Crain's Detroit Business, June 26, 2023

AS TEENS SHORE UP WORKFORCE, CAN THE LAW KEEP PACE?

Auto parts makers hit big hurdle

BY KURT NAGL

For automotive suppliers based in Michigan and elsewhere, labor costs and availability remain major issues complicating the push to localize production in North America, industry executives and experts say.

While commodity, freight and energy prices have mostly come back down to earth since post-pandemic spikes, elevated labor costs and worker shortages remain a pain point for manufacturers.

e once obvious solution of shipping work to lower-cost countries has become more complex as companies pull supply chains out of Asia. at’s led to a manufacturing

Legal marijuana seesaw in

boom in Mexico, where cheap labor is becoming less so, and the competition for plant workers is perhaps greater than ever, said Alejandro Rodriquez, Mexico country lead for South eld-based Plante Moran.

“What we’re seeing now is that companies are looking to go to Mexico because they cannot nd people in the U.S.,” Rodriguez said.

“Wages are increasing very rapidly. As a result of nearshoring, the many investments that are coming into Mexico, we’re seeing even more of an increase in labor costs because companies are competing for talent.”

Over the past ve years, the average monthly salary for a manufac-

turing worker in Mexico has increased 30 percent to 5,620 pesos (about $326 in U.S. dollars, by current conversion rates), according to data from Mexico’s Ministry of Economy. In that same timeframe, the average hourly wage of a U.S.

BY DUSTIN WALSH

Cannabis real estate developer Je rey Yatooma could soon have dominance of Auburn Hills’ marijuana market.

Yatooma’s impending dominance comes after a creative and successful ballot initiative that led to Auburn Hills voters approving weed businesses in the city in November 2022.

But the path for the city has not been straightforward. A month before the vote, City Council e ectively blocked marijuana licensing, and Yatooma, with an amendment to zoning rules. And now the council is ipping again. e city’s econom-

Hills

ic development team is expected to recommend a new marijuana ordinance to council next month that would approve licenses for just four properties, three of which are owned by Yatooma.

Auburn Hills Mayor Kevin McDaniel and his economic development team declined to comment on the matter, and more than a dozen emails to members of the Auburn Hills City Council were not returned.

e events in Auburn Hills highlight the fractured world of marijuana licensure where the state allows unlimited licenses, leaving local communities with broad authority to develop their own purported competitive methods to dole them out. Expensive lawsuits

A worker assembles an integrated drive module at the BorgWarner Inc. manufacturing facility in San Luis Potosi, Mexico. BLOOMBERG

PNC gives $1M to bring nonpro t helping underserved kids to metro Detroit

BY SHERRI WELCH

e PNC Foundation has committed $1 million over three years to bring national nonpro t Inroads Inc. and its “College Links” program to metro Detroit to help create post-secondary education and career pathways for minority high school students in the region.

e program, announced Tuesday, will also create a pipeline of talent for employers and help companies foster diverse and inclusive workplaces — the very thing Inroads’ founder intended when the organization began more than 50 years ago.

e late founder of St. Louis-based Inroads, Frank Carr, gave up a successful publishing career to focus on increasing ethnically diverse employees in corporate management and change the way they gained entry into the workforce.

Historically, 100% of students participating in the program have been accepted into college or post-high school education, Inroads said, noting it has more than 30,000 alumni and currently serves more than 4,000 students in cities across the country.

at track record attracted PNC.

“As a national main street bank, PNC is strongly committed to the communities we serve,” said Detroit native Michael Bickers, PNC regional

president for Detroit and Southeast Michigan, in a release.

“We know that supporting the Inroads program will help local students in historically under-served communities gain access to rewarding careers in science, technology, engineering and math. is program re ects PNC’s commitment to helping students of all ages achieve success in school and life.”

When it launches this fall here in metro Detroit, the College Links program will provide students in underrepresented communities with mentoring for college and career

Applications open for Crain’s Best-Managed Nonpro ts

Applications are open for Crain’s Best-Managed Nonpro ts 2023 program.

e program honors the best in leadership and nancial stewardship in Southeast Michigan’s nonpro t community.

is year’s contest asks nonpro ts to share how they seek feedback from the people they serve and how they use that information to improve programs and services. is might include shifting to help clients overcome barriers, lling gaps in services and adjusting how and when services are o ered.

Nominees, which can be any size, must be s 501(c)3 organization located in Macomb, Oakland, Wayne, Livingston or Washtenaw counties.

Applications must include an entry form, a copy of the organization’s code of ethics, a copy of its most recent audited nancial statement and a copy of its most recent IRS 990 form.

First-place winners within the past 10 years are not eligible; neither are hospitals, HMOs, medical clinics, business and professional organizations, schools, churches or foundations.

planning, access to scholarship and internship opportunities, resume writing and assistance in developing soft skills (like being on time for work, taking direction and operating as part of a team.)

Inroads will recruit employees from PNC and other area employers to serve as mentors to students. It will also seek internship slots at companies across the region, said Rob Darmanin, vice president, regional communications for PNC Bank.

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

Applicants undergo a nancial review by the nonpro t practice group at Plante Moran PLLC, and winners are selected after initial scoring and in-person interviews by a panel of nonpro t experts.

e deadline for applications is Aug. 7. Crain’s will notify nalists of the next steps the week of Sept. 25. Finalists must appear for in-person interviews (or virtual interviews if health conditions require it) with judges the morning of Tuesday, Oct. 3. Applicants will be considered with similar-sized organizations.

Crain’s will publish pro les of the selected honorees on Dec. 4, and they will receive a “best-managed” logo from Crain’s for use in promotional materials.

Apply at bestmanagednp.secure-platform.com.

Last year’s winners, On My Own of Michigan and Wayne Metropolitan Community Action Agency, represented the wide spectrum of best practices for recruiting and retaining talent. They had vastly different annual budgets — $615,000 for On My Own and $350 million for Wayne Metro — but were still able to be innovative in rethinking operational strategies to expand benefits, opportunities and other perks to keep employees engaged and satisfied.

Contact Assistant Managing Editor Laurén Abdel-Razzaq at lauren. razzaq@crain.com with entry-related questions.

Michael Bickers, PNC Bank regional president for Detroit and Southeast Michigan, announces a $1 million commitment over three years to bring St. Louis- based nonpro t Inroads Inc. to metro Detroit. PNC BANK

Demand for Michigan lake homes remains high

Market eases but inventory a challenge

NICK MANES

As demand for vacation homes in Michigan boomed during the onset of the COVID-19 pandemic, inventory for such discretionary purchases dwindled. Now, the crunch appears to be easing slightly.

Real estate industry sources say demand largely remains intact this summer, although the pool of buyers is somewhat shallower as many buyers have already found their property. Now it’s the availability of vacation homes that remains the challenge, largely mirroring the limited inventory in the broader residential market.

All told, the lakefront vacation market has returned to some sense of normalcy, but with “signi cantly” less inventory than before, according to Linda Sherwood, a Realtor with Lake Homes Realty LLC who focuses on the Higgins and Houghton lakes markets just south of Grayling.

Prior to the pandemic, which began in early 2020, having hundreds of homes available for purchase was hardly uncommon, Sherwood said. Now that number is closer to three dozen at any given time.

at means prices are still increasing — albeit not as fast as they had in 2020 and 2021 — and what’s available “sells quickly,” according to Sherwood.

e sentiments expressed by Sherwood appear in line with the ndings of a recent report released by Alabama-based Lake Homes Realty, which tracks lakefront and vacation property around the country.

e group’s latest quarterly report, released this month, found that the total market for lake homes and lots (based on overall listings) in Michigan stood at about $2.2 billion, up from about $2 billion a year ago and a 32% increase from the spring.

REAL ESTATE

New Livonia HopCat marks a change in strategy as the company recovers from bankruptcy

e July 24 opening of the HopCat location in Livonia comes at a time when the Grand Rapids-based restaurant/bar chain is cautiously growing.

Ned Lidvall, CEO of HopCat owner Project BarFly LLC, last week told Crain’s that the company is now on solid footing. at nancial stability comes a little more than three years after what was then BarFly Ventures LLC led for voluntary Chapter 11 bankruptcy protection and had

about $28 million in secured debt. In October 2020, it sold its assets to a pair of Texas-based private equity rms — Congruent Investment Partners and Main Street Capital — in a $17.5 million deal. Congruent and Main Street Capital are the same groups that initially nanced HopCat’s growth with a $25 mil-

lion injection of mezzaninenancing the company took on in 2015.

“We’ve come out of the pandemic era very stable,” Lidvall said. “Our businesses have been able to grow out of cash ow. ere is essentially no debt on our balance sheets. All of our locations are pro table for the most part.”

e new Livonia location is in a 9,200-square-foot space at 17800 Haggerty Road that was the former home of Claddagh Irish Pub and had been vacant since 2019.

Lidvall said it will be the nal new HopCat to open this year. A new HopCat in Royal Oak opened in the winter.

It’s the 11th location total for a brand that at one point pre-pandemic had 15 locations. Lidvall said the company continues to look at real estate across the Detroit market for another location, but there are no speci c plans for new bars.

Lidvall said Project BarFly is fond of the area.

Developer explores putting o ce project next to Troy’s tallest building

A Bloom eld Hills-based developer wants to build a new o ce building and parking deck on a key site along Troy’s busiest thoroughfare.

Kojaian Management Corp., run by C. Michael Kojaian, has submitted plans to construct a seven-story o ce building with almost 258,000 square feet and a four-story parking deck with more than 1,000 spaces on what is now surface parking for the 25-story PNC Center west of I-75 and just south of West Big Beaver Road.

A 5,000-square-foot retail building would also be built on the site, which is 20 acres, according to Troy Planning Commission documents from last month.

PNC Center — the city’s tallest building — was developed as the Top of Troy. Built in the 1970s by Kojaian, it sits in a federally designated Opportunity Zone, which gives investors in Quali ed Opportunity Funds appealing breaks on their capital gains taxes.

Tony Antone, executive vice president for Kojaian, said the company is working to get the site approved for the possible build-to-suit headquarters-style building before going to market seeking a user.

“We’re not building this spec,” Antone said, industry shorthand for speculative building, which is when a developer constructs a building without any tenants identified.

The Livonia HopCat will feature two outdoor patios, including this 26-seat space at the front of the restaurant. | JAY DAVIS/CRAIN’S DETROIT BUSINESS

JAY DAVIS

KIRK PINHO

rendering of

potential o ce building next to Troy’s PNC Center presented by Bloom eld Hills-based Kojaian Management Corp.

Lidvall

Michigan’s #1 Financial Advisor by both Barron’s* and Forbes**

Developer vows to complete Detroit Target after lender backs away

A local developer says a Chicago-based bank has backed out of nancing talks on his proposed mixed-use development anchored by what would become Detroit’s only Target Corp. store — but said he will see the deal through to completion with a new lender.

Jonathan Holtzman, who runs Farmington Hills-based City Club Apartments, said there was a term sheet — but not a loan commitment — from one of his longtime lenders, Associated Bank out of Chicago, but the bank backed away from the project.

“I’m not going to speak for Associated Bank,” Holtzman said. (I’ve asked Associated Bank to speak for itself in an email requesting comment last week.)

“I can only tell you Associated Bank is not involved in the project, not because of the city, Detroit, the project or the borrower or the deal.”

Without speaking directly about Associated, Holtzman said stress in the broader commercial real estate market — particularly the o ce sector — and more macro issues related to liquidity of many banks has caused di culties for developers to secure construction nancing.

He said people have been “sucking money out of banks” and instead investing in treasuries at 4% or 5% rates, causing liquidity issues for some banks.

“If a bank doesn’t have liquidity and then has all these troubled o ce loans and you say, ‘Hey, I want a loan for an apartment building,’ they don’t have the money,” Holtzman said.

Adam Lutz, a commercial real estate nance expert who is president and CEO of Lutz Real Estate Investments based in Birmingham, said broadly that construction nancing has substantially slowed due to banking, economic and real estate related issues like the ones Holtzman described.

But, in an interview this month, Holtzman vowed that the City Club Apartments Midtown development would move forward with nancing

from a di erent lender. He said he is in conversations with both Flagstar Bank and Fifth/ ird Bank.

“Could Midtown start at the end of the third quarter? Maybe. Could it start at the end of the fourth quarter? Maybe,” Holtzman said. “We are 110% committed to build in Midtown. ere isn’t a chance that we’re not building Midtown.”

Compounding the issue are in ationary, interest rate and labor issues which have all increased the cost of the proposed development, Holtzman said.

Holtzman also said he has never formally proposed a project in Detroit that has never been built

For years, Target had been the rumored tenant of a long-in-the-works mixed-use development at the corner of Woodward and Mack avenues.

e proposed 32,000-square-foot store was formally announced in October 2021 although major construction has not yet started. It would serve as a major retail win for the city, whose last Target store closed two decades ago in August 2003.

Most recently in October, I reported that the anticipated timeframe for construction to begin was December based on documents submitted to the city for brown eld nancing, but that window has come and gone.

At that time, the project cost was $103 million and would include 344 residential units across multiple

buildings, including a 16-story residential tower with 270 units, of which 20 percent would be for those making 80 percent of the federally designated Area Median Income.

AMI determines what is considered “a ordable,” but that factors in higher suburban Detroit incomes and therefore skews that gure upward. erefore a unit that is technically considered a ordable at 80 percent of the federally established AMI may not be a ordable at all for a large swath of Detroit’s population.

A second building totaling six stories would have 74 residential units and 9,100 square feet of commercial space. A third building — which would be the Target store — consists of about 31,200 square feet.

In addition, there would be a 186-space underground parking garage as well as a pair of pocket parks.

Chicago-based Norcon is the general contractor while BKV Group and SITE are the architecture rms working on the project, which is one component of a broader seven-acre development site known as South of Mack Avenue, which is owned by the Nyman family.

Other components include a parking deck and a new AC Hotel being developed by Detroit-based e Roxbury Group.

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

Curly hair specialist strikes out on her own

Owner

JAY DAVIS

of

Joyola Mei Hair prioritizes work-life balance

Joy Lewis has been a one-woman show for the last year at her new business in Corktown.

e Detroit cosmetologist opened Joyola Mei Hair salon in May 2022, but struggled to nd just the right stylists to ll out the chairs in her 1,100-square-foot shop at 1432 Michigan Ave.

e salon specializes in wavy, curly, coily and tight hair textures and uses clean, sustainable, vegan-friendly products.

“It was a little di cult to nd stylists who really care about curly hair,” Lewis said. “I worked by myself the whole rst year. I did a hiring blitz in (October), brought some people in thinking if I trained them it’d be easier once they got started. I brought in a few people, but it wasn’t a good t and didn’t work out.”

Lewis, 35, tells Crain’s she’s learned a lot about running a business, and herself, over the last year. She has a plan to go forward and a system to carry it out.

Good start

Lewis keeps a tight schedule, but allows herself some free time.

e stylist and entrepreneur operates Joyola Mei Hair 10 a.m.-6 p.m. Wednesday through Saturday. Lewis typically has eight clients each day. Most salons o er additional hours,

Joyola Mei Hair

The Black woman-owned salon opened May 11, 2022, in Corktown. Here’s more about the business:

The name: Pronounced “joy-oh-laa may”

Owner: Detroiter Joy Lewis

Location: 1432 Michigan Ave., Detroit

Clientele: People with wavy, curly, coily or tight hair textures.

Hair care: Clean, sustainable, vegan-friendly products and holistic services and techniques for hair cuts, styling and color.

The space: The 1,100-square-foot salon has stations for up to four stylists. The space features exposed brick walls and music plays from two wall-hung speakers.

Hours: 10 a.m.-6 p.m. Wednesday-Saturday and Sunday by appointment.

but she understands work-life balance is a part of success.

“It’s really easy to get burned out just from wanting to be productive,” Lewis said. “You can work seven days a week, say yes to every opportunity. It gets really hard to focus on setting boundaries. I don’t work those three days in order to be my best self at work. Keeping a healthy work schedule was necessary. I really do love what I do and it doesn’t feel good

as

she

o ers

niche services

when you get too tired and don’t want to be there.

“As a business owner, you do everything. If you don’t take that time for yourself, it can wear on you.” e approach has worked for Lewis.

In its rst year, Joyola Mei Hair brought in $160,000 in sales and made a small pro t. Two new stylists joined Lewis’ team on June 15, and the small business owner projects they can help boost sales to more than $200,000 in year two.

“I want to build a team to be able to get the word out more about what we’re o ering and so we can bring more clients in,” Lewis said. “My book is so full that I don’t think I can take any new appointments until September or October. I know there’s a desire for what we’re doing. ere’s a community that wants its curls nourished. at’s really the foundation of why I want to build out a team to be able to service more people.”

Rooted in service

Lewis took an interesting road to hair styling and cosmetology. She previously worked in government, serving as a legislative assistant to House Appropriations Chair George Cushingberry Jr. from 200610 and community coordinator 201318 for Detroit City Council in District 7.

Lewis completed the cosmetology

program at L’Esprit Academy in 2012. She served as an “Elite Stylist” with Ulta from 2019-22, marketing herself as a curls specialist and servicing about 80 clients each month.

Lewis began scratching her cosmetology itch during her time with Ulta. She became a top earner in her store’s district and grew a client base that got too big for the retailer. When Lewis believed she’d gone as far as she could go at Ulta, she set out to nd a space to start her own venture in spring 2021.

Lewis started Joyola Mei Hair with $125,000, including $100,000 in loans from Michigan Women Forward and ProsperUS Detroit, along with a $25,000 cash grant from Motor City Match.

Lewis knew o ering such a unique service could be a failure. She also knew the niche business she planned had a large clientele she could tap into.

“ ere aren’t many salons that specialize in curls,” Lewis said. “Even for myself, it was di cult to nd a stylist for my curly hair. I don’t have the answer to why it’s so di cult. People have their preferences. If I had to call it something, curls weren’t completely normalized when it came to getting your hair done.”

Leslie Deshazor of Detroit has been a client of Lewis’ for three years. Prior to that, Deshazor would make a 45-minute drive to Farmington to get her hair done. Deshazor, who has

worn her hair naturally for almost 20 years, sees Lewis as a godsend.

“ is whole time I’ve been wearing my hair naturally, I’ve had the hardest time nding a stylist close to home. I don’t know anybody in Detroit who’s doing what (Lewis) does,” Deshazor said. “It’s very comforting having a go-to person for my hair. I’ve sent friends and family to (Lewis) and they’ve all been happy with her work.”

Lewis is happy to help.

“Oftentimes, women think they need to get their hair blow-dried and straightened in order for it to be styled,” she said. “I’m trying to be a part of a group that changes that thought process where you cut your hair where it grows naturally. It’s been a bit of a process. ere are major bene ts to being taught how to do curly haircuts and colors. e education is out there.”

Lewis plans to continue to o er that education and sees big things for the Joyola Mei brand — like a second location in a di erent part of Detroit.

“ is is something I’ve wanted for a long time,” Lewis said. “ ere’s been some hiccups. I think I’ve done well working by myself, but I prefer to work with a team because there’s so much we can learn from each other. I think this has some staying power.”

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

Entrepreneur Joy Lewis last month celebrated one year in business at her salon, Joyola Mei Hair. Lewis opened the business after more than a decade as a licensed cosmetologist.

Investment in arts pays big dividends for Michigan

he COVID-19 pandemic greatly impacted arts and culture organizations, and the past three years have been a turning point for how we implement mission and business. Audience activity, while rebounding signi cantly over the past 12 months, remains lower than in pre-pandemic years, while the demand for online options has introduced the need for new investments in aging digital infrastructure.

Despite these challenges, arts organizations continue to serve as a major asset to economic growth and quality of life in southeast Michigan.

EDITORIAL

Next-gen philanthropy holds vital lessons

Metro Detroit’s philanthropic families used to have a plan for sitting on foundation boards: You serve until you physically cannot, and then the role passes on to the next generation. By the time that next generation gets tapped, they are already up in age. And while that model has worked for decades, it has meant that younger people don’t get their chance to have a say in where the money goes.

at model is changing to the betterment of all.

Crain’s senior reporter Sherri Welch delved into why in this year’s Giving Guide package. She spoke to young philanthropists who are stepping up to serve on boards, how established nonpro ts can attract younger donors and explored ways that some prominent metro Detroit families have paved the way for the younger generation to serve.

It’s important because millennials and Gen Xers are more likely than their elders to want to be directly involved in nonpro ts — they want to see that the money is getting to the intended target and doing what it was meant to do.

eir desire to get involved in social impact now, at a much younger age, through volunteerism, board service and philanthro-

py, is one of the key traits experts say will make them the most signi cant philanthropists in U.S. history.

Nowhere is this shift more pronounced than with the Fisher family. e Max M. and Marjorie S. Fisher Foundation was started in 1955 and was endowed in 2005 after businessman and philanthropist Max Fisher’s death. With focus areas on Jewish causes, childhood, arts and culture and impact investing, the foundation has become one of the most signi cant in Detroit.

But a seat on the board is not a given if you’re a family member. Instead, you have to apply and go through a rigorous vetting process to make sure you are the right person for the job. It’s this level of scrutiny and accountability that sets the Fisher Foundation apart and allows them to adapt more easily to the changing needs of the community they serve while bringing in the younger generation.

“One thing my grandmother (Marjorie Fisher) was very concerned about was that we always remain exible,” 31-year-old Alissandra Aronow, secretary of the Fisher Foundation board, told Crain’s. “She was always aware that nothing is permanent and nothing lasts forever. As time changes, people change ... need changes, we need to adapt to whatever the asks are around us.”

e next step is for more boards to create meaningful opportunities for younger philanthropists, to allow fresh ideas and new perspectives to ourish and for the next generation to be taken seriously.

e days of writing a check and checking out are over.

e numbers are striking: Arts and culture is a $1 trillion (with a “t”) industry nationally and, in Michigan, is a $15.5 billion industry, according to a recent report from the Arts and Cultural Production Satellite Account, a partnership between the National Endowment for the Arts and the U.S. Bureau of Economic Analysis.

From our rst concerts in the 1880s to our robust calendar today, each event from the Detroit Symphony Orchestra sets o a cascade of economic activity. We employ musicians, administrators, maintenance crew, IATSE stagehands, and Michigan-based contractors for everything from catering to parking to program book printing.

Sellout performances in historic Orchestra Hall bring 2,000 patrons to Midtown Detroit, and usually their trip is an experience — complete with a meal, a drink, or shopping before and after performances. e parents and siblings of the more than 400 students enrolled in the DSO’s Civic Youth Ensembles can spend Saturday mornings nearby while their children learn to play music with their peers, with no shortage of options for other cultural experiences in the corridor. Organizations from around the metro area rent DSO spaces for events, expanding further the impact of paid labor and consumer spending.

is ripple e ect is inherent to arts and culture organizations and greatly magni es their

Timpact. Since 2021, 113 such entities in the tri-county region, including the DSO, have self-reported comprehensive data to the National Center for Arts Research. Together we employ over 8,900 paid workers; we spend nearly $300 million. Despite a decades-long decline in public funding, with diminished budgets and limited resources, our arts and culture organizations continue to hold sway on the public imagination and the regional economy. Supporting the economy of arts and culture is imperative to the health and well-being of our region and our people.

Patrons, creators, and organizational leaders understand the empirical value of artistic and cultural encounters. Research demonstrates more measurable outcomes. A 2019 report from the World Health Organization links artistic engagement to positive outcomes in health promotion and the prevention, management, and treatment of disease. In 2020, a whitepaper from the State Education Agency Directors of Arts Education described how alongside science, technology, engineering, and math, the arts empower learners for “lifelong problem-solving.”

e DSO is strongly committed to expanding our participation in the growth and well-being of our city and region. Our Detroit Neighborhood Initiative works with hundreds of community partners to craft new cultural experiences together, reaching new geographic and cultural areas. Detroit Harmony — a citywide collaborative e ort between the DSO and other arts nonpro ts, schools, community organizations, and city leaders — promises an instrument and music education to any student in the city who wants to learn.

We are joined by a myriad of invaluable organizations that reach young people with opportunities to discover themselves and transform their lives through music, theater, visual arts and other meaningful arts and culture opportunities.

anks to the support of so many, the DSO and other arts organizations in our region provide critical sca olding for the economic and social well-being of Detroit and the metro area.

e organizational challenges of the past three years present an opportunity to further invest in that sca olding. To not do so is to risk a dual loss: our invaluable cultural capital, and its positive impact on the bottom line in Southeast Michigan.

DANIEL SAAD/CRAIN’S DETROIT BUSINESS

THEY WANT TO SEE THAT MONEY IS GETTING TO THE INTENDED TARGET AND DOING WHAT IT WAS MEANT TO DO.

ERIK RÖNMARK

Erik Rönmark is president and CEO of the Detroit Symphony Orchestra.

Music Director Jader Bignamini conducts the Detroit Symphony Orchestra.

SARAH SMARCH

For proof of MSU’s commitment, look upward, Detroit

DTERESA K. WOODRUFF partnership with Henry Ford Health, and we partnered with the Detroit Pistons to strengthen the New Center neighborhood and make the city and state a national leader in providing exceptional health care for all and growing our cancer research while addressing health disparities. Indeed, a joint research center in Detroit is being planned as part of that collaboration, adding even more green to the Detroit skyline.

etroit’s skyline is a little greener. is month, Michigan State University demonstrated anew its faith in Detroit through our investment in the iconic Fisher Building. e occasion was marked by illuminating the top of the landmark in Spartan green, signaling our continuing engagement in Detroit’s storied legacy of innovation and resilience.

MSU’s local connection predates our 1855 founding, when Detroit geologist, whiz kid and community leader Bela Hubbard joined those advocating for a new-model college and experimental farm to uplift the young state of Michigan. Over time, our associations grew, with MSU’s rst local Extension agent appointed in 1917 and the former Detroit College of Law — now MSU College of Law — rst a liating with the university in 1995.

rough generations, MSU has worked hand-in-hand with Detroiters to support local schools, community agriculture and nutrition, manufacturing and innovation, the environment, economic development, the arts, medicine and more.

Consider, for example, MSU’s 2009 decision to establish a College of Osteopathic Medicine campus in the heart of the city in the Detroit Medical Center complex. Today, that program is preparing more than 120 new Spartan physicians and nurses who will join a network of more than 1,350 health care alums from the college’s DMC site to care for our families and friends.

Consider, too, the city’s nancial distress and bankruptcy ling 10 years ago, when Spartans again looked for ways to partner with the community, not with unsolicited advice but by starting with a question: “How can we help?”

Spartans then stepped into action to aid in the recovery. Our world-class faculty and sta worked on food security assistance, local economic development projects, innovative ideas around city planning, and educating Detroiters and the state about the potential implications of the bankruptcy on their lives.

So, what are we doing today?

First, we are listening. I have personally talked with high school principals and community leaders and builders. I’ve talked to faith leaders and government workers. I’ve heard from folks in the arts and folks building roads. We are listening and we are partnering.

In 2021, we partnered with Apple and Rock Ventures to establish North America’s only Apple Developer Academy in the heart of the city to help develop the next generation of app developers and entrepreneurs who can contribute to the city’s growing economy. Two years ago, we graduated zero people; last year we graduated 100 Detroiters and this week we will graduate 200 MSU-Apple Academy coders — all from Detroit, all ready to change their neighborhoods one app at a time.

Earlier this year we expanded our

e results of such engagement?

MSU’s Motor City presence yields a $317 million economic impact on the region and has empowered Detroiters through educational opportunities including enrolling nearly 1,000 students

today and graduating over 4,300 alums. e university is a key talent asset for employers in Detroit and around the state. General Motors and Ford Motor Company are both top- ve employers of recent graduates and, among those graduating from MSU with engineering degrees, 58% chose to begin their careers within Michigan’s innovation ecosystem.

Behind all these numbers are the stories of Detroiters who embody the city’s motto of “We hope for better things; it will rise from the ashes” — a motto which MSU has helped enable through its commitment to democratizing higher education and making a

better tomorrow for all.

One of these stories belongs to a former Detroit high school student. is rst-generation college student, from a historically underserved family, came to MSU through our summer agricultural program nearly four years ago. Although she thought she wanted to go into design, this Spartan left her summer experience with a passion for helping others through sustainable parks, recreation and tourism. She is now a rising senior who is ready to nish her program and make a di erence in her community, enhancing the quality of life of her fellow Detroiters through the knowledge she has gained at MSU.

at’s transformation. at’s what MSU can do when we listen and work together.

So, what’s next for MSU in Detroit? My answer to those I’ve talked with is simple: MSU will continue to build on our legacy as a beacon of opportunity and transformation for Detroiters and as a partner in the community’s continued growth and success. We are in the community. We are listening. We are doing what you asked. In partnership. For you. And for the future. As Detroiters look to the night skyline and peer up to the splash of green at the apex of the Fisher Building, let it serve as a beacon signifying MSU’s part in Detroit’s continued rise.

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

Teresa K. Woodru is the interim president of Michigan State University and an MSU Research Foundation professor.

OPINION: Employers who hire teen workers have both an opportunity and a responsibility. PAGE 10

OPINION: Unaccompanied immigrant children are at risk of exploitation, but we can do more to keep them safe.

PAGE 11

TEEN LABOR IN HIGH DEMAND, BUT PITFALLS LURK

on child labor laws and exploitation; Michigan needs to improve tracking when and where they work

Earlier this year when an investigation by the New York Times revealed children, some younger than 15, were working illegally in overnight shifts at food processing giant Hearthside Food Solutions in Grand Rapids, the state of Michigan was unaware.

Most of these children were undocumented immigrants, but even if they were native-born school kids in nearby Kentwood Public Schools, the state would have been unaware. Even if Hearthside’s labor contractor pulled the appropriate work permits to employ those children, the state would have been unaware.

e state of Michigan, like many states in the U.S., has no infrastructure in place to track minor children who are working nor where they work nor whether they are working to the labor standards required by the state.

“Michigan and most states have a bifurcated system,” said Sean Egan, the deputy director of labor for the Michigan Department of Labor and Economic Opportunity. “Minors have to have a work permit and that’s han-

dled by the Michigan Department of Education. e school district where the minor lives has to sign the work permit, but those don’t go anywhere. ey aren’t sent to the education department or us. We simply don’t know where young people are employed until there is a complaint. We have the authority to investigate but we don’t have the sta to show up everywhere. So unless someone les a complaint …

Michigan enforces its labor standards. Some states, like many in the South, rely solely on the understa ed U.S. Department of Labor to enforce

labor rules concerning minors. e awed system for regulating minor labor is now under a microscope after the NYT report. e labor department earlier this year reported a 69% increase in children employed illegally by companies since 2018. Last year alone, the department found 835 companies in the U.S. employed 3,800 children in violation of labor laws.

Yet many states have turned to minor labor to supplement labor shortages. As of June 1, 14 states, including Iowa, Arkansas and, yes, Michigan, have recently weakened or proposed changes to their child labor laws to appease industries struggling to ll out their workforce or under the guise of parental rights.

“ e overall broad trend is that employers are desperate for workers who will accept bad wages and crappy conditions, like always,” said Daniel Costa, director of immigration law and policy research at Washington, D.C.-based think tank Economic Policy Institute. “With the pandemic, a drop-o in immigration and more people out of the workforce … that’s a recipe for more

DUSTIN WALSH

A tight job market has put a spotlight

|

BY

Sean Egan with the Department of Labor and Economic Opportunity says Michigan should keep track of where teens are

“THE OVERALL BROAD TREND IS THAT EMPLOYERS ARE DESPERATE FOR WORKERS WHO WILL ACCEPT BAD WAGES AND CRAPPY CONDITIONS.”

—Daniel Costa, director of immigration law and policy research, Economic Policy Institute

youth labor. And we’re seeing states rolling back child labor laws. at’s scandalous.”

But Michigan is looking to follow the lead of New Jersey, which recently strengthened its ability to enforce regulations by shifting minor work permits to its department of labor.

“We have thousands and thousands of kids working, but we only get to monitor that from the few hundred complaints we receive (annually),” Egan said. “In New Jersey, they now know exactly where young people are working and can better enforce their youth employment standards. We know we have to do better, so we’re evaluating a change.”

Underage opportunity

e COVID-19 pandemic pushed teens into the labor market in a big way, as many companies struggled to ll roles. e U.S. labor force participation rate for those age 16 to 19 climbed to 36.6% in late 2022, up more than 380,000 in that age range from 2019.

Older workers simply weren’t interested in the low-paying jobs typical in the restaurant, hotel and retail industries while the federal government handed out stimulus funds and COVID-19 remained a threat, particularly in the second half of 2021 when those sectors picked up steam after the release of COVID-19 vaccines.

In fact, those aged 16 to 24 saw the largest 12-month average median wage increase in July 2022 than any other age group, according to data from the Federal Reserve Bank of Atlanta. It’s important to remember that minors are typically paid less than their older colleagues. In Michigan, the minimum wage for working minors is $8.59 in 2023, only 85 percent of the regular minimum wage.

But even if teens are attractive to employers, federal rules prevent them from working in many industries.

e U.S. labor department sets the oor on minor employment standards and has a list of banned jobs and industries, such as jobs in roo ng or the use of meat processing machinery. Minors younger than 14 are banned from working at all, except for their parents or in certain agricultural settings.

States are then allowed to layer more rules on top of the federal standard. Michigan’s labor standards for minors go above and beyond the federal rules.

Michigan requires 30-minute uninterrupted breaks for all minors for every ve hours worked and restricts how early and how late a minor can work, both during the school year and during the summer.

Employed minors younger than 16 can’t use ladders or operate rides at amusement parks.

So to appease employer demand, and sometimes politics, many states rolled back these protections — some below the standards set by the feds.

In late May, Iowa Gov. Kim Reynolds signed an expansive labor bill that peeled away child labor protections. Iowa businesses can now hire 14-year-olds in some hazardous industries and 15-year-olds in manufacturing. Teens as young as 14 can work six-hour shifts at night during the school year and 16-year-olds can now serve alcohol.

In March, Arkansas eliminated youth work permits to verify age and parental consent for employment.

In June 2022, Michigan Gov. Gretchen Whitmer signed legislation that changed the state’s Liquor Control

Here are the rules for employing teens in Michigan

Michigan’s laws, regulations and rules regarding teen employment are speci c and have remained mostly unchanged in recent years. Those younger than 16 face strict limits on the hours they can work, both during the school year and in the summer, while 16- to 17-year-olds who are still in high school have more exible, but still restricted options.

Minimum wage

$8.59 in 2023, 85% of the regular minimum wage

Hours

 May not work during school hours when school is in session.

 No more than six days a week and no more than 10 hours a day; weekly hours must average eight hours a day.

 Special penalties apply for employing minors in jobs involving cash transactions after sunset or 8 p.m., whichever is earlier, without required supervision.

Restrictions: Ages 14-15

 Not before 7 a.m. or after 9 p.m.

 No more than 48 hours of combined school and work per week.

Restrictions: Ages 16-17

 Not before 6 a.m. or after 10:30 p.m. Sunday-Thursday when school is in session or after 11:30 p.m. on Friday and Saturday when school is in session.

 Limit work to 24 hours per week when school is in session. May work up to 48 hours a week when school is out.

Changes

In 2022, Michigan lowered minimum age on who can serve alcohol to 17.

Exceptions

 16- and 17-year-olds who have completed requirements for high school graduation.

 17-year-olds who have passed the GED test.

 Emancipated minors.

 14 years and older working under a work-study contract between an employer and a school district that provides supervision.

 Domestic workers at private homes.

 Minors working in businesses owned and operated by their parents.

 Workers who plant, cultivate or harvest crops or raise livestock on farms.

Commission standards to allow 17-year-olds to serve alcohol in restaurants. e previous standard was 18 or older.

“ is industry is operating with 35,000 fewer workers than it was pre-pandemic and as we head into peak tourism season it needs every edge it can get just to keep its head above water,” Justin Winslow, president and CEO of the Michigan Restaurant & Lodging Association, told Crain’s after the legislation reached the governor’s desk.

Anne-Marie Welch, partner and employment attorney at law rm Clark Hill PLC, said the con uence of an administration eager to crack down on child labor violations and employers’ need for workers is increasing interest in the area of minor labor.

“ ese issues haven’t been on the forefront like this before,” Welch said. “We have a (Department of Labor) that have made child labor laws a priority, but on the other side of the coin we have workplaces that need workers. We’ve got workers that want to ob-

tain experience and training, and those workers are minors. So companies are more willing to take on that responsibility.”

Avoiding exploitation

at responsibility is at the forefront for regulators and child welfare advocates, as it’s clear at least some companies use child labor improperly.

In February, a federal investigation found more than 100 children between 13 and 17 were working in hazardous occupations at 13 meatpacking operations owned by some of the country’s largest processors, including Tyson, JBS and Cargill. Auto parts plants in Alabama that supplied Hyundai-Kia were discovered to have been employing children as young as 14, some of them Guatemalan immigrants, in low-wage jobs.

A balance between a teen workforce that earns money and learns responsibility, and that can avoid exploitation may be tricky.

According to a 2018 study the In-

child can work with harmful fertilizers if tasked to do so.

Despite the industry accounting for only 1 percent of the U.S. workforce, 48 percent of all fatalities of working minors occur in agriculture, according to data from the U.S. Bureau of Labor Statistics on work fatalities.

Costa, with the Economic Policy Institute, said labor violations involving minors are likely far more common than known due to poor reporting mechanisms and understa ng in regulatory bodies.

“ ere were about 80 investigations per month last year; that’s less than 1 percent of ag businesses being investigated in a year,” Costa said. “ ey can pretty much do whatever they want without worrying if they are going to be investigated. e complaints are worker driven and there’s plenty of incentive not to complain, especially if you’re an immigrant or poor.”

And even if a company is investigated, the nes are low enough to not be overly bothersome, Costa said.

In Michigan, the labor department can levy a maximum ne of $15,000 for violating labor regulations involving a minor.

“It’s just the cost of doing business,” Costa said. “If they get busted, they’ll probably have to pay back wages they should have paid to begin with and maybe pay a ne. No one is going to jail. And that’s only in the rare instance they get caught.”

Cascade Township-based Forge Industrial Sta ng, the sta ng rm that the New York Times investigation names as placing underage workers at Hearthside, was sued earlier this month by the U.S. Department of Labor, which alleges the sta ng rm has not complied with subpoenas related to the investigation. e labor department alleges the company has yet to produce client contracts and client names for companies where it supplies workers.

Michigan’s teen workers

Jennifer Fields, director of the wage and hour division of the Michigan labor department, which leads minor labor investigations, said the biggest current deterrents to exploitation are the state’s workers’ compensation rules. If an illegally employed minor gets injured on the job, the employer is obligated to pay double the worker’s compensation under regulations.

dustrial Psychiatry Journal and promoted by the U.S. National Institutes of Health, low-income families and their children are most harmed by child labor. Employed children are more likely to drop out of school and su er physical, intellectual and mental health disorders.

Globally, 73 million of the 152 million children employed work in hazardous conditions, according to a report by the United Nations’ International Labour Organization. In fact, children aged 5 to 11 account for 48 percent of the minor labor force, mostly in agriculture and heavy industry.

In agriculture, child labor laws tend to be much more lax, even in Michigan.

Children can be working in the agriculture sector in the state at 13 as long as it’s not during regular school hours during the school year. Children 16 and older can work during school hours. And the state does not restrict any function of agriculture as hazardous for children older than 15, so a

But the state would have to know about that minor’s employment — something it currently does not know unless a complaint is led. While the state elds only a few hundred complaints annually, that number is rising. Complaints in 2022 were up more than 31% to 283 complaints over 216 in 2020, according to state data provided to Crain’s.

ere is no current timeline for when, or if, the state may adopt a new requirement that work permits will be distributed by the labor department instead of school districts.

“If we have kids working, especially those working to support their families, we can’t let that take away from what they could become,” Egan said. “I don’t know where the next Einstein is, but I want to make sure they had the ladder to get there. A minor’s health, safety and education needs to be thought of rst. We need to make sure that’s protected, so that they at least have the chance to become the next Einstein.”

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

PHOTOS BY GETTY IMAGES

SOURCE: MICHIGAN DEPARTMENT OF LABOR & ECONOMIC OPPORTUNITY

Teen workers deserve safe workplaces

June is Youth Employment Month in Michigan, a time to celebrate our youngest and newest members of the workforce and to make sure they have opportunities that help them build a brighter future by combining academic success and healthy workplaces.

Working at a paying job helps our youth build a strong work ethic, learn time management skills, accomplish tasks, follow directions and more. It’s their rst introduction to the working world, and it’s important that our youth have these opportunities — as long as they’re done with the proper protections in place.

Many of us recall seeing historical images of children working in hazardous occupations prior to the passage of the Federal Fair Labor Standards Act in 1938. Starting at extremely young ages, children working was an important piece of the overall family economic unit. With low wages and poverty, every hand in the household needed to chip in to maintain food and shelter. However, this type of employment also had a detrimental impact on the health, development, longevity and overall contribution of children to our society, so our nation made a policy decision that ended

children working before the age of 14 and established guardrails for those between age 14 and 17 while still in school.

Today, these guardrails are in place to protect youth from hazardous conditions, ensure they are fully participating in school and maintain their hours of work are balanced with adequate rest periods. e safety and well-being of our youth is always the predominant factor with youth employment laws and policies.

e primary goal is to ensure that children can reach their full potential educationally and developmentally while also allowing meaningful employment opportunities.

Michigan adopted Youth Employment Standards that prescribe more stringent requirements on working hours, occupations and a few other pieces that are not covered under federal law. is gives employers more clarity by eliminating vague obligations, so that schools, parents and students recognize that work is an educational opportunity that must not interfere with the in-school (or virtual) education of the student.

Educating parents, employers, schools and minors about legal employment is a top priority of the Michigan Department of Labor and

Economic Opportunity’s Wage and Hour Division. We often do webinars and events and are happy to help upon request to ensure everyone understands their rights and obligations under these important standards. We also do outreach collaboratively with the U.S. Department of Labor to help employers un-

derstand they must follow the stricter of the two standards.

For some Michigan speci cs:

 Employers are required to obtain work permits before a minor starts employment. Youth workers obtain a work permit from the school district in which they reside, whether they are a student there or not (e.g., home-

schooled children). e school district issuing o cer must sign the complete work permit and ensure that the type of employment, hours to be worked and the work itself does not interfere with educational requirements.

 Youth workers are entitled to a 30-minute break following ve hours

Immigration reform would help curb labor exploitation

Iwas walking out of my very rst town hall as West Michigan’s new congresswoman when the story broke. I had over a dozen text messages alerting me to the crisis — a damning exposé on migrant children working in exploitative jobs across the country. e dateline?

Grand Rapids, MI.

As I read horri c stories about children in my district — some as young as my own sons — I knew I had to act immediately, and I did, with the ownership of a legislator and the urgency of a mom. e rst thing I did was call the White House. As shocking as the revelations were, after two decades working on immigration issues, I knew how a problem like this could occur, where the fault lines in protec-

tion and enforcement existed, and how we needed to respond. I spent all weekend on the phone, advocating for the creation of an interagency task force that could ll the gaps between federal agencies responsible for protecting vulnerable children. at same week, the Department of Labor and the Department of Health and Human Services announced the task force’s implementation with a shared hope that our children will no longer fall through the cracks.

Back in Washington, I took to the House oor, calling on my colleagues to meet this moment with the urgency it deserved. I joined forces with Rep. Dan Kildee from Michigan’s 8th Congressional District to lead e orts to advocate for robust resources for the federal agencies charged with en-

forcing labor standards, and we continue to work to make it impossible for child labor violations to simply be a cost of doing business.

Yet, these steps were to treat the symptoms, not the cause of the underlying problem. At the root of it all is this: We do not have enough workers to do the jobs that are needed in a dynamic and globalizing economy. Our workforce looks completely different than it did when the Fair Labor Standards Act became law in 1938, and as technology evolves, it will continue to change.

Whether they know it or not, some employers exploit people’s vulnerabilities to ll gaps in their labor force. ose individuals are often migrants eeing persecution or dangerous neighborhoods. Some of those migrants are children, under pressure to earn a living for themselves or their families and willing to accept dangerous or illegal working conditions.

Innocent and desperate young migrants come from uniquely vulnerable circumstances as they enter our country and then are uniquely silenced in a system lacking appropriate reporting and enforcement mechanisms — particularly ones designed for children to understand and use.

Our outdated labor standards, our broken immigration system and our workforce shortages layer on top of each other to create incentives for children to be exploited for their labor. In the immediate aftermath of the reporting on migrant labor exploitation, everyone wanted to point ngers at one person or another to x it. But, this is a multi-system failure, and we need a multi-pronged solution.

To address the symptoms of our workforce shortages in the short term by combating child labor violations directly, I introduced the bipartisan

Justice for Exploited Children Act alongside Rep. Nancy Mace. I’m equally committed to addressing the underlying problem itself in the long term: We must address workforce development needs in this country. e gaps in the U.S.’s child care system, skills and trades training, alternative pathways to higher education and, critically, the need for comprehensive immigration reform could expand our labor force in legal, ethical ways.

Since I came to Congress, I’ve been hard at work in each of these areas — most notably working to help introduce a once-in-a-generation bipartisan, comprehensive immigration reform bill — the Dignity

Jennifer Fields is the wage and hour division manager for Michigan’s Department of Labor and Economic Opportunity/ Bureau of Employment Relations.

U.S. Rep. Hillary Scholten, D-Grand Rapids, represents Michigan’s 3rd District.

WORK TO MAKE IT IMPOSSIBLE FOR CHILD LABOR VIOLATIONS TO BE THE COST OF DOING BUSINESS.

of work.

 Youth workers must be under the supervision of an adult at all times while working.

 Youth workers must work within the prescribed hours or are limited to the prescribed hours between school and work.

 Youth workers cannot work in

Unaccompanied immigrant children need our protection

Recently Michiganders were alarmed to learn that unaccompanied immigrant children are working in dangerous conditions. Sadly, this su ering is both predictable and preventable.

As a nonpro t immigration legal services provider serving unaccompanied immigrant children in Michigan, we have long expressed concerns about the rights and safety of immigrant workers. Helping children caught between our nation’s crushing immigration and labor systems requires an understanding of the context of immigrant children’s lives and commitment from policymakers to do better.

First, our immigration system is effectively designed to keep part of our population without legal status and vulnerable to labor exploitation. As broken institutions, gang violence, natural disasters and repression push many in Latin America to seek safety abroad, there are virtually no legal options for people to secure protection or the chance to work in the U.S.

Critically, we must ensure the safety of all workers. Many worksites are unsafe for both children and adults. To better serve immigrant workers, state and federal labor standards enforcement agencies need full funding to achieve robust language access and bilingual sta ng. To protect workers who come forward, they must enforce prohibitions on retaliation.

lem of unaccompanied child labor is caused by individual bad actors. Some quickly focus on sponsor families. In truth, the majority of families hosting unaccompanied children are motivated by a sense of duty toward children in need. In speaking with hundreds of unaccompanied children, we learned that a sponsor’s home is where most children yearn to be. Unfortunately, even the best-meaning hosts confront profound poverty. eir desperation is exacerbated by lack of access to public bene ts. at distress drives youth to dangerous jobs to help keep food on the table. Focusing solely on the families at the tip of this crisis misses the opportunity to address the foundational cracks through which children slip.

“hazardous” occupations, which are de ned in the statute or the rules. We encourage everyone to join our e orts as we highlight opportunities and obligations for youth employment in Michigan. Visit michigan.gov/wagehour to learn more and sign up for future youth employment webinars.

With no line to get in to obtain legal status, undocumented people who ed their homelands face well-documented hardships. eir insecure status creates constant vulnerability. Even those with a path toward asylum or other lawful status endure years without work authorization or access to public assistance, and struggle to secure food and housing.

Federal lawmakers could address immigration-related issues that make immigrant workers vulnerable. Initiatives to expand refugee admissions for the Western Hemisphere and fresh e orts to o er protections to exploited workers could be transformative.

But other new steps, such as the asylum ban, will increase the risk of family separation and children making dangerous journeys alone. Comprehensive reforms to our immigration system are needed to build an equitable and fair system that supports families and communities. We need e cient procedures so that workers aren’t sidelined waiting for permits and children can more quickly secure permanent status.

We meet many workers who are not properly issued pay stubs, leaving them unable to track wages and pay violations. Standardizing these practices through agency enforcement would level the playing eld and prevent abuses. Even when workers are ready to report violations, agency deadlines are unduly short — making it di cult to complain after leaving a workplace and enhancing fears of retaliation.

In both state and federal systems, increasing employer nes for labor violations would augment accountability.

Faced with declining populations and worker shortages, some states are considering rolling back child labor standards. Instead, policymakers should support existing workers and close loopholes allowing abuse. e Fair Labor Standards Act permits children 12 and up to work legally in agriculture in dangerous conditions. We can address this by passing the Children’s Act for Responsible Employment and Farm Safety. And we can correct long-standing exclusions of farmworkers from protections like rights to overtime and organizing.

It’s tempting to believe the prob-

State and federal policymakers can strengthen our social safety net to make these families less vulnerable. Sponsor families should receive the necessary resources to support unaccompanied children. Rather than wait for Congress to change eligibility for Medicaid or food assistance, increasingly states are expanding access to programs for children and seniors. Michigan currently makes it di cult for immigrants injured on the job to seek workers’ compensation. State lawmakers could pass legislation to ensure immigrants have equal access to workers’ compensation, increasing employer accountability and allowing workers to recuperate.

e bottom line is that immigrant children are unlikely to work in harsh conditions if the adults in their households have a fair chance to meet basic needs. After supporting thousands of children and families through the immigration process in Michigan, we know the structures that leave children vulnerable to labor exploitation are complex.

Even so, there are clear solutions to protect immigrant children and adults working in Michigan. We must create a social safety net with room for immigrant families, provide su cient resources for state and federal labor enforcement, and build accountability through meaningful consequences for employers who take advantage of the most vulnerable.

Hearthside Food Solutions sites in Michigan were included in a New York Times investigation into underage workers. HEARTHSIDE FOOD SOLUTIONS

Act. Bringing people out of the shadows and into the legal workforce will also mean there are fewer shadows in which to hide and exploit children.

It’s simply unacceptable that we, as a nation, rely on other countries’ children to do our most dangerous jobs. I’m not opposed to kids working in age-appropriate jobs. I started babysitting at 12 and kids work legally on their family farms in West Michigan — but we are talking

about keeping 6-year-olds out of slaughterhouses. We must come together to root out exploitive child labor — and get ahead of tomorrow’s problems as well. Our nation’s history demands that we are constantly reforming closer to justice. As a mom, my heart is in this ght; as a legislator, it’s my responsibility to act: I won’t rest until the children in Michigan are safe, and we have a brighter future for all.

Elinor Jordan (left) is the training and impact supervising attorney at Michigan Immigrant Rights Center. Christine Sauvé leads community engagement, communications and policy for the center.

Detroit dismisses lawsuit against Winans’ Perfecting Church

City vows to continue ght against blight

KASS

ARIELLE

A city of Detroit lawsuit claiming 18 years of delays in the construction of Perfecting Church amounted to a “public nuisance” contributed to further delays in the church’s e orts to resume work on the property, an attorney for the church said June 19.

Detroit dropped its lawsuit June 16 after coming to terms with Perfecting Church on a timeline that would restart work on the property at 19150 Woodward Ave. no later than spring 2024. e timeline includes expected dates for the church’s project to move forward in securing nancing and meeting government approvals, in addition to the beginning of construction.

But David Jones, a partner with Schenk & Bruetsch who is representing the church, said the project would have kept moving, if not for the city’s interference.

“Essentially, what they did was delay Perfecting by 60 days,” he said, explaining that the church’s nanciers dropped out when the lawsuit was led in February.

In ling suit earlier this year, Corporation Counsel Conrad Mallett said the project — which began in 2005 when the property was deeded to the church from the city for $13,000 — was long delayed and needed to be brought into compliance. Monday, he said the city decided to try another tack after Judge Patricia Perez Fresard, in Wayne County’s ird Circuit, said last month it was too soon for her to appoint a receiver in the case.

“ e message I received was, ‘let’s have one more set of substantive conversations,’” Mallett said. “We sincerely believe that Perfecting Church and Bishop (Marvin) Winans and his team will comply.”

Additionally, Mallett said, the settlement and the speci c timeline gives the city a better chance of a favorable opinion — “to be sure every opportunity that could be extended was” — if a lawsuit is led again.

Mallett’s o ce has led nearly two dozen lawsuits against property owners in the city, using American Rescue Plan Act dollars to attack blight in the city. In addition to Perfecting Church, the lings include the owner of the Mammoth Building, the owner of a proposed concrete crushing plant, the owner of the Packard Plant and suits that target four properties owned by real estate investor Dennis Kefallinos and his son, Julian.

Mallett told Crain’s previously he had hired seven attorneys to focus on blight claims. ey are rushing to unmask individuals behind LLCs that own a number of dilapidated buildings so suits can be led and the legal process followed before ARPA money runs out. He called it an opportunity

to “really, profoundly, do something about blight.”

On June 19, he said the decision to dismiss the Perfecting Church case didn’t a ect the city’s strategy.

“Each one of these is unique,” he said. “ ere is no standard. ... ese are all going to be very case speci c.”

Jones, who represents one other property owner the city has sued for blight, said he thinks some of the lings are political in nature. Perfecting, he said, “wasn’t the ideal candidate” for a blight lawsuit because the church had already begun e orts to restart the construction project.

“Perfecting wasn’t speculating,” he said. “As a resident of the city of Detroit, I can’t criticize them, but you can’t lump everybody into the same basket.”

Jones said the delays came about because the church was trying to build a 4,200-seat church, a 35,000-square-foot administration building and a 1,000-space parking structure without any nancing.

Since then, leaders have lined up outside funding, he said — but that fell through when the lawsuit was led. Jones did not immediately respond to queries on the source of the funding.

e church said the lawsuit was the only thing preventing the nancing, Mallett said, so he wanted to take that obstacle away. e timeline says the church should present evidence of nancing by 30 days after an expected Oct. 31 approval from City Council on the updated plans. e church is expected to close on that nancing by 90 days later.

“ ere’ll be no ability to hedge at that point,” Mallett said. “Either you’ve got it, or you don’t.”

Both Mallett and Jones said they thought the timeline was doable to get construction restarted.

“We wouldn’t have agreed to it if we didn’t think it was achievable,” Jones said. “People would probably not choose to believe it, but we were on this track anyway.”

e agreement allows for some exibility in the dates based on the governmental boards and other individuals that need to approve the project through its stages. It also calls for the city to drop its blight tickets and correction orders against the church.

Jones said he thinks Perfecting Church will be a beautiful facility when it’s completed — he hopes it helps reinvigorate the community, leading more people to develop. For his part, Mallett said the Mammoth Building is the next one he’s focused on. He said the city’s method of ling lawsuits against the owners of long-blighted properties is the “only way” to get them to accept responsibility for their buildings. “Some property owners I’m hoping will take the prompt of a lawsuit to do whatever’s necessary to complete their vision,” he said.

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

Global engineering company to open R&D facility in Oakland County

Global engineering services rm Expleo, whose business portfolio includes the auto industry, will establish its rst North American research-and-development facility in Michigan and create nearly 200 jobs.

e $2 million-plus o ce will be located in Oakland County. Gov. Gretchen Whitmer joined executives for the announcement at the company’s headquarters in Paris, where she was in the midst of a European investment mission.

Expleo, which employs 17,000 people worldwide, chose Michigan over Canada and states in the Midwest and South, according to the governor’s o ce. Expleo USA Inc.’s space will house an engineering team, employ 196 people and have room to grow.

In an interview with Crain’s, Whitmer called Expleo a “really exciting company. ey are French and German. ey’ve got a footprint in both

countries and have been growing in North America. ey’re a supplier to our autos. ... It’s 200 really good-paying jobs and I think a great win for the state of Michigan.”

e Michigan Strategic Fund board will meet soon to approve what Whitmer called a “modest” in-

centive. e Michigan Economic Development Corp. worked closely with Expleo over the last 12 months, she said, and pitched the state’s strong mobility business environment, skilled workforce, economic momentum and inclusive laws.

“ is is really about the future,”

Whitmer said. “ is is really about R&D and making sure that Michigan’s got the cutting-edge leadership role that we’ve traditionally had and need to secure as we look to the future.”

Expleo o cials will visit the state next week as they consider where speci cally to put the operation, she said. e company did not indicate when it will open. Other Expleo U.S. o ces are in Mobile, Alabama, and Wichita, Kansas, according to its website.

Marcus Ganguin, Expleo’s executive vice president of automotive, said in a statement that the move into Oakland County will enable it to partner with auto businesses “to provide the deeply integrated engineering and technology services needed to address the most pressing challenges facing our industry such as e-mobility.”

Expleo will provide OEMs and tier-one suppliers with services and expertise in electronics, hardware/soft-

ware, digitalization, IT and consulting.

Whitmer, who is on her third European trade trip this year, spent Monday at the Paris Air Show working to grow Michigan’s aerospace and defense sectors. Sixty-two companies at the event have a footprint in Michigan, she said, and 15 other governors were in attendance.

“ is is an important part of the economic development work that we haven’t been able to do because of the pandemic and that we need to make a priority,” she said, saying most governors take four or ve international trips a year and she did just one in her rst term due to COVID-19.

“ ere’s been a lot of pent-up interest in talking with us and our team,” said Whitmer, who was next headed to Germany. She planned to meet with a number of auto suppliers there and visit with troops.

Contact: david.eggert@crain.com; (313) 446-1654; @DavidEggert00

The under-construction Perfecting Church in Detroit. | CRAIN’S DETROIT BUSINESS

DAVID EGGERT

Gov. Gretchen Whitmer meets with Expleo executives last week at the company’s headquarters in Paris. The rm will open a North American research-and-development facility in Oakland County. | EXPLEO

MICHIGAN INFORMATION TECHNOLOGY COMPANIES CRAIN'S LIST |

1 LOGICALISINC. 2600 S. Telegraph Road, Suite 200, Bloom eld Hills48302 248-957-5600; us.logicalis.com

2 ALTAIR ENGINEERING INC. 1820 East Big Beaver Road, Troy48083 248-614-2400; altair.com JamesScapa founder, chairman and CEO

3 MSX INTERNATIONALINC. One Detroit Center, 500 Woodward, 21st Floor, Detroit48226 248-829-6042; msxi.com

4 TATA TECHNOLOGIESINC. 41050 West 11 Mile Road, Novi48375 248-426-1482; tatatechnologies.com

5 ACRO SERVICECORP. 39209 W. Six Mile Road, Suite 250, Livonia48152 734-591-1100; acrocorp.com

6 STEFANINIINC. 27100 W. 11 Mile Road, South eld48034 248-357-2866; stefanini.com

CEO and managing director

RonShahani president and CEO

SpencerGracias CEO

RonAlveste er president and CEO

provider of integrated information and communications technology systems and services

Software and technology, engineering simulation, advanced computing, enterprise analytics and product development

process outsourcing service provider for global automotive retail segments and human capital managed service provider

Engineering services and design outsourcing; product lifecycle management and product development IT services; PLM and knowledge management software systems sales; technical workforce solutions (sta ng); training

Workforce solutions, sta ng and technology rm

Global technology company with a broad portfolio of solutions.

Industry-leading

$294.9 $220.6 Data

and digital engineering services

president and CEO AnantMehra

$166.7 $168.6 IT, engineering and professional sta ng

RobertGruschow president and CEO

$157.2 $154.2 Industrial manufacturing group,

13 WORKFORCE SOFTWARELLC 38705 Seven Mile Road, Livonia48152 877-493-6723; workforcesoftware.com $138.0 $128.2 Workforce management software

14 DIVERSIFIED COMPUTER SUPPLIESINC. 4435 Concourse Drive, Ann Arbor48108 800-766-5400; dcsbiz.com

chairman and CEO BrianLeek president

SuzanneSchoeneberger

NanuaSingh

$95.9 $92.6 Imaging/printer

$73.5 e $72.5 e Events and installations

development,

18 LOWRY SOLUTIONS 9420 Maltby Road, Brighton48116 1-888-881-2477; lowrysolutions.com

$57.1 $51.2 IoT, enterprise

19

EricHardy president and CEO

IT sta ng and consulting, including application development, business intelligence and data analytics 20

TomWilten president and general manager

OTAVA 4 825 Victors Way, Ann Arbor48104 734-213-2020; otava.com $35.3

NETLINK SOFTWARE GROUP AMERICAINC 999 Tech Row, Madison Heights48071 248-204-8800; netlink.com AnuragShrivastava co-founder and CEO KannavSharma CFO

BLUE CHIP TALENT 43252 Woodward Ave., Suite 240, Bloom eld Hills48302 248-858-7701; bctalent.com

RED LEVEL 40200 Grand River Ave., Suite 200, Novi48375 248-412-8200; redlevelgroup.com

24 NUTECHSLLC 39533 Woodward Ave., Suite 145, Bloom eld Hills48304 248-593-5700; nutechs.com

NicolePawczuk CEO

$34.4

$31.5

Sta ng, talent acquisition

Technology consulting

e

$4.6

DanCachia vice president

MarkSchmidt founder, senior developer BrianMcKeiver co-owner, solution architect

$4.7

$4.6 $3.5

|ThislistofleadingcomputercompaniesisanapproximatecompilationofthelargestsuchcompaniesinMichiganthatresearch,design,manufactureorinventequipmentorsoftware,plus companiesthatprovidesophisticatedcomputerservicessuchassystemsdesign,programmingandinformationretrieval.Itisnotacompletelistingbutthemostcomprehensiveavailable.Companiesbasedelsewherearelistedwiththeaddressand topexecutiveoftheirmainMichigano ce.Unlessnoted,thecompaniesprovidedtheinformation. Crain'sestimatesarebasedonindustryanalysesandbenchmarks,newsreportsandawiderangeofothersources.TechnosoftCorp.(dbaApexon)no longerquali esforthelistafterthemergerwithApexonandInfostretchCorp.wascompletedonApril13,2022.ArrowStrategiesLLCwhichwasNo.17onlastyear'slistdeclinedtoparticipate.NA=notavailable.NOTES: e. Crain'sestimate. 1. U.S. scal revenue. 2. From BusinessStandard . Ending in FY March 2022.

ResearchedbySonyaD.Hill:shill@crain.com

3. From Sta ng Industry Analysts. 4. Formerly Online Technologies Corp. Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data

Century-old Star Bakery in Oak Park set to close on July 2

Some lingering e ects of the coronavirus pandemic have led to the planned closure of a beloved, more than 100-year-old business in metro Detroit.

e owners of Star Bakery in Oak Park said Tuesday that the business will close for good July 2. Increases in the cost of labor and goods have made the business no longer a viable venture, the owners said in a news release. Daniel Buck re, David Schecter and Stacy Fox purchased the business in July 2021 from the Moskovitz family, who owned the bakery for more than 50 years.

“It was a very hard decision to close, and we did everything we could to try to save Star Bakery and make it profitable,” Buck re said in the release.

Star Bakery, founded in 1915, has been well-known to generations of metro Detroiters for its traditional Jewish-style baked goods including rye breads, challahs, rolls, rugelach, seven-layer cake and mandel bread.

“Wholesale was always a big part of the business at Star Bakery, and we determined we were no longer competitive on the wholesale side of the business,” Buck re told Crain’s.

e owners will carry on at Diamond Bakery in West Bloom eld Township, which they purchased in November 2021. Fox, a managing partner in both businesses and who previously owned Marty’s Cookies in Birmingham, will serve as a consultant for Diamond Bakery.

“We feel that our greatest chance of being successful with a Jewish-style bakery in the metro Detroit area is at Diamond Bakery in West Bloom eld,” Buck re said.

Buck re said revenues at both bakeries have increased on the retail

PEOPLE

side, but the wholesale business has faltered. He did not provide speci c revenue gures.

Fox explained that as the cost of labor and many ingredients went up, wholesale customers chose to go with machine-made products rather than the artisanal bread made by Star Bakery.

“We understand these economic decisions,” Fox said in the release, “but a small bakery can’t compete with big manufacturers.”

Diamond Bakery is on more solid footing because of its strong retail business and brand, Buck re told Crain’s in an email. Like Oak Park, West Bloom eld also has a large Jewish community.

Buck re and Schecter said they remain committed to maintaining a traditional Jewish-style bakery in metro Detroit. Diamond Bakery, at 6722 Orchard Lake Road, has been in business since 1977.

Buck re and Schecter own Star Bakery’s building. ey would prefer to lease it to someone interested in operating a bakery, but would consider leasing to other business owners or selling the property, Buck re said in an email to Crain’s. He declined to disclose the purchase price for the business and the building.

Nearly 20 employees will be a ected by the closure, Buck re said. ree full-time employees will transfer to Diamond Bakery, he said.

Buck re said closing the long-standing Star Bakery is bittersweet.

“We are, however, grateful that we will still be able to o er some of the beloved Star Bakery Jewish baked goods that generations of metro Detroiters have grown up with at Diamond Bakery.”

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

Gino Roncelli named president, CEO of family construction company

e next generation of the Roncelli family has taken over as leader of the eponymous Sterling Heights-based construction contractor.

Gino Roncelli, 34, was promoted to president and CEO of Sterling Heights-based Roncelli Inc. e ective Jan. 1, taking over from his father, Gary Roncelli, who retired as CEO and retains a position as chairman of the company board. Tom Wickersham, the former president and COO, has been named president emeritus and also retains a board position.

“It’s a proud moment to see my son, Gino, a third generation of the family, take the helm as president of

the company,”

Gary Roncelli said in a statement. “He has truly grown up in this industry, and his passion for the business, commitment to the mission and culture of our brand and dedication to customer service, are a combination for certain success. I look forward to the great things he’ll surely help us accomplish as he steps into this new opportunity.”

Gino Roncelli was previously vice president and, before that, principal and general counsel.

Roncelli, a graduate of the University of Michigan Stephen M. Ross School of Business and Wayne State University Law School, told Crain’s last week that the company has about $500 million in construction contracts and expects another $300 million in the next 12 months. ere are about 160 full-time employees, although total employee count can swell by several dozen, depending on the workload.

e company reported $253 million in 2022 revenue to Crain’s and $241 million for 2021, making it the 11th largest general contractor in the region.

Roncelli Inc. has done extensive work in the health care sector, with clients including McLaren Health

Care, the Detroit Medical Center, Henry Ford Health and Corewell Health; as well as automotive for Ford Motor Co., General Motors Co. and others.

Roncelli said he is gearing up for the company to grow its operations in public schools with school bond programs as well as utility-scale solar power.

“We are one of the most diversi ed contractors in the state,” Roncelli said. “We don’t do residential but we do just about everything else.”

Roncelli said the company will continue to expand its use of technology and is looking at hiring a chief technology o cer from outside the company’s ranks.

“I like the idea of bringing in some-

one from the outside,” Roncelli said. “We have historically rewarded loyalty. We are a meritocracy but it’s good to bring in” outside talent. e company was founded in 1966 by Raymond “Skip” Roncelli, who started with a small trenching company.

In addition to the new leadership at the top, three Roncelli executives have been promoted to vice president from director posts: James “Jim” Carnacchi becomes vice president of estimating while Paul Day becomes vice president of construction operations and Jereme Poxson becomes vice president of health care. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

JAY DAVIS

Increases in costs of labor, goods hurt company’s pro tability

Gino Roncelli

Star Bakery in Oak Park will close on July 2 after 108 years in business. Increasing labor and goods costs have led to the closure, according to the owners. | STAR BAKERY

Challahs and rye breads o ered at Star Bakery. The Oak Park bakery will close for good on July 2. STAR BAKERY

Buck re

“We love the Rochester Hills/Auburn Hills area. We love the Hall Road corridor,” he said. “We’re prioritizing right now and focusing on Livonia. The Livonia spot is one of the prime locations in the market. We’re excited about it.”

Lidvall said he believes HopCat will perform well in a suburban market. He cites the success of the Beltline location in Grand Rapids, which opened in 2018, as a reason for that confidence.

Price point plays a role in that projection, too. The Livonia HopCat neighbors higher-end restaurants including Mitchell’s Fish Market and Bravo! Cucina Italiana.

“We grew up as a semi-urban brand. I think the HopCat brand is essentially non-chain enough that it can do well anywhere,” Lidvall said. “All the locations look different. I think we provide an alternative with food- and bar-forward platforms that play well in the suburbs.”

The wide-open Livonia HopCat has seating for close to 270 guests. That includes two outdoor patios and a large rectangular wraparound 40-seat bar that Project BarFly Vice President of Operations Craig Stage said is the biggest in the company.

The bar area features five TVs and 60 beer taps. The location also features a 40-seat area that can be used for private parties. It will also include an arcade room with a selection of games for guests to play for free, according to Project BarFly Brand Manager Michele Ary.

The Livonia location will have about 140 employees.

TVs are hung high throughout the space, with more to be added, according to Stage. The HopCat-staple wall of classic album covers can be found on the northeast side of the restaurant.

“The smaller space is easier to manage,” Stage said. “It also creates a really good vibe for the guests, too. If you’re spreading people out in multiple rooms, it can be hard to

create a good vibe on certain days.”

Going forward, Lidvall said that smaller concept will become the norm for HopCat. Future locations would be around 6,500-7,500 square feet — significantly smaller than the more than 11,000-squarefoot locations in Midtown Detroit and Royal Oak.

“Our brokers are out beating the bushes for new sites,” Lidvall said. “We’re working hard to right-size the business. The Livonia space, that’s more of what we’re looking to do. The new Royal Oak space is big -

ger, but we were in the area before and we were confident it would perform well and it is.”

Lidvall nor Stage would provide revenue projections for the Livonia location, or financials for other locations.

Project BarFly is working to stay at a customer-friendly price point, Lidvall said. He said the company has done a solid job navigating what he termed a very difficult inflationary period.

“At this point, our year-over-year inflationary numbers are flat,” Lid -

vall said. “We’ve had to do some things with some pricing to stay competitive because the industry says that fast-casual traffic is down slightly, where fine dining and quick casual are up. Our challenge now is to keep our value proposition strong enough so people don’t trade down.”

Lidvall said HopCat ownership strongly supports the business. Congruent Investment Partners and Main Street Capital have been patient as the company worked to manage its way through the pan -

demic, he said.

Sustainable growth is the next step, according to Lidvall. “Internally, (Congruent Investment Partners and Main Street Capital) are probably more anxious to grow than we are,” Lidvall said. “But they want to make sure we’re able to grow successfully. We see a lot of companies that get out over their skis and grow too quickly. We don’t want to repeat that.”

Contact: jason.davis@crain.com

(313) 446-1612; @JayDavis_1981

Project BarFly Vice President of Operations Craig Stage shows o the new Livonia location on June 20. The 11th HopCat is scheduled to open on July 24. | JAY DAVIS/CRAIN’S DETROIT BUSINESS

The Livonia HopCat will feature a large, rectangular wraparound bar at the center of the dining room. The bar will have 60 beers on tap. JAY DAVIS/CRAIN’S DETROIT BUSINESS

against municipalities by motivated operators and their lawyers over those rules are common and, as is the case in Auburn Hills, the players in the marijuana space are more than willing to use all legal means to reduce competition and maximize profits.

‘Say Yes’ pushes

Yatooma and his associates set their sights on Auburn Hills last year as the state’s marijuana industry began to falter under product oversupply and plummeting prices — the grow side of the industry has quickly outpaced the retail side.

In January 2020, an ounce of marijuana flower retailed at an average of $512.05. Oversupply sank prices to an average of just $121.58 per ounce by July 2022, and marijuana companies were getting desperate, looking to open more retailers as fast as possible to have more outlets for product.

When there are limited locations to sell marijuana in a community, that can boost the value of real estate and marijuana operating licenses.

The city of Auburn Hills had previously banned medical marijuana businesses within its borders in 2010 and followed suit in 2019 for adultuse recreational sales as cultivation and retail operations prepared to begin operation in December that year.

In July 2022, Yatooma and associates created a ballot drive committee in several municipalities in the hope that voters would force city councils to welcome weed businesses.

Yatooma’s “Say Yes” committees cropped up in Sylvan Lake, Brighton, Farmington, Auburn Hills and other communities last summer.

According to reporting by the Livingston Daily, those associated with the ballot drives were Yatooma, under his Canna Zoned MLS real estate business; Joey Kejbou, an attorney who owns dispensaries under the names Consume Cannabis and Mint Cannabis Co. in Michigan, Ohio, Arizona and Illinois and processors in Michigan; Kerri Knipple, a real estate agent employed at Yatooma’s Canna Zoned; Benjamin Bayram, a former partner in the law firm of Yatooma’s brother, Norman Yatooma; and John Janiszewski, a senior attorney representing Yatooma and the Say Yes committees.

Ballot proposals had been successful in other Michigan communities that had previously banned marijuana, including a 2020 ballot referendum in the village of Pinckney.

The Say Yes to Auburn Hills Committee gathered the required amount of signatures and moved a ballot initiative to the election last November.

“… there was an overwhelmingly positive response to surveys that were sent out prior to the November vote so it’s clear the majority of people in the city wanted safe and regulated access to cannabis products,” Yatooma told Crain’s in an emailed response sent through his lawyers at Dykema. “Auburn Hills has a really strong business community and a large population. Auburn Hills is in the heart of metro Detroit and thousands of commuters come into and pass directly by the city on a daily basis, so this is all conducive to a strong retail business.”

But as Yatooma fought to legalize marijuana sales in Auburn Hills, he was also setting up to own a majority of the licenses in town.

Potential new marijuana licenses

Auburn Hills’ economic development team is expected to recommend a new marijuana ordinance to council next month that would approve licenses for just four properties, three of which are owned by Jeffrey Yatooma.

communities throughout the state.

When asked about his brothers’ operations, Yatooma told Crain’s: “I really have no idea what any of my brothers might own. We aren’t business partners and haven’t been for over four years.”

In a phone call with Crain’s, Gregory Yatooma said he was at the meeting representing a client, but declined to reveal who that client was.

And the contents of the meeting remain a mystery as Janiszewski sought to have documents Say Yes provided to the city officials at the meeting exempted from the Freedom of Information Act.

Handing over the keys

But in May, Cohen from the city’s community development office unveiled a plan to amend the ordinance to give four licenses to the three properties owned by Yatooma and the one owned by Green Pastures.

It’s unclear whether a threat of a lawsuit was the impetus behind proposed change or why those properties were selected, other than they could have been the only four properties to meet the criteria set under the ordinance passed by voters orchestrated by Yatooma’s Say Yes.

Council in the way?

The ballot language drafted by the Say Yes committee, which was ultimately certified by the city clerk in Auburn Hills, sets boundaries on who can get a marijuana license.

The language reads: “The city shall allow marihuana activities only within a building located on a parcel in which the individual or entity to hold the state license to operate has a recorded interest and CRA pre-qualification status before 30 days after the ballot wording of this ballot question is certified to the county clerk ...”

A recorded interest means direct ownership, a titleholder, or a mortgagee on a real property.

Basically, unless a motivated marijuana business or its representatives had control of a property prior to Sept. 9 last year, 30 days after the ballot language was certified, there was no chance of gaining access to a license in Auburn Hills.

Yatooma did not directly answer whether the language was intended to make him one of the only people to have a license under the ordinance.

“I believe this language requires a prequalified entity to have a recorded interest in a property … by a certain date,” Yatooma wrote in an email.

But prior to the election, the Auburn Hills City Council preemptively moved to adopt and amend its existing marijuana ordinance to create a new “green zone,” where marijuana businesses could be located. On Oct. 17, the council conditionally approved the ordinance if voters approved the Nov. 8 ballot measure — which they did with 4,870 voting to establish the new ordinance and 3,653 voting no.

The city’s new green zone, coincidentally, did not include any of the three properties owned by Yatooma, located at 1801 N. Opdyke Road, 2548 Lapeer Road and 2561 Lapeer Road, according to the latest information available from the Oakland County Register of Deeds.

Yatooma acquired the properties last year under three different LLCs.

A fourth property that qualifies, located at 2705 Lapeer Road, is owned by Green Pastures Land Co. It’s unclear whether that entity intends to be involved in the marijuana business in Auburn Hills. It’s also unclear

whether it’s related to a Green Pastures Group LLC that is a co-owner of several Michigan growers and processors.

And that’s where the issue has stood for months.

But behind the scenes, Yatooma and his lawyers have pushed hard against the city, according to emails between Janiszewski of Dykema and city attorney Derk Beckerleg obtained by Crain’s.

In an email to Beckerleg on Nov. 14, Janiszewski urged the city council to reconsider its zoning ordinance as it violated the “will of the people.”

In that email, Janiszewski alleged the new ordinance violated the Michigan Zoning Enabling Act and potentially open meetings rules by not having a public hearing on the green zone. Janiszewski called into question the legality of the move by city council amending the ordinance.

“… the city council did not follow numerous procedural and substantive requirements for enacting a zoning ordinance …,” Janiszewski wrote in the emailed letter.

The lawyer demanded a meeting with city officials, who agreed to a Nov. 28 meeting at Auburn Hills City Hall. City officials copied on the email from Beckerleg were City Clerk Laura Pierce, City Manager Thomas Tanghe, Assistant City Manager Brandon Skopek and Steve Cohen, director of community development.

According to an email from Janiszewski, he planned to attend the meeting with Yatooma, Bayram and Yatooma’s other brother, Gregory Yatooma.

Gregory Yatooma, a Crain’s 20 in their 20s honoree in 2007 and self-employed attorney, holds licenses for grow operation Candid Inc. in several

benefits of cannabis products. I have many friends and family members that use cannabis products for medicinal purposes as well, so providing greater access is important.”

Legal mania

Legal positioning has dominated the local municipal licensure arena since recreational marijuana went legal in late 2019. More than a dozen communities have been wrapped up in expensive lawsuits over marijuana rules, including Pontiac, Berkley, Royal Oak and Warren.

Under state law, communities are required to create a competitive process for handing out marijuana licenses if they are limiting the number. Some communities, have used zoning rules to either limit the number of available licenses or simply eliminate the possibility of licensure.

“If a city attorney is paying attention at all, they’ll understand almost any ordinance they put forward will result in a lawsuit against the city,” Lance Boldrey, partner at Dykema, and Janiszewski’s colleague, told Crain’s for previous story about the rash of previous municipal lawsuits and unrelated to the Auburn Hills issue.

When asked why the city is pushing those specific properties, Yatooma said he didn’t know.

“I couldn’t possibly speak to the city’s motivation, but I would like to think that the city is following the initiated ordinance and honoring all of the residents that signed petitions in favor of putting it to a vote and the nearly 5,000 registered voters that showed up and voted to pass it,” Yatooma wrote in the email to Crain’s.

Kevin Blair, partner and cannabis attorney for Detroit law firm Honigman LLP, said in an email to Crain’s that he’s confounded by why the city continues to push for near exclusive market access for Yatooma.

“They should also know they pay more for fighting the lawsuit than they could possibly earn in licensing fees or revenue sharing.”Yatooma has been behind several lawsuits against municipalities, including suits against Birch Run Township and Say Yes’ lawsuit against Brighton last fall.

A circuit court judge ordered Brighton’s City Council to certify the ballot language brought forth by Yatooma’s group. Ultimately, the Say Yes ballot drive failed when 57.76 percent of voters in the community rejected the ordinance.

Yatooma also has a history of using creative ways to attempt to gain access to licenses. Beyond the ballot language gambit, Yatooma also reportedly took out a Craigslist ad in Chicago to recruit people negatively impacted by drug laws in Illinois to gain access to an equity license.

The ad, reported on by the Chicago Sun-Times and placed by Yatooma’s Canna Zoned, offered $2,000 to anyone that could prove they were eligible under the Illinois social equity license guidelines.

ENOUGH TO

“While this certainly isn’t the first time that a cannabis company or real estate flipper has tried creative measures to stack the deck in their favor, what’s somewhat surprising here is that Auburn Hills so far hasn’t done anything to repeal the built-in monopolistic provisions, whereas other municipalities did so immediately,” Blair said. Honigman has represented other cannabis companies, including Lume Cannabis, which has Crain Communications President and CEO KC Crain as an investor, in lawsuits against municipalities.

If Yatooma receives licenses, it’s also unclear whether he would open dispensaries in the locations, become a landlord to another operator or sell the property and licenses — which would likely have an elevated value as he would control three of the only four available licenses in the city.

“If I am fortunate enough to get a license I would certainly explore all feasible options, but I think it’s premature to consider any plans at this point,” Yatooma told Crain’s. “I do think Auburn Hills would be the perfect place to operate a retail store and I would love the opportunity to be a long-term member of the community. I’m an entrepreneur at heart and I’m a supporter of the cannabis industry; I have seen the economic benefits that flow directly to communities, and I also firmly believe in the

Canna Zoned offered another $20,000 if that person’s involvement led to a social equity license. A Chicago resident Edna Patterson, who had been a victim of gun violence, received $2,000 from Yatooma’s group to be listed as the majority owner on the application for an equity license. After the Sun-Times reached out to Yatooma and Canna Zoned, Patterson’s contract was terminated but she was offered a $400 referral bonus for others that could qualify.

A cannabis real estate firm run by Gregory Yatooma, MSY Capital Partners, gave a $75,000 loan to former Michigan House Speaker Rick Johnson, who had previously chaired the Michigan Marihuana Licensing Board when it voted to prequalify one of his companies for a license, The Detroit News reported in April. The loan in question came after Gov. Gretchen Whitmer had disbanded the licensing board, the News reported.

Johnson pleaded guilty earlier this year to unrelated bribery charges. No criminal charges or accusations of wrongdoing have been levied against Gregory Yatooma or MSY Capital.

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

“IF I AM FORTUNATE

GET A LICENSE I WOULD CERTAINLY EXPLORE ALL FEASIBLE OPTIONS...”

Jeffrey Yatooma, cannabis real estate developer

SOURCE: CRAIN’S REPORTING

Jeffrey Yatooma | VIMEO

manufacturing worker increased more than 20 percent to about $32, according to the U.S. Bureau of Labor Statistics.

Unlike commodity and transportation costs, elevated labor costs are not likely to go back down, said Dan Sharkey, attorney at Birmingham-based Brooks Wilkins Sharkey & Turco PLLC who specializes in supply chain disputes. Nor are most customers willing to help eat labor costs after two years of negotiating price increases to cover other inated costs.

“ e one thing that hasn’t relented is labor. It has increased signicantly and is sticky,” Sharkey said. “ e customers generally ght back hard on supplier requests for price increases relying on labor costs as a justi cation. Many view it as an inherent risk that the supplier took when it quoted the parts.”

e labor pinch has been especially painful for manufacturers with a heavy reliance on low-cost labor, from seating suppliers to makers of electronic components.

South eld-based Lear Corp. employs more than 160,000 globally, 85 percent of which are in low-cost countries, according to an annual ling with the Securities and Exchange Commission. e seating and e-systems supplier, which has more than 50,000 workers across 40 plants in Mexico, had an annual median employee compensation of $8,934 in 2022, up 10 percent from the year prior.

CEO Ray Scott said during an Automotive News event earlier this month that as the microchip shortage and other supply constraints abate, labor has emerged as the company’s biggest issue.

“If you look at Mexico right now, there’s a big in ux of manufacturing jobs because of what’s happening geopolitically,” Scott said. “So there just isn’t enough employees to satisfy it.”

Plymouth-based seating rival Adient plc, also dependent on cheap la-

LAKE HOMES

From Page 3

Total listings also increased by about 24% from the group’s last quarterly report in the early spring to 3,647 properties available.

Lakes around the country are also seeing a similar dynamic, with inventory up slightly from earlier this year and prices continuing to increase, according to the Lakes Realty report.

“We are rebounding from historic lows of available lake homes for sale in 2021 and 2022 across virtually every lake market,” said Glenn Phillips, CEO and chief economic analyst at Lake Homes Realty. “While better, the selection of appropriately priced lake homes still needs to be improved. While softened compared to the last three years, it remains a seller’s market for lake real estate.”

at rings true to Anne Gain, a St. Joseph-based broker with the local o ce of @Properties Christie’s International Real Estate and focused on the Lake Michigan shoreline in the state’s southwest region, less than an hour from Chicago.

“ e will to buy is still there,” Gain said, noting that cash tends to reign in the vacation home market, meaning that rising interest rates are

bor, is facing similar headwinds. e company is closely watching wage in ation in Europe and Mexico, CFO Jerome Dorlack said last week during the Deutsche Bank Global Auto Industry Conference webcast.

“I think on some of the headwinds that the industry is facing, Mexican labor is certainly a challenge, and it’s going to be a challenge for anyone with a signi cant Mexican footprint, anyone who operates cut and sew operations, harness operations in that region,” Dorlack said.

Troy-based Aptiv plc, which em-

ploys thousands across 32 plants in Mexico, had an annual median employee compensation of $8,139 in 2022, a nearly 40 percent increase from 2020, according to its annual SEC ling.

e supplier of software and electronic connectors expects supply chain disruptions and in ation to cost the company $180 million this year, about half the damage of last year, CFO Joseph Massaro said during the conference. Even as the operating environment improves, not every aspect has fallen into place.

“ ere’s a labor question in North America that I think has to be resolved,” he said. “We don’t have answers to that now.”

For Detroit-based American Axle & Manufacturing, labor availability is also the top concern, especially in the U.S. e driveline supplier — whose employees earned a median compensation of $46,848 last year, up 23 percent year-over-year — is

struggling to attract and retain labor, especially at smaller sites in the country, CFO Chris May said during the conference.

“ at continues to be a very active issue that we manage as a company, but it is manifesting itself through ine ciencies and some premium costs,” May said. “ e ine ciencies associated with labor availability continue to impact our operations probably a little higher than we would have anticipated stepping into the quarter.

Nearshoring

Nearshoring was set o ve years ago by the trade war between the U.S. and China, which made manufacturing in Mexico an attractive option to avoid tari s, said Rodriguez, the industry consultant. e United States-Mexico-Canada Agreement, which replaced the North America Free Trade Agreement in 2020, fueled it.

OFFICE

From Page 3

More approvals, including possible signo on proposed facade changes later this summer, are still needed from the Troy Planning Commission, which heard a presentation on the proposed development last month.

Antone said the company is looking to capitalize on a series of unnamed companies looking for space to build in Auburn Hills but are coming up empty handed.

Summer lake real estate data

The market for vacation homes in Michigan remains hot:

Total market for lake homes and lots: $2.2 billion, up 32% from spring

Number of listings: 3,647, up from 2,935 in spring

Largest home and land markets: Lake Michigan

Most expensive lake on average:

largely a non-issue for many buyers, and that homes around $1 million tend to fetch multiple o ers.

“It’s mostly a supply issue,” Gain said. “When things come on the

Walloon Lake at $3 million

Total number of $1 million+ homes and lots listed: 417

Buyer pool: Some 45% of searchers are age 45-64 and 52% are male

Top searching cities outside of Michigan: Chicago; Washington, D.C.; Columbus, Ohio

SOURCE: LAKE HOMES REALTY

market they sell immediately if they’re priced well.”

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

“We’ve built a lot of buildings in Auburn Hills and there is very little land left, if any, that are sizable pieces,” Antone said. “ ere are folks who want to be in that area and are essentially saying, ‘Where can you put us?’ We kind of looked at our own inventory and said, ‘With a garage here, we can do this.’”

No end user for the possible new building has been signed.

Antone said the 363-foot high-rise has improved performance, even during the pandemic, and is now about 85 percent leased with PNC Bank being the largest tenant, taking four full oors.

e proposal comes at a time when the overall o ce market, both locally and nationally, remains in a state of ux, more than three years after the

Since then, nearshoring has been accelerated by supply chain fallout from the COVID-19 pandemic, the war in Ukraine and the In ation Reduction Act, which o ers incentives for onshore manufacturing.

“Even though the IRA does not name Mexico, it refers to countries the U.S. has free trade agreements with, so that is why Mexico bene ts,” Rodriguez said.

Direct foreign investment in Mexico isn’t coming just from North American companies looking to rein in their supply chains. Chinese companies are ooding the country not in search of workers, but to gain access to and preserve their business in the U.S. market, Rodriguez said.

“Some companies are looking to expand their operations in Mexico because of not being able to nd talent,” he said. “China is looking at Mexico to be able to serve the U.S. ere are companies in China that have never done any manufacturing outside of China that are trying to add the least amount of volume in Mexico for their products to be considered Mexican.”

In the U.S., where plants are dealing with persistent absenteeism and turnover, manufacturing has fallen out of favor for many would-be plant workers who can nd similar pay in fast food or other industries. In Mexico, a manufacturing job is still sought after, Rodriguez said.

“ ere’s a lot of people that are looking for well-paying jobs. “Having that manufacturing job is still very popular.”

But companies will have to pay more for that worker, regardless of where the plant is located. At a certain point, the cost increases make for bad business, Sharkey said.

“Many suppliers can’t pay the increased labor necessary to make the parts without taping dollars to every box, so it’s an economic impossibility to have a sustainable business,” he said. “ at’s one reason why, even three years-plus after COVID hit, we still have so much tension in the supply chain.”

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

COVID-19 pandemic prompted stayat-home work orders and companies to have o ce workers work remotely. e return to the o ce has been slow to materialize as o ce employees have generally expected more exibility on where they work, prompting many rms to adopt hybrid work models that have allowed them to lease less o ce space or put large blocks up for sublease.

Currently, the region’s o ce market is 19.3 percent vacant, according to a rst-quarter report from the Royal Oak o ce of Chicago-based brokerage JLL, although the actual day-today vacancy is much higher because companies are still paying on their leases even though they may not be back in the o ce full time. Sublease vacancy is close to 2.3 million square feet, and both direct and sublease rents have fallen and landlord concessions are on the rise.

Troy’s 12.8 million square feet of ofce space is about 23.8 percent vacant, JLL says.

Also in Troy, Kojaian has been exploring what to do with a large site at the corner of Long Lake and Crooks roads that it acquired from sta ng company Kelly Services Inc. a few years ago.

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

Workers use a die-cutting machine while shaping metal parts at a manufacturing facility in Santiago de Queretaro, Queretaro state, Mexico. | BLOOMBERG

Lear Corp. CEO Ray Scott Attorney Dan Sharkey

The convservatory of a Benton Harbor home on Lake Michigan being sold by Realtor Anne Gain. | ERIN WATSON

MDOT's new permanent chief on xing roads — and raising I-375

As Michigan’s new transportation director, Brad Wieferich oversees an agency responsible for nearly 10,000 miles of highways and about $6.5 billion in annual spending. He was named permanent chief of the state Department of Transportation by Gov. Gretchen Whitmer in late May after serving as acting head since January. The following interview with the 52-year-old DeWitt resident has been edited for clarity and brevity.

BY | DAVID EGGERT

 How has your MDOT experience prepared you for this job?

I have been with the department for more than 27 years now. It’s hard to believe it’s been that long. One of the things that has helped me is I’ve had many di erent positions in many di erent parts of the department, worked in di erent parts of the state. We’re kind of the front door in those o ces to the public. Having the experience of that work in three di erent regions, plus coming back to the central o ce and working more on the standards and policy/procedure side, really rounded out a lot of my perspective.

 Whitmer authorized $3.5 billion in borrowing to x highways and bridges after lawmakers rejected her proposed fuel tax increase. What happens when it ends? Will Michigan go o a cli in maintaining that infrastructure?

I wouldn’t say o a cli . At some point in 2025 is when the very last of the bond program will be in play. But yeah, that’s $3.5 billion worth of work that we’re able to do now rather than do some other time later. The positive piece about that is this is infrastructure that needed work. These were big projects that carry a lot of tra c, (are) important to the economy. If not for the bond program, these projects wouldn’t have gotten built. When that’s done, we’re back to about the same-size program as we had in 2019. (He noted there is about $400 million in additional annual revenue from the federal Bipartisan Infrastructure Law, not including grants for which Michigan can compete.) We work very closely with the Michigan Infrastructure O ce, we work with closely with other states agencies — EGLE is probably one of our big partners right now — in looking at how we can maximize our e orts to go

RUMBLINGS

after and procure those discretionary grant funds.

 Are things on track with two big Detroit-area projects: the new Gordie Howe International Bridge and the conversion of the sunken Interstate 375 to a street-level boulevard?

Yes. Building an iconic structure between two nations has been amazing. The contractual end date is November of 2024. I do know that there are discussions going on right now. We don’t own the contract. That contract is with the Canadian folks, the Windsor-Detroit Bridge Authority, who we obviously worked very closely with. [Canada is nancing the bridge.] The impacts of COVID and whatnot will likely play into the discussion. I-375, we got the (federal) grant, the $100 million. We’re working with our consultant right now to get to the point where we have base plans in

place that can ultimately be contracted via design build. With design build, the contractor teams with a designer and they do the design and the building. It allows for more input and creativity from the contractor. Obviously with 375, it’s going to be complex designing and building. You’re taking a depressed freeway and bringing it up to grade. We know that maintaining tra c is going to be a challenge for us. We know we’re going to need to engage a lot with the Greektown folks, with Blue Cross, with the RenCen, with everybody that’s in that area. When folks ask me ‘what do you lose sleep about,’ as complex as that engineering is going to be, to me it’s ultimately going to come down to how that project is perceived by the community. I don’t think anything the department can ever do is going to x that situation (the destruction of Black neighborhoods when I-375 was

built in the 1950s and 1960s.) It’s not as though a project itself is going to right a wrong in any sense. But I do think we need to acknowledge it. I think we do need to address it to the extent possible. It could be opportunities for the contracting of the work itself. That could be opportunities in the disposition of land that’s going to be available after the project is done. I’m very anxious about having those conversations and getting input from all stakeholders and all parties so that at the end of the day the project can meet those intended goals.

 What else is MDOT closely tracking?

There are a lot of things that the department does, and all local road agencies do, behind the scenes to address operations and safety. The frustrating part is watching the numbers go the opposite way. We’ve seen (tra c) fatalities rising instead of falling. I appreciated being part of that bill signing on distracted driving (the new hands-free cellphone law). That’s a huge piece of it. We’re using technology as much as we can to be e cient and to provide safety for the motoring public. But it seems that sometimes technology itself is also inviting distractions and other irresponsible driving behaviors. We’ll address what we can through engineering. But there’s a lot of societal issues, whether it’s drunk driving, whether it’s distracted driving, that we really need to work on. Fatalities have been going up. Speeds have been going up signi cantly since COVID especially.

 What do you do outside of work?

It’s the whole reason that I moved back to Michigan. I like to be outdoors. Whether it’s on the lake or snowmobiling or on a bike trail, hunting, pretty much anything that’s outdoors. We bought my wife an ebike, so we’re starting to get out on our bikes as well.

Domino’s latest delivery option comes with pinpoint accuracy

DOMINO’S PIZZA INC. IS OFFERING yet another delivery option, this one with “pinpoint” accuracy.

e Ann Arbor-based pizza chain (NYSE: DPZ) is introducing a new tech feature that allows customers to receive their orders nearly anywhere, including parks, baseball elds and beaches that don’t have a traditional address.

Using the Domino’s app, customers can select Domino’s Pinpoint Delivery, drop a pin on the map and get their food delivered to that spot.

“Domino’s is proud to be the rst quick-service restaurant brand in the U.S. to deliver food to customers with the drop of a pin,” Christopher omas-Moore, Domino’s senior vice president — chief digital o cer, said in a news release. “We’re always striving to make customers’ experi-

ences even better and more convenient, and Domino’s Pinpoint Delivery does exactly that.”

Customers can also track their order, see their delivery driver’s GPS location, view an estimated time of

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arrival and receive text alerts about their delivery. Domino’s will also alert customers when their delivery person arrives at the pickup spot, at which time they can activate a visual signal on their phone, which will help the driver spot them.

Domino’s has rolled out an arsenal of tech-enabled ordering and delivery methods, including “hotspot” delivery ve years ago and “mind ordering” via facial recognition, text message, Facebook, AppleWatch and Slack. In March, it launched a eet of custom-wrapped electric delivery vehicles in Southeast Michigan, in part to attract more drivers amid a labor shortage.

e promotion comes as the world’s largest pizza chain struggles with delivery woes and softening demand.

Reprints: Laura Picariello (732) 723-0569 or lpicariello@crain.com

Crain’s Detroit Business is published by Crain Communications Inc.

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Mrs.

Brad Wieferich is director of the Michigan Department of Transportation.