Crain's Detroit Business, June 17, 2024

How Michigan schools fell behind

Residential pickings are slim in Corktown

NickManes

As the former Michigan Central Station and the broader Corktown neighborhood get their moment in the sun, local real estate professionals are also looking at the challenges and opportunities for increased housing in the area.

e Corktown area just west of downtown Detroit is in the spotlight now and in the coming weeks as Dearborn-based Ford Motor Co. opens the restored 500,000-square-foot former train station, expected to house some 1,000 high-tech automotive workers by the end of the year, and thousands more

in the years to follow.

A sold-out concert this month featuring the likes of Diana Ross, Big Sean and Jack White o cially kicked o the public opening of the building, which had been closed for 35 years.

Given the anticipated density of workers in the Michigan Central district, which includes Newlab in the renovated Book Depository building, demand for housing should accelerate in the already hot neighborhood, said Ryan Cooley, owner of residential brokerage O’Connor Real Estate, headquartered in Corktown. A veritable condo and apartment boom has already been underway for years.

“With those kinds of (employee) numbers, and people wanting to walk to work, I think that would be pretty enticing for people,” Cooley said of the expected demand for residential options. “ at’s certainly the hope.”

See CORKTOWN on Page 17

CFO’s nightclub faces eviction, landlord says

e former CFO of the Detroit Riverfront Conservancy is facing the wrath of his shuttered Southeld nightclub’s landlord.

William Smith, who is accused of embezzling $40 million or more from his former employer, is two months behind in rent for Duo Restaurant & Lounge, 29555 Northwestern Highway, according to the club’s landlord, Tony Curtis.

Curtis, who co-owns Rochester Hills-based Papa Joe’s Gourmet Market & Catering LLC, said his attorney is preparing paperwork for South eld’s 46th District Court to boot Duo from the

ESTATE INSIDER Fired CFO amassed properties in tax auctions. PAGE 4

La Mirage Shopping Center he owns and seize its equipment and furnishings. It’s another blow for the embattled 51-year-old, facing federal allegations that he fraudulently used at least $14.9 million in conservancy funds to pay personal American Express credit card bills and transferred $24.4 million to a company he owned, e Joseph Group & Associates LLC.

See NIGHTCLUB on Page 13

Hunter House battle pits old vs. new in Birmingham.

CONVERSATION

First female CEO of Albert Kahn Associates on leading the rm.

Lori Richert and her second-grade Childs Elementary students focus on a literacy lesson in May. Educators say Michigan needs to be more aggressive about reforms to

Varnum expands Birmingham of ce with acquisition

ByKurtNagl

Varnum LLP has acquired Farmington Hills-based Young, Garcia & Quadrozzi, bringing more trial expertise to its growing Birmingham o ce.

rough the deal, Grand Rapids-based Varnum brings aboard David Garcia and Jaye Quadrozzi, plus a pair of business professionals, the rm announced.

e newly added attorneys bring with them more than a dozen clients with a range of commercial and intellectual property disputes, including Versata Software in its ongoing $100 million licensing and trade secrets dispute with Ford Motor Co. and Ann Arbor-based Flipsi Ltd. in a patent infringement case over its baby bottles.

“Dave and Jaye’s exceptional trial expertise and proven track record of handling high-stakes commercial and intellectual property litigation align perfectly with our commitment to providing top-tier legal services,” Varnum Chair Jon Bylsma said in a news release. “ is acquisition further builds our litigation repower in Southeast Michigan.”

e rm’s Birmingham o ce has grown to 30 attorneys since launching with seven in 2019. e rm has 185 attorneys in Michigan, as well as a small o ce in Naples, Fla.

For Garcia and Quadrozzi, the deal allows the boutique rm to tap into the larger resource pool of a larger law o ce.

“ e rm’s full-service platform, commitment to client service and

deep roster of litigators across a multitude of specialties provides the resources YGQ needed to further deliver outstanding results for

our clients,” Garcia said in the release.

Varnum says the rm’s growth is being driven by demand from cli-

ents, which include automotive suppliers, health care, banking and nancing, agriculture and venture capital companies.

Employees take over ownership of private jet company

ByDustinWalsh

Private jet management rm

Corporate Eagle is now an employee-owned company.

e deal, announced June 4, puts the ownership of the company into an employee stock ownership plan, or an ESOP, where each of its roughly 100 employees receive shares of the company for each year of service and salary rate, accumulating more ownership as they remain with the company and climb the ladder.

Terms of the deal were not disclosed, but the six-year plan buys out Rick Nini, founder, chairman and CEO, and eight other shareholders, including four of the company’s top executives. Nini held 53.4% of the company’s shares with the remaining owner-

ship distributed among the other eight shareholders.

An ESOP is e ectively an employee-bene t plan similar to a 401K plan, but the shares vest over time. When that employee retires, their shares are bought back by the company and redistributed to employees.

For Corporate Eagle, the owners like Nini will be paid out over six years, which the employees pay back over time. e total purchase price is covered by shareholder loans. As part of the deal, Nini will remain as the company’s top executive for four years until the those notes are paid down to 20% of the total loan.

Nini said the shareholders ultimately decided on an ESOP to protect the employees after a sale.

“I’ve had many opportunities to

sell the company, but I’ve watched other companies go through a sale after buyers say nothing is going to change, that management will stay in place and it never really works out like that,” said Nini, who founded the company in 1982.

“Our executive vice president and CFO will have been here 23 years in the next couple of months and he’s the new guy. I just couldn’t do it to the team. I want to give them continuity and let them take this company to the next level.”

Corporate Eagle currently has a eet of 17 jets consisting of Dassault Falcon 2000s and Hawker 900XPs. Its campus includes 57,000-square-feet of hangar space, a corporate o ce and a 85,000-square-feet of tarmac at the Oakland County International Airport in Waterford. e company generated $66 million in revenue in 2023.

Corporate Eagle operates by selling fractional ownership of jets to individuals to use for professional and personal purposes. For instance, the company will acquire a private jet and sell an eighth share to eight di erent people. With that fractional ownership, a customer can use the plane

for the equivalent of nearly 46 days out of the year.

e customers then pay Corporate Eagle for use of their pilots, fuel and other services. e company also manages jets for customers that have purchased their own jets by providing storage, maintenance, pilots, etc.

ere are more than 6,500 ESOPs in the U.S. and more than 200 in Michigan.

e largest ESOP in the state by employee count is Walker-based Challenge Manufacturing Co. roughly 3,000 employees and revenue of near $800 million in 2023. However, only a portion of the employees are part of the ownership team.

Madison Heights-based McNaughton-McKay Electric Co. is a 100% employee-owned company with a sta of nearly 1,800, nearly 500 in Southeast Michigan, and revenue of more than $2.8 billion last year.

ee ownership e ectively avoids the tragedy of the commons because people tend to take better care of what they own.

A 2020 study at Rutgers found that ESOPs outperformed nonESOP companies in job retention, pay and workplace safety. A 2017 W.K. Kellogg Foundation study that looked at workers aged 28 to 34 found that ESOP workers had a 92% higher median household net worth, 33% higher median income and 53% more median job tenue than those not in an ESOP. ESOP employees quit less, as

“With over half of our employees being pilots ... this is a perfect company to be employee-owned.”

Rick Nini, founder, chairman and CEO of Corporate Eagle

While McNaughton-McKay has existed since 1910, it became an employee-owned company in 2006.

ESOPs have historically outperformed companies with traditional ownership structures. Employ-

they are incentivized to stay and earn shares, and have higher retirement savings.

“With over half of our employees being pilots and then a lot of technicians, these are savvy people,” Nini said. “ is is a perfect company to be employee-owned.”

Varnum LLP has grown its Birmingham of ce to 30 attorneys. | VARNUM

Private jet rm Corporate Eagle has its corporate of ces and a eet of 17 jets at the Oakland County International Airport. CORPORATE EAGLE

Early peek at the past

Comerica opens 53-year-old time capsule nine years ahead of schedule

ByAnnaFifelski

In celebration of its 175th anniversary, Comerica Bank unveiled a time capsule June 6 that was sheathed in the walls of its downtown Detroit building for 53 years. e time capsule, which held photos, news clips regarding the building’s construction and more, was sealed on Sept. 20, 1971, when the building at 411 W. Lafayette Blvd. was constructed.

e capsule was originally supposed to be opened in 2033, said Steve Davis, Michigan market president for Comerica, but the banking giant wanted to use it to celebrate its milestone anniversary.

Comerica was founded in Detroit in 1849 as Detroit Savings Bank.

“Since that time, Comerica has stood as a beacon of strength to our customers, colleagues and within the communities that we serve,” Davis said.

Hunter House battle pits

old vs. new Birmingham

“Old Birmingham” and “New Birmingham” are clashing in court.

As the tony Oakland County suburb continues its longrunning glow-up — scraping the downtown of modest buildings to construct new high-end, four- and ve- oor mixed-use developments — a Birmingham institution and a property owner are battling over the future of a key site.

e bad blood between the owners of the Hunter House hamburger joint, which has slung sliders, fries and onion rings for close to three quarters of a century, and the owner of its building, Grand Blanc surgeon Hesham Gayar, isn’t new.

ey have been at odds for years, but now those disagreements have boiled over into Oakland County Circuit Court, where Hunter House owner Kelly William Cobb is tangling with Select Commercial Assets Hospitality LLC over the future of the site at Woodward Avenue just north of Maple Road.

e feud revolves around parking and details of a purchase agreement from nearly a decade ago.

lined in the agreement,” Cobb said in a statement. “We had to le a lawsuit when a fence was illegally erected on the lot, but we are continuing our conversations in the hopes to resolve this in a way that is a win for everyone.”

“I remain committed to develop the property,” Gayar said in a statement emailed to Crain’s. “I am willing to work cooperatively in good faith to resolve issues of dispute with Hunter House.”

e fate of a new mixed-use building is on the line.

Concerns

Hunter House sued Select Commercial Assets in March 2023 when the entity installed a fence around a municipal parking lot at Park Avenue and Hamilton that the restaurant uses.

Cobb and Hunter House argued that harmed its business by preventing customers from parking there. From the restau-

“I am willing to work cooperatively in good faith to resolve issues of dispute with Hunter House.”

Both sides say they are committed to moving beyond their dispute, but how long that will take is anyone’s guess.

With this merger, Comerica Bank became one of the 25 largest U.S. nancial holding companies.

e building at 411 W. Lafeytte now serves as Comerica’s headquarters for its Michigan market. Documents pulled from the time capsule indicate it was dedicated as the Manufacturers Bank building. e Manufacturers National Bank of Detroit, founded by Henry and Edsel Ford, was acquired by Comerica in 1992.

“Over the past decade of discussions, we were never provided a proposed plan which included the minimum needed to operate Hunter House in a future building, as was out-

rant’s perspective, it also posed a health hazard because it blocked access to the restaurant’s garbage bin and as well as being a tra c hazard by causing backups onto busy southbound Woodward Avenue.

Dan Gilbert buys GM’s Millender Center parking deck

Dan Gilbert has added another downtown property to his massive real estate portfolio.

His Detroit-based Bedrock LLC said June 5 that it has purchased the Millender Center on Je erson Avenue across from the Renaissance Center for an undisclosed price.

An a liate of General Motors Co. was the previous owner. e automaker deferred comment on the sale to Bedrock, which did not immediately respond to emailed questions about the purchase.

e Millender Center has more than 729,000 square feet of space with 1,738 parking spots and eight retail and dining tenants, accord-

ing to a press release.

“ e acquisition of the Millender Center adds a key downtown Detroit parking asset to the Bedrock portfolio,” Catherine Clark, chief investment o cer at Bedrock, said in a statement. “It additionally provides synergies to our Courtyard Detroit Downtown property and the mixed-use amenities located within the area.”

Bedrock bought the 265-room hotel from a GM a liate in 2019.

e Renaissance City Club Apartments, a 33-story apartment tower that’s part of the development, was not identi ed as part of the deal.

e Millender Center, which opened in the mid 1980s and is named after the Robert Millender Sr., sits across Je erson Avenue

from the Renaissance Center, the future of which is up in the air as Bedrock, GM, the city, county and state engage in discussions on how best to repurpose the 1970s o ce and hotel complex designed by John Portman.

GM owns ve of the seven RenCen towers — a 73-story hotel anked by four 39-story buildings — and is vacating the complex next year for a new global headquarters in the Hudson’s Detroit development that Gilbert is building on Woodward Avenue just north of Campus Martius Park.

Bedrock says it has a real estate portfolio totaling more than 140 properties — o ce, retail, residential, industrial, hotel and parking — totaling more than 21 million square feet.

ByKirkPinho

The Millender Center sits across from the Renaissance Center in downtown Detroit. | COSTAR GROUP

Employees remove panels in the wall of the building at 411 Lafayette Blvd. to reveal the Comerica Bank time capsule. Below:

Documents from the 1971 Comerica Bank time capsule that were unveiled on June 6. | PHOTOS BY ANNA FIFELSKI

See COMERICA on Page 18

ByKirkPinho

Hesham Gayar, owner of the building

See HUNTER on Page 18

Fired CFO amassed properties in tax foreclosure auctions

The former Detroit Riverfront Conservancy CFO purchased a slew of properties in the city at the same time he was allegedly embezzling tens of millions of dollars.

Over the years, William Smith — or entities connected to him — bought no fewer than 10 properties in the city, primarily in northwest Detroit, from the Wayne County Treasurer’s Office’s annual tax foreclosure auctions.

He also obtained property just a few blocks north of the Detroit RiverWalk with the intention of redeveloping it into a cigar bar.  e foreclosed properties were either purchased by Smith directly — such as a property on Rogge Street in 2018 and another on Sussex Street in October 2022 — or through an entity called YBE Property Group LLC connected to Smith, according to county land records reviewed by Crain’s. YBE’s known property purchases on Heyden Street, Biltmore Street and West McNichols came in 2015 and 2016.

All the purchases came well before the allegations against Smith, who prosecutors allege embezzled $40 million-plus from the conservancy over the span of a dozen years, became public last month and sent the conservancy into crisis mode.

But they all did occur when investigators say he was embezzling money. Federal prosecutors say

Smith, 51, used some $14.9 million in conservancy funds to pay personal American Express credit card bills and transferred another $24.4 million to a company he owned, e Joseph Group & Associates LLC.

Property records o er a more complete picture of Smith’s holdings. In addition to a South eld nightclub he owns that Crain’s reported this month is expected to be evicted for nonpayment of rent, he also owns single-family homes, vacant land and small commercial buildings in Detroit.

In an email on June 10, Wayne County Treasurer Eric Sabree said the county has no legal authority to take back properties it sold either to the LLC or Smith — or anyone else, for that matter.

“ e Wayne County Treasurer’s O ce has no mechanism to ‘claw back’ properties sold in the tax foreclosure auction,” Sabree wrote. “If law enforcement agencies contact our o ce, we will cooperate with them. Also, the matter has not been discussed in our o ce as we had no knowledge of these properties being connected to anything or anyone unusual.”

One of the properties, located on Biltmore, was transferred to an entity called You Services LLC for $35,000 in late April, not long before it became public that Smith was under investigation in the case that could land him in federal prison for up to 20 years. Another Biltmore property was transferred from another Smith entity, YBE Group LLC, in July 2020. e rest still appear to be owned by Smith.  e tax foreclosure auction has raised concerns over the years for

a host of reasons.

Detroit residents for years were over-taxed to the tune of some $600 million between 2010 and 2016, sending some into foreclosure as a result, the Detroit News reported in 2020. ere have also been concerns about the county — and, to be sure, other counties around the state — pro ting on the foreclosures by selling the homes and other properties at auction for more than the tax debt that’s owed. at changed recently, Bridge Michigan reported, with the Michigan Supreme Court ruling in the Rafaeli case, which said that counties must return proceeds in excess of what is owed to property owners.

ere are also, of course, long-running concerns about land speculators and other bad actors buying distressed properties on the cheap and sitting on them, waiting for values to increase so they can turn an easy pro t while

Michigan State names new dean for business college

Michigan State University has a new dean for its Eli Broad College of Business.

David Souder, senior associate dean for faculty and research at the University of Connecticut School of Business, will take on the role e ective July 8 pending approval from MSU’s board of trustees.

Souder will succeed Judith Whipple, who has served as interim dean since August 2022.

e former dean, Sanjay Gupta, abruptly resigned from his post in August 2022 amid concerns over his leadership, including an alleged failure to report an allegation of sexual misconduct that was made against one of his subordi-

nates, as Crain’s previously reported. Gupta is suing the university and others, alleging he was forced out of his deanship and an endowed chair/professorship through false pretexts related to required reporting of inappropriate actions of a former associate dean in the business school.

Souder is also a professor in the Boucher Management and Entrepreneurship Department at UConn. He has prior leadership experience as interim campus director for UConn Stamford, interim dean for the UConn School of Business and the associate dean for graduate programs, according to a news release from MSU. Before joining academia, Souder worked in the

private sector as a strategy consultant based in New York and London.

“ oughtful and forward-looking, Dr. Souder is a consensus-building leader with a strong commitment to fostering excellence in teaching and research,” MSU Interim Provost omas Jeitschko said in the release. “I am con dent that his breadth and depth of experiences will serve him well as the next leader of the college.”

Souder’s research focuses on corporate short-termism and long-term thinking, and he frequently speaks with media and business groups on related topics. He earned his bachelor’s degree from the Wharton School of the

doing little to nothing to improve them and wreaking greater havoc on the neighborhoods they are in.

Property records also show that Smith, through an entity called Biltmore Development Group LLC, also obtained property from the Detroit Economic Development Corp. at 1977 E. Woodbridge St. in the Rivertown neighborhood. at property, the Detroit News and Axios Detroit reported, was intended to be redeveloped as a cigar bar. Biltmore Development Group received two mortgages — one for $2.4 million from the Detroit Investment Fund LP and another for $600,000 from the Invest Detroit Foundation — in late April last year. A spokesperson for Invest Detroit said the organization had no comment on the matter.

In March 2019, the EDC, through the Detroit Economic Growth Corp., issued a request for proposals to redevelop the small property west of St. Aubin Street

into a “destination retail or commercial location,” Crain’s reported at the time.

A DEGC spokesperson said June 11 in an email that “the EDC is reviewing the property to determine whether additional actions are necessary.”

According to the Detroit News, in fresh comments, Matt Cullen, the chairman of the conservancy board, told attendees at the organization’s annual Shimmer on the River on June 10:

“We’ve all been betrayed by a bad guy, a guy we trusted who’s now been charged by federal prosecutors — a fraud and a thief,” Cullen said at Robert C. Valade Park, the News reported. “And that’s kind of a tough thing to say, a tough thing to talk about on a night like today.”

Smith, who was red from the conservancy late last month, was released from federal custody June 5 on a $10,000 unsecured bond.

University of Pennsylvania, with concentrations in nance and strategic management, and his doctorate in strategic management and organization from the University of Minnesota.

“It is a great privilege to be joining the Michigan State community as dean of the Eli Broad College of Business,” Souder said. “ e col-

lege has a long history of leadership among public business schools, and I look forward to working with the Broad leadership team, sta , faculty, students, alumni and our many partners across the university to help ensure that the mission and vision of Broad continue to inspire the future of business.”

Michigan State University’s Eli Broad College of Business will have a new permanent dean this summer, pending approval from the university’s board of trustees. | MICHIGAN STATE UNIVERSITY

David Souder

Kirk Pinho

Former Detroit Riverfront Conservancy CFO William Smith speaks at an event on May 12, 2021. | CITY OF DETROIT FLICKR

Nessel ignores reality in climate change suit

Michigan Attorney General Dana Nessel is at it again.

Nessel has cooked up a plan to sue the oil and gas industry over its role in climate change and allegedly hiding its own products’ role in the warming of the planet. She is now is advertising for outside law rms to take on the case.

It amounts to a political stunt, one that will have real costs for Michigan — costs that we’ll all pay.

Nessel’s argument is that the oil companies knew for years about the dangers of climate change but tried to tamp down worries with disinformation.

ough climate change and fossil fuels’ role in it are legitimate issues that demand the world’s attention, seeking to remedy that with lawsuits is misguided at best.

An array of business groups including the Michigan, Detroit and Grand Rapids chambers of commerce joined together to decry Nessel’s moves, saying they would have a chilling e ect on business in general in Michigan.

Backers of the lawsuits draw a comparison with multistate lawsuits against the tobacco industry and opioid makers that sought to recoup costs their products created.

But fossil fuels aren’t in the same class as those addictive and destructive drugs.

COMMENTARY

eir use created far more wealth than the costs of mitigating climate change. Even today as we work our way toward an increasingly electric future, without them,

much of the world’s population would freeze and starve.

Particularly rich is Nessel’s claim that the fossil fuel industry has harmed Michi-

gan’s economy. Without the internal combustion engine, the state that put the world on wheels might barely have an economy at all.

e fact is, all of us rely on the energy from fossil fuels, and every industry visits some costs on society, costs that we bear because of the bene ts the industries bring. Even if Nessel manages to extract a settlement from the industry, we’ll all wind up paying for it.

Oil and gas lawsuits call to mind other ideas. Should states sue automakers as a group over injuries and deaths from auto accidents? Cars can be deadly, but we deal with that through laws and regulations, not with blanket lawsuits against a whole industry.

Follow the logic of such lawsuits to its conclusion, and you’d wind up suing everybody who’s ever heated their house or gassed up their car.

Hiring outside law rms to pursue such lawsuits makes for a waste of taxpayer money in the process.

Targeting an industry is an easy way for a state to get branded as anti-business and anti-growth. It’s certainly not going to draw jobs or people to a state that sorely needs both.

Nessel should nd something better to do with the state’s time and resources.

What we’re looking for in guest column submissions

Opinion is everywhere these days.

Anyone with a social media account can simply let it rip, and it seems many do. Or at least it feels that way at times.

In many ways, we are so awash in opinion that seeing someone else’s point of view in a sea of words seems to have diminished in value. Certainly, it’s harder to get attention these days, unless, you say something really outlandish.

I rmly believe that our value at Crain’s lies in our reporting —   nding and sharing important and interesting stories, information and data that help our readers make better decisions and connections.

Mickey Ciokajlo is executive editor of Crain’s Detroit Business and Crain’s Grand Rapids Business.

e vast majority of the content we publish re ects this — straight news stories about vital industries and people doing business.

But we still publish an Opinion page, both in print and online. And on that page you will regularly see pieces by fellow business and community leaders.

e guest columns we publish couldn’t be further from the social media hot takes I referred to above.

For one, they are well-informed. Informed opinion still has a lot of value in my book. While I primarily consume news, I appreciate hearing the perspective of a per-

son who is an expert on an important issue that is in the news. We typically publish at least one guest column per week in Crain’s Detroit Business. At Crain’s Grand Rapids Business, where we publish in print every other week, we usually run two guest columns per issue.

We get a fair number of submissions in both markets, but we are always interested in hearing from all corners of our readership.

Submissions of guest columns are handled by Managing Editor Michael Lee in Detroit and Special Projects Editor Tim Gortsema in Grand Rapids.

Lee sent me criteria for what he looks for in evaluating submissions, which are  useful guidelines for both markets. Here they are, in, his words:

w First of all, it has to be a topic of interest to our audience; speci cally, an audience of metro Detroit and Michigan businesspeople and those who are interested in business.

e column should take a position on a matter of public debate. ere’s no need to state an opinion that nearly everyone agrees with.

Columns can’t be primarily self-promotional. ey should keep the bragging and horn-tooting about the author’s own business or organization to an absolute

Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com.

minimum, though it’s certainly ne to identify those a liations, especially as a way of establishing expertise.

w We’re generally not interested in columns focused on partisan electoral politics. ere are plenty of outlets for that kind of “red meat.” We’re not one of them and aim to publish substantive debate on di erences of policy, rather than party afliation.

We also generally don’t run columns offering business advice.

Columns should range from 400 to 750 words. We ask for a high-resolution photo of the author.

Examples of recently published guest

columns include one on inequity in youth arts as a public health issue. It was authored by three Detroit-area health care leaders. In Grand Rapids, we recently featured a column by the head of Mel Trotter Ministries urging leaders to consider the economic impact of human investment.

At Crain’s we will strive to keep delivering high-quality news and information every day. But we also want to hear from you on issues of interest to business leaders.

In Detroit, pitch your ideas to Michael Lee at malee@crain.com, while in Grand Rapids you can send them to Tim Gortsema at tim.gortsema@crain.com.

We look forward to hearing from you.

Sound off: Crain’s considers longer opinion pieces from

at

Dana Nessel | PROVIDED

Michigan schools rank near the bottom.

A x will take more than just money.

On a recent Monday at Childs Elementary in Ypsilanti, second grade teacher Lori Richert led her students through a discussion of wants vs. needs, referencing Abraham Maslow’s famous theory.

“Need is something you need to survive,” Richert explained, showing a chart illustrating Maslow’s hierarchy of human needs. “A want is something you don’t have to have.”

Ostensibly, this was a literacy lesson, one to help Richert’s second graders write an “evidencebased” research paper about a speci c job and its role in a community. So is a teacher serving a want or a need? A doctor? A homebuilder?

What ensued was a lively discus-

sion among the two dozen 7- and 8-year-olds, a reading lesson far more sophisticated than the days of “Fun With Dick and Jane” books.

“We’re pushing students much harder than ever,” said Richert, a 2023-24 Michigan Regional Teacher of the Year and 23-year veteran instructor for the Lincoln Consolidated School District in southeast Washtenaw County.

Many would agree academic expectations have increased for Michigan’s K-12 schools. But in many communities, results are falling short.

Indeed, Michigan’s education system currently ranks 42nd in the United States and last in the Midwest, according to Kids Count, an annual analysis by the Annie E. Casey Foundation. e ranking was based on four indicators: per-

centage of 3- and 4-year-olds in preschool; fourth grade reading and eighth grade math scores on the National Assessment of Educational Progress tests; and ontime high school graduation rates.

“We are in really bad shape,” said Venessa Keesler, a former state deputy superintendent and CEO of Launch Michigan, a bipartisan nonpro t spearheaded by the business community a year ago to advocate for systemic education reform.

And it’s not just high-poverty schools that are struggling, Keesler said. In fact, a Launch Michigan data analysis shows a signi cant majority of Michigan districts are underperforming, including many in a uent communities.

See K-12 on Page 8

SPONSOR

Kids Count education ranking

Michigan’s education system currently ranks 42nd in the U.S. and last in the Midwest. The education ranking was based on four indicators: percentage of 3- and 4-year-olds in preschool; fourth grade reading and eighth grade math scores on the National Assessment of Educational Progress tests; and on-time high school graduation rates. The darker the color equals a worse ranking.

JulieMack

Second graders take time for reading during a May school day at Childs Elementary in Ypsilanti. “We’re pushing students much harder than ever,” says their teacher, Lori Richert, a 2023-24 Michigan Regional Teacher of the Year, who works in the Lincoln Consolidated School District in southeast Washtenaw County. | QUINN BANKS

Sources: The Annie E. Casey Foundation

K-12 STANDARDS

Launch Michigan is among those urging a complete overhaul of the state’s education system, rethinking everything from school funding to the state’s oversight of K-12 districts, to improving the work environment for teachers to curriculum changes.

Some of that work already is underway, according to state Superintendent Michael Rice. He points to the state’s eight-point strategic education plan updated in 2020, and says progress has been made on multiple fronts, particularly in the past two years.

at includes signi cant increases in the state’s K-12 funding, money that is being used for new programs to address Michigan’s teacher shortage, bolster early literacy instruction, provide more resources for special education and low-income students, and expand state-funded preschool for 4-yearolds, among other initiatives.

Launch Michigan o cials agree that Michigan is beginning to move in the right direction, but believe the reforms need to go beyond the state’s strategic plan.

ey propose a framework with three basic components: Set high standards for a high school diploma; ensure districts have the resources to meet those standards, and create a governance model and accountability measures to ensure those standards are met, said Je Donofrio, CEO of Business Leaders for Michigan and chair of Launch Michigan.

“When you look at the states that have undergone these transformations, it’s a decades-long process,” Donofrio said. “It’s not just putting a little more money into the system or some sort of silver-bullet answer. It’s going to have to be a holistic approach.”

How did we get here?

irty years ago, Michigan was among the top 10 states in perstudent funding and its NAEP reading and math scores were above the national average.

Even with the dip since the pandemic, Michigan’s academic indicators have actually improved since then. But Michigan’s rankings have fallen as many other states have experienced much bigger gains.

at’s because those other states have been much more aggressive about systemic education reform and are now seeing the results, said Karen McPhee, a senior education policy adviser in the Snyder administration and former superintendent of the Ottawa Area Intermediate School District. Now an education consultant, McPhee is on the Launch Michigan board. Experts point to several reasons why Michigan has lagged in overhauling its education system.

One factor: e demise of highwage, low-skill jobs occurred later in Michigan compared with other states, delaying the impetus for education reform.

Another reason: Once it became

apparent that Michigan was becoming less prosperous, state policymakers prioritized tax cuts to boost the economy, and education funding took a hit for many years.

A third issue: Michigan’s K-12 system is one of the most decentralized in the nation. e state has more than 800 school districts — the sixth most among the 50 states — and those individual districts have considerable autonomy.

Michigan also is one of the few states where the governor does not appoint the state superintendent nor oversee the Department of Education. at’s the responsibility of an elected state school board, which hires the state superintendent.

“ e governance system here is disjointed,” Donofrio said. “You have multiple entities that have a piece of governance, whether it’s policy or funding or implementation, but no one who you can really say is accountable.”

Launch Michigan would like to give the governor the ability to appoint the state school board chair and hire the state superintendent with the “advice and consent” of the state school board.

Meanwhile, the Michigan Department of Education has appointed Brian Jacob, a University of Michigan expert on education policy, to lead a study on potential reform of the state’s education governance system.

Lori Richert and her second-grade Childs Elementary students focus on a literacy lesson in May. Educators say Michigan needs to be more aggressive about reforms to educate the state’s students more effectively. | QUINN BANKS

Venessa Keesler Brian Jacob

“Michigan has structural issues,” Jacob said. “It is really incredibly decentralized, and the state superintendent has less authority than in other states.”

As an example of how that impacts student achievement, Jacob said, “we need a more coherent, science-based approach to early reading instruction. is is something more states are doing and it’s proving e ective.”

So instead of letting each district choose its own early literacy curriculum, Michigan could mandate that districts choose from a limited number of curricula that have proven results.

Rice is supportive. “If you did nothing but constrained early literacy curricula to a few curricula with high value, high impact that can drive higher student achievement, that would be a big deal,” he said.

It would be especially e ective if the districts were mandated or incentivized to pair those curricula with high-quality professional development, Rice added.

He noted the Michigan Department of Education is now sponsoring free online classes in LETRS, a highly regarded literacy training program considered especially effective in helping teachers work with students who have dyslexia or other learning disabilities.

About 7,000 educators have gone through the program so far, Rice said. “We’d like more money. We’d like more teachers in this. We’d like to quadruple the number of early elementary teachers in LETRS training.”

Setting

higher standards

O cials at Launch Michigan applaud the LETRS program, but would like to go further and set statewide benchmarks for outcomes, particularly de ning the skill set needed to earn a high school diploma.

e current Michigan Merit curriculum is about “exposure” vs. actual mastery of material, they say.

“How a kid gets to graduate is determined at the local level,” McPhee said. “ at’s what we’ve accepted for 100-plus years of education in this state and we’re still accepting it today. ere needs to be a state determination of what a kid should minimally be able to do in math and language arts and sciences and social studies in order to receive a diploma.”

Making that concept a reality requires helping students stay on track throughout their school career and providing swift and e ective interventions when they begin to derail.

e key is “early and sustained interventions from day one” for atrisk students, McPhee said. “What we don’t want is to see a child get so far behind that it looks like the only remedy is special education. If that’s the appropriate remedy, then absolutely. But if it’s because we haven’t been able to support the teacher, provide those early interventions,” that’s not acceptable.   High-quality preschool is one program that has shown results. Gov. Gretchen Whitmer called for

Percentage of pro ciency on National Assessment of Educational Progress tests, 2022

Michigan is tied with four other U.S. states as having the 8th-lowest pro ciency scores in reading and is the 14th-lowest state for math.

PROFICIENT IN 4TH GRADE MATH

Top 5

Wyoming 44%

Massachusetts (tie) 43%

Nebraska (tie) 43%

Wisconsin (tie) 43%

Utah 42%

Bottom 15

Arizona (tie) 32%

Maine (tie) 32%

Maryland (tie) 32%

Michigan (tie) 32%

Mississippi (tie) 32%

California 30%

Alaska (tie) 28%

Arkansas (tie) 28%

Nevada (tie) 28%

New York (tie) 28%

Alabama (tie) 27%

Lousiana (tie) 27% Oklahoma (tie) 27% Delaware 26% Washington, D.C. 24%

Virginia 23% New Mexico 19%

59,508

The number of teachers in Michigan for the 2022-23 school year. This is a 3.8% decrease from the average of 61,841 in the 2011-12 school year.

PROFICIENT IN 4TH GRADE READING

5

Bottom 15

$67,012

The average teacher salary in Michigan for the 2022-23 school year. This is a 7% increase from the average of $62,613 in the 2011-12 school year.

Average public school teacher salary,

2022-23

Fifteen states and Washington, D.C., pay teachers more than Michigan. California, New York and Massachusetts pay the most, while South Dakota, Florida and West Virginia pay the least. The darker the color, the lower the average salary.

increase achievement in schools, your best bet is high-quality tutoring,” he said.

Another intervention is expanding the school day through after-school programs. Rice says the state has started funding such programs for the rst time. “ at’s a big deal,” he said.

Importance of teachers

Supporting teachers is a critical part of the puzzle, experts say. But many teachers say the system is failing in that regard.

Richert has been a teacher for more than two decades and the job has gotten harder over time, she says.

“I’ve seen this job change so much,” Richert said. “ ey keep adding more and more to our plate, but nothing is ever taken o .”

Richert works in a middle-class school district, “but even in my district, there’s a high turnover of younger teachers,” she said. “I think some of that is the needs of our students has increased so much, whether it’s social, emotional or academic needs. ank goodness I have the experience to know how to approach those problems. But if I were a new teacher, I would kind of say, ‘I don’t know if I’m cut out for this. is is a lot to take on.’”

Even as the job has gotten harder, teacher salaries have been stagnated and bene ts have been slashed. In the 1990s, Michigan teachers were among the highest paid in the nation. In 2021-22, the average starting pay for a Michigan teacher was $40,302, which ranked 41st in the nation.

In recent years, Michigan has experienced a teacher shortage, which has a direct impact on student achievement. Sta ng a school with highly skilled teachers is considerably harder when experienced teachers are leaving the profession and there are limited candidates to ll openings.

e teacher shortage is particularly problematic for high-poverty districts where the job is more challenging and the pay is typically lower than a uent districts. at means children most in need of skilled, experienced teachers are less likely to have them.

If Michigan wants to improve academic achievement, teacher recruitment and retention is a key issue, experts agree. at means addressing the No. 1 reason teachers leave the profession: Burnout.

“We’re just not very good at making sure our teachers are supported and have access to professional growth,” McPhee said. “And teachers are hungry for it, especially young teachers. ey want to do a good job. ey want to be successful.”

continual mentoring, continual coaching, continual feedback. at investment makes all the difference in the world.”

“ e state has made some really big and important steps to shore up our teacher pipeline,” Keesler said. “What we really haven’t done is agreed on where we’re going with all this reform.”

Need for more resources

Funding reform is another critical element.

Expert after expert makes a similar point: It’s no coincidence, they say, that Michigan’s academic outcomes stagnated at the same time that funding stagnated for K-12 schools.

In 2000-01, Michigan spent an average of $9,031 per K-12 student, 12% above the national average. By 2022-23, the Michigan average was $14,289, 15% below the national average. Indeed, between 2002 and 2015, Michigan ranked last in revenue growth for K-12 education, according to a study by Michigan State University.

O cials at Launch Michigan spell it out on their website: “For decades, Michigan has underfunded its schools, and now we are reaping the results of that disinvestment.”

However, in the past two years, Whitmer and the Democraticcontrolled Legislature have made education funding a priority. e state’s education budget has increased from $17.1 billion in scal 2022 to $21.5 billion in scal 2024, a 26% increase.

“ e scal ’23 and scal ’24 budgets have been phenomenal,” Rice said.

Ensuring adequate school funding over the long term is one of the priorities of Launch Michigan. It’s especially important that districts with large concentrations of atrisk students get the resources they need, Donofrio said.

“Equity funding is so important. It’s something that’s been a priority for us for a very long time,” he said about Business Leaders for Michigan. “You need a (funding) multiplier for poverty. You need a multiplier for students who learn at a di erent pace or have special needs or have English as a second language.”

At the same time, Donofrio said, the state needs to ensure that money is being spent wisely and that districts are making forward progress.

Sources: The Nation’s Report Card, Michigan Department of Education and NEA Ranking of the States, 2024

access to universal free preschool for 4-year-olds in her scal 2025 budget, but lawmakers have balked. Still, a further expansion of preschool in Michigan is set for this fall with state startup grants.

Another e ective intervention is high-quality tutoring for struggling students, either one-on-one

or in small groups and led by either a teacher or someone with speci c training, said Brad Hershbein, senior economist for the Upjohn Institute for Employment Research in Kalamazoo.

“Most of the research coming out of the pandemic says that if you want to invest in one thing to

But as an example, McPhee said, “what happens right now with professional development is teachers spend a day at a PD workshop. ey go back to their classroom with little support about how to deploy those new skills, so they go back to what they know. at’s not what happens in leading states and nations. ey get

Systemic reform “is going to be a slow process at times,” he said. “ e policy setting, the implementation, the funding — all of those things have to align under a very clear and accountable leadership structure to make the changes that will be necessary over a 10-year time period.

“So it’s not just a little more money here or a few more rules or a few more teachers in the pipeline,” Donofrio said. “It’s all going to be moving together and people will have to trust in that process. e most important thing we have to do today is create the ecosystem that will allow this multi-decade change.”

8 ways Michigan could improve student achievement

ByJulieMack

Michigan students are struggling. Michigan teachers are burning out. e state is lagging national averages on a variety of academic indicators.

No surprise, calls are growing for systemic education reform.

State Superintendent Michael Rice points to an eight-point strategic plan as a map for a way forward. Meanwhile, a coalition of business leaders, educators and other stakeholders has created Launch Michigan, a nonpro t seeking a complete overhaul of the state’s education system.

Launch Michigan is promoting three concepts: Specify the skills needed to earn a Michigan high school diploma; ensure schools have the resources to meet those standards, and create a better system of oversight and accountability.

ere are speci c proposals to improve Michigan’s academic outcomes:

Rethink the structure

Michigan has one of the nation’s most decentralized K-12 systems.

The state’s 800-plus school districts have considerable autonomy. And in Michigan, the governor does not oversee the state Department of Education nor appoint the state superintendent; those are the responsibility of an elected state board of education.

“That disjointed nature at the top is really tough,” said Jeff Donofrio, CEO of Business Leaders for Michigan and board chair of Launch Michigan. Structural reform “is not the only answer, but it helps lay the groundwork and create an ecosystem that would allow change.”

The Michigan Department of Education recently appointed an expert in education policy to lead a study on how to reform the state’s education governance system.

Rethink K-12 funding

Michigan needs to spend more money on education, particularly in providing more resources to high-poverty districts with large numbers of struggling students, many say.

As for where to find that money, Donofrio noted that Michigan’s student population is shrinking, which means more money per student.

He also pointed out that the state currently spends about $2.5 billion a year to cover unfunded liabilities in the state pension plan for school employees; those subsidies are scheduled to end in 2038, which potentially frees up that money. Donofrio also suggested there are more economic efficiencies to be had in relying on intermediate school districts to handle business services such as payroll for local districts.

Michigan already is reallocating its budget to spend more on schools. In the past two years, the state has increased its education budget by 26% to fund a variety of new initiatives.

Address state’s teacher shortage

Experts agree a vital factor in improving outcomes is ensuring the state has an adequate pool of skilled teachers. But Michigan has experienced a teacher shortage in recent years, as retirements have accelerated since the pandemic and fewer people are entering the profession as wages

have stagnated. In the past two years, the state has allocated almost $1 billion to bolster the teacher pipeline, Rice said. That includes money for scholarships to train more teachers, stipends for student teachers, a new student loan repayment program and paying veteran teachers to serve as mentors.

Other proposed reforms: Increase the incentives to attract and keep experienced teachers in high-poverty schools, and strategize on how to decrease burnout, the No. 1 reason teachers leave the profession.

The latter could include supporting teachers’ professional growth through more intensive mentoring, coaching and feedback — an investment that could help both teachers and their students.

Raise academic standards

Launch Michigan proposes establishing specific benchmarks that Michigan students must meet to earn a high school diploma.

“Frankly, if most high school graduates could read at a reasonable level — read newspapers, read books; if they could do math at a reasonable level where they weren’t intimidated by it; if they could write a work memo, then we would really have accomplished a lot,” said Tim Bartik, a senior economist at the Upjohn Institute for Employment Research.

But setting those high standards requires improvements throughout the K-12 system to ensure struggling students stay on track, experts agree.

Improve early literacy instruction

Many Michigan districts are still using a less-effective, outdated curriculum, and the state currently lacks the authority to mandate a change.

Michigan could require districts to use a high-quality early literacy curriculum. Rice, the state superintendent, says it would be even better if it was paired with high-quality professional development.

Just those two reforms alone “would be a big deal,” Rice said.

Create access to universal free preschool

High-quality preschool has long-term benefits for students and is an investment that eventually pays for itself, Bartik said.

In her fiscal 2025 budget, Gov. Gretchen Whitmer proposed access to universal publicly funded preschool for all Michigan 4-year-olds starting this fall. The Legislature has balked at that timing, but Michigan has significantly increased its state-funded preschool program in the past few years and continues to move toward universal access to free pre-K classes.

Expand access to high-quality tutoring

In terms of interventions for struggling students, the best bang for the buck is high-quality tutoring, said Brad Hershbein, a senior economist at the Upjohn Institute for Employment Research.

The tutoring can be one-on-one or involve small groups, he said, but it’s proven a much more effective intervention than retaining children in a grade. It’s also more effective and cost-efficient than cutting class sizes, Hershbein and Bartik say.

Improve accountability systems

Setting high standards and increasing school resources isn’t enough, Launch Michigan says. There also needs to be a

better system of accountability, to ensure that dollars are being spent wisely and standards are being met.

Giving the state more oversight powers would be useful, said Brian Jacob, a University of Michigan expert in education policy, but “I don’t think we want a system where there are automatic sanctions” and punitive measures against struggling schools.

A better strategy, he said, would be for the state “to identify which districts are not doing well for which students” and then use site visits to diagnose the issues and work with local officials to address them.

Venessa Keesler, the CEO of Launch Michigan and a former deputy state superintendent, is supportive of expanding a state initiative that partners an underperforming district with peers who have been successful.

“It’s about coming in and working alongside them and looking at things like curriculum,” she said.

The state also can use funding as a way to encourage districts to adopt best practices, she said.

“It’s like, OK, you can continue to choose your own curriculum,” Keesler said. “Or if you want this extra foundation allowance, you have to adopt one of the seven curriculums on the list."

It’s important to realize “Michigan can’t just fix our lowest performing districts if we’re going to get back on track,” she said. “We also have to nudge the happy middle, the districts that never show up on the low-performing lists.

“Every teacher I know is working really hard,” Keesler said. “Leaders are working hard. But we can’t keep expecting individuals to fix systemic problems. We have to get our system in order. Along with that is a communication element of getting people to understand that change has to come.”

Funds

are languishing, and students are paying the price

Education is foundational to Michigan’s success. We need best-in-class K-12 and postsecondary education and training systems to prepare Michiganders for future jobs, increase incomes, close the talent gap and successfully compete for business investment and job creation.

For years, Michigan has struggled in K-12 education performance. Now we can see the extent of the problem compared to other states — and it’s alarming.

needed to turn the ship.

To ensure better outcomes for our state and kids, we need to unite around comprehensive reform, including an overhaul of leadership and governance at the Michigan Department of Education.

Launch Michigan is a bipartisan, nonpro t organization that brings together education, business, labor and philanthropy to reimagine our state’s public education system. Its online dashboard, released in March, reveals that seven out of eight Michigan school districts underperform similar districts in leading states in areas such as reading, math and graduation rates.   e dashboard shows that even with the extraordinary e orts of parents, teachers and administrators, Michigan can’t overcome an educational system designed for a di erent time. Well-intentioned attempts over the years to update and improve have lacked the scale and long-term leadership

We don’t have to look far to see the struggles at the Michigan Department of Education. A healthy, well-functioning education system needs adequate funding, but those dollars must reach the classroom to be e ective. For decades, overly bureaucratic systems have siphoned money from teachers and students. Despite declining student enrollment, redundant administrative functions have persisted.

The governor and Legislature took the issue head on by allocating $245 million in one-time funds to help school districts implement noninstructional cost-saving measures such as shared services, integrated technology and centralized purchasing. The goal was to redirect hundreds of millions of dollars in savings back into the classroom, benefiting kids the most, without raising taxes or tapping into other funds. Instead of promoting the program and

spurring innovation in our school districts, the Michigan Department of Education has sat on the money. Two years later, most of those funds remain unspent. is inaction by the state superintendent is depriving our teachers and students of essential resources for an optimal learning environment, while a bureaucratic and antiquated system remains unchecked.

Despite the lack of leadership from the top, many school districts have forged ahead with solutions. ey have implemented shared software systems to access data and scale business functions and have reorganized and repurposed buildings. Many districts across the state have demon-

strated both the willingness and ability to change. But they can't do it alone.

Overhauling governance, optimizing and providing equitable, adequate resources, and setting high performance standards are three of the strongest ways we can catalyze change in the K-12 educational system. ese interconnected strategies pave the way for transformation.

Michigan’s K-12 schools rank 42nd in the nation, highlighting a crisis that requires immediate action. Voters must demand long-term change, and policymakers must take on the task of doing better for our kids. Our children deserve more, and the future of our state’s economy depends on it.

Michigan’s K-12 schools rank 42nd in the nation, highlighting a crisis that requires immediate action, writes Jeff Donofrio, president and CEO of Business Leaders for Michigan and chair of Launch Michigan. | UNSPLASH

JeffDonofrio is president and CEO of Business Leaders for Michigan and chair of the Launch Michigan board of directors.

5 important steps toward higher school standards

Michigan is at an opportune moment for improving its public education system. With historic new investments made in student funding over the last year, now is the time for state leaders to act on how greater investment — both current and future — can translate to dramatic improvement in student learning. Certainly, the evidence is clear that Michigan needs to change. In 2022, Michigan’s scores declined dramatically — nearly twice the national average — bringing Michigan’s performance down to 43rd in the country in fourth grade reading. Other key indicators of learning also show a great need for improvement.

plementing the standards or ensuring all schools had the supports and capacity needed to do so. Michigan can learn from leaders such as Tennessee, which has become one of the fastest-improving states for fourth grade reading over the rst several years of implementation.

Here are ve key pathways that Michigan should pursue now to ensure Michigan students of every background have the opportunity to attend a public school that will prepare them well for life after high school.

1. Ensure college- and career-ready preparation. In leading states like Massachusetts that have seen incredible academic gains for all students, a key strategy is strong implementation of rigorous college- and career-ready standards. Michigan adopted career- and college-ready standards in 2010. However, unlike leading states, Michigan did not have a leadership commitment to ensuring all educators and schools were fully im-

2. Focus on implementation, especially in reading. In 2022, Mississippi skyrocketed from the worst state in the country for early reading achievement to 21st. Like many states, including Michigan, Mississippi passed early reading reforms about 10 years ago. e di erence between Mississippi’s success and Michigan’s stagnation is implementation. Mississippi invested deeply in statewide reading initiatives including a heavy emphasis on the Science of Reading and sustained statewide support for schools including literacy coaches, intensive intervention and screening for reading di culties beginning in kindergarten, including a speci c screening for dyslexia — something Michigan legislators are currently considering.

3. Build on existing successes. All children deserve the opportunity to choose their post-secondary pathway, and Michigan leaders can ensure that reality by providing one strong college and career pathway from which students can choose to specialize. In

2006, Michigan created such a pathway — the Michigan Merit Curriculum —  but failed to focus on equitable implementation, particularly for urban and rural communities. Despite these challenges, under the MMC, the average Michigan student is enrolling in more math classes and passing these additional classes 88% of the time. Additionally, students from economically advantaged backgrounds have seen increases in college enrollment.  Imagine what would be possible with a statewide investment in ful lling the promise of the MMC.

4. Expand post-secondary access in high school.  Speaking of building on the MMC, there are ways to do this equitably now.  Indeed, opportunities for students to earn post-secondary credits in high school is an important lever in increasing postsecondary attainment and achieving the state’s ambitious Sixty by 30 goal. In Michigan, only 65% of students attend schools with diverse Advanced Placement course o erings, and Michigan ranks in the bottom

ve states for Black student representation in AP courses. Expanding access to AP courses — as well as dual enrollment pathways and trade certi cations — for all Michigan students is critical to ensuring all students have access to the most direct pathway to their post-secondary dreams.

5. Establish and truly implement a statewide opportunity plan. e opportunities and gains realized from strategies such as the MMC by students in more a uent areas should be shared across all geographic regions in the state. To do so, state leaders should create — and fully fund and implement — a Statewide Opportunity Plan to ensure that all school districts fully expand access to a robust college- and career-ready academic experience for all students. at should include ensuring all districts have access to equitable resources, including fair funding and the ability to compete for top educator talent. Doing so will make the di erence for Michigan’s future — and its economy.

Public education is complex, but we are improving it

Journalist H.L. Mencken once said, “For every complex problem, there is a solution that is clear, simple…and wrong.” So it is with the question of how to improve Michigan schools, which has led to many would-be — and failed — initiatives.

at’s why the State Board of Education in 2020 approved Michigan’s Top 10 Strategic Education Plan. e plan acknowledges the complexity of public education and lays out eight goals and metrics for each, with upstream resources and upstream developmental goals affecting downstream goals.

cation, Michigan Department of Education, local and intermediate school district educators and education organizations.

In the last two years, we’ve increased by 86% funding for economically disadvantaged students — from $512 million in scal year 2022 to $952 million in scal year 2024, with an opportunity index that begins to address the cost of educating high concentrations of poor children. Funding for students with disabilities more than doubled, while funding for English learners increased 58%.

Other solutions to improving Michigan’s schools in the Top 10 plan include:

e plan outlines what Michigan must do — and must do more — to improve public schools.

Goal 8, to provide adequate and equitable school funding, and Goal 7, to increase the numbers of certi ed teachers in areas of shortage, are the upstream resource goals to help accomplish all other goals. Without plenty of good teachers and su cient funding, we can’t maximize our children’s education.

From 1995 to 2015, Michigan had the lowest in ation-adjusted, total revenue growth for schools in the nation. e deterioration of in ation-adjusted funding, harm to the teaching profession, and decline of supports for students and sta adversely a ected student achievement. e good news: We’re turning the tide.

is scal year and last, children bene tted from historic education budgets from the Legislature and Gov. Gretchen Whitmer, with advocacy from the State Board of Edu-

In addition to this progress in meeting Goal 8, Michigan has made great strides on Goal 7. In the last ve years for which data are available, the number of people in a teacher preparation program increased from 9,512 to 14,829.

In scal year 2020 and before, the state appropriated no funds to address the teacher shortage. In the last two scal years, the state appropriated $575 million and $448 million for educator recruitment and retention. Included are scholarships for aspiring teachers, student teacher stipends, Grow Your Own programs for students and support sta to become teachers, teacher loan repayment programs, teacher induction and mentoring support, a rural credentialing hub to help address shortages in Northern Michigan, and money to retain teachers.

New teacher and counselor reciprocity laws have begun to help recruit more easily veteran educators from out of state, and a new law to bring back retired teachers has helped as well.

w Expanding early childhood learning opportunities (Goal 1). In the last three years, Michigan increased Great Start Readiness Program funding by 109%. An extra year of education, particularly for young children who are economically disadvantaged, is critical to improving literacy and educational outcomes.  Michigan’s e orts are paying o . In the National Institute for Early Education Research Annual Yearbook, Michigan’s prekindergarten program continues to be tied for rst in quality but is 19th in access. e governor’s call for universally accessible pre-kindergarten is fundamental to educational improvement in the state.

w Improving early literacy achievement (Goal 2). More than 7,000 Michigan educators have registered for and are being trained in Language Essentials for Teachers of Reading and Spelling training, commonly known as LETRS, with support from the Michigan Department of Education. More still need the opportunity.  e number of intermediate school district literacy coaches has nearly tripled. e Michigan Department of Education has promoted diversity in literature to encourage students to read more. It has developed and distributed dyslexia guidance to school districts, and the state legislature is working on important dyslexia legislation.   w Improving the health, safety, and wellness of all learners (Goal 3). Every Michigan school district participates in the new Michigan School Meals program that makes available free breakfast and lunch to all public school students in grades pre-

kindergarten-12, a nutritional boost for every school day. To address student mental health, Michigan districts added more than 1,000 helping professionals over the last three years: school social workers, guidance counselors, nurses and psychologists. Funding for children’s mental health increased from just over $30 million in 2019 to more than $400 million this year.

w Expanding secondary learning opportunities for all students (Goal 4). Michigan needs to continue to increase all secondary learning opportunities, particularly career and technical education, Advanced Placement, dual enrollment and early middle college. Increases over the last decade, interrupted in some cases by the pandemic, need to be accelerated by state investment, especially in career and technical education, to which too many students have insu cient access.

w Increasing the percentage of all students who graduate from high school (Goal 5). Statewide graduation rates have risen 10 of the last 12 years, and rates for all 17 student categories increased last year.

w Increasing the percentage of adults with a postsecondary credential (Goal 6). is percentage increased from 45% to 51% from 2019-22, signi cant progress toward the state’s Sixty by 30 goal — 60% of adults ages 25-64 with a postsecondary credential of some sort by 2030.

Given the complexity of the challenge and the disruption of the pandemic, Michigan has made signi cant progress since implementation of the Top 10 plan. With a nod to Mencken, it isn’t simple. With appreciation to Robert Frost, we still have miles to go before we sleep.

Amber Arellano is executive director and Jen DeNeal is director of policy and research at e Education Trust-Midwest.

In 2022, Michigan students’ test scores declined dramatically, bringing the state’s performance down to 43rd in the country in fourth grade reading. Efforts to improve that should include a focus on implementing reforms in early grades, The Education Trust-Midwest’s Amber Arellano and Jen DeNeal wrote. | QUINN BANKS

Michael F. Rice has been state superintendent with the Michigan Department of Education since 2019.

Michigan is at a critical moment for education decisions

It’s been more than two years since Michigan schools resumed in-person learning after being shut down because of COVID. But many students are still weathering the e ects of interrupted learning brought on by the pandemic.

Chibuzo Ezeigbo is the program o cer for the Education and Economic Mobility Program at e Joyce Foundation.

Michigan elementary school students lost nearly half a grade of learning in math and reading between 2019 and 2022, and recovery has lagged many other states, according to the Education Recovery Scorecard by Harvard and Stanford researchers. About 31% of students are chronically absent, compared to 20% pre-pandemic. And only about 54% of recent high school graduates attended college this year, down from 62% before the pandemic.

Michigan school districts received more than $5 billion in COVID relief funds from the federal government to help schools recover. But the money is running out. And it will take more than that for a full recovery. Here are some things that Michigan policymakers can do next:

w  Make greater investments in the new funding formula that drives money to high-need schools. Michigan does not spend enough on K-12 education to ensure that every student is adequately prepared for college and career success. Researchers at Michigan State University found that, adjusted for in ation, funding for K-12 education decreased by 30 percent between 2002 and 2015.  Michigan long had one of the most regressive funding systems in the nation, which deprived high-poverty districts of adequate resources to support student needs. Last year, Michigan established the Opportunity Index, a formula that provides additional funding to districts based on concentration of poverty, thanks in part to the strong advocacy of groups like e Education TrustMidwest. is index can help level the playing eld, but last year, the state provided only about 18% of the funding needed to ensure that all students meet state standards.

Deeper, more sustained investments are critical.

Use data to tailor teacher shortage solutions. Teacher workforce challenges are highly localized. Rural districts in Michigan are more likely to experience severe subject-speci c shortages and rely on teachers placed outside their licensed areas of expertise, according to data from the Education Policy Innovation Collaborative at Michigan State University.

Urban areas are more likely to experience more broad shortages and rely more heavily on longterm substitute teachers. State policymakers should analyze teacher workforce trends annually and tailor solutions to address the varying challenges districts face.

Ensure students have high-quality programs that prepare them for careers. e Growing Michigan Together Council report notes that Michigan’s workforce shortage weakened its tax base and wages that support schools, roads, and housing.

Michigan can create a stronger pipeline of workers to ll jobs in in-demand industries by providing more incentives for high schools and businesses to collaborate on paid internships and apprenticeships. ese programs give students tangible work experience and skills that employers need to ll positions. is work requires coordination across secondary, higher education, and workforce sectors.

e new Michigan Department of Lifelong Education, Advancement, and Potential can play a critical role to align goals, data, and funding across these systems.

w

Help make college more affordable. In 2023, nearly $100 million in Pell grants (given to students with the greatest financial need) went unclaimed by Michigan high school seniors who would have qualified for the grant but did not complete the FAFSA form for federal college aid.

Over the last three years, Michigan has ranked in the bottom half of states for percent of seniors completing the FAFSA. Other states that require seniors to complete the FAFSA have seen completion rates rise. The best policies have adequate opt-out allowances for students who do not fill out the FAFSA, and ample resources and training for districts to help students navigate the financial aid process.

Additionally, Michigan should allow students to use state college aid funds to cover the cost of college tuition before federal aid is applied. is would free up more federal aid to cover food, housing, books, and other costs college students often struggle to pay for.

e road to education recovery will not happen overnight. But targeted, data-informed decisions that support those most in need can help Michigan position itself as an engine for growth, vitality, and opportunity.

NIGHTCLUB

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Smith’s attorney, Gerald Evelyn, said he was in a meeting the morning of June 7 and hung up the phone.

Duo closed abruptly last month, an unexpected ending for a popular nightclub, restaurant and bar that people familiar with it described as regularly busy — albeit at times disruptive to neighboring tenants.

Signs of the quick closure show.

A trash can in front of Duo was nearly over owing on June 6, and there were stray pieces of garbage outside the restaurant, set back from Northwestern. A door on the side of the restaurant was open, revealing mechanical equipment. A mounted outdoor TV sat unprotected from the elements.

A sign on the door dated May 28, attributed to Duo management, reads:

“Duo will be closed for the week of (sic) temporarily to perform (sic) much needed building maintenance issues. We are tentatively looking to re-open the week of 6/16/24. ese improvements will allow us to better serve our guests and enhance the overall experience at Duo. We apologize for any inconvenience this may cause and we look forward to serving you in the future.”

Curtis suggested that it’s unlikely that will happen. He said he spoke with Smith on June 5, which would have been just prior to his initial appearance in federal court in front of a federal judge who released him from custody on a $10,000 unsecured bond. His bank and wire fraud charge is a 20-year felony.

“He sounded pretty depressed. I know I’d be depressed if the FBI just came after me for $40 million,” Curtis said. “I thought he was a very nice guy, and I was totally shocked when I heard about it.”

In general, Smith had always been on time with rent payment, minus a few instances of being a week or two late. Curtis said Duo appeared to be doing well, based on parking lot usage — which prompted complaints from

neighboring businesses, including the Guitar Center store that anchors the property between Inkster and Franklin roads. Curtis said he even hired a company to enforce parking rules.

“He must have been that busy,” Curtis said.

Michigan Liquor Control Commission records show that Duo — which Curtis said occupied about 3,800 square feet — was one of the biggest purchasers of liquor from the state.

In fact, last year, it paced only behind two other Class C liquor license locations in purchases — Little Caesars Arena, which bought $1,186,551, and Brass Rail in Detroit that bought $880,894. Duo was not far behind, with $868,051.

It bought $151,590 in 2020, $302,772 in 2021 and $664,477 in 2022. rough April this year, it had purchased $214,029. In 2019, prior to the onset of the COVID-19 pandemic that upended the restaurant industry, it bought $485,877.

It’s not known whether Smith’s legal woes will prompt any ramications from the Michigan Liquor Control Commission.

“ e MLCC cannot speak to any enforcement action that the commission may undertake related to criminal allegations made against a member of a licensee,” MLCC spokesperson Abby Rubley said in an email. “Licensees subject to violations if the licensee or stockholders/ members of the licensed business are convicted of a crime, pursuant to administrative rule R 436.1011.”

Lively location

Duo was considered by those familiar with it to be a lively spot for nightlife, with bands and DJs and other events.

It also served up “absolutely excellent” food, said Joe Blankenship, who hosted an event at Duo called “Cocktails & Conversation.”

Devon Johnson, a drummer who played on Fridays and Saturdays and worked there booking bands, said some 60 or so Duo employees — himself, as well as bartenders, servers, cooks and security guards — are now be-

lieved to be out of work. at’s just one of the things troubling for Johnson, who was at Duo for eight years. He felt stable with long-term employment supporting his wife and three children, and he also enjoyed working for Smith, who he considered an “awesome” boss.

“I would never even guess he would do this,” Johnson said. “He actually changed my life, how I look at business. He started telling me about having multiple incomes.”

And Wil Brooks, a bass player with the R&B band e Shade, which had a standing monthly Saturday gig at Duo for the last two or three years, was also shocked that Smith, a person he had come to know, has been accused of misdeeds.

“I don’t picture him doing that, and I was actually getting into arguments with people who were accusing him,” Brooks said. “I was defending him. I’m like, ‘Hey, unless he gets indicted or arrested, don’t drag that man like that.’ He’s out here doing great things for people and a lot of the employees at the bars and whatever else he owns, they rent houses from him.”

Johnson also expressed shock. “ ey are putting out there like he is a bad dude. I think he just got caught up in the situation. Who knows who else is involved?” Johnson said. “We don’t know nothing about that stu . From where I am, he was a great dude, and I think that everybody that worked at Duo would say the same. Everybody is blown away.”

On Saturdays, there were distinct atmospheres at Duo, Brooks said.

“It was pretty packed, especially in the summer, the warmer months,” Brooks said. “It almost turns to a di erent crowd about 10 o’clock, because we’re done, and the DJ takes over. en the party people come in.”

For his part, Curtis said there is plenty of interest in getting the spot up and running again — under di erent ownership.

“I’ve been getting calls the last three days from probably seven di erent people wanting to buy the restaurant,” Curtis said.

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

Duo Restaurant & Lounge in South eld is owned by William Smith, former chief nancial of cer for the Detroit Riverfront Conservancy, who is accused to embezzling $40 million or more from the organization over a dozen years. | KIRK PINHO

CRAIN’S DINING AND ENTERTAINMENT GUIDE

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HAMLIN PUB

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With nine lively Metro Detroit locations, Hamlin Pub is where delicious food meets chilled spirits and live entertainment. Enjoy the special summer menu and refreshing drinks on spacious patios. Big screens always feature local Detroit sports, making it a fan favorite. Hamlin Pub is the spot “Where Everyone’s a Regular,” so you’ll feel like family from your rst visit.

HOSPITALITY TRAINING INSTITUTE OF MICHGAN

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The Hospitality Training Institute of Michigan is the state’s premier source for hospitality leadership, compliance, and skill set training programs. We prepare workers to advance in hospitality careers by giving them the management, business, and leadership skills they need to rise. Our curriculum includes nationally recognized credentials. 2,000 registrants attend at NO COST! Registration is now open. Sign up today.

LINCOLN YARD

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Union Joints’ repurposing of the former school bus garage in Birmingham’s Rail District came to life this year in the form of Lincoln Yard and little yard. The lively setting leans into rotisserie meats with far reaching sauces, wood- red pizzas and a highly curated bar. The little yard sibling opens early with skilled baristas and all-day breakfast.

MADAM

298 S. Old Woodward Ave., Birmingham, MI 48009 • 248-283-4200 daxtonhotel.com/food-drink

Madam is an award-winning restaurant located inside the stunning Daxton Hotel in downtown Birmingham. A vibrant dining experience in an art-forward space, where its menu is curated to complement seasonal avors through fresh, locally sourced ingredients. Madam is open for dinner seven days a week and for weekend brunch.

MICHIGAN RESTAURANT & LODGING ASSOCATION

225 W. Washtenaw, Lansing, MI 48933 • 800-968-9668 • mrla.org

Michigan Restaurant & Lodging Association’s mission is to lead the hospitality industry through advocacy, education and innovation. Whether it’s navigating the complexities of regulations, providing cuttingedge training, or empowering members with practical business solutions, the MRLA is an indispensable, one-stop resource for the hospitality industry. Our membership ranges from owners, operators, suppliers, to educators and students. Become a member today!

MIDDLE EATS

Middle Eats is fast casual style concept serving Mediterranean inspired bowls, wraps and salads. Everything in our kitchen is made from scratch and sure to satisfy all palates. Find a location near you to experience fast, fresh and healthy options!

SAROKI’S

Find your nearest location on our website: sarokis.com

Saroki’s Crispy Chicken & Pizza, renowned for its fried chicken, hand-battered chicken tenders and New York Style pizza, prides itself on using only the highest quality ingredients. Freshly made daily, Saroki’s delivers exceptional taste across its 13 Metro Detroit locations, making it a local favorite for delicious, highquality, quick service food.

THE WHITNEY

4421 Woodward Ave., Detroit, MI 48201 • 313-832-5700 • thewhitney.com

The Whitney Mansion is world famous for upscale dining in Detroit. The Whitney provides several unique experiences throughout the property: a ne dining restaurant, elegant afternoon tea service, Sunday brunch, The Gardens and Ghostbar. Each has its own unique appeal that guests can enjoy. Classic dining, elegant weddings and exclusive private events make The Whitney rst choice for memorable celebrations.

WING SNOB

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Michigan Central’s rebirth welcomed by businesses

ByAnnaFifelski

Detroit’s oldest neighborhood is anything but stagnant. Just in the past three decades, Corktown has morphed and shifted following the closure of key landmarks: rst Michigan Central Station in 1988, and then Tiger Stadium 10 years later.

Now, the gateway neighborhood to Southwest Detroit features new housing developments, a ourishing small business landscape and a growing hub of startup and venture capital developments.

is month, the neighborhood saw the latest — and most highly anticipated — development in its saga: the reopening of Michigan Central Station following Ford Motor Co.’s intensive six-year restoration.

But the reopening of the station is only a product of Corktown’s tremendous growth, not its cause, said Sheila Cockrel, a former Detroit City council member and lifetime Corktown resident. at sentiment is widely shared amongst the business community in the neighborhood. But some fear already rising rents could stie growth.

Continuing transformation

While national media narratives often insinuate Detroit is facing its comeback moment, Cockrel said that couldn’t be further from the truth — especially in Corktown.

“Detroit has had residents who kept the city viable for generations,”

Cockrel said. “Just like the rest of Detroit, Corktown has always been a viable neighborhood that has literally withstood multiple e orts to destroy it in the mid-1950s.”

In the 1960s, the city of Detroit declared Corktown a slum and leveled dozens of homes for the construction of the Lodge Freeway. Cockrel, also the president of the Train Station Neighbors Block Club, said that no matter what issues may be happening “down the street,” there are always residents who are working to continue planting owers.

“(Neighborhood e orts) are another important indicator of people’s faith and belief in the neighborhood and in the ability of all of us to play a role alongside the Ford Motor Company and the Michigan Central team in improving the neighborhood,” Cockrel said. “Not xing it. Because it wasn’t all that broke.”

When it was up and running as Michigan Central Depot, Cockrel said the building was nothing short of magical.

“It was an adventure because you would walk in the train station and you’d be met with the sounds and the sights and the lights and the bustle of people,” Cockrel said.

“It was really like going to a special place. It was so di erent from dayto-day life, but it was part of the community.”

After it closed its doors in 1988, Cockrel recalled the station becoming something akin to “ruin porn” and “ultimately one of the major symbols of the city’s decline.”

ere was the potential for a long time that Michigan Central Station would be torn down. While on City Council, Cockrel said she and the other o cials were pushing the Moroun family, who owned the building from 1995 until 2018, to either demolish the building or begin xing it up.

“I think they needed that threat,” Cockrel said.

e Greater Corktown Development Corp. also pushed for rehabilitation of the train station, said Paul DeBono, the organization’s former president. e group would go on to work with the community to develop plans for a viable future for the station.

“I think that opened the door for someone, and really only someone like a Ford could come in and

tackle a project like that,” DeBono said. “I think Ford did all the right things, but frankly, they really are a champion in the neighborhood.” But change was slow-moving. In the building’s vacant years, it became something like a badge of honor to sneak into the train station, Cockrel said, though she never toured the ruins herself.

From ruin to revival

“ ere were 100 ways to die per square inch,” lmmaker and photographer Stephen McGee said of the Michigan Central building during its era as a vacant eyesore of the Corktown neighborhood.

McGee moved to Detroit from California in 2005 and purchased a house in Corktown, formerly known as “Righty” of the Imagination Station nonpro t project, for just $1 in 2013. Despite the living murals that frequently decorated the outside of the house, the building was inhabitable. It was only one of two buildings that faced Michigan Central Station from 14th Street. Its twin, Lefty, caught re in 2012.

McGee, his wife and three daughters have been living in the renovated home since 2017, a year before Ford announced it had bought Michigan Central Station. Despite the small disruptions the six-year construction project caused, McGee viewed it as a temporary, but necessary evil.

“Our city was disinvested for 16plus years. e implications of that is getting it back on the right track; the implications of that are things like construction,” McGee said.

In addition to its $950 million makeover of the train station and neighboring former Book Depository building that now houses Newlab and more, Ford has committed an $11 million cash infusion to the city, including a $6 million makeover of Roosevelt Park.

Since Ford’s announcement in 2018 that it planned to buy the former train station, there have been nearly $500 million in private investment in various projects in the Corktown area, according to an estimate by city of Detroit o cials. Additionally, city and state investments in infrastructure in the area total about $27.5 million.

“( e developments) are just showing the trajectory that Corktown was on,” DeBono said. “Getting a big player like Michigan Central didn’t save Corktown, it was already moving in a positive direction; it only helped Corktown and I think that’s gonna be the continued scenario.”

DeBono’s stake in Corktown goes back generations. His family has lived in Corktown since they emigrated from Malta in the 1920s, and he served as the president of the Greater Corktown Development Corp. from 2000 to 2010, where he focused e orts on advocating for the totality of the neighborhood.

“I think Corktown has been an anchor for the city, being the oldest neighborhood, the historic context, the parades, the events, the baseball, you name it. It’s got its own life,” DeBono said. “I think Ford, smartly, came in to become a partner with the neighborhood and I think they will continue to be a great partner … I think you’re just going to continue to see solid organic growth come out of the neighborhood. I think that’s only helped by the opening of Michigan Central and Ford’s commitment, but also the other aspects of the neighborhood.”

Joe Mifsud, co-owner of Cork & Gabel restaurant and Six Spoke Brewing Co., both on Michigan Avenue in Corktown, said Ford has been engaged with the residents and business owners throughout the construction processes. Still, he’s happy the construction is

CORKTOWN

From Page 1

e vibrant city neighborhood with its numerous eating, drinking and music venues has already been a draw. e opening of Michigan Central and the surrounding district only heightens the appeal.

Leasing activity for rental properties in the Corktown neighborhood has also been strong, according to local estate executives, and the supply of for-sale properties — particularly condos — remains low.

With roughly 10 condos in the neighborhood on the market, and only a couple of single-family homes, the incoming wave of Ford workers who might wish to live within walking distance of their o ce will nd minimal options. And with what Cooley says is a soft market for land sales, he doesn’t anticipate a rush of new residential development in the immediate neighborhood.

“We’re also not having a lot of conversations with people (in the Corktown neighborhood) that are asking us to go ahead and list their place … I’m not having those conversations at all right now,” Cooley said. “I don’t think inventory is going to be changing anytime soon.”

With regard to condos currently listed in the immediate vicinity around Ford’s new campus — most of which are listed by Cooley’s brokerage — would-be buyers will have just a handful of options.

At present, those condo options include a 700-square foot, one-bedroom unit asking $300,000 in e Coachman development on Bagley

wrapping up because of the impact it’s had on his businesses.

“It’s been progress and it’s been disruptive. I know it’s for the betterment of the area, but like for example, June 6, we are completely cut o because of where we’re geographically located,” Mifsud said. “We’ve had our building shut down a few times, also we’ve lost power, they’ve cut the old gas lines to make new gas lines … and so on a personal level, we’ve lost some business that way. It’s going to come back so I gotta be optimistic, but it’s been a little bit of a struggle … but it’s gonna be good for everybody.”

e reopening of the train station is sure to draw more attention to the historic neighborhood, Mifsud said, through new businesses, visitors and even potential home buyers and renters. Even so, Mifsud, a lifetime resident of Corktown, is concerned about how the

Street, as well as a 2,130-squarefoot, three-bedroom condo just to the east in the Bagley 10 project, and carrying an asking price of $839,500.

James Tumey, a sales agent at O’Connor Realty, will host an open house this afternoon ahead of the concert for an available 2,000-square-foot, two-bedroom condo on 11th Street priced at $569,000.

Also available is a 5,600-squarefoot penthouse condo owned by Michigan Lt. Gov. Garlin Gilchrist.

On the market for a year, the property has undergone a number of price reductions, most recently late last month, with a 6% drop to $1.6 million.

However, as Cooley notes, many newcomers to the area will be more inclined to “dip their toe” in rst and opt to rent in the neighborhood before buying.

Still, in that scenario, would-be lessees will nd minimal options.

Cooley said his brokerage does a handful of leasing, mostly on behalf of condo owners or small-time landlords, and the rentals brokered by the rm tend to go quickly, attracting multiple interested parties.

On a larger scale, the Perennial

looned in popularity due to the walkability of the neighborhood and the investments from Ford and other developers.

According to the Rocket Homes Corktown Housing Market Report, the median sale price of a threebedroom house in Corktown increased 21.3% from May of last year to $620,000.

big changes from Michigan Central could impact the lives of his neighbors.

“Corktown would have always survived. It’s the oldest neighborhood, but there’s a reason,” Mifsud said. “ ere’s a lot of old neighbors and residents that live here that care about it. ey x their homes up and x your business up out of their pocket. ey’re the ones that kept it safe and clean. So it would survive and thrive even without the train station, but you’ve got to admit that with the train station, it’s just … really going to set this o and make it even more of a destination for people to work here and develop more property.”

Climbing costs

Property values across the city continue to climb this year. Last year, condos across Corktown bal-

Corktown apartment and retail development with 195 units — most market rate but with some subsidized — along the south side of Michigan Avenue just west of Trumbull opened late last year.

e building is more than 70% occupied, according to a Crain’s analysis of the development’s leasing website.

e project’s lead developer, Farmington Hills-based Hunter Pasteur Homes, declined an interview request, but a spokesperson said principals there are satis ed with the pace of leasing thus far.

For market-rate units at Perennial Corktown, studio units start at $1,650 per month and larger twoand three-bedroom units lease for up to $5,000.

Construction is underway on an additional phase, a renovation of a nearby building with completion expected next spring. More retail is also moving into the building’s ground oor in the coming months.

Another apartment development called e Brooke at Bagley and 16th streets just to the south of Michigan Central, is expected to open its doors to residents in the coming weeks.

Bob Roberts, co-owner of McShane’s Irish Pub in Corktown and president of the Corktown Business Association, said he and his partners “beat the gold rush” when they opened the restaurant and bar in 2012, before the city’s bankruptcy and investments in the neighborhood.

Unfortunately, that didn’t save them from the impact of the added attention on Corktown.

“We experienced a 30% rent increase at McShane’s this year, which was substantial and a little bit of a surprise to get that much of an increase, but we did,” Roberts said. “We’re trying to gure out how to maneuver and what our next steps are.”

Other restaurants, like Michigan and Trumbull Pizza, have moved or closed due to the rent hikes, Roberts said.

He worries that Corktown will soon get too expensive for longtime business owners and residents and even those just moving to the neighborhood. Hundreds of condos and apartments have cropped up around Corktown in the past few years.

“ e thing that I worry about is that (residents) become either

rent or mortgage poor,” Roberts said. “You’ve taken on this huge rent burden or you’ve taken on this huge mortgage burden and now all of a sudden, you don’t have any other disposable income … so you just don’t have the money to go out and go to the restaurants, go to the pubs, the breweries and go to the small retail shops.”

As for businesses, he worries the high rent rates are keeping prospective business owners out of the neighborhood.

“ ere’s de nitely been a lot of interest in Corktown, that remains high. However, if you drive around and look, there’s also a number of key commercial and retail spaces that’s available, and it’s been available for quite some time,” Roberts said. “My guess is that because of the rent and the fact that Michigan Central (was) not open yet … that people can’t just make it pencil correctly. ey can’t make it make sense. I think that’s why there’s more people that are passing on opportunities that are available in Corktown.”

Roberts admits, though, that there is both good and bad that come with the developments in the area.

Ford said it plans to sta Michigan Central with 1,000 employees by the end of the year, and 2,500 by the end of 2028, which Roberts anticipates will bring more business to the area.

He hopes that the developments in Corktown will help its businesses thrive.

The Coachman development on Bagley Street in Corktown has a condo listed for sale at $300,000. PHOTOS BY NICK MANES

Michigan Avenue in Corktown, as seen on June 3. | ANNA FIFELSKI

The new Perennial Corktown apartment and retail development is more than 70% occupied after opening late last year.

Select and Gayar argued that it had a new lease for the parking lot approved by the city and that it needs the site to proceed forward with its development proposal.

Although the city signed o on what was to be a tri-party lease in November 2022 that included Hunter House and Select, the restaurant declined to sign it. Under that lease, Hunter House could use the lot until construction on the mixed-use building started and then it would transfer to Select.

Ultimately, Judge Victoria Valentine ordered the fence removed.

e bigger issue is the future of the mixed-use development on the site. e 949-square-foot Hunter House building at 35075 Woodward Ave. would have to be razed to make room for the new ve-story building, which would also be built on the neighboring 35001 Woodward parcel.

Hunter House contends in court documents that, via a purchase agreement with Select, it has “the ability to review and provide ‘prompt and reasonable approval’ ” of redevelopment plans for the property. Yet Select and Gayar, without Hunter House signing o on the plans, sought and received Birmingham Planning Board approval in 2021.  e restaurant, in its court lings, says “a comedy of errors” over the years have led to the site not yet being redeveloped, even though it’s been envisioned in one way or another for at least about two decades.

Hunter House is also concerned that the proposed development doesn’t have surface parking for the restaurant, as called for in the purchase agreement. On the other hand, Select contends that although a proposal for the site that had 11 surface parking spots was approved prior to the Great Recession (and prior to its ownership), the city’s attitude toward surface parking has changed.

Plans for the site go back much farther than the most recent incarnation just a couple of years ago. Victor Saroki, the prominent Birmingham architect who was part of a previous ownership

group, said Hunter House’s sway in the project is carved out because the restaurant component would be set up as a condominium unit, with Hunter House owning it.

“To them having surface parking was essential,” Saroki said. “So they had some surface parking, and they had Hunter House on the corner and the hotel was built over them and parking built under them. at’s why they had control.”

Select Commercial Hospitality also argues that Hunter House is misreading the purchase agreement, which dates back to 2015 when Select Commercial Assets paid $5.6 million to Birmingham Property LLC, registered in Beverly Hills to Jamal Kalabat, for the property.

Select says an addendum from 2005 “substantially changed the agreement between the parties” and that the restaurant is “no longer entitled to approve the entirety of the development.”

It also says the original purchase agreement only gave Hunter House “reasonable discretion” to approve the entire development and “sole discretion” related to its space in the new building.   e case is ongoing.

City’s evolution

e Hunter House building could become another Birmingham mainstay to become a casualty of the city’s evolving character.

In recent years, several squat, decades-old buildings have come down as the city densi es and adds things like hotels, o ce space, apartments and condos and retail.

Much of that can be traced back close to 30 years, when the city’s 2016 master plan was approved in 1996. at process was led by renowned urban planner Andres Duany, and included Birminghambased Gibbs Planning Group and other consultants.

COMERICA

From Page 3

The time capsule was inscribed with the date Aug. 10, 2033, which would have been the 100-year anniversary of Manufacturer’s Bank.

Carefully removed from the box by members of the Detroit Historical Society were postcards of the building, a resolution by Detroit City Council for the construction of the building, a history book of Manufacturers Bank from 1933, commemorative coins and paperweights, a reel of lm, which the bank plans to get digitized, and more. Comerica employs 850 team members in Detroit and 4,500 employees throughout the state of

Balmoral Building was built in its place. e site where Gayar wants to build his new building also once housed a gas station.

“Why would we have these prominent gateway sites into the city be one-story gas stations? Gas stations don’t need to be on these prominent locations,” Saroki said. “ oughtful development is what’s important here. Do good buildings and recognize the history of what you got.”

More recently, the new RH (formerly Restoration Hardware) store under construction resulted in the demolition of the property that used to house Capital Tile, Lutz Financial Services, Roche Bobois, Frank’s Shoe Service and Coldwell Banker Weir Manual. Construction halted for over a year due to a redesign and restarted in 2023.

e former Mountain King restaurant and an old Talmer Bank branch on Old Woodward Avenue have also been razed to accommodate a new ve-story building by Birmingham-based Markus Management Group, which has lured the Dykema Gossett LP law rm from Bloomeld Hills as an anchor o ce tenant.

“We intensi ed the zoning all around that area and we allowed for what’s e ectively a ve-story building,” said Mark Nickita, a co-founder of Detroit-based Archive DS architecture and planning rm, as well as a former Birmingham mayor, city commissioner and planning board member.

“We had a whole lot of property in the city that was under-utilized: parking lots, low-scale buildings, under-producing buildings that we don’t really want, that are now considered non-conforming, things like gas stations and surface parking lots. ose should all be replaced with higher and better-use buildings that adhere more to walkability, the mixed-use nature of a downtown core, to be more efcient, to be more productive and be better contributors to the core,” Nickita said.

Case in point: e Greenleaf Trust building replaced an old gas station during the doldrums of the Great Recession. Not long after, a strip mall was razed, and the

Michigan. As of June 2023, the bank was the third largest in Michigan with $33.1 billion in deposits and 177 o ces in the state.

To be able to take a glimpse back into the past is proof of Comerica’s perseverance, Curt Farmer, CEO of Comerica Bank, told Crain’s.

“It is just so interesting for not only me, but for our employees, and our board, etc. To walk back in time and sort of reinforce all the things that we’ve managed, through the di erence we’ve made in the lives of so many people along the way and the commitment that we’ve had to our customers, even as we’ve grown beyond the state of Michigan and other markets as well, that history continues for us,” Farmer said.

To continue to preserve its legacy for another 175 years, Farmer

Just outside of downtown at the southeast corner of Woodward and Maple, a Chicagobased developer plans a large apartment development that would replace a vacant old o ce building.

e Daxton Hotel at Old Woodward and Brown took the place of small old o ce buildings.

Next to the RH development, a site has been scraped of its previous dated buildings that are being replaced by the 135,000-squarefoot 370 Brown building. at project, expected to cost $80 million, will house a new 42,000-squarefoot JPMorgan Chase & Co. o ce. It’s one of several projects in the city that developer Ron Boji is involved in.

“We are extremely bullish about Birmingham. It’s just the beginning of the glow-up,” Boji said.

“I think the ‘Old Birmingham’ people have seen the newer developers come to town ... and they are proving they can be in this wonderful, quaint upscale walkable community and be a complement to it.”

said the bank takes its relationships with its customers seriously. “Technology plays a more and more important role with our customers, but one thing we always say is that what we focus on rst is personal relationships and oneon-one relationships with customers and getting to know them, their families, their companies,” Farmer said. “We need to have technology to help enable a lot of that, and that will continue to evolve, but I don’t see AI replacing bankers anytime in the future. Relationships really do matter. Personal connectivity with our customers really does matter.”

e bank also donated $17,500 to the Detroit Historical Society in recognition of the work the organization does to preserve Detroit’s history.

The owners of the Hunter House hamburger joint on Woodward Avenue just north of Maple Road and the owner of its building, Grand Blanc surgeon Hesham Gayar, have been at odds for years over proposed redevelopment. KIRK PINHO

First female CEO at Albert Kahn Associates on leading storied rm

Kimberly Montague didn’t always want to become an architect. It was a University of Michigan pre-med “weeder” course in organic chemistry that made her pursue architecture and design instead of medicine. Now fast-forward to today, and Montague, an avid traveler and athlete, has been named the rst female CEO to lead Detroit-based Albert Kahn Associates Inc., the eponymous rm started by “Detroit’s architect” Albert Kahn in 1895. She replaces Alan Cobb, who is retiring after nearly 50 years and will retain the honorary title of chairman emeritus and principal. She has previously worked for Planetree Inc. and Herman Miller Inc., among others. She spoke with Crain’s about her new role, diversity and trends in the industry — and her favorite race she has ever run.

By | Kirk Pinho

You are the rst female CEO at Albert Kahn Associates. What does that mean for you personally as well as the organization?

I’m the 12th president and rst woman to be elected to this position from the rm. For me, generally, I would say there are still more men than women in the eld of architecture speci cally, and design and construction overall. I spent a bulk of my career mentoring and working a lot with diverse students and emerging professionals about the opportunities. I’m proud I’m the rst woman CEO and I’m going to say I hope I’m not the last, knowing where the industry is going. When we started school, purely from a gender perspective, it tended to be half male and half female. As you progress through your career, there are fewer and fewer females in those leadership positions. But I will also say, having been at the Mackinac Policy Conference last (month), there were quite a few of the panel discussions and presenters on stage that were women in CEO positions. So this is kind of a turning tide for female leaders in signi cant positions.

Women, as well as people of color, are underrepresented in architecture, as well as in plenty of other facets of commercial real estate. How can that be changed?

I go back to the whole aspect of mentoring. We have several organizations we work with here at Albert Kahn to help bridge that gap and perhaps have more students exposed to what it means to be an architect. I will also tell you our diversity within our rm, I think right now we are beating the industry average in terms of people of color and women in positions at our organization. We spend quite a bit of time working with organizations like Boys Hope Girls Hope of Detroit and the ACE Mentor Program of America and others to ensure we are telling the story about what it means to be an architect, an engineer, in project management and the impact this kind of work can have in communities, communities in which we each grew up. We know there is still more work to be done but you can’t do the work if you don’t spend time talking to those who have the potential.

What’s the biggest challenge

ahead for the company and what are you most looking forward to about the job?

What I’m most looking forward is working with our team here. We have an exceptional culture here at Albert Kahn. We have people that have been here for 30-plus years and people that have been here for less than 30 days, and everyone in between. We maintain the connections with those folks through our network of former Kahn employees and retirees. We like to call them “ex-Kahns.” For me, I think it’s really kind of growing those future leaders within our organization and I’m excited about that.

I think the challenging parts of the job, you know the economy, plays a role on who is doing what work and where. I will say that with one of our major markets, which is health care — people sadly continue to get sick — so hospitals will continue to do projects. We see that as a strength in our strategic plan and we are committed to that health care market. In higher education, there has been a big boom in potential projects from many of the major universities and some of the smaller colleges here, both locally and around the state. ose kids will continue to need to learn, to be taught, so that’s another great market for us.

What sort of design changes and design trends have you noticed in the last few years, speci cally in regards to COVID and health care?

Someone made a comment at the Mackinac Policy Conference about people returning to the o ce. We are fortunate here at Albert Kahn that we have a lot of people that like to come to the o ce. Who wouldn’t like to come to the Fisher Building every day? In our industry speci cally, there is quite a bit of work that’s done very collaboratively. ere is some heads-down focus work that needs to be done on an individual basis, too, but by and large, most of the people come to the o ce Monday through ursday. However, that shift for the number of people that are not going back to o ces, will continue to in uence the commercial real estate industry. We are seeing that with the move of General Motors to the Hudson’s block. at was a very strategic move that they made speci cally related to the footprint that they’re going to need for people in o ce. at’s certainly in uencing the kinds of projects. at said, there are an awful lot of our clients thinking, “With the footprint we do have, what are we going to provide in that space to encourage our employees to come and work here?” It’s not just ping pong tables and Taco Tuesday. Sure, that may have an in uence. Everyone loves a good sh taco. But does the culture encourage collaboration, encourage and provide an opportunity for learning and exposure to new ways of working.  I would also be remiss if I didn’t mention those two little

letters we’ve been hearing in every industry, which is AI. How and where and when will that be part of the conversation? It already is. It’s already having an in uence on what we do and how we do it. But it still requires a human brain to be able to input the correct information and input the data and the facts and gures for an output that is accurate. It’s the old saying: garbage in, garbage out.

When you’re not leading this really storied company, what are you doing? What keeps you busy outside the of ce? I love to travel. I had the opportunity to travel quite a bit. Traveling for pleasure is probably one of the highlights for me. It does relate back to design and architecture — experiencing new places, meeting new people and learning about di erent cultures and looking at how those environments are designed and help support the people. It could be a sleepy beach in Hawaii or it could be Amsterdam or Paris, France. ey all have their own culture and their own ways about them. Design has an in uence on that. I’m also a pretty avid cyclist and runner. I used to do quite a bit of triathlons but those take lots of time to train for, and these days I don’t have quite as much time as I had on my hands. Keeping the shoulders and knees loose with cycling and swimming and running, I spend as much time as I can outdoors, especially in the summertime in Michigan.

What’s your favorite race you’ve ever participated in?

I’ve done the Freep (Detroit Free Press) half-marathon twice, but I will tell you my favorite half-marathon was one I did at Disney, about six or eight years ago now. It was a nighttime run. My husband and the friends that went with us, they were all touring around Epcot drinking wine and eating ne food and I was running 13.1 miles. When I nished, I called them and said, “Where are you?” ey said, “We’re drinking champagne at France, come join us!” I said, “Save me a glass. I’ll be there in an hour.” ere were costumes and Disney characters and you’re running at night through Animal Kingdom and you can hear the lions roaring. It was the most unique race I’ve ever run. It was really, really fun.

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