support contracts resulting from competitive bid process. DESC is seeking proposals from qualified individuals, organizations and/or firms Bid package for this RFP is available for download at this DESC website: https://www.descmiworks.com/opportunities/rfps-and-rfqs/.

Adient has 3,000 engineers globally working on seating design. | ADIENT

In hunt for jobs, Detroit welcomed heavy industry to neighborhoods. Residents are ghting back

For 15 years, Vanessa Butterworth has battled environmental injustice for Greenpeace and elsewhere. So when she learned a concrete crushing facility had been proposed for her Core City neighborhood, she knew just what to do to ght back. at didn’t make it any easier.

She organized neighbors, communicated with o cials, planned press conferences and researched the property’s owner, spending an estimated 10 hours a week on her effort to rebu the operation. But still, the ght is ongoing. ere are appeals to wait out and cleanup to advocate for.

“I feel like I’m losing years of my life,” Butterworth said. “Our communities have to spend their time ghting draconian, egregious proposals. ... It’s horrible what’s happening to people, it’s absolutely horrible, and the city knows it.”

Butterworth’s success marked a rare but increasingly common victory against the overlap of homes and industry for residents in a city where development long predates zoning laws and disruptive uses frequently abut homes. Concrete crushing, asphalt mixing and automotive manufacturing are among the many operations that put business owners in con ict with residents in their own backyards. e city of Detroit has long worked to lure much-needed jobs to the city, but has also gone to bat for residents a ected by industrial operations. And the con ict between industry and neighborhood is taking on increased importance as the city works on a new master plan.

In a blight-related lawsuit last month against the concrete crushing plant — and in a letter from Mayor Mike Duggan to the city’s Zoning Board of Appeals — the city has supported the neighborhood’s e orts. But for Butterworth and other neighbors, there are still possible appeals, and there’s the matter of the property itself, which “is covered with large mounds of dirt, concrete debris, and other solid waste,” according to the lawsuit.

Butterworth wants it cleaned up; she said dust is blowing all over the neighborhood causing health issues and discomfort.

Murray Wikol, a member of landowner Can-Am International Trade Crossing who was sued by the city for blight on the property, said the proposed concrete crushing facility would be small, contained and have high-tech air monitoring systems. He doesn’t understand why residents are so concerned.

“ ere are hazards way worse than this,” Wikol said. “We have guns, we have meth, we have robbery.”

City planners said about 16% of the total land in Detroit is zoned for industry. For eresa Landrum, a Southwest Detroit community advocate, that means there are plenty of other places Wikol’s concrete crusher could go. She said the Core City property is prime space for development that would o er amenities for residents.

“ ey want to create a neighborhood again,” she said. “Why would you want something like that in the middle?”

A balancing act

Wikol said he cares about the city and its future, but that his property has been zoned for industrial use for decades. If residents win, he said, it’s possible that there would never be any new industry in the city of Detroit.

“I cannot see how that is sustainable economically,” he said.

Instead, Wikol says, if Detroit wants to get industrial zoning out of neighborhoods, it should work with landowners — like himself — to look for other places to put them.

“People who are residents should be safe and secure and have a vibrant community,” he said, “but to do that, in my opinion, you need jobs.”

Heavy industry does bring jobs to a city that has long had high unemployment: Even outside of auto manufacturing, it accounts for more than 9,000 jobs in the city of Detroit in 2022, according to data from the Workforce Intelligence Network.

Duggan has made job creation a top priority for the city since he was rst elected nearly a decade ago. At Detroit Homecoming in 2019, he touted e orts to bring two plants from Fiat Chrysler (now Stellantis) to the city and pushed for more clearing of land to make way for job-creating industry.

“We know that if we can deliver quickly, cut through the bureaucracy, get the permits done quickly that we’ve got the workforce here that wants to work hard and be trained — and we think that’s the formula,” Duggan told attendees at the time. “And now I just have to assemble some more land. We gotta clear it.”

Critics say it’s that lure of jobs that has long led Detroit o cials to support land uses that aren’t compatible with healthy neighborhoods.

Wendy Caldwell-Liddell, a community organizer who’s the planning and development manager at advo-

cacy organization Detroit People’s Platform, said there are some days she loses sleep over ghts to protect residents’ health from industrial pollution.

“We are so development-thirsty here, we don’t take a moment to consider the e ects. What you’re telling me is their pro ts matter more than my health,” she said. “It makes me feel like residents just get thrown in the trash.”

Caldwell-Liddell said she wishes government leaders would take more initiative to reduce the amount of industrial land in the city. She said the fact they haven’t is a re ection of their priorities.

“I always thought our community would be more creative with what they did with those industrial areas,” she said. “I would think they would rezone, remediate the site, generate real value.”

Detroit didn’t have its rst zoning laws until the 1940s, said Rory Bolger, a city planner/zoning specialist with the city planning commission in the legislative policy division — long after the city had already been built up. By then, residents were used to living near auto plants and other industry, though their acceptance of such closeness has changed over the years.

Now, city planners have begun to down-zone some properties ahead of a new master plan for the city, the rst since 2009. And some members of City Council said they think it’s high time for Detroit to take more action to further separate residents from the noise, scents and pollution that come with heavy industry.

Detroit City Council Member Gabriela Santiago-Romero said she’s asking for more vegetation and distance requirements between industry and residences. She also said the city can sometimes be too lax in what it allows, and she supported revoking business licenses for existing compa-

nies that out the rules — including those with unpaid tickets and nes. When industry is too close to where people live, she said, it takes away opportunities for the things people want to see in their neighborhoods. It also has other costs, including those to mental health.

“Constantly having to be on the defense, it leads to constant stress and fear, which leads to anxiety,” Santiago-Romero said. “ at’s a true cost.”

What is fair?

Sen. Stephanie Chang, D-Detroit, said she has proposed legislation in the past that would require a certain bu er between industry and homes. Buyouts, like those that are occurring near the under-construction Gordie Howe Bridge and have been proposed by City Council near Stellantis, should also be on the table, she said. But Chang said zoning happens at a local level.

Bu er discussions are often about how many hundreds of feet away from industry people should live. But for Landrum, even that’s too close. She said she’d like two or three miles of open space between residents and industry. It would help o set the noise pollution, as well, she said.

“How do we coexist in a safe, clean environment with industry?” she asked. “You put homes further away. You cannot put industry in the middle of the city like that.”

Sometimes, though, even miles feel insu cient.

Marsha Bruhn lives four miles away from what was a proposed asphalt plant, but she’s one of the leaders of the successful ght to stop it.

Bruhn, a past president of the North Rosedale Civic Association and the former director of the city planning commission, said she heard about the proposal only because a

neighbor who works for Wayne County learned about it. e proposed asphalt mixing facility, at the South eld Service Drive site of the former Farmer Jack headquarters, was rejected by the city of Detroit in late 2021 after a ood of opposition. While Asphalt Specialists Inc. was only required to notify people within 300 feet of the facility, Bruhn based her opposition to its approval on the fact that wind patterns were likely to blow the odor into the Grandmont-Rosedale neighborhood.

“All the opposition came from neighbors to the north,” Bruhn said. “You have to always be vigilant. ... I think it’s a continuous challenge to be informed.”

No one from Asphalt Specialists returned messages seeking comment about the proposal.

Pam Weinstein, the coordinator of the Rosedale Park block captains and the past president of the Rosedale Park Improvement Association, said the city’s rules for industrial land use are outdated.

“One hundred years ago, it was completely routine for people’s homes to be cheek-to-jowl with a factory, with a mill,” Weinstein said. “ is proposal, these are ideas that are about 100 years old.”

One advantage of continued ghts, she said, is that communities are beginning to work together to o er help and hard-gained knowledge about how to oppose such proposals.

Grandmont-Rosedale has had neighborhood civic associations for a century, Weinstein said, giving them a solid framework to organize residents. ey also have Bruhn’s expertise, as well as others’ in the community.

“We had so many advantages,” Weinstein said.

Other communities do not.

Simone Sagovac, the director of the Southwest Detroit Community Benets Coalition, said there aren’t many

ARIELLE KASS

A home sits right up against what was going to be an asphalt mixing and storage site. | QUINN BANKS FOR CRAIN’S DETROIT BUSINESS

legal protections for residents near the under-construction Gordie Howe Bridge. Community bene ts agreements, instead of securing additional amenities for residents, have had to focus on mitigating the impacts of industry, she said.

“ e burdens we are laying on people for the bene t of so many — the cost to public health, the quality of life — don’t get factored in,” Sagovac said. “We need processes that are more empathetic. ... It’s so bad and the anguish is so extreme, what we’re putting people through.”

But Wikol said if Detroit is worried about the e ects of industry, the whole city is in trouble. Where his facility is proposed near I-96 and Warren Avenue there are already multiple highways bringing truck tra c that causes pollution, he said.

“If we’re against that, we should shut down all the roads, all the bridges,” Wikol said.

‘A sacri ce zone’

Even with improved networks, neighbors have to fend for themselves, said Raquel Garcia, executive director of Southwest Detroit Environmental Vision. ere’s no organized city apparatus to help protect residential areas, she said.

“ e city should be leading on this,” she said. “Residents have been talking about this for more than 30 years.”

Communities of color are particularly a ected by the “environmental racism” of industrial development, activists like Laprisha Berry Daniels said. Daniels, the executive director of Detroiters Working for Environmental Justice, said communities with fewer nancial resources tend to be targeted most often.

“Detroit’s being treated as a sacri ce zone, Detroiters are being treated as sacri ce people,” she said. “ ere’s an assumption that business will have its way. I would like for it to change.”

She said grassroots e orts are starting to make a di erence.

“I think we’re winning more ghts,” Daniels said. “We’re more aware of the ghts we need to be engaged in.”

Duggan, in his February letter to the Board of Zoning Appeals regarding Wikol’s property, wrote that he was opposed to the “very high-impact concrete crushing facility.”

“ ere is no doubt that the proposed use would pose an adverse public health, noise, and safety hazard for local residents,” he wrote.

He added that it would aggravate residents’ pre-existing conditions, expose them to harmful emissions and that the proposal lacked the proper screening to protect residents. While the land is zoned for industry, the concrete crushing operation would need a special permit to move forward, because of the impact it would have.

While Wikol said he thought there should be more opportunities for residents and businesses to work together on proposals such as his, Butterworth called it one of the most egregious proposals she’s ever seen.

“I don’t think it would have been rejected if we didn’t mount this ght,” she said. “We have to stay vigilant all the time.”

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

Detroit is an ‘asthma capital’ in the U.S.

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.

One of the most common complaints from Detroit residents who live near industrial areas is concerns about their health.

Questions of air quality in particular are a recurring theme. A 2022 report by the Asthma and Allergy Foundation of America showed Detroit had the third-highest prevalence of asthma in the country and was ranked rst as an “asthma capital.” A recent State of the Air report from the American Lung Association said Detroit was 12th-worst in the country for particle pollution.

Whether it’s particulate matter and dust created from crushing concrete, diesel from truck tra c or volatile organic compounds from paint fumes, people are being exposed to pollutants when they live near areas where those uses are prevalent, said Kathryn Savoie, the director of equity and environmental justice at the Ecology Center, an Ann Arbor nonpro t that focuses on environmental justice and education.

“All of this is happening in really close proximity to residential areas, which is a problem,” she said.

Very ne particles in the air can be particularly harmful because they can deposit in the lungs, said Edward Zoratti, the division head for allergy and immunology at the Henry Ford Medical Group. Zoratti said it’s particularly acute for people with preexisting conditions, because the e ects over time are cumulative.

Air-quality concerns helped Marsha Bruhn and Pam Weinstein defeat a proposed asphalt mixing facility at 12155 South eld Service Drive. Bruhn, the past president of the North Rosedale Civic Association and Weinstein, the past president of the Rosedale Park Improvement Association, said the prevailing winds that would bring potential pollution to their neighborhood would a ect residents’ health miles away.

“ e rates of asthma are through the roof and there’s no question it’s caused by proximity to all these uses,” Weinstein said.

Robert Shobe, whose house backs up to the Stellantis paint shop, said neighbors have moved away because they couldn’t breathe. A friend across the street died of a heart attack, and he wonders if environmen-

tal factors were to blame. Shobe carries an inhaler now, and said he worries he’s shortening his own life by staying in the home he’s lived in for 26 years.

An engine plant was already on the property when he moved in, but Shobe said the paint shop is much closer — just 401 feet from his door.

“We’ve been guinea pigs over here from the very beginning,” he said. “I feel foolish for still being here.”

A Stellantis spokesperson declined an interview request for this story, citing pending litigation and the fact that the plant complies with zoning laws.

After racking up 10 violation notices and more than $500,000 in nes for air pollution at its factories in Detroit and Warren, Stellantis late last month asked the state to approve

Detroit’s City Council budgeted $400,000 for air puri ers for residents near the existing Stellantis plant and former AMC plant; Wayne County also announced a plan in March to install air-quality monitors around the county.

e cumulative e ects of living near industrial pollution primarily a ect Detroit’s low-income communities of color, Savoie said, and it’s important to do better to protect people’s health. She said often, residents don’t even know what’s happening or being proposed nearby — there’s a limited radius in which people are noti ed about changing land use, but in the case of air quality, the e ect can be much broader. And while soot spewing from smokestacks was a clear indicator of poor air quality in the past, more modern pollution is often less obvious. In addition to air quality concerns, lower property values and frequent truck tra c that shake a home’s foundation and endanger children are among the quality-of-life concerns, she said.

“If you say this area is not safe for human habitation because of industrial activity, where are you going to go? Where are you going to be safe?” Savoie said. “We have to gure out how to do things so we don’t create all that pollution in the rst place. ... No one should be exposed to harmful air.”

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

In Detroit, homes often abut heavy industry

Why do people live near land that’s zoned for heavy industry? In part, it’s because of the way Detroit grew.

e city is more than three centuries old; it was founded in 1701. Of course, Detroit wasn’t much of a city then. But as it was built up over the years, homes were constructed near people’s jobs and residential areas popped up near manufacturing centers. e pattern repeated as the city grew.

Long before there were thoughts of what should be built where, industry followed the railroad lines and the river, said Rory Bolger, a city planner/zoning specialist with the Detroit planning commission in the legislative policy division. It was the way to transport goods that were produced in the city across the country.

e city’s zoning map largely follows that pattern, with industrially zoned areas paralleling train tracks, he said, and neighborhoods growing where the jobs were. Now, he said, that’s not the way anyone would design a city.

“We’re due for a major reexamination,” Bolger said. “It’s very likely legislation is going to be coming forward to put more meaningful limits and constraints on uses where we can identify meaningful

off-site impact.”

Detroit is in the process of creating a new master plan, the rst for the city since 2009.

It wasn’t until 1940 that Detroit had zoning laws at all — well after the city had been built up, Bolger said. A rst attempt at zoning was adopted in the 1920s, but it was overturned by a vote of the people, he said.

In some cases, residents and industry have coexisted. Breyana Emanuel, who lives on Stahelin Avenue, backs up to what is now a manufacturing site for milk powder supplier VernDale Products. She said there’s been minimal noise and not many trucks in the three years she’s been there.

Sitting on her back stoop one afternoon, Emanuel said she hadn’t been aware that the low wall separating her from the milk powder plant was almost the only barrier between her and an asphalt-mixing facility. It was rejected by the city of Detroit in late 2021 after a ood of opposition, but Emanuel said the smell of asphalt — and increased truck tra c — would have made her consider moving, if the project had been approved.

“Why would they put it over here, where residents are?” she asked. “It’s OK if it were in more secluded areas. But not behind my house.”

Asphalt Specialists, which pro-

posed the asphalt plant at the Southeld Service Drive site of the former Farmer Jack headquarters, did not respond to requests for comment.

Marsha Bruhn, past president of the North Rosedale Civic Association and the former director of the city planning commission, said a nearby neighborhood association had signed o on the plan. Even though the asphalt facility wasn’t consistent with the future land use plan for the area, she thought that nod could have gone a long way toward its ultimate approval. e company had obfuscated the extent of the work that was planned for the site, she said, which included asphalt mixing.

“So often, people say one thing, but when you actually see the plans, it’s different,” she said.

Currently, Detroit is 16% industrial land, said Kimani Je rey, a city planner. He said questions about where industry should go continue to be asked in the city.

Some areas zoned for heavy industrial use that are near noncomplementary uses have been shifted toward light industry or commercial development to better separate what Bolger called “more obnoxious uses” from where people would interact

with them. Je rey said if a proposed project will be a negative in uence on the community, the department tries to keep it from even going to a public hearing.

e update to the city’s master plan will help solidify areas where industry should and should not go, but it won’t be an easy process, said Detroit City Council Member Latisha Johnson.

“It’s probably an uphill battle,” she said. “How do we have this industrial land and make it so it doesn’t negatively impact our residents?”

Bu ers between properties can be bigger, areas can be down-zoned to less intense uses and best practices from other areas can be baked into the master plan. Council is having these conversations because it’s important for industry to be a good neighbor when it does impact how people live, she said.

“It’s our responsibility to make sure the laws are favorable for residents in the community,” Johnson said. “I think now is the time to push the envelope.”

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

ARIELLE KASS

ARIELLE KASS

Heavy industry in neighborhoods could be making that worse

Pam Weinstein holds one of the informational yers created to raise awareness about ghting the asphalt plant that she said would have a ected her neighborhood. QUINN BANKS FOR CRAIN’S DETROIT BUSINESS

“WE’RE DUE FOR A MAJOR REEXAMINATION.” —Rory Bolger, city planner/zoning specialist, Detroit planning commission

Fair Food Network CEO refocuses on Detroit, nutrition security

Kate Krauss moved into the CEO role at Fair Food Network in January as part of an internal succession, seven years after she came to Michigan to serve as COO of the Detroit-based organization. An Ohio native (something she kept quiet while working in Ann Arbor), she began her career at ABC News, working on “Nightline” for ve years before making a leap into the nonpro t sector and roles at the Nature Conservancy and Slow Food USA in New York where she served as managing director.

At Fair Food Network, Krauss, 47, is leading advocacy around increased funding for the Farm Bill to broadly expand federal dollars for programs like its signature “Double Up Food Bucks” program, which matches SNAP bene ts spent on fruits and vegetables at markets and grocers with other private and public funding and has been replicated in 28 states.

You actually began your career on one of the national networks in television news, right? How did you get into food systems work?

I started my career in television journalism at ABC News and worked for “Nightline” back in the Ted Koppel days, 20 plus years ago. I was there during 9/11 and anthrax and really difficult stories. I got tired of reporting on all of the terrible things that were happening in the world, and I really wanted to do something where I could make a difference. One of my last jobs there was a lot of care and feeding of people who were going to be interviewed. I had this surprising skill set of spending time getting to know them and chatting with them. I found that was a skill set that one could turn into fundraising pretty easily. And so that was my transition.

 What are you focusing on in your first year as CEO?

We’re doing a lot of advocacy around nutrition security within the Farm Bill and working on expanding the legislation so that it puts as much as 10 times as much resources into healthy food access programs and incentive programs like Double Up Food Bucks and others around the country.

Right now, Double Up Food Bucks is about a $10 million program in Michigan. We could be helping 10 times as many families in Michigan bring home more fruits and vegetables. It’s also economic development for the local retailers and support for the local farmers that are participating. By expanding Double Up across Michigan, we’re helping families, we’re helping retailers and we’re helping farmers.

RUMBLINGS

 What else are you working on?

This fall, we are relaunching the Michigan Good Food Fund. It’s been around since 2015. What we’ve done over the last two years is redesign it so that it’s more communitycentered and more focused on bringing money o the sidelines to food entrepreneurs. We realized that by having it be narrowly focused on healthy food, there was this really wide range of businesses that were not being served. In the previous version, the focus was really on healthy food access. It’s now become a larger de nition that expands to wealth generation and economic development as an indicator of health.

 Fair Food Network is also providing support for food entrepreneurs itself, beyond the fund?

Yes. We are the administrative backbone of the Michigan Good Food fund, but we also have our own financing arm and we’re really trying to migrate that financing arm to be a catalyst for all the financing partners across the state to get more money into the hands of food entrepreneurs that are going to be changing, growing wealth in their communities. What sets us apart is that we do guarantees, equity deals and grants to try to help build capital stacks that will make it easier for our lending partners to provide loans to food entrepreneurs. Right now, that’s about $500,000 to a million dollars a year. We’re hoping to grow that as we can raise money for it.

 You recently moved the Fair Food Network’s headquarters to Detroit from Ann Arbor. Why did that make sense?

We started Double Up Food Bucks

BY | SHERRI WELCH

in Detroit in 2009, and Detroit has been a priority place for us this entire time. Many of our key programmatic partners are here. And during the pandemic, the number of our sta who are actually based in Detroit also grew a fair amount. Perhaps part of the reason was that we weren’t requiring sta to come to Ann Arbor and because we were virtual, we were recruiting from across the state. There was a lot of sta excitement and interest in having our headquarters be in Detroit. And that coincided with a desire to be a little bit closer to partners.

 Do you have any surprising hobbies?

One is maybe less surprising than the other, but I love to bake sourdough bread and through that have gotten into fermentation and into heritage grains like Emmer wheat and di erent kinds of wheat that are native to di erent places. There’s a surprising community around that. The other hobby is not food related: I’m a bridge player. That’s another one that has a funny community. There’s more people out there that are my age and younger, even, that are really interested in cards.

Truscott Rossman names new president in leadership transition

DETROIT-BASED PUBLIC RELATIONS rm

Truscott Rossman on Wednesday named a new president as part of an ongoing transition e ort.

Allie Walker, who has been leading the rm’s day-to-day operations for more than a year, takes the reins from Ron Fournier. He will now serve as a senior adviser focusing on client service and business development.

Walker represents a new generation of leadership at the integrated communications rm, CEO and co-founder John Truscott said in a statement.

“Allie is the perfect next step for TR in our rapidly evolving industry,” Truscott said. “Five years ago

Walker Fournier

Ron and I set out with bold goals to build on the tremendous foundation that Kelly Rossman-McKinney and I had already established. We’ve exceeded expectations, doubling our revenues and our client list. And now we have an emerging

leader poised to take us to another level.”

Walker, 36, started her career on Capitol Hill for Congressman Dave Camp, where she supported media e orts and strategy for the powerful Ways and Means Committee. After working in Honda North America’s Washington, D.C., o ce, she joined TR in 2015. Most recently, she served as the rm’s vice president, handling Truscott Rossman’s largest client accounts for international, national and statewide organizations.

Walker has spearheaded a focus on project management and strategic integration, creating unique divisions for corporate communica-

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tions, public a airs and digital communications.

“It’s an honor to lead this team and serve our clients,” said Walker. “JT and Kelly created a special organization, Ron drove it forward, and I hope to be able to build on that legacy.”

Fournier, 59, will remain an active member of the client service teams where he will support clients from the rm’s headquarters through high-level strategy, creative content, and media relations expertise. He will continue to recruit and serve new clients as well, the company said.

Fournier is the former publisher and editor of Crain’s Detroit Business.

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