Crain's Detroit Business, June 05, 2023

Hart Plaza seeing more upgrades

Outdoor space gets attention after years of neglect | By Arielle Kass

Jamon Jordan recalls a time when weekend after weekend was spent going to ethnic festivals at Detroit’s Hart Plaza.

ere were Mexican festivals, Arab festivals, Greek festivals, Italian festivals. ere were Polish festivals, Caribbean festivals, African-American festivals and African world festivals.

“Almost every weekend, Memorial Day to Labor Day, most of it took place at Hart Plaza,” Detroit’s ocial historian said of the Isamu Noguchi-designed public space, which he described as Detroit’s public square. “You’d come down and there’d be something happening.”

Duggan aims for massive tax overhaul

Land-value tax would take aim at incentives that encourage blight

BY ARIELLE KASS

Detroit Mayor Mike Duggan said Wednesday at the Mackinac Policy Conference that he hopes a proposed tax change intended to save homeowners hundreds of dollars a year while raising taxes on land speculators will be on the ballot in February, coinciding with the presidential primary.

e proposal, called a land value tax, would triple taxes on land in the city, while eliminating the Detroit operating tax of 20 mills on all structures. Duggan said it would drop the city’s tax rate from 86 mills, the highest in the state, to 67 mills — lower than the tax rate in Warren, Ferndale and Ann Arbor, though higher than the rates in Farmington, Livonia and Troy.

e mayor called the tax change an opportunity for the “biggest building of wealth of Detroiters in history” and said it would make the city competitive in the region in a way it hasn’t been before. e idea has been discussed for decades as land values fell and taxes on improvements continued to rise, Duggan said, but has never been this

MACKINAC ROUNDUP

Michigan’s population drop, economic development funds and more.

Page 16

close to implementation. e current tax structure is a “ticking time bomb” that is threatening to undo years of hard work across the city by rewarding property owners who let their land deteriorate, Duggan said. ere are 30,000 property owners who pay taxes on vacant buildings that have sometimes been abandoned for decades, he said. e low cost of holding on to such property is the equivalent of “30,000 cheap lottery tickets,” Duggan said.

Since its 1975 opening, many Detroit residents moved away and the festivals followed. But Jordan said with 16 festivals through October — led o by the Movement Festival, which never left, over Memorial Day weekend — Hart Plaza is due to have the busiest year it’s seen in a decade. Last weekend, entertainment for the Detroit Grand Prix took place there; Motor City Pride will take over next weekend. And some of the ethnic festivals have returned: the African World Festival and the Arab Chaldean Festival will both take place in Hart Plaza in July.

See HART PLAZA on Page 15

THE CONVERSATION Marc Nassif on back-to-office issues and how softball changed his life.

The top-paid CEOs in Metro Detroit

See who made the most, beginning on Page 8

CARS?

The Dodge Fountain at Hart Plaza during the Movement festival that ran over Memorial Day weekend. | CONNOR VALONE

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

 NEW CHAIR FOR DETROIT SPORTS COMMISSION

 5 DETROIT PARKS TO GET FREE WI-FI

FINANCE

Angel investors expect rebound after 29% drop in 2022

 DEMO CONTRACTORS SOUGHT FOR PACKARD PLANT

THE NEWS: Detroit is seeking demolition contractors to raze the remainder of the Packard Plant, a key step toward completing its quest to tear down the hulking eyesore on the city’s east side. A series of requests for proposals were issued earlier this month to bring down the remaining portions of the plant at East Grand Boulevard and I-94.

WHY IT MATTERS: Much of the plant is owned by an a liate of Fernando Palazuelo, the Peru-based developer who bought the blighted property at a Wayne County tax-foreclosure auction in 2014, paying just $405,000 for its 40-some acres and 3 million-plus square feet of obsolete manufacturing space designed by Albert Kahn. e city has already started tearing down some of the plant, starting in September with the building at 6199 Concord and then in January on a city-owned building at 1539 E. Grand Blvd.

THE NEWS: Terry Rhadigan was announced as the new chair of the volunteer-led Detroit Sports Organizing Corp., where he’ll head up the organization’s e orts to prioritize, evaluate and execute signi cant future bid opportunities for major sporting events.

WHY IT MATTERS: Rhadigan’s appointment comes after the city was tapped to host the 2024 NFL Draft and 2027

NCAA Men’s Final Four basketball championship.

 MCLAREN APPOINTS FIRST CHIEF NURSING OFFICER

THE NEWS: McLaren Health Care is promoting longtime hospital executive Jennifer Montgomery as its rst-ever systemwide chief nursing o cer. Montgomery will also assume the role of senior vice president, both e ective June 1. She will serve as the top clinical and operational leader in nursing for the three-state, 13-hospital system based in Grand Blanc.

WHY IT MATTERS: Montgomery will use the role to position McLaren with educational partnerships to boost its nursing ranks at a time of a nationwide shortage, exacerbated by the pandemic.

THE NEWS: e Detroit Parks Coalition, city of Detroit and Connect 313 are teaming up to install free public Wi-Fi networks in ve Detroit parks. Bradby, Chandler, Clark, McDu y and Palmer Parks will see the new Wi-Fi connectivity by fall.

WHY IT MATTERS: A total of $265,000 in grants from the Detroit Pistons, Rocket Community Fund and John S. and James L. Knight Foundation is funding the installations and ve years of service provided by Cornus Internet, along with charging stations in the parks.

 MDOT NAMES PERMANENT LEADER

THE NEWS: Brad Wieferich, who has been acting director of the Michigan Department of Transportation since January, was named the agency’s permanent chief. Gov. Gretchen Whitmer, who announced the promotion, called Wieferich a “smart, dedicated leader” who has worked in the department for 27 years.

WHY IT MATTERS: Wieferich has played a vital role in advancing the Gordie Howe International Bridge and Whitmer’s bonding program for roads as well as implementing the federal infrastructure law, according to the governor’s o ce.

 Angel investing in Michigan followed a national trend in 2022 with sharp declines in the number of deals and the amount of capital invested.

Active angel investors across the state put $46.3 million into 79 Michigan-based startup companies last year, a 29% decline from the statewide deal ow in 2021 and a 33% decrease in the amount invested, according to an annual report from Ann Arbor-based Michigan Angel Community.

In metro Detroit, investment was down in 2022: 22 deals with angel investors putting in $11.5 million of a total of $24.8 million invested, compared with 35 deals, $22 million in angel dollars and $54.1 million in total investment in 2021.

In the Ann Arbor area, total investment was up to $200 million, but the number of deals (26) and angel investment ($12.1 million) were down compared to 2021’s 38 deals, $17.7 million in angel investment and $74.2 million total.

Angel investors put $18.2 million into 16 deals involving technology startup companies based in the southwestern Lower Peninsula region, which compares to 17 deals in 2021 for $16.4 million.

Lansing-based Enspired Solutions, which received angel capital in 2022, is focusing on equipment and technology that can destroy PFAS in water. | ENSPIRED SOLUTIONS

Ballmer grant helps BasBlue double its funding

goal

Nonpro t also hires rst executive director

SHERRI WELCH

BasBlue, the Detroit nonpro t meeting and mentoring space for women, is standing up its foundation arm in short order.

It has raised $4 million, double the target it shared a year ago when it officially launched the foundation, to support the economic mobility and leadership skills development for women, teenage girls and non-binary individuals.

Does Detroit have a future with ying cars?

Startup behind eVTOL aircraft struggles to raise money for take o

Housed within an old hangar at the historic Coleman A. Young Municipal Airport in Detroit is the Sigma-6, a sleek $5 million eVTOL aircraft that represents the future of aviation.

But the electric vertical take-o and landing machine is running out of runway.

Airspace Experience Technology, the startup behind the aircraft, has burned through nearly all of its cash, founder Jon Rimanelli said. And it seems there’s little appetite

from investors or economic development o cials to continue backing the project — at least in Michigan.

Rimanelli said he has been looking around at sites outside of the state to potentially move his startup and he even considered trying to sell it. Last month, he visited Wichita, Kan., where he said economic development o cials rolled out the red carpet for him. He said he’s not received the same treatment in Michigan.

“How are we going to survive if we can’t raise money in this town?”

Rimanelli said during a recent tour of his space at the airport on the city’s east side. “I’m open to selling it because we can’t grow it here. I’ve been shing in this pond for 10 years.”

e company was awarded a $50,000 grant by the Michigan Economic Development Corp. last year, but Rimanelli said there’s no indication there will be morenancial support.

“Airspace Experience Technologies has proven to be a forward thinker in the autonomous aerial mobility space,” MEDC spokes-

man Otie McKinley said in an email. “We are excited to see what the company has in its future, and we applaud them for their continued successes.”

Now, as the city and state work to lure Toyota-backed Joby Aviation and a potential $500 million manufacturing plant to the airport, Rimanelli fears being forgotten. But the overall lack of traction for eVTOL vehicles — or ying cars, for short — in recent years may be what underlies Rimanelli’s frustration.

BasBlue has also hired its rst-ever executive director for the foundation and is taking mentorship and emotional and academic support programs to teenage girls in the Detroit Public Schools Community District through an 18-month pilot funded with a $1 million grant from the Ballmer Group.

“With the Ballmer grant and (new executive director) coming on board, it really takes us to an entirely di erent level,” said BasBlue co-founder Nancy Tellem, a longtime entertainment industry executive and entrepreneur who moved to Detroit in 2015 with her husband, Detroit Pistons Vice Chairman Arn Tellem.

Lisa Whitmore Davis will join the foundation this week as its inaugural executive director. She brings more than 25 years of experience raising money to support a range of causes, including diversity, equity and inclusion, services for the aging, higher education, civic organizations and state and county branches of government.

Black-owned, immersive gallery opens in downtown Ferndale

In her latest voyage into entrepreneurship, Redford resident Lauren Fresh is covering a lot of ground.

Fresh opened Imani Immersive Gallery on May 21 in downtown Ferndale. e focus of the gallery is its state-ofthe-art 360-degree projection mapped room that gives visitors the feel of being underwater. e Black-owned gallery features an underwater ocean view, animations from a projection screen and LED lighting. Featured digital artwork was designed by Gabriel Hall, proprietor of De-

troit-based LightBender Studio.

Fresh, who co-owns the gallery with her husband Rodney, got the idea to open the gallery following a visit to an immersive exhibit, which she found to be therapeutic. Immersive art experiences use technologies such as virtual reality, holography and digital projection to enable patrons to enter the work of art and become a part of it.

“I love the interaction of all the senses, sounds and sights,” Fresh said. “I wanted to create a unique experience that would use the tranquility of audio and visual sensations as an immersive experience, to allow people a temporary escape from life’s stresses. e world can be heavy, so the temporary solitude and peace of mind that make for a healthy balance are more sought after than ever.”

Balance led Fresh to add a handson element at Imani, which she said allows for an elevated experience.

e hands-on section includes motion-themed exhibits like LED seesaws, interactive games and a oating maze. Additional exhibit themes will rotate through the gallery over the course of the year. e space is also available for public and private events. Tickets are $40.

A podcast studio, with its own entrance in another section of the building, is available for rent for $60 an hour for audio use and $100 an hour for audio and video production.

e gallery is in a new 4,850-square-foot space at 211 W. Troy St. Fresh last summer signed a ve-year lease with building owners Steven Mills and David Toppin.

Employees of Airspace Experience Technologies pose for a photo in front of the Sigma Six aircraft at Detroit city airport. Lelan Kornhaus, high voltage architect; Conor Hughes, director, propulsion and controls; and Jon Rimanelli. | KURT NAGL/CRAIN’S DETROIT BUSINESS

KURT NAGL

Davis

The Imani Immersive Gallery is open in downtown Ferndale. The gallery gives patrons an underwater experience, and also includes a hands-on section. | IMANI IMMERSIVE GALLERY

ESTATE INSIDER

Washington Boulevard median updates planned

ere has been a lot of change to Washington Boulevard the last 10 to 15 years.

More may be coming — but you’d have to look to the middle of the boulevard rather than its sides to see it.

A group consisting of the Downtown Detroit Partnership, city of Detroit, Bedrock LLC and Groundswell have been working on alterations to the median that are to be reviewed by the Historic District Commission in June.

Gina Cavaliere, chief community impact o cer for the DDP, which is the applicant to the HDC for the changes, said the city is expecting to put a request in to the Downtown Development Authority to fund the project, although the precise amount is not known.

Among the potential changes: Removal of about three dozen trees in the center and edges of the median, adding a decomposed granite path, plus ornamental grasses, ground covering and owering perennials, according to commission brie ng documents.

e document says the tree removal will allow for more sunlight for plants and prevent overcrowding of tree roots. It is being recommended by a city General Services Department specialist, plus a professional arborist. Twelve Japanese zelkovas and elms would be removed between Park and Cli ord; six between Cli ord and Grand River; 16 between Grand River and State; and two between State and Michigan.

“ e pathway was recommended based on what trees are healthy and which ones are not,” Cavaliere said. e trees are not expected to be relocated.

ose aren’t the only changes afoot in the area, as plans have been moving forward to bring big changes to Grand Circus Park, which is

4 District Detroit projects get tax break OK

City Council approves $51.8M exemption

CRAIN'S DETROIT BUSINESS

Detroit City Council on Tuesday approved a 10-year, $51.8 million tax break for four projects that are part of the District Detroit project put forth by the Ilitch family and billionaire developer Stephen Ross. There was no discussion before council approved the commercial rehabilitation exemption certificate requests for the residential and commercial buildings at 2211 Woodward, 2200 Woodward, 2250 Woodward and 2300 Woodward Ave.

Part of the project includes converting office space in the Fox Theatre into a new hotel.

purchased the Industrial State Bank Building and the Stephens Building and spent at least $10 million renovating them, keeping them as affordable senior housing.

Royal Oak Starbucks sold

e Royal Oak Starbucks co ee shop with the drive-through that regularly causes backups for northbound Woodward Avenue motorists has sold for $2.2 million.

It’s all part of $798 million in total tax incentives and breaks Olympia Development of Michigan and Related Cos. are seeking for the four buildings. On April 25, the Michigan Strategic Fund signed off on a more than $600 million transformational brownfield incentive for the District Detroit area.

Washington Boulevard’s northern terminus. at project is not o cially connected with the Washington Boulevard project as it is being funded through federal COVID-19 stimulus dollars doled out to the DDP by the state last year.

“ is is a great example of a project where the community is coming together to make some much needed upgrades and the end product will represent the perspectives and needs of the broader community,” Cavaliere said.

Comparatively, the changes are minor when viewed against the backdrop of all the others that have taken place on Washington Boulevard the last decade and a half or so.

Dan Gilbert’s Bedrock is in the nishing stages of completing a massive redevelopment of the Book Tower and Book Building, an e ort that started all the way back in 2016.

It includes 229 residential units, a 117-unit Roost apartment/hotel concept, which was announced in 2021 and opened last week, plus about 52,000 square feet of retail and o ce space.

ere is also an indoor-outdoor lounge, 3,000 square feet of co-working space and a large atrium with a 1920s skylight with 7,000 glass jewels and 6,000 glass panels. In addition, there are 300 parking spots and plans for a Japanese restaurant with a sake bar. My colleague Jay Davis reported on some of the names of

the food and beverage o erings earlier this month.

Of course, there is also the redevelopment of the Westin Book Cadillac, which opened after a massive and complicated renovation by John Ferchill. Ferchill’s ownership of the hotel and residential tower ended on a down note, with a joint venture purchasing the building after it fell behind on $77 million in commercial mortgage-backed securities debt during the pandemic. Chicago-based Oxford Capital Group LLC and New York City-based hedge fund Taconic Capital Advisors LP are spending at least $16.5 million renovating the building.

But there’s also Jonathan Holtzman’s new development, City Club Apartments CBD Detroit, on the site of the former Statler Hotel, bringing a few hundred new residential units along the boulevard.

e Gateway Center building at Washington and Michigan has been torn down and is currently surface parking, although owner Richard Karp has said that is not the intended future use. He has told me previously the site makes sense for a large mixed-use development.

Joe Barbat redeveloped the Gabriel Richard building, on the other side of Michigan Avenue from the former Gateway Center, and is now residential space.

And a joint venture between e Roxbury Group and Invest Detroit

e South eld o ce of Calabasas, Calif.-based brokerage house Marcus & Millichap Inc. put out word of the sale last month, and sta in the Royal Oak Assessor’s O ce said the sale took place May 15 to Bloom eld Hills-based retail real estate investment trust Agree Realty Corp. (NYSE: ADC).

e sellers, an entity called MTB1 LLC that is registered to Bruce Dolgin in Stevenson Ranch, Calif., accepted an o er less than their original asking price of $2.67 million.

Darin Gross, a senior associate for Marcus & Millichap, said his team in South eld took over the listing from a California o ce of Marcus & Millichap in February. ere were a pair of asking price reductions before arriving at the $2.2 million sale price, he said. e roughly 1,800-squarefoot store has caused tra c headaches and has been the subject of news reports and Royal Oak Citizens Tra c Committee resolutions directing the city to work on a solution.

According to CoStar Group Inc., a Washington, D.C.-based real estate information service, the property was built in 2015.

Gross said Starbucks recently exercised an option to extend its lease and now has six or seven years left on its agreement.

Agree Realty is moving its headquarters in Bloom eld from East Long Lake Road to the old Art Van Furniture store on Woodward just north of the Starbucks it just bought.

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

The development team says that without the taxpayer funding, the buildings that would create more density downtown would not be financially viable, thereby jeopardizing construction, jobs and tax revenue to the city. Others argue that the Ilitches have broken development promises over many years, and that the developers whose total fortune is more than $10 billion shouldn’t be seeking public funding, particularly in a city with many woes.

There have been dozens of Detroit meetings and public discussions over various incentives and community benefits agreement plans in the last several months.

In all, the developers are proposing 1.2 million square feet of new office space, 695 residential units (nearly 140 of which would be considered affordable), 146,000 square feet of retail and 467 hotel rooms.

The Fox Hotel project at 2211 Woodward Ave. plans to create 220 permanent jobs and would not alter the Woodward-facing facade of the theater.

At 2250 Woodward Ave., plans call for a mixed-use building with first-floor retail and 20 floors of multi-family housing space above. It should have 287 residential units, 58 of which will be considered affordable. A five-story mixed-use building with first-floor retail and office space above is planned for 2300 Woodward Ave.

At 2200 Woodward Ave., the plan is to create a 17-story mixed-use building with office space and firstfloor retail, according to documents from the development team. Construction on that building, a large tower in front of Comerica Park, could begin this summer. Occupants aren’t known, although the Ilitch/Ross team has hinted at a bank tenant.

A group consisting of the city, Downtown Detroit Partnership, Bedrock LLC and Groundswell have been working on alterations to the median on Washington Boulevard north of Michigan Avenue that are to be reviewed by the Historic District Commission in June. | KIRK PINHO / CRAIN’S DETROIT BUSINESS

This Starbucks co ee shop on Woodward Avenue in Royal Oak has a new owner after a $2.2 million sale earlier this month. | COSTAR GROUP INC

Renovation to add 35 units of a ordable housing

CRAIN'S DETROIT BUSINESS

Renovations have begun on two vacant buildings in northwest Detroit that will add 35 units of a ordable housing.

Grandmont Rosedale Park Collective II, at 9710 W. Outer Drive just south of Grand River Avenue, is the latest project to tap the city’s Strategic Neighborhood Fund, which helps developers foster vibrant and safe places for residents to walk, eat, shop and gather, the city said in a news release.

FLYING CARS

From Page 3

Five years ago, the entrepreneur predicted that his rst iteration of a ying car would be shuttling passengers to and from Detroit Metropolitan Airport by 2023. Needless to say, that is still a long way from reality.

Rimanelli’s optimism matched the overall spirits of the mobility tech industry at that time, though. Five years ago, many expected driverless cars to be widespread by now, too. On the contrary, automakers have largely put full Level 5 autonomy on the backburner in order to focus on electri cation and more practical advancements in driverless features.

With a cooling economy, many experts have predicted a venture capital “winter” compared to the past few years of aggressive investments in mobility startups.

Erik Gordon, a professor at the University of Michigan Ross School of Business, said investment has tightened, but there is still a general willingness to give money to promising companies. e problem with

From Page 3

ere is an option to renew, but Fresh hopes to eventually own her own space. Lauren and Rodney Fresh invested nearly $225,000 into the venture. Rodney Fresh projects the gallery to bring in more than $218,000 in annual gross profits.

Supporting his wife’s dream was Rodney Fresh’s motivation to get involved with the business.

“I believe in her and I want to see her dreams come true,” Rodney Fresh said. “My wife had a vi-

eVTOL, however, is the same problem with autonomous vehicles.

“Sometimes the technology works well under really controlled conditions, but not good in the wild,” Gordon said. “ ink about driverless vehicles. When we run them around our make-believe village here at the University of Michigan, they do terri cally. When you let them loose on the streets of Ann Arbor, you’re scared to death that they’re going to run over a pedestrian.”

at long, winding path to market can dissuade investors, especially the “venture capital tourists” who learned their lesson in the recent boom and bust of SPAC companies and mobility startups, Gordon said.

“Others are still looking for great investments,” he added. “ eir standards are higher than they have been for the last three or ve years.”

Joby Aviation is considering the Detroit airport for a potential $500 million investment and up to 2,000 jobs for a manufacturing plant. e company, along with state and city o cials, have declined to comment, but it is believed that Joby will make a location decision in the

sion and I wanted to help bring that vision to life.”

e couple run the business with a sta of seven part-time employees while managing their own careers.

Lauren, who said she previously owned an event planning company, continues to “work in corporate America.” Rodney teaches at Detroit Communication and Media Arts High School and is treasurer for the Detroit Federation of Teachers. He also co-hosts the “Motown & Coney” podcast with omas Foster.

One other part of their life the couple manages is the inspiration

next month or so.

Even as one of the main players in the eVTOL space, the Santa Cruz, Calif.-based company’s future is uncertain. It has been burning cash since it started in 2009, and it took a big loss last year, according to its annual nancial report led with the Securities and Exchange Commission.

“We have incurred signi cant losses since inception” the ling said. “We incurred net losses of $258.0 million, $180.3 million and $114.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. We have not yet started commercial operations, and it is di cult for us to predict our future operating results.”

What Joby has that many others in the business lack, including Airspace Experience Technology, is a major funding source. Toyota, its largest investor, has plunged $400 million into the company.

One of its smaller, early round investors was San Francisco-based Trucks Venture Capital. Founding partner Reilly Brennan, who is based in metro Detroit, said he thinks the future is bright for mobility aviation.

for the gallery, which is named after their 12-year-old daughter, Imani, whose name translates to “faith.” Lauren Fresh said that was intentional.

“ is is something that she’ll always be able to look back at,” she said. “We’re creating a legacy for her. She thinks about it a little. One of the Ferndale Business Association members at our opening asked her about it and she lit up.”

Fresh hopes the gallery helps add to the allure of downtown Ferndale. e gallery soon will o er extended hours for an event she has dubbed Immersive Ferndale Fridays, when visitors can get 25 percent o the

“I think the SpaceX e ect is real when it comes to this early-stage pipeline,” Brennan said of the spacecraft manufacturer founded by Elon Musk. “ ere’s just a ton of movement now in that space overall as opposed to 10 years ago.”

ough Brennan said he has no insight into Joby’s manufacturing decision making, he thinks Michigan’s chances of landing eVTOL business in general are strong.

“Especially because of the way so many automotive companies have been looking at VTOL, we’re likely going to see VTOL and aviation ideas in the state of Michigan,” he said.

Rimanelli said he is working to secure a contract with the U.S. Air Force’s Agility Prime, which is designed to help companies commercialize technology for defense. He said he hopes for a grant award that can help keep the company going.

“We’re gonna keep pushing,” he said. “We hope this Air Force program takes o and helps inspire investors.”

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

admission price. e gallery will operate until 10 p.m.

“It’s something that we want to o er the community,” Fresh said. “I noticed a lot of the restaurants in the area open around 4 p.m. We normally close at 8 p.m., so we wanted to give people the opportunity to experience the gallery and not have to leave the area for entertainment.

“In this day and age, people prefer an experience. Words can’t do the gallery justice. It’s something you have to feel.”

Contact: jason.davis@crain.com

(313) 446-1612; @JayDavis_1981

e developers are Detroit-based Cinnaire Solutions and the Grandmont Rosedale Development Corp. “ is groundbreaking ceremony marks a signi cant milestone in our collective vision for a more inclusive and vibrant community,” GRDC Executive Director Michael Randall said in the release. “ is development will not only provide safe and a ordable homes for individuals and families, but it will also serve as a catalyst to enhance the quality of life for the Minock Park neighborhood and overall Grandmont Rosedale community.”

e renovated buildings will feature 35 units reserved for households earning at or below 60% of the area median income, the release stated. at means rent for a one-bedroom apartment would start at $838 per month. Two units will be reserved for residents earning no more than 50% AMI, which will translate to monthly rent of $667 per month for a one-bedroom apartment. A two-bedroom apartment will rent for $1,036 per month.

e a ordability of all the apartments will be guaranteed for at least the next 30 years.

“A ordable housing also can be high quality housing and this great project is another example of that,” Detroit Mayor Mike Duggan said in the release.

e renovation of the property will include new HVAC and electrical systems, windows, kitchen remodeling, improved roo ng, ooring and more. e $9.7 million development was awarded $1 million in loans from the SNF while Cinnaire Equity provided a $4.6 million investment and Grandmont Rosedale Development Corp. provided a $215,000 sponsor note, the release stated. e development also received approximately $1 million in HUD HOME grants and $351,000 in American Rescue Plan Act funds from the city’s Housing and Revitalization Department.

“We believe that potential means nothing without action behind it, and we are proud of the team that came together to bring the potential of Grandmont Rosedale to life,” Mark McDaniel, Cinnaire president and CEO, said in the release. “We are grateful for our partners at GRDC, Ethos Development Group, O’Brien Construction, the City of Detroit, MSHDA and members of the surrounding community for their commitment to the vision that will result in much needed a ordable housing for Detroiters.”

Airspace Experience Technologies is seeking additional investment to keep its Sigma-6 dreams alive at Detroit’s city airport — or elsewhere.| AIRSPACE EXPERIENCE TECHNOLOGIES

Why would anyone want to move to Michigan?

As business and community leaders convened last week for the Detroit Regional Chamber’s annual confab on Mackinac, here’s something else to ponder:

What does Detroit’s future look like?

EDITORIAL

Property-tax revamp a big swing at status quo

Detroit’s explainer/booster-in-chief put on a master class in his presentation at the Mackinac Policy Conference in how to make a pitch on a complicated topic tangible, understandable and even entertaining, all at the same time.

e proposal by Mayor Mike Duggan, called a land value tax, would radically rework how property taxes work, in an e ort to change incentives that perversely reward blight.

Buckle in. Like we said, it’s complicated. e plan would triple taxes on land in the city — while eliminating the Detroit operating tax of 20 mills on all structures. e owner of a $100,000 house would save $925 per year, Duggan said.

e core idea is to provide an incentive for developing underused land and a disincentive to letting abandoned buildings rot while squatting on land speculating that it could eventually rise in value.

Duggan said that on average, the owners of vacant and dilapidated properties pay $30 a year in taxes because the city’s land tax is so low. e mayor aptly compared that to a cheap lottery ticket.

“Blight’s rewarded, building is punished,” he said. “We don’t tax blight. ... ere are people who bene t from the fact that we don’t tax blight.”

Detroit may be perhaps uniquely suited to serve as a test bed for this idea. A small share of city revenue comes from the property tax. It has far too many properties with blighted

commercial buildings that have no value now and only a looming cost for a wrecking ball. And it needs help in making the math work on residential and commercial development.

Give the mayor credit. is is no half-measure. It’s bold and creative. Will it work to spur property squatters into converting their holdings to productive use? at remains to be seen.

One case the mayor made very e ectively: e status quo hasn’t done Detroit any favors over the past ve decades.

e numbers as highlighted by the mayor are equally eye-popping. More than 450 scrapyards compared with two movie theaters in the city limits. Perhaps the most stunning statistic: Only eight new single-family homes were built in the city limits last year.

Much needs to change. e tax structure is a good place to start.

Can this particular plan work?

e theory seems to make sense, but there are plenty of questions that aren’t going to be easy to answer. Similar tax schemes have only rarely been tried, and not at all in a city the size of Detroit.

It’s still unclear what unintended winners and unintended losers might materialize. You can rest assured both would be created in a plan with so many variables.

Even the mayor acknowledges there’s plenty more studying to do to truly understand the proposal’s rami cations.

But the need for change isn’t debatable. e status quo has had its time and has been found wanting.

Give the mayor and his team credit for taking a big and di cult swing at an intractable problem.

To wit, New York, Chicago, Los Angeles, Philadelphia and Detroit. All iconic American cities that at one time were the ve largest in the country based on population. While there’s been a reshu ing of these cities, one that has precipitously dropped is Detroit.

According to the U.S. Census, Detroit reached 1.85 million residents in the 1950s. When I was a youngster growing in the city, it was home to 1.5 million people. Today, it’s just more than 620,000. Metro Detroit is still a top 15 population center (it fell from the top 10 in recent years), but the city is not.

Talk about a gut punch and a region’s pride taking a hit. Certainly, the numbers can be challenged but overall trends cannot.

It’s astonishing that any city can lose nearly two-thirds of its population. Coupled with a recently published Crain’s story headlined “Nearly half of young Michigan residents expect they might leave state, poll shows,” the city’s and state’s population trends should be concerning for all of us.

ere are many reasons for the city’s population decline, including past policies (urban renewal, freeways being strategically built, etc.), white and, now Black ight, manufacturing job losses, safety concerns, education challenges, and more.

Moving forward?

Big, shiny objects are simply not the only answer. While they garner the headlines, focusing on “blocking and tackling” can make the di erence.

In business, when a brand is in the declining phase in the product life cycle, a decision has to be made to refresh (or rebrand), harvest (stop promoting) or simply have an exit strategy. No one is suggesting the latter but it’s time for the city to rede ne itself.

Detroit will no longer be a manufacturing behemoth. It needs to be right-sized and focused on areas of future development and growth opportunities.

For example, what types of jobs should it target to attract and what are speci c plans to make it happen? Is the current workforce prepared for the ongoing technological evolution?

What role does education have in this new economy? What are future sources of revenue?

Yes, the city has attracted investment dollars, new development and new residents.

Recent announcements for e District Detroit including its promise of 18,000 jobs,

a revitalized vibrancy in Corktown, an investment in General Motors Co.’s Factory Zero Detroit-Hamtramck Assembly Center and new housing projects have certainly brought a level of optimism and excitement. But more must be done.

e city has vast amounts of vacant land. How will it be repurposed and leveraged for investment opportunities? What’s the overall vision for this land? How is it turned into revenue generators and job creation? Urban farming is not the only answer. Ultimately, how can this land be used to create value?

I believe the state needs to continue to increase its e orts collaborating with the city on attracting investment dollars and jobs. Not just piecemeal, but a comprehensive, overarching plan designed to attract investments, jobs and residents into the city while retaining those still here.

We’ve all seen and heard stories about the decision to “out ow” jobs to other states by companies headquartered in metro Detroit. How did this happen? And what plans are in place to stem and reverse the tide?

Regarding residents, people seek quality of life opportunities including safety, security, jobs, a ordability, education, entertainment, etc. In today’s world, people are nding solace in suburban communities and elsewhere.

Young people continue to migrate elsewhere. While we can’t control the weather (harsh winters, at times), not all young people are moving to warmer climates. Chicago, Seattle and Denver, anyone?

As a college instructor, I know rsthand the number of young people wanting to leave the city and state. I’ve received a number of emails from former students now living elsewhere.

How?

Anecdotally, I simply ask by show of hands how many plan on staying? Less than half intend to. I recently attended a panel discussion of Gen Z’ers and listened intently as to why they plan to leave Michigan. Not staying, but leaving.

Politics and regional di erences aside, the city, region and state need to take a good, hard introspective look while asking a simple question: Why would anybody want to move here?

Otherwise, we’ll be reprising a line we’ve heard before (and I’m paraphrasing here): e last one to leave should not forget to turn o the lights.

I’m hopeful the lights will continue to burn for a long time.

But not without change.

Mark Lee hosts “ e Weekly Wrap Up” 2-4 p.m. Saturdays and “In the Conference Room” 11 a.m.-1 p.m. Sundays on 910 AM.

THE STATUS QUO HASN’T DONE DETROIT ANY FAVORS OVER THE PAST FIVE DECADES.

MARK S. LEE

Mark S. Lee is president and CEO of e Lee Group.

DETROIT NEEDS TO BE RIGHTSIZED AND FOCUSED ON AREAS OF FUTURE DEVELOPMENT AND GROWTH OPPORTUNITIES.

Detroit Mayor Mike Duggan introduces a property tax proposal on the big stage during the 2023 Mackinac Policy Conference. | DALE G. YOUNG/CRAIN’S DETROIT BUSINESS

Working together to move Michigan into the future

Michigan has the unique distinction of being home to three of the nation’s top research universities — Michigan State University, the University of Michigan and Wayne State University — which together make up Michigan’s University Research Corridor. As presidents of these three institutions, we recognize our critical role in talent and economic development across the state of Michigan and beyond.

We know that Michigan’s key business areas — manufacturing, automotive, health care and agriculture — rely on us as partners in developing the tools, technologies and talent to meet the demands of these evolving industries.

Our three universities conduct 91% of the state’s total academic research and development — $2.6 billion annually. at’s money coming into Michigan for cutting-edge research that ultimately improves the lives and health of our residents and communities.

All three universities are conducting research aimed at identifying environmental threats to human health such as PFAS and microplastics, as well as developing innovative ways to improve medical care across the state.

For example, the Michigan Opioid Technical Assistance Collaborative is a new state e ort that taps our research institutions to help provide resources to Michigan communities working to reduce drug overdose deaths, which exceeded 3,000 statewide in 2021 and neared 2,000 in the rst nine months of 2022.

Michigan is a top-10 state for academic R&D, thanks to the depth and breadth of research done at our institutions. Our work supports critical industries such as mobility, life sciences and industries tied to our water resources. Our universities are developing new technologies that will shape these industries, from sensors and hydrogen power to articial intelligence and quantum computing.

We also prepare the talent Michigan’s economy needs to be competitive by enrolling more students than any other top university cluster in the nation — over 152,000 annually. e URC leads the nation in preparing the greatest number of graduates for careers in the mobility

industry — 14,824 total, more than university clusters in California, Texas and Massachusetts.

We award more medical degrees than any other peer cluster — over 2,500 degrees each year — as well as nearly 13,500 degrees in high-demand elds such as business, computer science and engineering.

While we develop tremendous talent on our campuses, our next big goal is to encourage graduates to develop their careers here in Michigan.

Half of the URC universities’ 1.7 million alumni live in Michigan, and we know that growing the number of knowledge-based and high-tech jobs in Michigan is key to attracting

our future graduates. at’s why we work with the state’s economic development partners to attract employers who can o er our graduates more high-demand jobs here at home. It’s clear that the collective strength of Michigan’s research universities is ampli ed when we are working collaboratively. It’s one reason the URC’s economic impact reaches every Michigan county and totals more than $20 billion annually.

Together, we are developing the solutions and talent to help solve the problems Michigan faces today and anticipate the challenges of tomorrow.

From top talent to top employers, Crain’s Career Center is the next step in your hiri ng proc es s or job search.

SANTA J. ONO, M. ROY WILSON AND TERESA K. WOODRUFF

Santa J. Ono is president of the University of Michigan.

M. Roy Wilson is president of Wayne State University.

Teresa K. Woodru is interim president of Michigan State University.

GETTY IMAGES/ISTOCKPHOTO

EXECUTIVE COMPENSATION

CRAIN’S LISTS

See our lists of the top-compensated CEOs and non-CEOs.

PAGES 9-11

Metro Detroit’s 10 highest-paid CEOs

KURT NAGL

While 2022 was not quite a record year of earnings for Southeast Michigan’s top-paid CEOs, the C-suite certainly didn’t feel too much pain from the supply chain woes and recession worries that marked the year.

e 10 highest-paid executives of the publicly traded companies took home a total of $168 million last year, down 10% from the year prior.

e average CEO compensation package was $16.8 million, about 462 times the average median pay of employees at those companies, which was $36,382.

e list skewed even more automotive than usual, with automaker CEOs seeing their massive salaries fall slightly while supplier executives saw compensation jump.

CEOs are collecting eight- gure checks at a precarious time for the automotive industry and economy. Companies are cutting costs as the scramble for electrication intensi es and nancial uncertainties loom. Labor negotiations later this year are also sure to be lled with drama as the newly elected leader of the UAW promises “war” for better wages and bene ts for the working class.

Following is a breakdown of how top executives were rewarded for guiding their companies through 2022:

James Farley

President and CEO, Ford Motor Co.

2022 compensation: $21 million

Mary Barra

Chair and CEO, General Motors Co.

2022 compensation: $29 million

Barra, 61, saw her compensation decline marginally last year in tandem with the Detroit-based automaker’s

Farley’s salary slipped 8% from 2021 as the 60-year-old CEO goes head-to-head with Barra, Tesla CEO Elon Musk and a host of other automakers for electric vehicle supremacy. Like those automakers, the Dearborn-based Blue Oval is looking to slash costs for improved pro tability.

Farley promised a better 2023 after the company left $2 billion on the table last year, attributable to the costly EV pivot and $1 billion in higher than anticipated supply chain costs.

Farley had a base salary of $1.7 million, $15.1 million in stock awards and $2.8 million in nonequity incentive plan compensation. He earned $1.4 million in “other compensation,” including $903,857 in personal use of aircraft.

e CEO’s compensation was 281 times the median salary at Ford, listed as $74,691. is also represents a sizable reduction from 2021, when Farley took home 356 times more than an average employee.

slightly lower net income of $9.9 billion compared with $10 billion in 2021. As the company forges ahead with ambitious electri cation plans, it announced its intent to cut $2 billion in costs in 2023.

Barra’s compensation package

President and CEO, BorgWarner Inc.

2022 compensation: $17.9 million

e leader of Auburn Hills-based automotive supply giant BorgWarner saw a slight uptick in pay in 2022. Lissalde, 55, guided the company to a year of increased revenue ($15.8 billion) and gross pro t ($3.1 billion) as it closes in on break-even for its EV business. e supplier has been steadfast in its “electric rst” approach, which inspired a planned spin-o and billions of dollars in planned divestment from the gas engine over the coming years.

Lissalde’s compensation was composed of $1.3 million in base salary, $12.3 million in stock awards, $3.4 million in nonequity incentive plan compensation and $865,128 in “other compensation.”

e chief executive was paid 542 times more than the median BorgWarner employee’s compensation of $32,960, which is about on par with the year prior.

came with a base salary of $2.1 million, $14.6 million in stock awards, $4.9 million in option awards and $6.3 million in nonequity incentive plan compensation. In addition, the executive earned $1.1 million in “other compensation,” which included $254,037 in

Chairman and CEO, Aptiv PLC

2022 compensation: $16.2 million

e automotive electronics supplier, which has a base in Troy, emerged from a tumultuous 2022 with net income of $531 million, about at with the previous year, on revenue of $17.5 billion, up 12% year over year.

Clark was rewarded with a 10% pay hike.

Clark’s compensation consisted of a $1.5 million base salary, $12.5 million from a longterm incentive plan target award and $2.2 million from an annual incentive target award.

e 60-year-old CEO’s pay was 1,991 times more than that of its median employee, identi ed as a full-time hourly employee making $8,139 in Mexico, “where competitive wages vary greatly from standard U.S. hourly rates,” the company said in an SEC ling.

personal travel on a corporate aircraft and $147,767 for security.

Barra’s compensation was 362 times that of the median GM employee’s earnings of $80,034 — a signicant reduction of the 420:1 ratio in 2021.

Raymond Scott

President and CEO, Lear Corp. 2022 compensation: $15.4 million

e top executive of the South eld-based seating supplier saw a nearly 20% pay increase last year. at includes a base salary of $1.3 million, stock awards totaling $11.1 million, nonequity incentive plan compensation of $2.4 million and $567,097 in “other compensation,” including $44,672 in personal use of company aircraft.

Scott

Scott, 57, steered the supplier to $523 million in adjusted net income — up 9% year over year — on revenue of $20.9 billion, up 8% from the year prior. He is also overseeing the company’s strategy of localizing some manufacturing, which includes a new $80 million EV parts plant in Independence Township in Oakland County.

Scott took home 1,719 times as much as a median employee ($8,943), determined to be an hourly worker outside of the U.S.

See CEOS on Page 12

Kevin Clark

Frederic Lissalde

Farley

Lissalde Clark

Mary Barra

BLOOMBERG

TOP-COMPENSATED CEOS CRAIN'S LIST |

Ranked by scal 2022 compensation

|TopcompensationforCEOsatpubliclyheldcompaniesinWayne,Oakland,Macomb,WashtenawandLivingstoncounties.Incentive plan/retirementcolumnistotalofnonequityincentive-plancompensation,nonquali eddeferredcompensationandchangeinpensionvalue.NA=notavailable.NOTES:

SOURCES:S&PGlobalMarketIntelligence,(Marketintelligence.spglobal.com)andSEC lings

1. WillretireonJune1.Atthattime,BillEmerson,longtimeRocketexecutive and current vice chairman of Rock Holdings, will assume the role of CEO on an interim basis. 2. Died on August 19, 2022. Warren Lada was appointed as interim CEO.

3. Succeeded Timothy Mayleben as CEO in May 2021. Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data

TOP-COMPENSATED CEOS CRAIN'S LIST |

Ranked by scal 2022 compensation

SOURCES:S&PGlobalMarketIntelligence,(Marketintelligence.spglobal.com)andSEC lings |TopcompensationforCEOsatpubliclyheldcompaniesinWayne,Oakland,Macomb,WashtenawandLivingstoncounties.Incentive plan/retirementcolumnistotalofnonequityincentive-plancompensation,nonquali eddeferredcompensationandchangeinpensionvalue.NA=notavailable.NOTES: 1. E ectiveJune1,2021,changeditsnametoTheShyftGroupInc.(NASDAQ: SHYF)afterdivestingitsEmergencyResponsebusiness. 2. Retirede ectiveApril30,2022.SucceededbyformerCOO,RussellWeiner. 3. FiredasCEOinApril.CompanynamedRickRodgersasinterimCEO. 4. SucceededAndrewDahlaspresidentand CEOonJan.10,2022. 5. PriortohisappointmentasCEO,Paynewasanon-employeedirector. 6. SucceededRussellEllisonaspresidentandCEO,e ectiveJuly1,2022. 7. AnnouncedonMay10thatHomePointtosellremainingmortgagebusiness toDallas-basedMr.CooperGroupandshutdownoperationsfollowingthedealclosing.InApril,thecompanyannouncedasaleofitscoremortgagelendingbusinesstoTheLoanStoreInc.,basedinTucson,Ariz. 8. AppointedCEOinDecember2022.

Succeeded Edward Christian who died in August 2022. 9 Appointed CEO in June 2021. 10. Appointed as interim CEO after the death of Edward Christian in August 2022. Christopher Forgy was appointed CEO in December 2022. Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data

TOP-COMPENSATED NON-CEOS CRAIN'S LIST |

CEOS

Douglas Del Grosso

President and CEO, Adient PLC

2022 compensation: $15.4 million

Del Grosso, 61, falls in right behind his crosstown competitor with a compensation package 8% larger than the previous year. It included a base salary of $918,000, $12.1 million in stock awards, $2.1 million in nonequity incentive plan compensation and $206,728 in “other compensation.”

Adient, which is domiciled in Ireland with a base in Plymouth, kept sales ($14.1 billion) and gross profit ($807 million) relatively flat from the year before despite headwinds that cost the automotive supplier $2.2 billion in revenue for

NONPROFITS

the year.

Del Grosso has prioritized the bottom line and shedding bad contracts above growth at any cost.

With Adient’s median employee making $16,808, the ratio of CEO to median employee compensation was 913:1.

Gary Shi man

Chairman and CEO, Sun Communities Inc.

2022 compensation: $15 million

Shi man, 69, the highest-paid nonautomotive executive on the list, had a 9% pay hike in 2022, when the Southeld-based real estate investment trust had a net income of $242 million — a nearly 40% decline from the year prior.

Shi man had a base salary of $900,000, stock awards of $12.4 million, nonequity incentive pay of $1.7

million and $6,132 in “other compensation.” e CEO made 342 times that of the company’s median employee, which took home $43,786.

Je rey Brown

CEO, Ally Financial Inc.

2022 compensation: $14.4 million e 50-yearold CEO of the Detroit-based auto lender saw a 7% pay decrease in 2022, when the company recorded a record revenue of $8.43 billion. However, net income fell 44% to $1.71 billion. His compensation package called for a $1 million base salary, $4.3 million bonus, $9.1 million in stock awards and $47,008 in “other compensation.”

Brown took home 132 times as much as a median employee, which earned $109,445.

David Dauch

Chairman and CEO, American Axle & Manufacturing Holdings Inc.

2022 compensation: $13.4 million

Built around gas engines, American Axle is trying to stake its claim in the electric motor space and convince investors of its terminal value potential. e Detroit-based supplier recorded a 12% revenue increase to $5.8 billion in 2022, with a near at operating income of $243.9 million.

Meanwhile, Dauch’s compensation increased 20% last year. e top executive took a base salary of $1.25 million, on top of $5.5 million in stock awards and $5.6 million in nonequity incentive plan compensation. “Other compensation” totaled a bit more than $1 million, primarily in retirement contributions.

Dauch made 286 times more than

COVID outbreak at Pontiac homeless shelter shows pitfalls of post-pandemic world

e COVID-19 public health emergency may o cially be over, but outbreaks are not.

ree dozen guests in Hope Shelters’ emergency shelter in Pontiac have come down with the virus, along with four sta members since it lifted its mask requirement on May 11 when the COVID public health emergency expired.

e organization, which operates congregate emergency and recuperative shelters for homeless individuals released from the hospital, is once again putting people up in a local hotel and testing weekly to protect sta and clients and avoid the unexpected $18,000 cost it’s incurred with the current outbreak to put them up in area hotels.

e illness has taken root despite a 95% vaccination rate among the shelter’s clients and mandatory vaccination policies for its sta of 30, Executive Director Brian Wright said.

“It really wasn’t until the mask mandates went away that we had issue again,” he said.

e organization operates a 60bed adult emergency shelter and a

health emergency ended on May 11, the shelter dropped its mask mandate, he said.

Over the last two months, on two separate occasions, someone staying in the emergency shelter had COVID but didn’t discover it until they went to the doctor for asthma

have either shifted to noncongregate shelters already or in are in the midst of shifting. Individual or noncongregate spaces at emergency shelters not only stop the spread of communicable illnesses but also keep families together and provide privacy to individuals seeking assistance, shelter leaders said.

e federal government is “telling us we can expect additional pandemics in the future,” Wright said.

Other emergency shelter operators, congregate and noncongregate, say they’ve seen ve or fewer COVID cases in the past week or so.

Lighthouse, which put clients up in hotels during the pandemic, now operates a noncongregate shelter with individual apartments in Pontiac.

that of a median employee at American Axle, which pulled down $46,848.

Sachin Lawande

President and CEO, Visteon Corp.

2022 compensation: $10.5 million

Rounding out the list is Lawande, who guided the Van Buren Township-based supplier of cockpit electronics to a record sales year with $3.8 billion in revenue and $130 million in net income, tripled from the year prior, despite widespread microchip shortages.

Lawande, 56, was rewarded with a 13% pay increase, which included a $1.05 million base salary, $7 million in stock awards, $2 million in nonequity plan compensation and $497,328 in “other compensation.”

His compensation was 474 times greater than what the median employee made: $22,213.

NONPROFITS

The Children’s Center names advocacy veteran as CEO

SHERRI WELCH

e Children’s Center has named Nicole Wells Stallworth as its next CEO, following a yearlong search.

Wells Stallworth, who developed community and government engagement strategies for e Children’s Center from 2011-2014, will rejoin the Detroit-based nonpro t e ective July 10.

recuperative shelter with 14 beds, two to a room, for those released from the hospital but needing additional care. It didn’t see its rst outbreak of COVID until December 2021, Wright said, and cases had been minimal since then with regular testing for sta and clients every three weeks.

But when the o cial public

or another issue, Wright said.

And recently, more than three dozen people, all but one in the adult emergency shelter, have come down with the virus.

Hope Shelters has returned to “hoteling” those who are sick by putting them up at a local hotel for 10 days or longer to ensure they are symptom-free and taking food to

them. e practice, common for many shelters during the pandemic, has added an unexpected $18,000 to Hope Shelters’ $1.2 million budget, Wright said.

e Alliance for Housing of Oakland County, the county’s continuum of care agency, is covering $15,000 of the cost with American Rescue Plan Act dollars from the county, he said.

“I talked with some doctors trying to say can we dial down our responses, and they said they think we need to continue...testing frequently, wearing masks and isolating people when they are positive,” Wright said. For now, the Oakland County Health Department is coming every week to test sta and clients. And Hope Shelters is again requiring masks for guests and sta , he said. It will reassess the renewed policy once everyone is better and the outbreak dies down.

“We’re trying to protect the guests but also the organization...I want to make sure we don’t incur this kind of expense again,” Wright said.

Spurred by COVID, local shelters

In Detroit, Cass Community Social Services is working to open a noncongregate shelter in Detroit this fall, and NSO opened a new shelter with a exible design that provides separate spaces for four to eight men or women in each “pod.”

All but one of the shelters Detroit Rescue Mission Ministries operates are noncongregate, President and CEO Chad Audi said.

“By o ering individual accommodations and adhering to strict health and safety protocols, we aim to create a safe environment for those seeking assistance,” Audi said, noting DRMM operates the only quarantine shelter in Detroit with the city.

Hope Shelters plans to follow suit with a new, noncongregate shelter to make the shelter safer for clients and sta and to avoid the costs of hoteling in the future.

Wright said he is anticipating ARPA dollars from the county will help cover roughly half the costs of the $15 million noncongregate shelter building Hope Shelters plans to construct over the next couple of years.

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

She’ll succeed Debora Matthews, who is retiring after more than 37 years with the organization, the past 18 as president and CEO. Matthews will phase out her tenure with a hybrid schedule until Sept. 29 to help ensure a smooth leadership transition, the organization said. e 46-yearold brings more than two decades in leadership on the front lines of advocacy for issues that impact equity and quality of life outcomes.

She’ll join e Children’s Center amid challenges with state Medicaid reimbursement rates for community mental health services and competition for talent with private service providers that are putting pressure on its bottom line. Founded in 1929, e Children’s Center provides behavioral health services for children, adoption and foster care services.

“We are thrilled to have Nicole back to lead e Children’s Center into this new chapter for the organization. Ms. Wells Stallworth’s background and experience align with our recently established strategies and initiatives aimed at keeping TCC serving the community for years to come,” Board Chair Liz Agius said in a release.

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

Del Grosso

Shi man

Brown

Dauch

Lawande

Hope Shelters is dealing with a COVID outbreak that has sickened three dozen guests and several sta members at its adult emergency shelter. | HOPE SHELTERS

“I TALKED WITH SOME DOCTORS TRYING TO SAY CAN WE DIAL DOWN OUR RESPONSES, AND THEY SAID THEY THINK WE NEED TO CONTINUE...TESTING FREQUENTLY, WEARING MASKS AND ISOLATING PEOPLE WHEN THEY ARE POSITIVE.”

—Brian Wright, executive director, Hope Shelters

Wells Stallworth

GM, Stellantis give lifeline to insolvent supplier

Unique Fabricating to get $15M bailout until it sells itself, restructures

ree of Unique Fabricating Inc.’s largest customers have agreed to bail out the insolvent supplier with price increases and investment of up to $15 million to tide over the company until it sells itself and restructures.

General Motors Co., Stellantis and Yanfeng Automotive Interior Systems Co. entered into an accommodation agreement with the Auburn Hills-based supplier on May 22, according to a ling with the U.S. Securities and Exchange Commission.

At the same time, the company entered into another forbearance agreement with lender Citizens Bank NA, which stipulates that Unique Fabricating must pay $1.23 million in past due interest and attorney and adviser fees.

As part of the accommodation agreement, customers also agreed not to “exercise certain rights of set o , recoupment or deduction” and not to resource parts components to other suppliers.

cials for the scal year ended Dec. 31 due its statements being investigated for inaccuracies. Additionally, the company is being investigated for alleged labor rights violations at plants in Mexico.

In its most recent nancial report — the one under review — company executives said it took a $6.2 million operating loss and $10.6 million net loss in the third quarter, with projected full-year sales of $136 million. It had just $500,000 in cash and $1.3 million in liquidity under its revolving credit facility.

e company, which also counts Rivian Automotive Inc. and Bosch as customers, aims to continuing operating amid the restructuring process and potential sale.

Unique Fabricating could not be reached for comment last week.

“GM is aware of the developments at Unique Fabricating and is supportive of it as a going concern,” GM spokesman David Barnas said in an email. “As such, we are working with several of Unique Fabricating’s other customers and its creditors to allow them to be viable long-term through either a restructuring or sale. We do not expect any interruption to GM supply during this process.”

Stellantis declined to comment.

Small businesses get a chance to shine in summer events in downtown Detroit

A variety of events designed to boost local small businesses will take place this summer in downtown Detroit.

mercial kitchen, has been making cheesecake for 22 years — in addition to working full time for a local automaker.

The deal imposes a deadline of Oct. 31 for the company to be sold to a qualified buyer. The agreement may be terminated by a customer if a default occurs. The company must formulate a restructuring plan, hire a chief restructuring consultant and engage an investment banker within 30 days.

“ e accommodation agreement provides for speci ed price increases to be paid by customers during the term or other funding to be provided by customers to the company through the purchase by customers of a junior tranche of debt to be established under the credit agreement of up to $15 million in the aggregate,” the ling said.

e nancial struggles of Unique Fabricating, which supplies plastics, rubber and foam, became apparent earlier this year when it failed to report its nan-

Like other automotive suppliers, Unique Fabricating has struggled with production volatility, shrinking volumes and in ation, which have had an outsize impact on smaller companies further down the supply chain.

e accommodation agreement indicates that automakers and tier-one suppliers are still willing to make nancial concessions to suppliers to keep them a oat, as they did during the supply chain snarls over the past couple of years. When Bingham Farmsbased Gissing North America LLC led for Chapter 11 bankruptcy protection last August, GM, Toyota and BMW agreed to fund Gissing’s projected liquidity shortfall of more than $14 million as a bridge to it being sold.

Unique Fabricating (NYSEAMERICAN: UFAB) stock was trading at 23 cents per share as of Tuesday, having lost nearly all of its value since launching its initial public o ering in 2015 at $11 per share.

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

e Downtown Detroit Partnership is including Market Fridays, the Night Market at Beacon Park and the Downtown Detroit Street Eats program as part of its summer programming.

Market Friday

Market Fridays will take place 11 a.m.-3 p.m. Fridays June 9-Aug. 25 at Cadillac Square. e weekly outdoor pop-up market will feature vendors from a variety of industries. Vendors participating in the June 9 opening day include bath and body retailer Boho Luxe Detroit, Estella’s Vegan Cuisine & Desserts, Cheesecake King LLC, Grannies Pound Cake, Lorraine’s Premium BBQ Sauce LLC, Unalome Organics cosmetics, Detroit Bracelet Co. and Madou Permanent Jewelry. e lineup will be updated each week, according to DDP CEO Eric Larson.

The Night Markets at Beacon Park

e Night Markets at Beacon Park will run 6-10 p.m. June 10-Aug. 26 featuring a rotating list of food trucks, starting with Max Chicago Style Italian Beef, and Authentic Jamaican. Local DJs and musical acts will also provide entertainment on stage each week during the Night Markets, beginning with DJ Dante Lasalle, and Mike Main and the Branches. Both markets are a great way to bring a variety of new o erings into core areas of the city, Larson said. “We encourage people who wouldn’t

normally come downtown to get down here,” Larson said. “It’s a fantastic way for small businesses to grow their customer base and show o what they have to o er.

“All the programs we o er are deliberately designed to help small businesses and drive additional trafc downtown. e events are free. You can window shop, sit in the park and read a book.

e bottom line is we’re doing a much better job of providing the types of events people want and engaging all aspects of the community. Downtown is the place to be.”

Larson did not o er speci cs, but said the cost to participating vendors is nominal. e fee paid depends on the program and other factors, he said.

“We charge what we think (vendors) can a ord and it depends on the amount of foot tra c the event will bring,” Larson said. “What we’re really trying to achieve for the businesses is more exposure and a real opportunity to expand their footprint.”

Growing his list of clientele is what keeps Cheesecake King founder Marquis Hill coming back to Market Fridays.

is year marks the fth Hill will participate in the weekly event. Hill, who does his baking out of a com-

“(Market Fridays) has been wonderful for my business,” Hill said. “You’re able to get new people trying your products, and network with other businesses. I think it’s great the city puts these types of events on. Running a small business and working full time is really time consuming, so having these types of opportunities can only help.”

Downtown Street Eats

e Downtown Street Eats program will help more than 80 food truck operators expand their footprint.

e program began April 10 and runs 11 a.m.-3 p.m. weekdays and during special events through October, with food trucks rotating between Cadillac Square and the Esplanade on Woodward Avenue north of Je erson Avenue.

Downtown Street Eats, in its 11th year, sees about 2,500 people each day stop at a variety of food trucks.

e posted June 5 lineup includes Bu y’s Mexi-Casian Grill, Cousins Maine Lobster, Little Brothers Burgers and Shredderz hash browns.

Cost for vendors to participate in the street eats program is less than $200, according to Larson.

e event is now a part of the overall fabric of the city, he said.

“It’s a great way to increase the food o erings downtown and for the small business owners to test out new concepts before investing in brick and mortar,” Larson said.

“It’s important for people to have a bit of skin in the game, though. If everything were free, there wouldn’t be much incentive for the vendors to put their best foot forward. We want people out there who want to support the growth of downtown.”

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

Unique Fabricating Inc. has lost almost all of its value since launching its initial public o ering in 2015 at $11 per share.

“GM IS AWARE OF THE DEVELOPMENTS AT UNIQUE FABRICATING AND IS SUPPORTIVE OF IT AS A GOING CONCERN.”

—David Barnas, spokesman, General Motors

Market Fridays, an event from the Downtown Detroit Partnership, will take place 11 a.m.-3 p.m. Fridays June 9-Aug. 25 at Cadillac Square. DOWNTOWN DETROIT PARTNERSHIP

Marquis Hill, owner of The Cheesecake King LLC, will for the fth year partipicate in Market Fridays at Cadillac Square. | CHEESECAKE KING

Larson

Skymint faces auction with lender as stalking horse bidder

DUSTIN WALSH

e assets of embattled Diamondale marijuana cultivator and retailer Skymint will be auctioned o .

e company has been under three months of court-ordered receiver Gene Kohut.

“After his appointment, the receiver continued to operate Skymint’s business operations, the receiver has determined that is in the best interest of the receivership estate and its creditors to sell all the receivership property,” lawyers for Kohut, a partner at Detroit-based advisory rm Trust Street Advisors, wrote in the motion led in Ingham County Circuit Court on May 26.

e company’s assets, which include the leases on 23 dispensaries and two cultivation sites, will be sold to the highest bidder. However, the motion for an auction comes with a stalking horse bid from the Canadian lenders that sent Skymint into receivership in early March.

Tropics LP, under a new entity to be formed later, have o ered to acquire the Skymint assets for $109.4 million, setting the bidding oor.

Under the terms of the proposed auction — the judge still must approve the auction — any entity that outbids the stalking horse bid by Tropics’ new entity would have to assume all of Skymint’s liabilities, making a deal to acquire the struggling marijuana company a steep transaction.

Kohut said most creditors are supportive of the auction, so he expects minimal pushback. He told Crain’s he expects the judge to approve the auction process by the end of June.

Currently, Skymint owes Tropics approximately $135 million. at means any new bidder would be on the hook for at least $244.4 million to acquire the company.

David Morrow, CEO of competitor Lume Cannabis Co., said it’s unlikely any other Michigan company would bid on Skymint.

“ e simple math is the Skymint assets are worth less than the $127 million senior note (lender) SunStream has,” Morrow said. “ e big problem all these failed and failing cannabis businesses have is their assets are worth less than their total debts. ey have signi cant negative

COURTS

monthly cash burn, and they owe the federal government millions of past due taxes. It’s easy to say no to that stupid deal.”

Skymint ended up in receivership after Tropics, a subsidiary of Calgary-based Sundial Growers Inc.’s investment rm SunStream Bancorp Inc., loaned Green Peak $70 million in September 2021 toward the acquisition of competitor 3Fifteen Cannabis and its 12 dispensaries in Detroit, Grand Rapids, Ann Arbor, Flint and elsewhere. Sundial is a publicly traded company on the NASDAQ.

Under the Tropics promissory note, Skymint agreed to repay the lender in full by September 2025 at an interest rate of 12.5 percent, compounding monthly, as well as sell some common shares of the company to Tropics. Under the agreement, Skymint agreed to maintain a minimum cash balance of $7.5 million, which Tropics alleges in the suit that it failed to do in March last year. In response, Tropics loaned Skymint another $5 million, raising the loan total with fees to nearly $81.5 million.

Skymint did not meet its new loan obligation in June 2022 after failing to raise an additional $15 million in new funding. e company also failed to pay additional fees to Trop-

ics, pay back rent on its E. Jolly Road facility in Lansing and pay certain taxes. e two parties entered into another agreement in November, which included Tropics paying more than $5.8 million toward overdue sales and excise taxes for Skymint.

Tropics sued Skymint in early March to force a receiver. Tropics has also lent Skymint another $5.15 million to continue operations under the receiver.

Tropics alleged in the court ling that Skymint’s daily sales revenue dropped from $356,953 in April 2022 to just $184,579 in January of this year, exacerbating an already badnancial picture. Skymint was allegedly 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 owed nearly $4 million in sales and excise taxes by March 25, the suit alleged.

Under the receiver, Skymint has faced more and more uncertainty.

Skymint and the receiver have battled in court with the owners of 3Fifteen, New York-based Merida Capital, who also lent Skymint $8 million toward the 3Fifteen acquisition.

Its lawyers have sought on several

occasions to disjoin 3Fifteen 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 returned control of bank accounts with nearly $500,000 in funds and more than $600,000 spent on rent and bills for those dispensaries back to Skymint.

Merida alleged in its own lawsuit against Skymint in Oakland County Circuit Court that the company was mismanaged and that its co-founder and CEO Je Radway used the company as a personal piggybank. Radway took an “inde nite leave of absence” from the company in April.

It’s unclear whether Merida and 3Fifteen could upend the receiver’s motion to put Skymint up for auction.

Max Newman, partner at Butzel Long and attorney for 3Fifteen, told Crain’s the company will “speak through our objection with

the court.”

In April, Skymint ceded its lease on the former Summit Sports and Ice Complex near Lansing. e company planned to double its marijuana production capabilities with the facility, but never completed the build out. Skymint surrendered the 176,000-square-foot facility and 21 acres back to developers, the country’s largest cannabis property developer Innovative Industrial Properties Inc.

San Diego-based IIP invested roughly $30 million to acquire and renovate the facility on Skymint’s behalf, but sought to retake the property after Skymint failed to pay on its lease.

e auction of Skymint would be the largest marijuana business failure in Michigan — and possibly the U.S. — and highlights the di cult conditions these companies are operating under in Michigan, where prices have declined more than 80 percent since legalization in December 2019.

e price collapse is largely due to product oversupply — recreational marijuana retail prices have plummeted from $512.05 per ounce of ower in January 2020 to just $87.76 per ounce of ower in April — e ectively eliminating margins for many businesses.

At least ve other marijuana companies are under a court-ordered receiver in Michigan.

A court-appointed receiver is an unbiased third party that e ectively takes control over a company’s operations and nancial books and then makes a recommendation to the court on what the best path is to satisfy creditors, whether that means a reorganization of the company or a liquidation.

Marijuana remains a Schedule 1 drug at the federal level, which bars cannabis companies from being able to use the federal bankruptcy courts to settle debts, leaving state circuit courts as the only means for nancial protection.

So it’s quite possible that while Skymint is the rst marijuana company to be auctioned by the court, it may not be the last.

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

Ford sues Blue Cross Blue Shield over antitrust, seeks millions in damages

DUSTIN WALSH

Ford Motor Co. led an antitrust lawsuit against Blue Cross Blue Shield last week, alleging the insurer is turning “astronomical pro ts” and paying “extraordinary salaries” by xing prices through anticompetitive behaviors.

e case, led in U.S. District Court in Detroit, accuses the national arm of the insurer and Blue Cross Blue Shield of Michigan of violating the Sherman Antitrust Act by dividing the country up into regions and controlling prices, resulting in higher prices for Ford and its employees.

e allegations stem from a class action lawsuit led by corporations in Alabama that resulted in a $2.7 billion settlement in 2020. Ford opted out of that case, which is currently under appeal, to pursue its own legal

action against e Blues.

Neither Ford nor BCBSM immediately replied with comment.

Ford’s attorney alleges in the suit that by Blue Cross splicing up states across the U.S. and not competing with each other, competition was restrained, therefore allowing e Blues to charge higher prices for premiums. Blue Cross’ 36 licensees cover the lives of 106 million, or one out of every three people in the U.S., and service 88 Fortune 100 companies, Ford said in the suit.

It’s unclear the exact dollar gure Ford is seeking in damages, but the automaker is asking for “treble the amount,” or three-times the amount between what Ford paid Blue Cross and what it estimates it would have fairly paid for bene ts in a competitive market.

Ford said it spent $500 million on premiums since 2009.

e Ford lawsuit is happening before the appeals court in Alabama can rule. Lawyers for Home Depot and a handful of other corporations are seeking to stop the settlement to allow for others, like Ford, to le their own suits against Blue Cross.

BCBSM faced a separate antitrust lawsuit in Detroit originating from allegations of illegal market domination by Anesthesia Associates of Ann Arbor.

e physician group accused BCBSM of working with other Blue Cross licensees to lower rates for anesthesiologists and block the group from performing in hospitals. A federal judge dismissed that suit on Dec. 29 last year.

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

Skymint, which primarily operates under the parent company of Green Peak Innovations Inc., remains in receivership and is going up for auction. | SKYMINT VIA FACEBOOK

HART PLAZA

Yet, years of neglect left the plaza with many needed repairs, according to a recent study of the Civic Center area. Stairs need to be rehabilitated, drains do not work and the concrete is in poor condition, the East Riverfront Asset Study said. Lower levels have re and water damage, as well as outdated plumbing and electrical equipment. In some places, the plaza is a safety hazard.

“Hard structures only have so long of a life expectancy,” said LaJuan Counts, Detroit’s demolition director, who is expected to add construction responsibilities to her role later this summer. “It needs a lot of repair if it is hard.”

e city has already put nearly $4 million into improvements at the plaza, according to Rhea Bautista, Detroit’s manager of capital planning. ose upgrades include replacement concrete in some areas, and Jason Huvaere said it’s made a big di erence.

“ ese improvements are very welcome,” said Huvaere, director of the Movement Festival and principal of Paxahau Inc., which produces the Jazz Festival and entertainment for other large events at Hart Plaza. “ e whole surface has changed. e entire place looked like broken stones for years.”

Huvaere called the new surface a “total game changer” for both ap-

BASBLUE

From Page 3

Davis has served for the past year as director, institutional partnerships and equity for New Orleans-based Resilia, a Black women-led, venture-backed startup working to power a digital transformation in the nonpro t sector.

Prior to that she was director of senior services for Wayne County between 2019 and 2022. She also spent nine and a half years with AARP, the bulk of it serving as associate state director-multicultural outreach/community engagement and served as director of development for the Eugene Applebaum College of Pharmacy and Health Sciences at Wayne State University from 2006-2010 after serving as director of public a airs for Wayne County.

“We’re really delighted by what we’ve been able to build so far; now we’re in the next phase,” Tellem said. Davis brings tremendous experience in nonpro ts, fundraising and program development, Tellem said. “She really is a thought leader in the community engagement space and an innovative builder of philanthropic partnerships.”

Davis will bolster the fundraising leadership BasBlue’s engagement and philanthropy manager, Miah Davis, has provided, Tellem said, noting BasBlue plans to add additional sta to the foundation’s operations.

With the new DPSCD pilot, the foundation expects to add program managers and is considering the addition of a social worker to provide emotional support for the girls age 14-18 served through the program, Tellem said.

As BasBlue’s rst program geared speci cally to teenage girls, the Detroit pilot builds on more than 100 educational and impact programs for women currently o ered by the nonpro t, including the Zero-to-One Entrepreneurial Fellowship Program,

pearance and safety. He said trees have also been planted, and while there were times over the years that the plaza may have seemed desolate, and littered with trash and debris, it’s a lot di erent now.

“It’s going to keep looking better and better,” he said.

Updates to come

e city plans to invest more than $9 million in continued improvements; those projects include improving amphitheater seating, upgrading re alarms and re suppression and improving the grand

stairs along the RiverWalk, Bautista said. One of the most noticeable improvements will be to the Dodge Fountain, which Counts said she expected to be restored by next spring.

“We take our jewels very seriously,” she said. “We were going to gure it out. e fountain at Hart Plaza must always be the fountain at Hart Plaza.”

ere are questions, though, about what the best use for the plaza may be. Counts said the current “cold” design, with so much concrete, is out of favor, and studies continue to look at what changes might be made to the plaza, including more green space.

e asset study suggested the plaza’s many monuments might be more intentionally positioned and recommended better everyday uses for the area, outside of festivals.

Any improvements would be bene cial for the city as a whole, said Marc Pasco, spokesperson for the Detroit Riverfront Conservancy. Pasco said Hart Plaza has meant a lot to Detroiters for generations, and anything that brings more people there is a “wonderful thing, not just for the riverfront, but for people as a whole.”

“It’s exciting for those of us at the conservancy, seeing improvements being made and more events coming there,” he said. “It’s a gem in our city; it’s a gem along the riverfront.”

ere are still things Huvaere would like to see, like improved electricity and water, and permanent fencing. Counts said she doesn’t think there is a reason to fence o the plaza, which she said would isolate it from the rest of the city, though Huvaere suggested it would help protect it during the winter and make it easier to manage festivals and other events.

Pieces of the plaza also include underground kitchens, a food court and other spaces, though Counts said she doesn’t expect them to be publicly accessible again.

The heart of Detroit

Jordan, the historian, said Hart Plaza is key to a successful Detroit. It’s large enough to host events with 100,000 people or more, and there’s

der-resourced DPSCD high schools.

BasBlue will spend the next six months conducting focus groups with students, parents, faculty and the community to shape the services it o ers through the program, Director Maria Baker said.

“Ballmer Group is proud to support BasBlue to ensure women and high school girls have access to the social capital and skills they need as they de ne their own pathways to success and economic opportunity,” said Temeca Simpson, portfolio manager at Ballmer Group, in a release.

access to both the river and the downtown business district. No other space in the city has that combination of amenities.

e plaza sits on the site of Detroit’s founding, and that connection to the city’s history is key, Jordan said. While he said Campus Martius may have supplanted Hart Plaza as the city square, there’s no replacing it completely.

“It’s important to understand how central Hart Plaza has been historically to this feeling that Detroit was an international city,” he said. “It brings back the spirit that we are all one city. ... When it comes down to it, we’re all from the D.”

ere’s been an increase in people wanting to book events there after the summer season, said Jasmine Barnes, the chief of policy and engagement for Detroit’s general services department. Barnes said there’s no comparable space in the city. e Movement Festival considered leaving in 2006, Huvaere said, but fans wouldn’t have it. ey reacted “very strongly” to the idea, he said, and he decided to stay put. Still, he thinks there is plenty of room to improve the plaza. Its own conservancy, he said, might help maintain it into the future.

“It’s just a really special place. ... ere’s no other spot like it,” Huvaere said. “It’s right in the middle of everything.”

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

“BasBlue has powerful programming that will equip the next generation of entrepreneurs across Detroit.” BasBlue has raised $4 million over the past year and a half to address economic mobility for women and nonbinary individuals through programs, resources and a meeting space for its now 650-700 members. Funding has come from organizations including the Ralph C. Wilson Jr. Foundation, Pathways Foundation and Priority Health, Tellem said. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

Trailblazer-in-Residence Scholarship Program, Founders + Fund(hers)

Pitch Day and Art of BasBlue.

“We’ve seen an incredible interest from young women coming on board and interested in what it’s like to be an entrepreneur and have had young

women entrepreneurs pitch their ideas and ask how to get their business started,” Tellem said.

It will provide girls from economically disadvantaged backgrounds with the connections and tools they need to thrive today and tomorrow and help develop diverse skill sets from academic success to career and/or college readiness, she said.

“While many youth programs focus solely on college readiness, BasBlue seeks to develop diverse skill sets among our youth from academic success to career readiness, as college may not be for everyone,” Tellem said.

e program will give the girls participating “the chance to see what is possible...on where they want to take their life,” she said.

e $1 million grant from the Ballmer Group will fund the development of mentorship, academic support, leadership development, career readiness and alternative career path programs for teenage girls in un-

REQUEST FOR PROPOSALS

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/.

Crowds attend the Movement Festival at Hart Plaza over Memorial Day weekend.

CONNOR VALONE

Khalilah Burt-Gaston, executive director of the Song Foundation; Sarah Feldman, operations manager for East Warren Development Corp.; Madeline Wyatt, director of client relations for the Remington Group; and an unidenti ed person network at a BasBlue event. | CRAIN’S DETROIT BUSINESS

Nancy Tellem, co-founder, BasBlue.

“ at’s what’s driving me nuts,” the mayor said. “Who would design a system this crazy?”

Duggan said that on average, the owners of vacant and dilapidated properties pay $30 a year in taxes, a gure that doesn’t even cover the $100 annual cost to mow the lawn ve times a year.

“Blight’s rewarded, building is punished,” he said. “We don’t tax blight. ... ere are people who benet from the fact that we don’t tax blight.”

Under the new system, which must be approved by legislators and City Council before going to a vote, the cost to hold that property would increase to $85 a year on average, he said, with the largest increases being felt in parts of the city where land is worth more, namely downtown, Midtown and Corktown. At the same time, he said, property taxes for homeowners would drop.

“If we can pass this, the average Detroit homeowner will get a 25% tax cut,” Duggan told reporters after the announcement. “And the people who own vacant land and buildings will get a tripling of their taxes. at’s the gist of what we’re trying to do.”

e proposal has broad support, and comes on the heels of a Lincoln Institute for Land Policy report that proposed a similar solution to issues of high residential taxes and high speculation. Nick Allen, a Massachusetts Institute of Technology doctoral student who co-authored that study, said it would change the calculus in Detroit that it was pro table to hold on to property. Land speculation is one of the biggest problems in the city, he said, and the tax change is likely to change that calculus.

“ is is a reform to make Detroit competitive with its region, competitive with its state,” Allen said. “It’s really costly to invest and it’s really cheap to hold, so the most pro table thing to do is to hold things. is is not going to change your right to do that, but it’s going to change the cost.”

Allen said he would expect a 6%12% increase in business growth in the city in the rst three years of implementation — if passed by voters next year, the measure would go into e ect in 2025 and be phased in over a three-year period, Duggan said.

Dave Blaszkiewicz, the president and CEO of Invest Detroit — which commissioned the Lincoln Institute study — said the tax change has the opportunity to be transformational for the city.

“It’s an amazing opportunity for the city of Detroit,” he said.

e CEO of Detroit Future City as well as developers and business leaders praised the plan in statements sent out after the speech. Richard Hosey, the owner of Hosey Development, called it forward-looking, while Rip Rapson, CEO of the Kresge Foundation, which helped fund the Lincoln Institute study, said it could be an equitable way forward for development in the city.

ere are those who question the viability of the proposal. Christopher Berry, a professor at the University of Chicago and director of the Center for Municipal Finance, said previously that why Detroit land remains undeveloped is an open question. He said that in many cases, he suspects there isn’t demand for development — and a new tax structure cannot change those economic fundamentals.

Still, Berry called the proposal a

“bold” idea and said it amounts to a bet on Detroit by its leaders.

“If you really believe the city is poised now for its resurgence, if you believe the economic fundamentals indicate the city is poised for a comeback, this is good policy,” he said.

Joe Tate, the Democratic speaker of the Michigan House, has said he supports the measure. He and Duggan said they would like to see it passed this year, with the option for it to be a statewide measure that other local governments could take to voters — though Duggan said he didn’t think it would be applicable to most other cities in the state, only those like Flint that also deindustrialized and saw their land values collapse.

Over the next six weeks, Duggan told reporters, members of his administration will sit down with site owners to talk about the possible effects of the plan. Duggan said he wanted to assess the impact on warehouses and urban farms “to make sure we don’t have unintended bad consequences.”

Detroit Chief Financial O cer Jay Rising has said the plan will be revenue neutral, with large increases in taxes on the value of land in some areas making up for decreases elsewhere. Duggan said he expected it to be “within 90% of revenue neutral,” saying the expected growth would make up for any losses.

“If we lose 10% in 2027, it’ll be dwarfed by growth in the city,” he said after his speech.

e city will credit property owners for required parking that takes up space, Duggan said, but excess land that businesses own will see higher costs. He also said Detroit’s more than 400 scrapyards, as well as owners of vacant properties and parking lots — who he said would be “hit hard,” to cheers — are likely to see their taxes rise.

ose who own some of the 22,000 side lots that have been sold in the city aren’t likely to see an impact unless they own more than three properties, Duggan said. Still, the Detroit Land Bank Authority will plan to buy back any side lots, for $100, that people no longer want to hold on to, he said.

Duggan said that if successful, the proposal could save the owner of a $50,000 home $463 a year in taxes, and the owner of a $200,000 home $1,850 annually. Residents in Neighborhood Enterprise Zones would see savings of about half of what they are now, but those savings would be permanent — now, they end when NEZs expire. At the same time, he said, a land value tax could encourage more building in Detroit, both of new homes and other development, with lower taxes making the city more desirable for development.

“Neighborhood development is what is going to be incentivized,” he said.

“If we do it right, we can spread beauty to every corner of the city.”

— Crain’s Detroit Business reporter David Eggert contributed to this report.

Other news and announcements from the Mackinac Policy Conference:

Whitmer forms council to tackle population drop

Gov. Gretchen Whitmer on ursday established a council to recommend ways to grow Michigan’s stagnant population and to set a target population goal for 2050.

e 28-person Growing Michigan

Together Council will have 21 voting members and be co-chaired by Walbridge Chairman John Rakolta Jr., a Republican and former ambassador to the United Arab Emirates; and Shirley Stancato, the Democratic vice chair of the Wayne State University board of governors and former president and CEO of New Detroit Inc.

Other voting members will include lawmakers, the director of the state Department of Labor and Economic Growth and people representing business, labor, education, nonpro t and other sectors.

“We need an all-of-the-above approach to grow our state, and I look forward to seeing what they come up with,” she said in a Mackinac Island news conference ursday.

Michigan ranked second-last nationally with just 1% growth from 2000 to 2020 and is projected to grow more slowly than the rest of the country for years to come and start to decline in the 2040s.

—David Eggert

Detroiters cite transportation access as the biggest barrier to work

Detroiters said the biggest barrier to employment is access to transportation, according to a survey released ursday by the Gallup Center on Black Voices and the Detroit Regional Chamber.

Camille Lloyd, director of the Gallup Center on Black Voices, on ursday presented the ndings of the Detroit Resident Voices Survey Report, based on a poll last fall of 12,000 Detroit-area residents — 6,243 living in the city of Detroit and 5,227 in the metro area.

is was the rst city-speci c survey Gallup has conducted. It was designed to illuminate issues that a ect metro Detroiters’ quality of life and pinpoint insights that can be used in the public, private, and philanthropic sectors to develop new programs and initiatives to identify and close equity gaps.

Among the results the study found:

 40% of Detroit city residents and 52% of Detroit suburban residents consider themselves to be thriving.

 39% of Detroit city residents are satis ed with the availability of good jobs, versus 72% of Detroit suburban residents and 66% of Americans.

 For Detroiters who work, 51% cited access to a car as a top employment barrier, while 44% cited access to convenient public transportation as a barrier.

 Among working Detroiters, 44% cited level of education and training as additional barriers to job mobility.

 Just 30% of city residents said they were satis ed with the educational system or schools in their area. In Detroit’s suburbs, 58% are satis ed with their local schools, which is lower than the 68% of Americans overall who are satis ed.

 43% of Detroit city residents said there were times in the past year when they didn’t have enough money to buy food for themselves or their

families, compared to 18% of suburban residents.

 23% of city residents said they didn’t have enough money to provide adequate shelter or housing, compared to 10% of suburban residents.

—Rachel Watson

Democrats propose 2 new economic development funds

Gov. Gretchen Whitmer and Democratic legislative leaders on Wednesday began unveiling what they called a “comprehensive” economic development strategy, starting with two funds to ready brownelds for business investment and help Michigan land federal funding from two major laws.

ey provided few details and said more elements of the “Make it in Michigan” plan will be unveiled in coming weeks. ey were still negotiating how much money to put into the funds as part of the budget lawmakers want to nish in June. e money was billed as necessary to win manufacturing and other business projects.

e proposed Make it in Michigan Transformational Brown elds Fund appears similar to Senate-passed bills that would double a yearly tax incentives cap for transformational mixed-use brown eld redevelopments to $80 million.

e proposed Make it in Michigan Advanced Manufacturing and Clean Tech Competitiveness Fund would “bring home more than our fair share of federal resources from the CHIPS and Science Act and the In ation Reduction Act,” Whitmer said during a news conference at the Detroit Regional Chamber’s Mackinac Policy Conference. e 2022 laws will “help us make more stu in America,” including in the semiconductor and clean-energy sectors, she said.

—David Eggert

Cuban urges businesses to accept, adopt AI

In a rollicking and often profane interview on stage at the Mackinac Policy Conference, billionaire entrepreneur and NBA team owner Mark Cuban gave the audience a view into what arti cial intelligence will mean for businesses, and how it will further the divide between businesses that get good at it and those that fail to learn.

Cuban outlined in an onstage conversation with Crain Communications Inc. President and CEO KC Crain a distinction between AI that does optimization and business analytics work and is becoming more widely deployed and the “large language model” AIs exempli ed by ChatGPT that can conduct conversations. He urged businesspeople who haven’t already played with ChatGPT or similar programs to do so because that’s the only way to begin understanding what they can do.

“ ere’s two types of companies,” Cuban said. “ ose who are great at AI and everybody else.”

Cuban also said he sees entrepreneurship as a way to overcome political division and get things done.

“We’re going through a lot of discussion of ‘woke’ businesses and ‘not-woke’ businesses … I think your business needs to match the demographics of your prospects,” Cuban

said. “When you have people that look like the people you’re trying to sell to, they tend to have a better connection ... e demographics continue to change, but that’s where the money is.

“ e biggest opportunities exist where no one else is serving that community,” he continued. “Call me woke, but … I call it good business.”

—Michael Lee

Liz Cheney doesn’t rule out presidential run to block Trump

Former Republican U.S. Rep. Liz Cheney on ursday did not rule out a run for president, even as a third-party candidate, but said she is focused on ensuring that Donald Trump never becomes president again and opposing other election deniers.

Cheney had said previously she is thinking about running. She sat on the House committee that investigated the Jan. 6 insurrection, and her opposition to Trump and his lies about the 2020 election cost her re-election in Wyoming.

“I’m not making any announcements here today. I am really focused on making sure that Donald Trump doesn’t get anywhere close to the Oval O ce,” Cheney said to applause at the Detroit Regional Chamber’s Mackinac Policy Conference. “I’m going to continue to make sure to do everything I can both to ensure that and also to make sure that other election deniers are not elected.”

Asked later if she might launch a third-party candidacy, she said: “I’m not going to rule it out.”

Cheney, who campaigned for Democratic Rep. Elissa Slotkin in her battleground race last year, said Michigan is “hugely important” politically. e Michigan Republican Party is led by an election denier, which Cheney said has occurred in Wyoming, too.

Cheney said she supported Slotkin, who now is running for U.S. Senate, in part because the political ground is shifting.

“We all have to support people we know will defend the Constitution and people who will do what’s right,” she said.

—David Eggert

Education a ‘centerpiece’ to grow talent

Partnerships between higher education institutions, business and the state will be central to improving the Michigan’s educational systems, its ability to attract knowledge economy jobs and talent, leaders said.

ey spoke during the panel conversation “Talent Today & Tomor-

Detroit Mayor Mike Duggan.

Top: Liz Cheney.

Bottom: Mark Cuban.

row” on Wednesday afternoon on Mackinac Island.

Nationally, Michigan ranks 40th in fourth-grade reading, 42nd in high school graduation rates and 40th overall in education systems, said Je Donofrio, president and CEO of Business Leaders for Michigan.

“It’s not because we don’t have good teachers and good administrators and they’re not trying their best. Our education system just isn’t designed for the economy of today and in the future. And it’s long past time that we do real systemic education reform,” he said. “Education has got to be the centerpiece of how we change our trajectory.”

ere’s a lot of innovation happening through partnerships among community colleges, four-year universities, local communities, health care and business.

University of Michigan President Santa Ono pointed to e orts with Detroit Public Schools Community District on the former Marygrove College campus in Detroit and the planned University of Michigan Center for Innovation in Detroit as examples of innovation.

Grand Valley State University based in West Michigan started a homework helpline during the COVID-19 pandemic that has evolved to provide more than 90,000 tutoring hours across the state digitally and inspire students to teach through that positive experience, GVSU President Philomena Mantella said during the panel discussion Wednesday.

Lansing Community College is providing space on its campus for electric vehicle battery manufacturer Ultium Cells LLC to attract and hire 1,700 people it will employ at a new

plant next door, LCC President Steve Robinson said.

—Sherri Welch

Benson asks businesses to help people get driver’s licenses back

Secretary of State Jocelyn Benson is asking businesses and other organizations to help expand a public-private program aimed at helping 150,000 people whose driver’s license suspensions were lifted under 2021 laws but who still need to take further action to drive again.

e “Road to Restoration” initiative could use more volunteer attorneys and money, both to assist residents at clinics and to pay court fees and nes that prevent them from getting their licenses back.

Benson was joined by existing partners — the city of Lansing, the Miller Can eld law rm and DTE Energy Co. — during a Wednesday news conference on the island.

“We’re here seeking additional partners. Businesses and other organizations can join this initiative in a myriad of ways, including helping to pay court nes and fees for those restoring their licenses or providing free or a ordable transportation options to people who want to attend a clinic,” she said, saying license restoration boosts the economy because people can drive to work. “Often court fees and nes are the only thing standing in the way of a Michigander getting their license back. And when partners commit to paying those fees ... it signi cantly increases the number of people who can get their licenses restored.”

At the clinics, Department of State sta and volunteer lawyers have oneon-one meetings with people trying to get back behind the wheel. More than 5,200 residents have been helped at 23 clinics in 14 cities since 2022. Benson announced that three new mobile o ces, which provide secretary of state services at the clinics, will be launched this summer in Flint, Gaylord and Marquette.

—David Eggert

Panel pitches ideas to solve workforce crisis

How can Michigan compete? ere are nearly 250,000 open jobs in the state and a population that is aging and declining overall.

A panel ursday at the Mackinac

Policy Conference titled “ e Detroit Region’s Fierce Competition” set out to highlight some answers.

e problem is stark. If Michigan’s population continues on its current path, retirees will outnumber workers by a large sum. In 2050, the number of prime working age Michiganders — those 25-to 64-years old — will grow by 2%, according to data from the Citizen’s Research Council. e number of those 65 years and older will grow by a stunning 30%. To make matters worse even further in the future, the number of those under 17 years old will drop by 6% by 2050.

“We need to be proactive and organize and develop strategy to work on systemic barriers,” David Meador, former chair of DTE Energy and current executive director of the Detroit Regional CEO Group. “We have to make it easier on the supply side.”

Nicole Sherard-Freeman, group executive of jobs, economy and Detroit at Work for the city of Detroit, highlighted the city’s Skills for Life program. e $75 million program, funded through federal COVID-19 relief funds, pays Detroit residents to work three days a week at the city and funds two days of education or training.

e reality is K-12 education needs to be drastically be improved, Susan Corbin, director of the Michigan Department of Labor and Economic Opportunity, argued.

Je Donofrio, president and CEO of Business Leaders for Michigan, said the state needs to look outside its borders to supplement the workforce, so “we have to welcome educated immigrants.”

—Dustin Walsh

Gov. Gretchen Whitmer signs an executive order that forms a new committee designed to encourage population and economic growth. | PHOTOS BY DALE G. YOUNG/CRAIN’S DETROIT BUSINESS

Top: Detroit Mayor Mike Duggan. Bottom: Mark Cuban.

Marc Nassif on back to o ce issues and how softball changed his life

Marc Nassif, senior managing director, BBG Inc., could have wound up in a very di erent position had he not joined a company softball team more than 20 years ago after graduating from Albion College. He wound up playing with a slew of National City Corp.’s commercial real estate group members and, by the time the summer was over, he was working exclusively on those types of deals. Fast forward to today and Nassif, a father of three, is one of the leading commercial real estate appraisers in the region, working in downtown Detroit and across the country.

BY | KIRK PINHO

 What are you seeing in terms of trends, given what the Fed has been doing the last year or so with interest rates?

There is a lot of equity on the sidelines waiting to see what’s going to happen right now. You’ve got encumbered deals on oating rates that are under stress and people searching for opportunities to get out of those or get some debt relief. You’ve got a slowdown in leasing, which is a carryover from the pandemic and remote work. There is also new uncertainty due to interest rates and the economy, and reluctance to sign long-term deals right now. There are a lot of people who, unless they have a speci c reason to be making a move, are sitting on the sidelines.

Downtown Detroit is a great example of that. If you look at daytime occupancy now vs. three years ago, you’re still only at about 50%. So if you’re doing a retail deal, if you’re doing the Apple store that everybody’s talking about, what are actually the numbers of people down there on a daily basis?

 People just don’t seem to be coming back. Is there anything that can be done to get more butts in seats in the o ces?

 If there are a lot of people on the sidelines, what needs to be done to nudge them out and into the playing eld? Is it just stabilizing rates? Other factors?

That’s a very big piece of it. Life (insurance) companies are still very busy and very active (in lending). People are trying to go that route if the metrics of their deals work, in terms of stabilization and cash ow and the life cycle of the deal. Unfortunately, not everyone can do that. If there was more certainty in interest rates, people would be more prone to move forward. If there was more certainty in back to work, people would be moving forward more.

RUMBLINGS

Some of the larger tech companies have signaled they want their people back in. I think that’s the start of it. There have to be some large players who remove the optionality. I think a lot of the Gen Z and younger people coming out of school are now expecting to work remotely and expect it to be a day to day option they have, and that’s a challenge. Somebody has to come out and say, “No, you’re back in the o ce.” It has to be somebody big enough to set a trend, and I think a lot of larger companies are waiting for that.

 Where do you see commercial values heading?

It depends on the asset type, and I think the people who are still seeking large numbers, it goes back to that uncertainty. If you’re of the mindset that rates are going to come back down and things are going to heat back up, and you’re just going to sit on this big number for another six to nine months because you don’t want to let the market know what you’ll accept,

Bill Ford: Politicization, a ordability threaten adoption of EVs

FORD MOTOR CO. IS FACING a host of barriers in its pursuit to win the electric vehicle race, but chief among them are two factors that threaten the entire industry: a ordability and politicization.

e executive chair of the Dearborn-based automaker said he is surprised by how quickly electri cation has taken o around the world and in the U.S., where adoption has been slower than places such as China and Europe. He said he’s even more surprised how in the U.S. especially, Ford’s products have become polarizing.

“ ere is this notion now that if you are ‘red’ you’re for internal combustion, if you’re ‘blue,’ you’re for EV’s,” Ford said. “In our wildest dreams we never thought we would see our products somehow be polit-

icized…So that will change the rate of adoption.”

Ford expressed those thoughts and a range of others ursday

theme of the conference — driving population growth — by outlining steps the automaker is taking to keep talent in the state, including its $950 million Michigan Central campus.

Keeping workplaces fresh and exciting for young talent is important, but keeping cars cool in the eyes of the next generation is downright crucial for the automaking business. According to the chairman, the lack of a ordability of EVs is turning o young would-be buyers, and that poses a threat for the industry as a whole.

“ at more than anything is preventing young people form really engaging the car industry,” Ford said. “People still love cars. e problem is a ordability. Vehicles have gotten really expensive.”

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Editorial

during an onstage interview conducted by journalist Christy McDonald at the Mackinac Policy Conference. e chairman hit on the key

Bill Ford on the big stage during Thursday events of the Mackinac Policy Conference at the Grand Hotel on Mackinac Island. DALE G. YOUNG / CRAIN’S DETROIT BUSINESS

Marc Nassif is senior managing director at BBG Inc.

“I THINK A LOT OF THE GEN Z AND YOUNGER PEOPLE COMING OUT OF SCHOOL ARE NOW EXPECTING TO WORK REMOTELY AND EXPECT IT TO BE A DAY TO DAY OPTION THEY HAVE, AND THAT’S A CHALLENGE. “

—Marc Nassif, senior managing director, BBG Inc.