Crain's Detroit Business, July 17, 2023

A DECADE AFTER DETROIT’S BANKRUPTCY

10 years after the historic ling, the Detroit of July 2023 is a far cry from the city mired in debt in 2013. But lingering issues with pensions, blight and reputation remain. BEGINS ON PAGE 18

Alzheimer’s drug: Hope — and big pro ts

Newly approved Leqembi gains traction

By Dustin Walsh

Leqembi. It’s an unusual name for a new hope and promising revenue stream.

e new Alzheimer’s therapy developed by pharmaceutical players Biogen and Eisai received full U.S. Food and Drug Administration approval earlier this month, alongside an announcement that the infusion treatment would be covered under Medicare — and buzz is growing.

“It’s an exciting time for Alzheimer’s treatment,” said Craig Vollmer, chief commercial o -

cer for Texas-based Soleo, which operates specialty pharmacy and infusion services in all 50 states and is the sole U.S. distributor of the drug. “It’s not a cure, but we believe there is going to be quite a lot of interest in the drug. We’re already getting calls from patients and caregivers.”

Soleo is currently treating 30 patients nationwide with the drug, including a male patient being infused at his home in Ann Arbor. at patient declined to be interviewed by Crain’s.

See ALZHEIMER’S on Page 17

Metro Detroit lags in new home builds

House construction on the upswing nationally

By Nick Manes

Construction of new homes nationally is on the upswing, but closer to home, things are lagging a bit.

A report released late last month by the Home Builders Association of Michigan, and based o U.S. Census data,found that permits for the construction of new homes were o by more than 20% year-to-date through May of this year compared with the same time period last year.

Meanwhile, nationally, homebuilding starts were at an 11-month high in May, according to the most recent data from the National Association of Home Builders, also citing U.S. Census data.

While forecasting a positive

outlook for the remainder of the year and into next year, the Michigan numbers did provide yet another reminder of the shortage of housing and the need to address it, said Bob Filka, CEO of the Lansing-based HBAM trade group.

See HOMES on Page 17

Paul Vela worked with the Detroit Fire Department for more than 23 years and now works as a service technician for a construction company as a way to get health care coverage he can no longer get through the city post-bankruptcy.

Life Remodeled to buy former Dominican High building

By Sherri Welch

Neighborhood revitalization nonpro t Life Remodeled has a deal lined up to buy another school building in Detroit, just months after its purchase of the former Cooley High School fell through.

It’s set to buy the Marvin L. Winans Academy of Performing Arts — the former home to Dominican High School from 19402005 — and surrounding property on the city’s east side for $1.7 million from Perfecting Church and Perfecting Holdings.

Life Remodeled plans to convert Perfecting’s school building at 9740 McKinney St. into its second community hub as part of a more than $7 million project, Life Remodeled CEO Chris Lambert said. e deal includes a total of 7.55 acres and is expected to close this fall.

Lambert said he was surprised to hear from Perfecting’s broker, Exclusive Realty, with an invitation to look at the school just days after Life Remodeled’s deal to purchase Cooley from Detroit Public Schools Community District fell through.

“As a person of faith, I would call it a God thing,” he said.

Life Remodeled ended its bid to buy Cooley after the district rejected its nal purchase o er in March, balking at the price it was o ering for the long-shuttered high school and, among other things, the absence of clawback and other provisions to ensure it would be developed into the community hub Life Remodeled proposed. With the broker’s invitation to look at Winans Academy, which was closing due to low enrollment, Lambert pulled out a map. e school’s location was a bit of a match made in heaven. Life Remodeled had invested in the nearby Denby neighborhood in 2016, bringing in 10,000 volunteers for a six-day, blight-removal and beauti cation project, building a park designed by high school students in the community.

“We have some very strong relationships there that we’ve developed over the years,” Lambert said.

ere also aren’t a lot of available properties in Detroit that would t minimum requirements to make Life Remodeled’s community hub model work, he said, noting he’d looked at every available property owned by DPSCD and the city. e nonpro t targets

historic school buildings because those built in Detroit in the early 1900s were put in the center of communities and were walkable and accessible.

“I would have never thought to reach out to an existing school that was already functioning,” Lambert said.

“Now that I’ve learned what I’ve learned, maybe in the future I will reach out to other entities that currently own school buildings. But right now our focus is on ensuring that this project is highly successful.”

Perfecting Church Pastor Marvin Winans had earlier toured Life Remodeled’s Durfee site but it was only after Exclusive Realty made the introductions between the two that the church learned about all of the things Life Remodeled had done in the Denby neighborhood, COO Cindy Flowers said.

“We’re happy something can go there to bene t the neighborhood,” Flowers said. “For them to go there to o er all the di erent programs for the community, we think is a great opportunity.”

Life Remodeled is in the quiet stage of a capital campaign to cover the purchase price and renova-

tions and provide gap operating funding. It’s also talking with a foundation about a program-related investment or low-interest funding available for the project and will look at debt nancing if needed, Lambert said.

It’s operating on a $2.8 million budget this year. e 87,000-square-foot Winans Academy building is in good shape but in need of a new heating and cooling system, a new roof and elevator and cosmetic renovations, he said.

Life Remodeled is also recruiting other nonpro ts to lease space in the building and provide needed services in the community. e model is the same as it put in place at Durfee Innovation Society, its rst community hub opened under a temporary certi cate of oc-

cupancy in 2017 in the central Detroit neighborhood where the 1967 uprising began and left decades of disinvestment in its wake. Today, the site serves more than 22,000 Detroiters each year through its nonpro t partners’ efforts focused on workforce development, health and human services, and youth programs.

e community hub model is aimed at ensuring students in the neighborhood are performing at or above grade level in math and reading, providing access to health services and helping community members obtain higher-wage jobs and achieve economic self-suciency.

Among other things, the community is requesting an urgent care center and arts o erings in the new community hub.

Winans Academy | MATT FRIEDMAN/TANNER FRIEDMAN

Phinia sees growth in gas engines, alternative fuels

Recent BorgWarner spinoff sees need for variety |

While battery electric is believed by many to be the future of the automotive industry, pro ts will be reaped from the internal combustion engine for decades to come, Phinia Inc. CEO Brady Ericson said.

Gobbling up the gas engine business shed by other suppliers and plowing money into hydrogen and alternative fuel research and development is the growth play for Michigan’s newest public traded company, spun out from BorgWarner Inc. earlier this month.

While the legacy company has eyes only for electric, the newly independent Auburn Hills-based supplier of fuel systems and aftermarket parts is unapologetically all in on gas and alternative fuels.

“Our feeling is we’re going to need a variety of solutions to get to carbon neutrality,” Ericson said in an interview with Crain’s. “It’s not all going to be 100% BEV (battery electric vehicles) for every mobility application out there. We think a lique ed or

Pharmacist licensing rule under review

Dustin Walsh

Becoming a pharmacist in Michigan is about to get easier.

State regulators are moving to eliminate a popular certi cation requirement to become a licensed pharmacist in the state.

However, the elimination of the Multistate Pharmacy Jurisprudence Exam, which assesses competency in state and federal drug distribution laws, is controversial. Experts are torn on whether eliminating the exam will jeopardize industry safety at a time when pharmacists are seeking more autonomy in the health care industry.

BY KURT NAGL

gaseous fuel is going to be needed for centuries.”

Phinia (NYSE: PHIN) stock popped on its rst day of public trading, though its value has since fallen well below where it started. It opened July 5 at $37 and closed at $26.61 Tuesday, a 26% drop. e volatility is likely the result of big block buys and index trades, but the stock has drawn investor attention for the company’s strong margins and cash ow in addition to low debt levels.

To investors xated on terminal value, Ericson argues the case for Phinia’s longterm future. e company isn’t on a path to just squeeze out pro ts before winding down, he said. Rather, it will seek merger and acquistion deals and spend more than $150 million annually on R&D.

“We’re not going down a path that we’re going to just consolidate and go down in size,” he said. “We

e elimination of the exam was quickly pushed through the Michigan Board of Pharmacy last month and the new set of regulator rules was submitted to the Joint Committee on Administrative Rules in Legislature July 6. It’s unclear when the committee will take up the new proposed rules. If passed, Michigan would become just the second state to eliminate the requirement, which proponents call outmoded and a deterrent to industry advancement. Idaho eliminated its requirement in 2018.

e jurisprudence exam is a 2.5hour, 120-question multiple choice examination of federal and state laws required in the state to become a certi ed pharmacist. Pharmacists are the only discipline in health care required to pass a law exam to receive licensure.

e elimination of the exam is supported by many in the industry, including national pharmacy chains and pharmacy bene ts

manager organizations.

During the public comment meeting for the state pharmacy board on June 2, several individuals led comments to support axing the exam.

While none of the commenters disclosed their a liations, at least one appears to be a representative of a major insurer.

Jessica Morris, who according to her LinkedIn pro le is a clinical consultant of strategic partnerships for Optum Inc., the pharmacy bene ts subsidiary of UnitedHealth Group — the largest health insurer in the U.S. — called the exam “pointless” due to stopgap technology that ensures pharmacists follow all laws, state and federal.

“Many of the speci c details, such as information on prescription labels or permissible re lls, are now automatically checked and enforced by these systems, alleviating the burden on pharmacists to memorize every minute aspect of the laws,” Morris wrote in support of eliminating the exam.

Detroit auto show lands another $8 million from the state

Grant to be used in ‘reimagining’ annual event

Kurt Nagl

e North American International Detroit Auto Show is poised to receive an $8 million grant carved out from Michigan’s budget, representing another state subsidy for the long-running event in Detroit.

e grant will be used to “solidify Michigan’s lead in the mobility and electri cation sector” and will provide “signi cant impact in reimagining the Detroit Auto Show,” according to Rod Alberts, executive director of the Detroit Auto Dealers Association, which produces the show.

Scheduled for Sept. 13-24, the show underwent signi cant change since returning after the

COVID-19 pandemic. e legislature gave organizers a $9 million grant for last year’s event reboot, which is becoming more Michigan-centric and less of a stage for the global brand reveals and glitzy press conferences it was known for in the past.

e $8 million grant is one of 14 economic development earmarks totaling $66.2 million in the $82 billion budget the state legislature approved last week.

“ e show will serve as a platform to highlight Michigan’s global position as a mobility and electri cation epicenter,” Alberts said in a prepared statement to Crain’s.

Last year’s event — the rst since 2019 and the rst held outside of the traditional January slot

— marked a departure from the century-old show’s focus on trade and industry. Held inside Huntington Place and at various outdoor areas downtown, it was heav-

ily consumer-focused, giant rubber ducky and all, resembling a civic festival of sorts designed to bring people downtown.

Organizers have indicated that

the upcoming show will have a similar mission, which the grant will support.

“ is support provides signicant impact in reimagining the Detroit Auto Show bene ting the industry, the city of Detroit, and the State of Michigan,” Alberts said.

House Speaker Joe Tate was unavailable for an interview, but his spokeswoman Amber McCann said in an email: “ e auto show is an important part of the culture of the Motor City and is linked to Detroit and Michigan’s automotive history.”

e show has promised more brand participation and vehicle reveals than last year, which saw signi cantly fewer OEMs, suppliers and journalists than previous years.

“We have a tremendous amount of exposure with the aftermarket...”

Brady Ericson, CEO, Phinia Inc.

Held inside Huntington Place and at various outdoor areas downtown, the reimagined North American International Detroit Auto Show was more consumer-focused than years past and featured a giant rubber ducky celebrating Jeep owners. | VINCE BOND JR.

Brady Ericson, president and CEO of Phinia, is joined by Chris Taylor, vice president, NYSE Head of Listings and Services, in ringing the stock exchange’s opening bell. | NYSE

Broadway Street apartment building project proposed

A nine-story residential building could rise on Broadway Street in downtown Detroit.

Detroit-based developer and landlord Basco of Michigan is proposing to put 80 units (20% of them considered a ordable) and 6,600 square feet of rst- oor space for either one or two restaurants on the site of three existing buildings at 1322 Broadway St., 1326 Broadway St. and 1332-1336 Broadway St. north of Gratiot Avenue.

e project was slated to be considered by the Historic District Commission last week.

Under the proposed $38 million plan, the facades of 1332 Broadway, which Basco owns through an a liate, and 1326 Broadway, which is owned by the Downtown Development Authority, would be fully restored but the rest of the two buildings demolished. e same fate was originally proposed for 1332-1336 Broadway, also owned by the DDA, but it was later determined that the facade was too deteriorated to save, so that building would be demolished although the new frontage would be a “modern homage” to the original, said Roger Basmajian, who runs Basco.

e new nine-story mid-rise would be set back about 18 feet, delineating between the old and new portions of the building.

Funding sources for the project

have been identi ed but not yet nalized, said Nevan Shokar, vice president of real estate for Basco

of Michigan. Construction would start in October and nish in April 2025.

In June 2014, Dan Gilbert had an agreement with the DDA to buy the properties but never executed.

Two years later, the Basco a liate, Broadway Detroit Development II, won a 2016 Detroit Economic Growth Corp. request for proposals for the 1326 and 1332-1336 Broadway buildings.

Basmajian said the buildings, made of wood, have had water damage and sustained a re, leaving them in “very poor condition.”

“We studied the various possibilities for this site for a very long time,” Basmajian said. “ e solution we have come out with is the most responsible and best possible option to save what’s able to be saved that is historic and create the density that was a requirement of the original city RFP.”

Detroit-based Kraemer Design Group is the project architect while the general contractor is Sterling Heights-based Roncelli Inc. e proposal includes the following unit breakdown, according to Shokar:

◗ 30 studio apartments averaging 468 square feet with an average rent of $1,481 per month. ere would be 10 studios with rents at $940 per month, a rate equivalent to 60% of the Area Median Income.

44 one-bedroom units averaging 705 square feet and renting for an average of $2,011. ere would also be six a ordable units renting for $1,007 per month, also equivalent to 60% AMI.

Two two-bedroom units renting for an average of $2,721 for an average of 907 square feet.

◗ Four penthouse units with 1,144 square feet renting for an average of $5,750.

Target ‘sortation’ center coming to Detroit fairgrounds site

A Target Corp. distribution facility is expected to open on the former Michigan State Fairgrounds site in Detroit.

e building would clock in at about 180,000 square feet on a portion of the sprawling property at Eight Mile Road and Woodward Avenue, where the state’s largest Amazon.com Inc. distribution facility has been constructed after being announced almost three years ago, the Minneapolis-based retail giant con rmed last week.

rough a spokesperson, a message was sent to Detroit-based developer and landlord e Sterling Group, who is co-developing the majority of the property with Dallas-based Hillwood Enterprises LP.

Target did not respond to additional questions about the building.

A sign on the site — generally referred to as Parcel A — says a logistics-style building is expected to be open in June. A rendering shows a new building with some red on its front, but no tenant identi ed.

e contractors listed are Oliver/Hatcher Construction and MiG Construction.

In February, Target said it was opening more than a half-dozen sortation centers in a $100 million investment in markets across the U.S.

ose new facilities, expected to be online by 2026, add to its eet of existing sortation centers in Minnesota, Texas, Colorado, Illinois, Georgia, Pennsylvania and Illinois. Its three most recent centers opened around Chicago and Denver. At the time, the company said its new facilities will end up “creating hundreds of new jobs in local metro areas with market-leading wages.”

e sortation centers are a way to help Target compete with the rise in e-commerce. ey receive orders prepared by store employees and send them out through a delivery network, whether that’s Shipt or another third-party provider. Target refers to it as part of its “stores-as-hubs” strategy, using its brick-and-mortar big-box stores “as a launchpad for online orders.”

e company said last year that its online sales rose nearly $13 billion from 2019 to 2021 and stores ful lled more than 95% of total sales in 2021. Some 50 million

packages are expected to go through Target sortation centers this year, double from last year, the company said.

Frank Hammer, a co-chair of the State Fairgrounds Development Coalition, which has been vocal in criticizing various components of the 142-acre property’s redevelopment plan over many years, said the Target facility is going on the site of the old Joe Dumars Fieldhouse/Agricultural Building, demolition of which came as a surprise to his organization. He and members of the community rst became aware of the incoming Target building in May when told by a city o cial during a Zoom meeting, Hammer said.

e Target facility would join the gargantuan Amazon facility, which is the size of approximately 20 typical Walmart stores.

“ e idea that the fairgrounds can be turned into this mammoth logistics center ... We have a lot of feelings about that, because the fairgrounds actually plays a very critical role in Detroit and in the region, and the state,” Hammer said.

e Sterling Group/Hillwood JV is also working on another building already under construction on

the site, although its ultimate occupant is not yet known. It’s expected to be about 292,000 square feet, per marketing materials from the South eld o ce of Colliers International Inc., which has the listing.

Sterling Group and Hillwood paid $9 million for the fairgrounds site and no city tax breaks or incentives have been involved. e city paid $7 million for it in April 2020. e lack of tax incentives and the fact that the JV paid the appraised value of the land allowed it to skirt the city’s community bene ts ordinance process, which is triggered at $75 million.

“Our e orts from the very, very beginning was the notion of community input into what would become of the fairgrounds,” Hammer said. “ at was really our premise, in terms of our involvement. When the community bene ts ordinance passed in 2016, we saw that as an opportunity ... at was something that was legislated, that this development, certainly Amazon would have, you know, come under the terms of the community bene ts ordinance.”

e $400 million Amazon facility started construction in late 2020.

A nine-story residential building would rise on Broadway Street downtown under a $38 million proposal that would mix new construction with historic preservation. | KRAEMER DESIGN GROUP

Kirk Pinho

Kirk Pinho

A portion of the former Michigan state fairgrounds property in Detroit is expected to become a new Target Corp. sortation center. | KIRK PINHO

Bavarian Inn matriarch dies at 101

By Jay Davis

Dorothy Zehnder, the matriarch and co-founder of the popular Bavarian Inn Restaurant & Lodge in Frankenmuth, died July 9. She was 101.

Pet Beastro expands to Macomb County

By Jay Davis

A locally owned retailer is expanding to bring its brand of pet pampering to Macomb County. Madison Heights-based e Pet Beastro on June 30 opened its second location at 13828 E. 14 Mile Road, just east of Schoenherr Road. e new Pet Beastro location takes over a 4,800-squarefoot space previously occupied by a shuttered Pet Valu store.

e Pet Beastro o ers dog and cat food, treats, toys, supplements and supplies. e Warren location features pet chiropractic services, same-day local delivery within 25 miles of the store, and nutrition counseling for dogs and cats. Several Pet Beastro sta hold Raw Pet Food certi cations and can help owners build complete, balanced raw diets for their pets, along with guidance on transitioning pets to a fresh food diet.

Owner and founder Jill Tack, who opened the rst location in 2007, said sales played a major role in the move to the east side.

“We have a signi cant portion of our customer base on the east side, and this will help make it as convenient as possible for existing customers, while making it accessible for a new audience,” Tack said. “ e expansion also in-

creases our delivery zone radius, and decreases delivery costs for our customers.”

e Warren Pet Beastro features what Tack is billing as the Midwest’s largest selection of frozen raw dog and cat food. e store is equipped with an 18-door freezer solely housing raw and gently cooked pet food, pet hydrators, and toppers.

“As pet owners, we know how important it is to give our furry family members the best by feeding better and how that quality can assist in our pets feeling healthier, living longer, and maintaining a high quality of life,” Tack said in a statement.

With 10 new employees Pet Beastro now employs 22. Tack declined to disclose company revenue, along with revenue projections for the Warren store.

e pet industry is a big one in the U.S., with a projected $143.6 billion in sales coming in this year, according to the American Pet Products Association.

Tack, prior to establishing e Pet Beastro, worked in retail and as a graphic designer. She has an eye toward further expansion.

“We’re always open to exploring new store locations to grow with our customer base,” Tack said.

NOTICE OF AUCTION AND SALE OF RECEIVERSHIP PROPERTY - CANNABIS

Gene R. Kohut of Trust Street Advisors, LLC in his capacity as court-appointed receiver (the “Receiver”) of Green Peak Industries, Inc., District Bay, LLC, The District Park, LLC and GPIMD Corp. (collectively, “Skymint”) is conducting an auction for the sale of substantially all assets of Skymint.

Skymint operates a large network of cannabis provisioning centers across Michiganincluding locations in Ann Arbor, Metro Detroit, Bay City, Lansing, Flint, Saginaw, Muskegon, Kalamazoo and Portage

Pursuant to an order entered by the Ingham County Circuit Court on June 21, 2023 (the “Approval Order”), an Auction for the sale of Skymint’s assets has been scheduled for August 8, 2023, at 11:00 a.m. (Eastern Time) Any and all parties desiring to participate in the Auction must make a qualified bid consistent with the procedures established by the Approval Order no later than July 28, 2023 The Approval Order authorizes the Receiver to conduct an Auction, sets forth the bidding procedures for the Receiver to sell Skymint’s assets free and clear of all liens, interests and encumbrances, and approves a proposed form of a purchase agreement (the “Stalking Horse Purchase Agreement”). A complete copy of the Approval Order, the Stalking Horse Purchase Agreement, the Bidding Procedures, and all related materials can be obtained by request from the Receiver’s counsel identified below

Those interested in submitting a bid for consideration should contact the Receiver’s counsel, David Dragich or Amanda Vintevoghel-Backer, at The Dragich Law Firm PLLC, (313) 886-4550, skymintauction@gmail.com

Zehnder was born Dec. 1, 1921, in nearby Reese. For the majority of her long life, Zehnder worked in various capacities at the family-owned Frankenmuth businesses, which she founded and managed with her husband William “Tiny” Zehnder, starting in 1950. Together, they helped make Frankenmuth a destination for family-style chicken dinners at the Bavarian Inn Restaurant, later adding the Castle Shops, Bavarian Lodge, Frankenmuth Gift Shops Inc., Frankenmuth River Place Shops and a specialty line of food products.

Zehnder also authored three cookbooks: “Cookies and Bars” in 1986, “Come Cook with Me” in 2011 and “From My Kitchen to Yours” in 2013, which included 195 family recipes.

ose recipes went a long way in serving food in 12 dining rooms that seat 1,200 guests — about 900,000 meals each year. Fully sta ed, the Bavarian Inn Corp. has about 1,000 employees. Seven members of the Zehnder family currently run operations at the Bavarian Inn, according to a news release.

In a statement, the Zehnder family vowed Dorothy’s legacy will live on.

“We mourn the passing of our beloved mother, grandmother, and family matriarch,” says the

statement issued July 10. “We extend our thanks for the support from the Frankenmuth community and ask that you help us remember Dorothy for the amazing woman she was and who will remain in our hearts. Our family will continue to uphold the spirit of Dorothy and her legacy to this community.”

Zehnder’s legacy also includes a variety of accolades.

In 2020, she was enshrined into the Michigan Women’s Hall of Fame and earned the Saginaw Lifetime Achievement Award. Zehnder in 2013 earned the Outstanding Achievement in Michigan Tourism award from the Michigan Lodging and Tourism Association, which recognizes the person who “serves to promote, protect and grow Michigan tourism to the bene t of all industry segments and our state’s economy.” at same year, the Detroit chapter of the National Association of Women Business Owners recognized Zehnder as one of its Top 10 Michigan Business Women.

Dorothy and Tiny Zehnder in 1973 established the William and Dorothy Zehnder Foundation, a 501(c)3 organization that o ers grants to a variety of causes and organizations.

Congressman Dan Kildee, representing Michigan’s 8th District, praised Dorothy Zehnder.

“Dorothy was an absolute legend and an amazing woman,” Kildee said in a statement. “For over eight decades, Dorothy dedicated her life to putting a smile on the faces of others through her cooking, baking and hospitality. Her career is simply remarkable, starting as a waitress at the restaurant and eventually running the Bavarian Inn’s many successful ventures.”

Zehnder was preceded in death by her husband of 63 years, sister Edna Hegenauer and daughter Judy Zehnder Keller.

She is survived by her brother Ray Hecht, son Bill Zehnder, daughter Roxie Westgate, 10 grandchildren and 25 great-grandchildren.

You have a vision for your business, we have the expertise to help you get there. As we celebrate our 150th year, find out why businesses just like yours have trusted us for generations to provide access to the financing you need for what’s next on your Horizon.

Dorothy Zehnder

The Pet Beastro co-owners Jill Tack and Louis Boedigheimer on June 30 opened their second location at 13828 E. 14 Mile Road in Warren. | PET BEASTRO

Fund for congested rail crossings a good start

Nobody likes getting stuck at a railroad crossing waiting on a freight train.

At minimum, it’s an inconvenience, blocking the trip from Point A to Point B. In worst-case scenarios, it’s a public safety hazard preventing re trucks, ambulances and police cruisers from getting to where they need to go.

Perhaps no region of Michigan knows this better than the Downriver area of metro Detroit, where industry and residential communities coexist closely and trains are known to block roads for long periods of time.

It’s a problem years in the making and one that at times can seem intractable — or, certainly, really expensive — to x. Building one bridge over railroad tracks — a “grade separation project” — can cost $25 million to $50 million, depending on the terrain. at’s cost-prohibitive for most local municipalities.

Yet with little fanfare last week, a pair of bills pushed by Downriver legislators were signed into law that will establish a state fund that should begin to address the issue.

To be clear, it’s not enough money to x the problem. But it’s a start.

e fact that the e ort attained broad legislative support from both sides of the aisle shows that on certain initiatives, such as common-sense infrastructure

improvements, partisan di erences can be set aside for the betterment of local communities.

Within an $82 billion budget, clearly $10 million can be found without raising taxes or fees. It comes down to priorities.

While untangling congested railroad crossings may not be the sizzling hot-button issue that plays to voter emotions of either party’s base, prioritizing this work will not only improve public safety but

economic development as well.

e program will get $10 million in the next state budget — much less than the $50 million initially proposed.

Local communities will apply for grants from the fund and must provide a local, federal or private match that equals at least 10% of the cost to build an overpass or underpass.

Projects will be prioritized based on their proximity to areas such as rail yards,

manufacturing plants, hospitals, re stations and assisted living facilities, among other locations.

“Our hope is to address the areas of crazy congestion in Southeast Michigan rst and then be able to help across the state because there are thousands of train crossings with roads,” said state Sen. Darrin Camilleri, D-Trenton, one of the bill sponsors. “We need to prioritize those that we know are causing signi cant delay.”

Freeing up those crossings could also lead to more economic development in southern Wayne County where Camilleri said companies have cited train-related congestion as a reason not to locate there.

In addition to the new grant fund, the budget includes a separate $20 million earmark for a grade-separation project near the intersection of Fort Street and Van Horn Road in Trenton.

While much of the focus has been on metro Detroit and, speci cally, Downriver, Camilleri believes work may start to accelerate across Michigan with the creation of the statewide fund and more attention brought to the issue.

is is a problem years in the making and will take years to x. But prioritizing existing funds to create a program that helps local communities address congested rail crossings is a good place to start.

EPA is putting up roadblocks to Michigan’s success

Michigan’s population decline is a critical issue that requires a wholeof-government approach to solve. Unfortunately, some federal o cials don’t seem to recognize the scale of the challenge we are facing, and they are advancing a regulatory agenda that is only going to make the problem worse.

While Michigan is still in the top 10 most populous states, we’re not growing. is is not news to state government, economic development agencies and NGOs that have been sounding the alarm bell on this issue for years. At the Home Builders Association of Michigan, our members have been acutely impacted by this trend of out-migration, and that is why we have advocated and been a strong voice for thoughtful policies that balance economic growth with environmental protection.

e Statewide Housing Plan released last fall provides a roadmap for improving and increasing our housing stock. And considering that 47% of all housing units in the state were built before 1970, we’re in serious need of an upgrade. For

calendar year 2023, our organization projects only 15,531 single-family permits being pulled across the state of Michigan. However, problematic policies coupled with high costs make it di cult to retain residents and attract new ones.

Both U-Haul and Atlas Van Lines ranked Michigan in the top ve states for one-way, outof-state trips in 2022. We rank 49th in population growth since 1990, ahead of just West Virginia. We’re ranked 32nd in median household income with the average household earning $59,600 per year, which is more than $6,000 below the national average. Home values are also declining: in 2000, the average home was worth 11% less than the national average; in 2020, that gap tripled to 34% according to a recent report from the Citizens Research Council of Michigan.

What the report doesn’t address, though, is a new e ort by the Environmental Protection Agency to push through new air quality regulations that will make it harder — and costlier — to expand the state’s housing supply. EPA has traditionally adhered to a schedule

on which it reviews and proposes changes to the National Ambient Air Quality Standards or NAAQS. However, this year the agency tore up the rule book and proposed ratcheting up the regulations for a particulate matter called PM2.5, which is commonly found in construction zones, manufacturing operations, and power generation.

e purpose of the schedule is to give builders and other industries a degree of regulatory certainty to guide equipment purchases, facility expansions, and operational adjustments. Being in nonattainment of the NAAQS regulations can result in harsh consequences, from turbocharged permitting requirements to restrictions on federal infrastructure funding — placing new highway and transit projects in jeopardy. EPA’s own analysis estimates that numerous counties across Michigan would fail to meet the new PM2.5 thresholds in the proposed rule, setting the stage for nonattainment designations.

EPA’s proposal is especially concerning for the home building industry, as the new NAAQS rule would negatively impact manufacturers of the key materials we rely on most. e lumber, aggregates

and insulation industries have all submitted comments to the EPA expressing their concerns with the proposal. ese impacts are not abstract. A recent study from the National Association of Manufacturers found that the NAAQS PM2.5 rewrite threatens $7.3 billion in manufacturing economic activity and 26,900 jobs in Michigan alone.

What’s even more confounding about the proposal is that, according to the EPA, PM2.5 levels are down over 40% since 2000 and concentrations of NAAQS pollutants declined 78% between 1970 and 2020.

Michigan needs 190,000 housing units — single-family homes, apartments, and condominiums — to begin meeting the ambitious goals our leaders have set for reversing our state’s population decline. at won’t happen if regulators in Washington, D.C., push misguided proposals like the EPA’s revision of the NAAQS for PM2.5. Michiganders need to tell the EPA to stop putting up roadblocks to our success.

Problematic policies coupled with high costs make it dif cult to retain residents and attract new ones.

Dawn Crandall is executive vice president of government relations for the Homebuilders Association of Michigan.

Traf c backups on Allen Road in Woodhaven at a Canadian National railroad crossing have been blamed for impacting the speed of just-in-time deliveries to Downriver auto plants. WAYNE COUNTY

PHARMACIST

From Page 3

“It is worth noting that there are currently no published articles demonstrating a direct correlation between jurisprudence competence exams and patient safety. Without concrete evidence that passing such an exam leads to safer care provided by pharmacists, the burden of cost and time associated with the (exam) becomes di cult to justify.”

e Michigan Board of Pharmacy indicated it would address a replacement protocol for the exam, but said in public comment it would take up that cause at a later date.

e Michigan Pharmacists Association also opposes removing the exam. Eric Roath, director of government a airs for the industry group, called into question the wholesale removal of the exam from licensure.

“Pharmacists are far more likely to be brought before the pharmacy board for potential legal violations than any other provider,” Roath said. “Physician cases are usually due to a clinical error. Pharmacy is the highest regulated eld in health care. To say there are no better solutions to ensuring practice competency than to just remove the exam is wrong. e competency assessment is actually e ective in verifying.”

Others are also not convinced it’s the right move as pharmacists are seeking a larger role in patient care. For instance, national pharmacy chains like CVS and Walgreens are rapidly expanding their primary care clinics across the U.S. Walgreens’ VillageMD opened two clinics in Westland this year with plans to open more than a dozen more in the next few years.

“Pharmacists are looking to expand their scope. It seems somewhat antithetical to eliminate one of the competency exams and start deregulating the profession while also pushing for greater autonomy,” said Alan Rogalski, partner at law rm Warner Norcoss & Judd in Detroit and former practicing pharmacist. “We need the greater oversight over the profession to demonstrate that pharmacists should be considered at the top of the health care food chain.”

It’s likely chain pharmacies and multi-state health care providers favor eliminating the jurisprudence exams across the country in a bid to control their own costs and consolidate operations and workforces.

“I don’t know their motivations, but the exam likely stands as an impediment to some business planning,” Rogalski said. “Chains are looking to decentralize their functions. Rather than having a nationwide presence, they would probably like the ability to process pharmaceuticals remotely without having to have a pharmacist licensed in Michigan.”

Pharmacists are also one of the more prosecuted health care professions for violating laws.

A simple Google search of health insurance fraud by pharmacists in the region reveals more than a dozen indictments in the past ve years that include distributing opi-

oids to patients without a prescription and defrauding Medicare or Medicaid for reimbursement on drugs they didn’t prescribe or sold without a prescription.

In April, regulators in Idaho published a white paper in the American Journal of Pharmaceutical Education that stated there has been no evidence of public safety being jeopardized by its removal of the jurisprudence exam requirement.

at article was co-written by Deeb Eid, who was listed as voluntary faculty at Ferris State University’s College of Pharmacy. His full-time job, though, is as a senior adviser of regulatory a airs for CVS.

Susan Davis, associate dean of pharmacy and clinical professor at Wayne State University, said it’s really the role of the state’s phar-

macy schools to ensure proper legal education.

“A one-time test is redundant with the e orts of pharmacy schools and employers,” Davis wrote in an email to Crain’s. “Pharmacy schools include pharmacy law and ethics as a standard part of our curricula, so every graduating pharmacist has passed competency assessments and had that knowledge reinforced in direct practice experiences. Pharmacy employers already have sta development activities in place to ensure appropriate standard of care and adherence to all regulatory standards and laws.” She also doesn’t believe patient safety would be impacted, but calls for another simpler more streamlined approach to replace

the jurisprudence exam.

“I don’t expect elimination of the MPJE to have a negative impact on public health and safety,” she wrote to Crain’s. “Federal and state pharmacy regulations that protect public health continue to be enforced.

For graduating pharmacists, the three Colleges of Pharmacy in Michigan communicate with each other and with the Michigan Pharmacists Association to help ensure that we consistently teach and assess state and federal laws. I support eventual elimination of the (exam). Ultimately the problems outweigh the bene ts, and those bene ts can be replaced by more e cient mecha-

nisms. However, my preference would have been to wait for results of other deliberations happening at the national level with the National Association of Boards of Pharmacy, as they are considering a more streamlined national approach to jurisprudence examination. Similarly, I would prefer to have more formal assessment of data from other states that have already removed (the exam) to determine if there was any impact on disciplinary actions or patient safety events.”

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

“Pharmacists are looking to expand their scope.”

Alan Rogalski, partner, Warner Norcoss & Judd

Denny Martin

Chief Medical Of cer, Sparrow Health

During a press conference the morning after the tragic mass shooting on Michigan State University’s campus in February, Denny Martin broke down.

rough tears he updated the public on the condition of several of the shooting victims — ve injured victims were treated at E.W. Sparrow Hospital in Lansing, where Martin, 46, was serving as acting president.

Sparrow’s mass casualty planning worked, and the hospital was quickly praised for its quick response and organized e orts to save the ve living victims.

ree were killed on the campus. But it was Martin, who had only been the top administrator at the

hospital for 11 months, who immediately connected with the public, industry and social media with his tearful press conference. After a near three-year pandemic and countless mass

Sometimes heroes wear scrubs, white coats or business attire. Sometimes they’re well known by the public, often though, they are working behind the scenes to improve health within medical systems and in the community to save lives.

We requested nominations of people who should be recognized for expanding access to care, innovating new programs and procedures and opening doors for diverse talent. Peers, colleagues and patients delivered.

shootings, people grabbed onto the vulnerability and rawness of a leader that shrugged o the public relations and clinical detachment training for one real moment.

“ at’s as real as I am,” Martin said. “We’re all trained to separate our emotions, but that’s not a real thing. We all have characteristics about ourselves we can’t hide. It’s OK to be emotional in health care.”

Martin’s emotions are now serving as a teaching moment at home and nationally.

He’s given talks to Sparrow’s medical students since and will be a keynote speaker at the annual meeting of Seattle-based

ird Sector Co., an interim executive search and advisory rm.

“ e overwhelming attention I’ve received is humbling,” Martin said.

Since the tragic event, Sparrow Health was acquired by the University of Michigan. E.W. Sparrow Hospital will be renamed University of Michigan Health-Sparrow Lansing on April 1, 2024.

Martin’s tenure as interim president came to an end on May 1 when longtime health administrator Margaret Dimond took over the role to serve as the hospital’s rst woman top executive in its 127-year history. Martin returned to his previous role, which

he also held during his tenure as president, as the hospital’s chief medical o cer.

He remains a critical part of the hospital’s and system’s mass casualty planning, which is now expanding its scope.

“Not every incident is the same,” Martin said. “If we care for 20 victims of a gun-related event, they have a set of wounds that require certain resources and skills to treat. A chemical spill from a train derailment would require a totally di erent response. We’re starting to think more broadly about mass casualty events to be as prepared as we can.”

Dustin Walsh

Praveen Thadani President, Priority Health

Praveen Thadani has made a career out of reducing health care disparities.

The president of Priority Health, the $5 billion integrated insurer of Corewell Health, believes in making health care make sense for everyone.

“We think insurance is an important need, having a champion of your health and well-being,” Thadani said in an interview with Crain’s last year. “Health care is complex and somebody needs to be there to make it make sense. That’s the role we want to play in (Southeast Michigan).”

Thadani, 51, is a proponent of value-based contracting with physician organizations, which creates risk-sharing among the pair and more deeply embeds the insurer into the practices. He’s focused on accessible, affordable and equitable care.

“There’s been a deep evolution that’s happened in the industry. Almost 90 percent of premium dollars go back to providers. So we can’t grow without deep partnerships with providers. We’re shifting from reimbursement for care to a higher priority of care model, ultimately becoming a health manager,” he told Crain’s. “We believe when care is better and more accessible, it’s simpler and easier, and ultimately more sustainably affordable.”

Thadani has made it his mission since the Beaumont-Spectrum merger in February 2022 to stake a claim in the Southeast Michigan market.

Priority Health is already the second largest insurer in the region thanks to the acquisition of ClearChoices from Trinity Health in 2007. That deal brought on 143,000 members, and Priority has managed to carve out more for a current total of 340,000 members in Southeast Michigan.

However, to expand its footprint in the region, the insurer is going to have to battle for market share under the long shadow of the dominant Blue Cross Blue Shield of Michigan, which controls around 60 percent of the market statewide and much more in metro Detroit.

Priority gained roughly 29,000 new members on Jan. 1, when Corewell Health moved the former Beaumont employees over.

Over a 25-year career, Thadani spent time in various roles at Optum, Humana, UnitedHealth Group and more managing consumer, commercial and government health plan products. He earned bachelor’s and master’s degrees in public health from the University of Illinois and another master’s degree in health systems management from Rush University in Chicago.

Thadani serves on the boards of directors for Alliance of Community Health Plans, Detroit Economic Club and The Economic Club of Grand Rapids. He also serves on the advisory boards of Machinify Inc. and Help-Full.

Dustin Walsh

“Health care is complex and somebody needs to be there to make it make sense.”

ADMINISTRATOR OR EXECUTIVE HEROES

Judges

Our judges, a panel of Crain’s Detroit Business editorial staff along with health care professionals, reviewed a lengthy list of talented nominees.

Jai Reddy

Founder and CEO, LifeLab Kids

Jai Reddy became frustrated with the lack of therapeutic services for his son, Arjun, who had been diagnosed with autism in 2009. e family commuted back and forth to facilities that o ered limited services.

“ ere were not any good programs out there that could provide him with a meaningful day,” Reddy said. “I (asked myself), ‘Am I doing everything for my son? I didn’t feel that way.’”

In 2019, Reddy founded Ferndale-based LifeLab Kids, which provides multiple therapeutic services for youth with autism, attention-de cit/hyperactivity disorder, Down syndrome, anxiety, mood disorders, developmental delays and other learning and developmental disabilities.

e nonpro t has 50 employees and has served more than 350 kids, aged 18 months to young adult. Last year, Reddy opened a second location in Clinton Township.

Paul

Chittick,

section head of Infectious Diseases and International Medicine, Corewell Health East

M.D.,

LifeLab Kids provides a multidisciplinary approach tailored to each child’s needs. Services may include speech therapy, occupational therapy, feeding therapy, tness, behavior therapy and more.

“Having a team that works together under one location allows time for collaboration and to talk about the kids in depth to make sure every minute of their time is meaningful,” Reddy said.

LifeLab also provides nontraditional therapies. e nonpro t offers art and music therapy, which allow youth to creatively express themselves.

Personalized programs are available for children who need life skills — such as laundry and other chores or how to make trips to the grocery store — that help them become independent at home and in their communities.

A technology entrepreneur, Reddy also implemented a tech-

George A. Mashour

George Mashour has taken an active role in ensuring that anesthetics are safe not only for patients but also for the planet.

In 2021, Mashour began analyzing data related to inhaled anesthetics and their e ects on the environment. He said nitrous oxide — commonly known as laughing gas — is the oldest anesthetic and has been in continuous clinical use since the mid-1800s. However, its atmospheric lifetime is more than a century.

“I made a decision as chair to work with our entire department to see what we could be doing to change our anesthetic practice in a way that promotes both patient and planetary safety,” said Mashour, who is also a professor of anesthesiology, neurosurgery and pharmacology and a faculty member in the Neuroscience Graduate Program. He oversees 900 people, including more than 500 clinical care providers, who deliver anesthesia to more than 100,000 patients on average yearly.

In 2022, Mashour founded the Green Anesthesia Initiative or GAIA, that he and a team within the department of anesthesiology lead. e initiative aims to reduce the department’s greenhouse gas emissions by 80% over three years.

Last year, the initiative began shifting to more modern, environmentally favorable inhaled anesthetics and reduced or eliminated

the most carbon-emitting anesthetics.

Nitrous oxide use, for instance, decreased by 72%. Michigan Medicine ceased using des urane, another commonly used inhaled anesthetic, altogether. Desurane has the approximate environmental impact of driving a gas vehicle 400 miles.

Alternatively, Mashour’s department increased use of sevourane, which is similar clinically to des urane but has an approximate environmental impact of driving a gas vehicle 20 miles.

Further, the initiative implemented novel technology to ensure patients are administered “just the right” amount of anesthetics, while reducing excess drug waste, he said.

“We’re not being excessive in a way that’s having the drug go out into the atmosphere,” he said.

His team also reduced carbon emissions by administering ni-

trous oxide through individual tanks rather than pumping it directly through Michigan Medicine’s building, which can create leakages.

Next, Mashour hopes to in uence other health care systems to change their drug purchasing and usage practices by sharing data and collaborating with Michigan Medicine’s Multicenter Perioperative Outcomes Group, a multidisciplinary group that hosts the largest clinical data repository in the eld of anesthesiology.

“It’s a great platform for us to think about how we can coordinate better care that is safe for the patient and safer for the planet,” he said. “Beyond that, we can think about how we could collectively do better in health care when it comes to environmental impact.”

e initiative has already made an impact. Michigan Medicine’s total carbon dioxide equivalents emitted due to anesthesia gas use has been signi cantly reduced from previous years. In 2019, 1.9 million carbon dioxide equivalents were used.

“In the latter half of 2022, 317.6 thousand were emitted, which is on pace for the initiative’s goal of 635.2 thousand this year — a substantial decrease since the rst year GAIA has been launched,” Mashour said.

Rachelle Damico, Special to Crain’s Detroit Business

nology program at LifeLab Kids that teaches youth, based on their needs, to take turns, practice patience and socialize with their peers, learn how to repair computers, build a robot or learn computer programming.

is past spring, LifeLab Kids’ Ferndale location opened a sensory playpark with specialized playground equipment that safely helps children with sensory processing di culties (such as sensitivity to touch or sound) regulate their bodies and work on their motor skills.

To encourage healthy eating habits, LifeLab Kids plans to

overhaul and expand its kitchen to be accessible and kid friendly. e nonpro t helps kids with di culty tolerating certain food textures explore di erent foods and cook in the kitchen.

Reddy plans to purchase a more than 25,000 square-foot-facility in Pontiac for his nonpro t’s next project, a pre-vocational program the provides 11- to 19-year-olds with the skills necessary to transition from school to post-secondary employment and education.

“Kids of this population should have the opportunity to choose a purposeful job path for themselves,” Reddy said. “We are using every avenue possible to help them achieve their goals and reach independence.”

Rachelle Damico, Special to Crain’s Detroit Business

Dr. Stonisch transformed this smile. Let her transform

Dr. Mary Sue Stonisch, Faircourt Dental

Anesthesiology Department Chair, Michigan Medicine, the University of Michigan

“Kids of this population should have the opportunity to choose a purposeful job path for themselves. We are using every avenue possible to help them achieve their goals.”

Luanne Ewald, COO, C.S. Mott Children’s Hospital and Von Voigtlander Women’s Hospital, University of Michigan Health

Dustin Walsh, senior reporter, Crain’s Detroit Business

Leslie D. Green, assistant managing editor — Special Projects, Crain’s Detroit Business

Riney CEO, Henry Ford Health

Bob Riney was ready to retire. He’d been with Henry Ford Health for 44 years and had done virtually every job available in the various operating units at the $6.6 billion system.

en his boss, President and CEO Wright Lassiter III, announced he would be leaving Detroit to head up Chicago-based CommonSpirit Health. e departure came as Henry Ford was executing a 30-year partnership with Michigan State University to bring a medical school and a $150 million research institute to downtown Detroit.

Riney postponed his plans and became the interim CEO in August; by September the promotion was permanent.

HFH is Michigan’s second-largest health system, with six hospitals including its agship Henry Ford Hospital in Detroit. It also owns the integrated insurer Health Alliance Plan. And as if the day-to-day dealings weren’t enough to keep him busy, Riney, 63, has taken ownership of an even bigger plan to transform the hospital campus in Detroit. at includes overseeing a nine- gure, comprehensive campaign — the largest in HFH’s 108-year history — to support the $1.8 billion expansion of its Detroit hospital and teaming up with MSU to raise money for the new research center, an e ort that has already garnered a multi-million-dollar lead gift.

Rachelle Larson

Senior Physical Therapist — Pelvic Health and Women’s Health Residency Coordinator, Corewell Health’s Beaumont Hospital, Royal Oak

“Refuse to be average,” reads a plaque hanging in Rachelle Larson’s home o ce. e gift from a client plays heavily into the work she does.

“I have a passion to serve an underserved population,” she said. “And I think my passion inspires people to get better.”

Larson knew what she wanted for her career in middle school after she saw a physical therapist working with Harrison Ford’s character in a movie. She began her career in neuropathy and moved to orthopedics. But it was a seminar showing how pelvic oor issues a ect quality of life that “really lit a re for me,” said Larson, who earned board certication in Women’s Health in 2006.

She said chronic pelvic pain a ects 1 in 7 women and 1 in 10 men, and urinary incontinence can a ect as much as 30% to 50% of the population. However, these conditions are often underreported and undertreated.

“ ere’s not a week that goes by that I don’t hear a patient say, ‘why didn’t my doctor know about this?’ As a pelvic health physical therapist, I am able to help them improve these symp-

toms and improve their quality of life,” she said.

Yet, Larson doesn’t just treat patients, she also advocates for them.

“I love to be the voice of this problem, which is often undertreated. To me, the more we can get awareness out, the more we can bring advocacy and awareness for patients su ering, letting them know there are avenues for improvement,” she said.

Larsen said physical therapy

is “the rst line of defense” before more drastic measures are undertaken and estimates her team brings improvement in 60% to 80% of cases.

“I tell clients, I’m not a pill, procedure or surgery,” she said.

In 2020, Larsen took on a leadership role and now works toward uniting Corewell pelvic health therapists throughout the state. She designs quarterly seminars sharing knowledge, treatment and techniques and is a mentor to new hires and seasoned physical therapists less experienced in pelvic issues.

In addition, Larsen played an important role in shaping a new Women’s Health residency program.

“ e exciting aspect of the residency program that we are working on is it allows continued growth and expansion of dedicated physical therapists to the eld of pelvic health physical therapy,” she said. “Knowledge is power, and the more we can highlight that there is treatment available for these symptoms, the better awareness patients and medical providers can have.”

e 1 million-square-foot hospital building and outbuildings planned for the site across from HFH’s agship hospital and the joint research center are part of a $2.5 billion project in development with MSU, Detroit Pistons owner Tom Gores and other stakeholders. e larger vision also includes the HFH Center for Athletic Medicine, Henry Ford Detroit Pistons Performance Center, mixed-use residential and a parking structure.

At a time when consolidation and cost cutting are common in the health care industry and many hospitals are suspending investments in new facilities, Riney is charging forward into the future of HFH.

A Wayne State University graduate who served as HFH chief operating o cer since 2003, Riney is also a xture in the metro Michigan and metro Detroit community, serving as a trustee of the Alfred I. duPont Charitable Trust, board member and pastchair of the Michigan Health & Hospital Association, board chair of e Parade Co. and Caymich Insurance Co., and board member of the Detroit Zoological Society, M1 Rail Transit Authority, Hudson-Webber Foundation and Business Leaders for Michigan.

As for why he was willing to stay on after more than four decades with the system, Riney said at the time of his appointment: “Henry Ford is home.”

— Dustin Walsh

Deb Koesler

Clinical Nursing Director of Children’s Emergency Services, C.S. Mott Children’s Hospital

Late last summer, as kids were heading back to school in Southeast Michigan, an unexpected “tripledemic” emerged.

COVID-19 along with in uenza and Respiratory Syncytial Virus or RSV which are usually seen in the winter surged among children as they returned to schools.

Because of COVID-19 social distancing, kids didn’t have the immunity they had in earlier years, said Deb Koesler, clinical nursing director of children’s emergency services at C.S. Mott Children’s Hospital.

Seeing the rapidly rising number of sick children coming to the ER, she went above and beyond her role and began making plans to make room to treat them.

Koesler worked with the team to add beds in hallways to double capacity for noncritical and noncontagious patients. ey also took space in the adjoining pathology blood-draw area and began using the negative-pressure hazmat space as a closed room for children who were contagious.

ose temporary spaces were badly needed as it turned out. In 2021, the ER team treated 2,445 patients with respiratory distress

or fever. In 2022, that number rose to 3,317 patients, a 36% increase, the hospital said.

On average, each day before the surge, the ER saw about 120 patients, Koesler said. With the tripledemic, that number surged as high as 194 patients per day. Many were treated and released. Others who needed to be admitted but couldn’t be for lack of inpatient beds were occupying 20 of the ER’s 33 closed-door rooms. at left just 13 rooms for ER patients, prompting Koesler to go looking for additional space.

She ensured the temporary beds were added to the hospital’s electronic medical record system to ensure tracking of patient care. She also worked to secure portable pulse ox monitors, inhalers, treatment and oxygen masks and other equipment to help them care for patients moved into temporary treatment areas. And she made sure the ER had juice boxes, Gold sh crackers and other snacks for children and chips, cookies, granola bars and soft drinks — considered contraband on the campus — for sta who needed to keep up their energy.

To help treat the surging num-

ber of ER patients, Koesler enlisted educational and supervisory sta to supplement front-line nurses and sta .

“We ordered in food (and) did whatever we had to do to keep seeing patients” through November when the surge ended, she said.

Given those e orts in the ER, Mott chose Koesler to serve on a hospitalwide group looking to double occupancy capacity for in-patient units on a larger scale. e plans wound up not being needed because the tripledemic surge died down, Koesler said. But with a strategy now in place to add temporary capacity, it will be easier to ramp it up in the future as needed.

— Sherri Welch

— Natalie Tomlin, Special to Crain’s Detroit Business

Bob

Martina Caldwell

Medical Director of Diversity and Inclusion, Henry Ford Health

Ikenna Okereke

Vice Chair of Surgery and Director of Thoracic Surgery, Henry Ford Health

Dr. Martina Caldwell and Dr. Ikenna Okereke are paving new roads at Henry Ford Health for students of ethnically diverse backgrounds to pursue medical careers.

e pair’s personal experiences laid the bedrock for programs that show students the health care industry does have a place for them.

Okereke recalls having people look at him in a way that made him feel as if he didn’t belong. Sometimes, it wasn’t just a look.

“I had people literally tell me that,” said Okereke, who emigrated from Nigeria as an infant.

After facing bias and racism on his journey to becoming a surgeon, he now helps students of color realize their potential.

Okereke, vice chair of surgery and director of thoracic surgery at Henry Ford Health, cold-called schools and reached out to contacts without a speci c plan. In 2016, he started a surgery mentorship program that invites students to view live operations, participate in surgical simulations and tour the hospital.

e program launched with 24 applicants and last year had 438. e students are picked from communities with historically low numbers of people moving into the medical eld.

“Some of these students, they just don’t have that expectation that they’re supposed to be doctors or lawyers or CEOs, they just don’t believe that it belongs to them,” Okereke said.

Okereke’s e ort to help his hometown of Detroit grew after volunteering in Haiti following the 2010 earthquake.

“Anything I am today is because of the people and mentors of this city, along with my parents. I was lucky to grow up here,” he said.

Okereke’s program and her own personal experiences inspired Caldwell to launch Readying Youth Scientists for Excellence in Medicine, Health Equity and Discovery, a six-week summer program.

Like her colleague, Caldwell, medical director of diversity and inclusion at Henry Ford Health, wanted to create new pathways for students historically excluded from access to health care careers.

“It’s really hard for children to become what they can’t imagine and what they haven’t seen,” she said. Her program accepted 25 high school students this year and 15 college students.

"Undergrads mentor high school students. Medical and research graduate students mentor undergrad and high school students. Residents and fellows mentor medical, graduate, undergrad and high school students. Senior faculty mentor everyone and everyone is reciprocally expected to be enriched by the high school students," Caldwell said.

e students are selected based on academics, essay questions, demographic backgrounds and their capacity for resilience.

“We nd that — particularly for groups who face structural marginalization or have a lot of economic and educational barriers

— resilience is the key to success,” Caldwell said.

Most of the participating graduating high school students are now pursuing medical educations, she said.

— Ryan Kelly, Special to Crain’s Detroit Business

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Martina Caldwell Ikenna Okereke

PHYSICIAN HEROES

Andrea Hadley

Division Chief for Acute Care Medicine, Helen DeVos Children’s Hospital

During the “tripledemic” of respiratory viruses last fall, health systems such as Helen DeVos Children’s Hospital were hit with a deluge of patients su ering from COVID-19, the u and RSV.

Dr. Andrea Hadley met the crisis with quick thinking and creativity.

“It was really stressful knowing there were more sick kids than we knew how to care for,” Hadley said.

Not acting wasn’t an option.

“I simply said, ‘ ere’s a job to do; let’s do it. Let’s gather the troops of expertise. We have to serve these children,’ ” she said.

Hadley, who has served as an internal medicine and pediatric physician for eight years and is also section chief of Pediatric Hospital Medicine, said they needed out-of-the-box thinking to increase the ability to care for

Gary Sarafa

patients inside and outside the hospital.

Her team took several routes, including using a virtual hospitalist program to help 13 a liated regional hospitals without pediatric sta members serve children they would normally send to HDVCH. ey worked closely with doctors and nurses through video visits, providing support and advice on medication, oxygen, testing and feeding.

e collaboration kept many children and their families from traveling farther than necessary for admittance or having to wait for care, which would put them at even greater risk. It also freed up beds for sicker patients nearer to the hospital.

Since launching the initiative, triage capacity at HDVCH has risen and more patients receive care

CEO, Avalon Physician Services

After nearly 20 years of working at skilled nursing facilities, hospitals and psychiatric hospitals, Dr. Gary Sarafa began losing that vital connection to his work.

ere was an “endless tide of woe revolving through the door, and there were a lot of social determinants at that time that I couldn’t really address — that I wasn’t equipped to address,” Sarafa said. “I thought there was a better way to care for patients.”

He started Avalon Physician Services in 2016 with “just me and a bag” and has grown it by 50% per year. e organization specializes in non-nursing home se-

nior care, mental health and substance use services and is in the top 1% of Primary Care First, a Medicare payment model with 2,600 participants.

Avalon uses a mix of home visits and technology, such as video calls and health monitor devices, to temper the costs for the patient. And medical tests like bloodwork, X-rays, and doppler echocardiography can all be done in the home.

By treating patients in their homes, Sarafa said he can see the environments in which they live and use a holistic approach to address multiple issues. Some parts of a patient’s treatment, like fami-

ADVANCEMENTS IN CARE HEROES

closer to their homes and fami lies, Hadley said.

Her team also expanded home care for patients on oxygen.

“We took a multifaceted, multi disciplinary approach...which re quired the expertise of multiple teams: nursing, respiratory thera py, environmental services, emer gency department,” she said.

“It’s testament to how nimble and forward thinking our team at HDVCH is and how able we are to navigate crisis and change.”

Hadley said that crisis laid bare weaknesses in the sys tem, but she’s optimistic about the future.

“It brought us all together across the state. Now we’re plan ning what to do for the next time.”

said. “It causes pain for the primary doctor if a patient has a hole in their care.”

While Avalon’s method saves money and time for the patient and health care system, Sarafa said, care coordination is often challenging.

“ at’s why almost nobody does it,” he said. “ ere are a lot of variables you have to be able to roll with.”

life but also laid a plan for future care that respected her wishes to stay out of the hospital.

ly consultations, have also become easier.

Avalon reduced its patients’ 30day hospital readmission rate by around 20%, Sarafa said, by seeing people between their initial hospital discharges and their visit to a primary doctor.

“We want to be the cavalry for the primary care doctors,” Sarafa

Sophie’s Place Music Therapy Team

C.S. Mott Children’s Hospital, University of Michigan

Building from the knowledge that music therapy can address pain management, self-expression, coping, bonding, and simply brighten spirits, Sophie’s Place offers individual and group music sessions for children and their families. ere are six centers in the U.S.

Meredith Irvine’s music therapy team at C.S. Mott Children’s Hospital sometimes creates “heartbeat songs.” ey use a stethoscope to record the heartbeat of heart transplant or terminally ill patients and then use their rhythms as a bassline for percussion. en families can choose an accompanying song and instrumentation.

e nal product is treasured.

“It’s met with immense gratitude, sometimes for years after-

ward,” Irvine said. “Each therapist has a unique perspective. It’s a joy to support the work they do.”

Heartbeat songs are one of many o erings at Sophie’s Place, which opened last year at C.S. Mott Children’s Hospital. Irvine has been with the music therapy program for nine years and now serves as Sophie’s Place Studio manager.

Having a dedicated space is a dream come true.

“It provides families the opportunity to have the space to express themselves,” Irvine said. “Our work has always been rooted in patients and families. ey are at the center of all the care we provide.”

Group sessions, which include karaoke or drum circles, are focused on bringing people together.

e sta supports songwriting

and production in individual sessions.

Sophie’s Place also broadcasts regularly scheduled programming throughout the facility, such as Name that Tune, Music Bingo, Storytime and Song of the Day. Children and families can choose to attend and appear on camera, even serving as co-hosts, or they can participate from their rooms.

What makes us unique is we have the only studio producer in the nation,” she said. “We’re able to really craft the visual and audio quality of our programs.”

Another key component of Sophie’s Place includes visits from community musicians, which connect patients to life outside the hospital.

Irvine said her team served more than 4,000 patients in 2022,

A Dearborn Heights family recently called Avalon to care for their mother, who was having life-threatening symptoms, including swelling legs. e patient had not seen a doctor for years and was determined not to go to the hospital.

“We were able to kind of thread the needle in a way that was gratifying for the patient, her family,and for us,” Sarafa said, adding that they not only likely saved her

Sarafa, who is president of the Oakland County Medical Society, tries to stay on the cutting edge of health care and considers value and risk-based health care to be the future of the industry. e physician’s move to “old-fashioned” house visits wasn’t the rst time he sought more purpose and connection in his career.

Near the end of his medical school residency, Sarafa traveled to Kosovo to help refugees a ected by the war.

“Until I started doing house calls, that was actually the best thing I had ever done in my career,” he said.

— Ryan Kelly, Special to Crain’s Detroit Business

with nearly half participating in broadcasts.

Now she is excited about upcoming research opportunities for improving services for teens, the bereaved and women experiencing high-risk pregnancies.

“Sophie’s Place has put eyes on what we’re doing,” Irvine said. “It has brought opportunities to expand and provide outreach. I’m so grateful.”

—Natalie Tomlin, Special to Crain’s Detroit Business

— Natalie Tomlin, Special to Crain’s Detroit Business

“I simply said, ‘There’s a job to do; let’s do it. We have to serve these children.’ ”

Patricia Keefer

Medical Director for Pediatric Palliative Care Programs, C.S. Mott Children’s Hospital; Hospice Physician at JoElyn Nyman Anchors Programs for Children at Hospice of Michigan

When the Jo Elyn Nyman Anchors Programs for Children’s Southeast region reached its highest number of patients in many years in 2022, Dr. Patricia Keefer was con dent her team at the Hospice of Michigan program could meet their needs.

She’s known for walking compassionately alongside the young hospice patients expected to live less than six more months, their frightened families and the sta members charged with their care.

Before reaching hospice, those with serious or life-threatening illnesses receive palliative care to improve their quality of life and manage symptoms. Keefer’s teams provide palliative, or pain-relief, care to pediatric patients and outpatient hospice services and comfort to those anticipated to live less than six months.

She also leads the pediatric palliative care team at Mott Children’s Hospital.

Keefer began work in palliative care shortly after becoming a pediatric hospitalist in 2008. Since then, she has built up resilience that, she said, is common within this care niche.

“ ere might be a cause to celebrate. ere might be a crisis brewing... but you can’t be excited too easily. It’s important to gure out what is and isn’t a crisis.”

Halley Crissman

Finding and accessing health care can be a challenge for transgender, nonbinary and gender-diverse individuals.

Her clinical work focuses on supporting pain symptom management and helping families navigate when their medically compromised child gets a routine illness like strep throat or a respiratory infection.

Keefer and her team gure out where patients are on their journey and how they can help families look to sta for an extra layer of support.

Keefer has also trained hospice nurses who primarily work with adults in the last few years. ere is a distinct learning curve for nurses, she said, since pediatric patients present such unique components, including varied diagnoses and developmental levels.

For instance, a child could have a rare combination of a kidney and heart condition that “really requires us to be humble in how we approach this little person,” she said.

At the core, Keefer said the training helps nurses e ectively assess at the moment to know when and how to reach out for appropriate help.

“We’re always trying creative new ways to solve problems. Each patient is di erent,” she said.

“We share di erent methods to make patients more comfortable at their most vulnerable times. Since these are children facing a terminal diagnosis, learning about how they are living is that much more important. I want kids to get really good care, and I work with a team who wants the same.”

Kimberlydawn Wisdom

Chief

National data suggests about 0.5% of U.S. adults, or 1 in 189, identify as transgender, said Halley Crissman, associate medical director and director of gender affirming care for Planned Parenthood of Michigan.

But there are few providers of hormone therapy, and gender diverse patients often face discrimination when seeking other types of health care, which leads to poorer health outcomes for transgender individuals.

“All health care should be... safe and supportive for people of all genders, whether some-

care in a medical setting that is not gender-affirming. But that person still has a uterus and needs cervical cancer screenings and annual checks, she said.

Crissman secured funding to compensate and recruit 18 advisory board members from the transgender community. Based on their feedback, PPMI upgraded electronic medical records to accurately capture patient identities and pronouns, trained staff on gender-inclusive care and launched a website to enable patients to easily access information about their care.

She also hired a dedicated gender-affirming care patient navigator and developed a marketing campaign that featured trans models and employed trans creatives.

hormones with their gender identities.

Not all transgender individuals need hormone care, she said. Some can address their identities by the way they dress and express themselves.

body is cisgender or transgender,” she said.

Crissman led efforts to ensure PPMI is gender-affirming, creating spaces where people of all genders could feel comfortable getting the health care they need, regardless of their outward appearance.

A transgender man, who was assigned as a female at birth might be taking testosterone and have a beard, may not be comfortable seeking

Between May 2022 and January 2023, she rolled out gender-affirming care at all 13 PPMI health centers and in its telehealth services.

Crissman, 37, also led the launch of gender-affirming hormone therapy at Planned Parenthood for people age 18 and older to help improve their physical and mental health.

She said people who experience gender dysphoria, meaning their experience of gender doesn’t align with the experience of their bodies, need treatment to better align their

Wellness & Diversity Of cer and Senior Vice President of Community Health & Equity, Henry Ford Health

Dr. Kimberlydawn Wisdom doesn’t just address infant mortality because it’s her job. Her family was deeply a ected by it when she was a child. Now she intentionally helps other Black mothers and their babies through pregnancy and the rst year of life.

“It’s been sort of a theme throughout my personal life, and then it transferred into my professional life. is is something that I care very deeply about,” said Wisdom, who is chief wellness and diversity o cer and senior vice president of Community Health and Equity at Henry Ford Health.

In her e orts, Wisdom launched Women-Inspired Neighborhood Network: Detroit a decade ago. e average num-

ber of infant deaths in the Black community is 10.6 deaths per 1,000 births, according to the Centers for Disease Control and

Prevention. Many experts attribute the high rates to the distrust of the health care community. Since then, the WIN Network has delivered more than 600 babies with only one preventable infant death. e program recently helped a mother who previously gave birth to three children prematurely deliver her rst full-term baby.

e mother “always thought, ‘well, you know, we always have small babies in our family,’” Wisdom said. “She didn’t see she had normalized the whole aspect of prematurity.”

e WIN Network has a team of community health workers and nurse midwives who work with groups of ve to 12 mothers due to deliver their babies around the same time. ey meet

in a model called “group prenatal care.”

Wisdom said the mothers and caregivers build critical trust that is needed for the mothers to receive guidance.

As a child, Wisdom grew up with twin cousins who lost their mother and sister at birth and continually heard how family members didn’t trust the health care system. As a physician witnessing preventable infant deaths, she felt the need to help.

“When I was in those positions to have to try to resuscitate a baby or have to resuscitate a mom in the emergency department… it was like ‘OK, this is not something of the past,’” Wisdom said. “ ese disparities and these challenges…are real and persistent.”

“But when we are able to provide that hormone care, we see significant improvements in physical and mental health and fewer suicides.”

As of February, PPMI cared for more than 1,200 patients across the state. “We’re able to see patients within a few days or at longest a few weeks compared to months and months of waiting...at other institutions,” Crissman said.

An adjunct clinical assistant professor of obstetrics and gynecology at Michigan Medicine, Crissman also leads trainings for other medical professionals on providing high-quality, affirming care to transgender patients and advocates for it in Michigan and across the country.

— Sherri Welch

Last year, WIN Network: Detroit opened a Group Prenatal Care Center with more than double the space of its previous location and received at least $1.7 million in grants this year. Wisdom hopes that funding sources will expand.

Wisdom’s work has been recognized by two White House administrations. She has served on national advisory boards under Presidents Barack Obama and Donald Trump and is a former Michigan surgeon general.

“It’s not outside the realm of possibility that this vision could actually materialize [into] a model that’s embraced across the country and really make transformative change,” she said.

— Ryan Kelly, Special to Crain’s Detroit Business

Director of Gender Af rming Care and Associate Medical Director, Planned Parenthood of Michigan

“All health care should be...safe and supportive for people of all genders, whether somebody is cisgender or transgender.”

—Natalie Tomlin, Special to Crain’s Detroit Business

MICHIGAN HOSPITAL COMPANIES CRAIN'S LIST |

Ranked by 2022 net patient revenue

2 HENRY FORD HEALTH 1 Ford Place, Detroit48202 800-436-7936; henryford.com

3 UNIVERSITY OF MICHIGAN HEALTH (FORMERLY MICHIGAN MEDICINE)

ASCENSION MICHIGAN 28000 Dequindre Road, Warren48092 866-501-3627; ascension.org/michigan

Kellogg Eye Center

38 Ascension St. John Hospital, Ascension River District Hospital, Ascension Macomb-Oakland HospitalMadison Heights Campus, Ascension MacombOakland Hospital - Warren Campus, Ascension Providence Hospital - Novi Campus, Ascension Providence Hospital - South eld Campus, Ascension Providence Rochester Hospital, Ascension St. Mary's Hospital, Ascension St. Joseph Hospital, Ascension Standish Hospital, Ascension Genesys Hospital, Ascension Borgess Hospital, Ascension Borgess-Lee Hospital, Ascension Borgess-Pipp Hospital, Ascension Borgess Allegan Hospital, Ascension Brighton Center for Recovery

St. Joseph Mercy Ann Arbor, St. Joseph Mercy Chelsea, St. Joseph Mercy Livingston, St. Joseph Mercy Oakland, St. Mary Mercy Livonia, Mercy Health Saint Mary's, Mercy Health Muskegon, Mercy Health Lakeshore Campus 6 MCLAREN HEALTH CARE One McLaren Parkway, Grand Blanc48439 810-342-1100; mclaren.org

McLaren Bay Region, McLaren Bay Special Care, McLaren Caro, McLaren Central Michigan, McLaren Greater Lansing, McLaren Orthopedic Hospital, McLaren Lapeer Region, McLaren Clarkston, McLaren Flint, McLaren Health Plan, McLaren Macomb, McLaren Oakland, McLaren Northern Michigan, McLaren Northern Michigan Cheboygan, McLaren Port Huron, McLaren Thumb Region, Karmanos Cancer Institute, McLaren Health Management Group, McLaren Medical Group, McLaren Proton Therapy Center

Hospital of Michigan, Detroit; Children's Hospital of Michigan, Troy; Detroit Receiving Hospital; Harper University Hospital; Hutzel Women's Hospital; Cardiovascular Institute; Rehabilitation Institute of Michigan; Sinai-Grace Hospital; Huron Valley Sinai Hospital.

17

LAKE HURON MEDICAL CENTER 2601 Electric, Port Huron48060 810-216-1500; mylakehuron.com

18 HEALTHSOURCE SAGINAW 3340 Hospital Road, Saginaw48603 989-790-7700; healthsourcesaginaw.org

19

GENERAL

10 461 W. Huron St., Pontiac48341 248-857-7200; pontiacgeneral.com

ResearchedbySonyaD.Hill:shill@crain.com |ThislistingisanapproximatecompilationoftheleadinghospitalcompaniesbasedinMichigan.Netpatientrevenuelistedisoperatingrevenue,excludingbaddebt.Totalrevenueisnetpatient revenue,investmentincome,non-operatingorotherrevenue.Uncompensatedcareischaritycareplusbaddebtatcosts.Thesearemedicalservicesforwhichnopaymentisreceivedorexpected.Itisnotacompletelistingbutthemostcomprehensive available.Unlessotherwisenoted,informationwasprovidedbythecompaniesdirectlyorfromstateandfederal lings.CompanieswithheadquarterselsewherearelistedwiththeaddressandtopexecutiveoftheirmainMichigano ce.NA=not available.NOTES: e. Crain'sestimate. 1. BeaumontHealthandSpectrumHealthmergedasanintegratedhealthsystemwiththetemporaryname,BHSHHealthonFeb.1.,2022.RebrandedasCorewellHealthinOctober2022. 2. Annual nancialreport endinginDec.31,2021. 3. FormerlyMichiganMedicineandUniversityofMichiganHealthSystem.SparrowHealthSystemwillbecomeUniversityofMichiganHealth-Sparrow,e ectiveApril1,2024,aspartofSparrowjoiningtheMichiganMedicine clinicalnetwork. 4. From ModernHealthcare5. FormerlyMidMichiganHealth.E ectiveDec.1,2021,thenamechangewaspartofasystem-widebrandchangeupdatingthehealthsystemandfacilitynames,andlogo. 6. SparrowHealthSystemwill becomeUniversityofMichiganHealth-Sparrow,e ectiveApril1,2024,aspartofSparrowjoiningtheMichiganMedicineclinicalnetwork. 7. ManagesGardenCityHospitalandLakeHuronMedicalCenter.

8. MetroHealth-UniversityofMichiganHealth announced it is rebranding to University of Michigan Health-West in June 2021.

9. From American Hospital Directory. 10. Also known as Oakland Physician Medical Center Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data

What can we do together?

Can we build stronger, healthier communities?

Can we make health better by making it better for everyone?

Can we impact today and inspire tomorrow?

PHYSICIAN ORGANIZATIONS CRAIN'S LIST |

1 BEAUMONTACO 1 26901 Beaumont Blvd., South eld48033 947-522-0037; beaumont-aco.org

2 MCLAREN PHYSICIAN PARTNERS 2701 Cambridge Court, Suite 200, Auburn Hills48326 248-484-4928; mclarenpp.org

3 THE PHYSICIAN ALLIANCELLC 20952 12 Mile Road, Suite 130, St. Clair Shores48081 586-498-3555; thephysicianalliance.org

4 UNIVERSITY OF MICHIGAN FACULTY GROUP PRACTICE 4101 Medical Science Building I, Ann Arbor48109-0624 800-211-8181; medicine.umich.edu/medschool/patient-care/u-mmedical-group

4986 N. Adams Road, Suite D, Rochester48306-1416

Receiving Hospital, Corewell Health, Henry Ford Health System,

Insurers and health systems are playing catch up on paying for and administering the drug, but it holds promise for both patients and providers.

“ e disease is so long and so painful, emotionally,” said Jean Barnas, director of program services for the Michigan chapter of the nonpro t Alzheimer’s Association, which serves patients and their loved ones. “Any treatment that could maintain people’s abilities, allowing them to still be able to do the things they love, that’s a great thing.”

Coming to market

e FDA approval of Leqembi (Lecanemab) comes after years of searching for treatments to combat Alzheimer’s, which a ects more than 6.5 million people in the U.S. with half a million new diagnoses annually. And it’s rising. Alzheimer’s-related deaths in Michigan have increased 171.4% since 2000, according to the Alzheimer’s Association.

Two years ago, the FDA granted controversial “accelerated approval” to a competing drug called aducanemab known by the brand name Aduhelm. e drug had shown disappointing clinical trial results and was largely shunned by the medical community, resulting in few prescriptions.

Leqembi received the accelerated approval, which fast-tracks a drug for full approval, in January after showing positive results.

In clinical trials, it was shown to delay cognitive decline in Alzheimer’s patients by 5.3 months compared to a placebo after 18 months of treatment.

While a 5.3-month delay might not seem like a lot of time, the drug could delay progression of the disease long enough for Alzheimer’s patients to get through weddings or play with their grandkids before symptoms of the disease — which include memory loss, poor judgment and lack of physical control — set in, said Vollmer.

Leqembi is a monoclonal antibody drug, similar in type to the drugs created to treat moderate-to-severe COVID-19 symptoms, that breaks down toxic plaque in the brain called beta-amyloid. e plaque is a key hallmark of those with early-stage Alzheimer’s.

e average lifespan of a person diagnosed with Alzheimer’s is four to eight years, meaning Leqembi could buy the patient an extra 6% to 11% more time before the disease ends their life.

But whether or not Leqembi is the right solution for a patient is complicated, said Dr. Judith Heidebrink, professor of neurology, neurologist and co-leader of the clinical core of the Michigan Alzheimer’s Disease Research Center at the University of Michigan.

e drug is proven e ective, but there are side e ects that must be considered. e most common side e ect that occurred during Leqembi’s clinical trials was known as amyloid-related imag-

ing abnormalities: a swelling of the brain that occurs without symptoms and can cause bleeding of the brain.

Heidebrink said the average person is better o trying the medicine than not, but many tests will be involved in determining whether Leqembi is a t.

“ e number one thing we’ll look for is whether the person is a good candidate; whether they match closely with the pivotal clinical trial population,” Heidebrink said. “ en it’s an individual discussion on what gaining ve or six months of less impairment means for them and whether genetically they are at higher risk for bleeding or swelling and nding a balance.”

UM-Health is not currently offering Leqembi as it goes through clinical review at the health system, but plans to within weeks, Heidebrink said.

Henry Ford Health is also reviewing the drug.

“Henry Ford Health is currently analyzing the data provided on this new drug treatment and the evaluation process which would need to be completed in appropriate patients,” Dr. Brien Smith, chair of the neurology department at HFH, said in an emailed statement to Crain’s. “ ere are several other medications approved for Alzheimer’s disease (some have been approved since 1996), but Leqembi has a novel mechanism of action (removing amyloid from the brain), improved clinical outcomes and associated unique side e ects not previously encountered.”

e previously approved drugs — galantamine, rivastigmine, and donepezil — do not delay the disease’s progression, but can reduce or control some symptoms.

Covering the drug

Leqembi is expensive.

e drug retails for roughly $26,500 annually, putting it out of reach for most patients before Medicare steps in to lower costs. But even with coverage, the drug requires a one-hour infusion twice a month, either in a hospital, infusion clinic or provided at home by a clinician. As well as imaging to determine whether the patient is eligible and a host of other services where the cost adds up.

Soleo is able to distribute the drug to providers, as well as infused patients at their clinics —

In Michigan “we should be doing similar to the national numbers,” Filka told Crain’s, adding that the national numbers “certainly drew our attention.”

The data

All told, at least at the national level, homebuilders are quite happy at the moment. Which might come as a surprise given the widely held belief that interest rates are primed to stay elevated for the foreseeable future.

site) availability in our state. And that issue is going to be with us for a while, but I think things are getting better.”

Sunnier skies ahead?

e housing shortage in Michigan has become a top priority for Michigan policymakers at all levels of government, as well as the state’s economic development community.

e administration of Gov. Gretchen Whitmer has set a goal of bringing about 75,000 new or rehabilitated housing units over the next ve years.

such as its only Michigan location in Novi — or at patients’ homes. However, the drug is only e ective for those early in their Alzheimer’s diagnosis, which could happen before the age of 65, when individuals are eligible for Medicare.

Michigan insurers haven’t moved to cover Leqembi, yet.

“For commercial members, Blue Cross Blue Shield of Michigan is still in the process of reviewing and determining coverage for Leqembi in light of the FDA’s recent decision to grant Leqembi full FDA approval,” Atheer Kaddis, vice president of pharmacy services at Blue Cross Blue Shield of Michigan, wrote in a statement to Crain’s. “A committee of Blue Cross and external pharmacists and doctors will be doing so as part of its process of reviewing all newly FDA approved drugs including Leqembi.”

Some people have already paid out of pocket for the drug and a chance at delaying the disease.

For Soleo, it’s another rung on the ladder to rising success. e company has seen 40% year-overyear growth for the past 10 years and will surpass $1 billion in sales this year, Vollmer said.

Soleo actively serves 400 patients across the state with 40 employees.

Soleo is only part of a growing industry that’s blooming alongside the rise of these specialized therapies like Leqembi.

e number of specialty pharmacies grew 315 percent to 1,570 specialty pharmacies in 2021 in the U.S., from just 378 in 2015, according to the 2021 Economic Report on U.S. Pharmacies and Pharmacy Bene t Managers by the Drug Channels Institute. And hospitals are quickly getting on board, now owning about a third of specialty pharmacies — because they are lucrative.

In 2019, only 4.9 percent of commercially insured patients took specialty drugs, but those drugs made up about 50 percent of all drug spending that year.

“We’ve got a well-diversi ed portfolio, so we believe Leqembi is only going to be incremental revenue for us,” Vollmer said. “ ere are so many therapeutic areas. But Leqembi is an important part of our growth. It’s going to depend on where the patient population is, but with a disease as pervasive as this … it’s an important part of our growth.”

U.S. homebuilder sentiment advanced in June to an 11-month high as a limited supply of existing homes continued to spark interest in new construction.

e National Association of Home Builders/Wells Fargo gauge rose ve points to 55, gures showed late last month. e index, which has increased for six consecutive months, exceeded all estimates in a Bloomberg survey of economists.

“A bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year,” Robert Dietz, NAHB chief economist, said in a statement. “ e Federal Reserve nearing the end of its tightening cycle is also good news for future market conditions in terms of mortgage rates and the cost ofnancing for builder and developer loans.”

at same month, housing starts for single-family homes also hit an 11-month high, increasing 21.7% to 1.63 million units, seasonally adjusted, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

But things aren’t quite as joyful in Michigan, at least not yet.

Federal data compiled by HBAM shows that there have been 5,022 single-family home permits issued in the state so far this year through May, a drop of 21% from the same time period last year.

Filka cites a host of issues for the decline in homebuilding, including mortgage interest rates, fewer lots, utility hook-up challenges and regulatory delays.

In so doing, policies that allow developers to make an annual payment — rather than paying traditional property taxes — are beginning to take hold, and legislation to bring about new economic development tools are nearing the governor’s desk for a signature.

e policy focus, coupled with some signs of normalcy in the macroeconomic climate, is bringing about some wider sense of optimism.

Like Filka, Rich Kligman — who serves as president of both the HBAM trade group and Plymouth-based Superb Custom Homes — also — is feeling better about the coming months, citing demand for homes as well as interest rates steadying, even if they remain above the low levels of the last few years.

Indeed, Kligman said he’s seeing the in ationary pressures from building materials of the last year and more begin to subside. Such a sentiment tracks with the recent ndings from the National Association of Home Builders regarding the uptick in month-over-month housing starts.

Such stats should be positive for the cooling in ation trend of recent months, according to Dietz, the NAHB economist.

“Additional housing supply is good news for in ation data, because more inventory will help reduce shelter in ation, which is now a leading source of growth for the CPI,” he said.

For Kligman, whose metro De-

Bob Filka, CEO, Home Builders Association of Michigan

Filka, however, is optimistic.

Given the various regulatory processes that can di er from one municipality to another, coupled with the long-running supply chain woes and increased pricing, many projects are running behind, he said. However, he said many builders around the state are just now getting to the point where they will be pulling permits for projects.

“So, I think we’ll see those numbers rebound here later this summer and into the fall,” he said. “So, I actually do see us catching up, but I think (the slowdown is) a re ection right now of the environment and the process and the lack of (building

troit custom building company does between $8 million and $10 million in annual revenue with most work being subcontracted, the goal is not to be the biggest builder out there.

e company currently has around a dozen projects at various stages.

“We could probably do a small handful more, but anything beyond we’d need additional resources,” Kligman told Crain’s. “We’re busy and we’re getting continuous inquiries on renovations and new construction. For ... the way we’re structured, our pipeline is solid.”

— Bloomberg contributed to this report

Lecanemab, sold under the brand name Leqembi, is pictured at Soleo Health in Novi. | NIC ANTAYA

“I think we’ll see those numbers rebound here later this summer and into the fall.”

Progress but hangovers remain

Detroit bankruptcy: What’s changed since the city went broke?

Sandy Baruah is insistent: Detroit’s bankruptcy was only good for the city.

A decade after the historic ling, the CEO of the Detroit Regional Chamber said he cannot think of “a single issue” that would be better if Detroit had taken another path.

“ ings were really bad before, and they were headed worse,” he said. “We took advantage of the opportunity and turned a nickel into a dime.”

After 10 years of recovery, the Detroit of July 2023 is a far cry from the city mired in debt in 2013 — when streetlights were burnt out, bus service didn’t run and city contractors left and right were pulling out of their contracts, or threatening to.

Still, even after so many years of improvement and change, lingering issues tied to that bankruptcy ling remain. Whether it’s unresolved pension disagreements, issues of blight or reputational dings that aren’t fully healed, the city still has some hangovers.

Pension cuts

e biggest remaining disputes post-bankruptcy involve Detroit’s retirees.

Two pension programs took cuts as part of the Grand Bargain that would extend a lifeline to the city. Many retirees remain hopeful that some of their losses may yet be restored. At a recent community meeting, Mayor Mike Duggan said he “would like to see a 13th check” beyond the monthly payments the city is sending that could help reduce retirees’ nancial burden.

e city still doesn’t have the authority to make that decision, and won’t before December 2024, the mayor said.

In an interview last week, Duggan said conversations about the possibility of another check, which he likened to the equivalent of a cost-of-living increase, would take place beginning in February. A Legislative Policy Division report that said the city would have to spend more than $1 billion to be in a position to restore cuts is a nonstarter, he said, noting that’s Detroit’s entire annual budget.

“ at’s not something anybody’s going to consider,” he said.

An attempt by the Police and Fire Retirement System of the city of Detroit to speed up the city’s timeline for repaying its pension fund after a decadelong grace period was recently rebu ed by a federal judge, though the PFRS on July 10 asked that the ruling be reconsidered.

Detroit has until next July to make its rst payment in 10 years to the pension funds. It has 30 years to ensure the funds are fully capitalized; the PFRS asked that it be done in 20 years.

e city for years has been socking away millions of dollars to help mitigate the shock of having to pay pension obligations for the rst time in a decade. Ratings agencies say the city is well-prepared to manage the new payment schedule; they’ve been upgrading Detroit so the city is now on the cusp of an investment-grade rating. But the retirees themselves continue to have concerns, and the cuts they

absorbed are still resonating in their daily lives.

Paul Vela, a Canton Township resident who reached the Detroit Fire Department’s mandatory retirement age of 60 in 2021, said he’s now working more than he did at any other point in his career. His re department job required two, 24-hour shifts a week; these days, he’s working ve days a week for a construction company in an e ort to cover health care costs and supplement his pension. Retiree health care was scrapped in the bankruptcy’s Plan of Adjustment, something that continues to be a frustration for retirees and current employees alike. e state, in its 2023-2024 budget, allocated $10 million to help defray the costs, but that’s far less than the $97 million the PFRS said it needed.

Vela thought he might start a company — and he did — but he wasn’t able to stay busy enough to pay the expenses he needed to cover the gaps. He’s glad to have found employment, but he still hopes for something less demand-

ing in the future.

“I’m on ladders all the time; I’m not a big fan of being on ladders all the time,” Vela said of his new job. “I didn’t really expect that when I retired, to be working. It’s not what I envisioned.”

Vela won’t be eligible for Medicare until he’s 65, but some retirees who counted on the city’s health care promise didn’t pay in to the federal program at all. Matthew Gnatek, a Detroit Police Department sergeant and chairman of the PFRS board, said it’s “asking an awful lot” of rst responders to sacri ce their bodies for decades then live without access to health care.

“Everybody loves the police until you have to pay for them,” he said.

Je rey Pegg, a DFD lieutenant who is also a union secretary and a trustee on the PFRS board, said he knows of retirees who have put o going to the doctor or paying for health care because of the cost, including one who died of a heart attack at 63.

Health care expenses are a huge issue for existing retirees and those who are still working for the city, Pegg said. He estimated about 300 active re and police employees are a ected by the change, as are hundreds of retirees. Pegg also lamented a cost-of-living adjustment that, at less than 1%, doesn’t keep up with in ation.

“We need these bene ts to change so members know they’ll be taken care of in retirement,” Pegg said. “Anyone who had 10 or 15 or 20 years before the bankruptcy, this is the biggest issue.”

Michael Van Overbeke, who represents the General Retirement System of the city of Detroit, said the 4.5% cut to bene ts the group took continues to be a hardship. A cost-of-living adjustment was eliminated for those retirees, too. While there is a provision that would allow bene ts to be restored, he said the required funding levels to do so aren’t close to being met.

“ e retirees are still paying for the bankruptcy every month with the reduction of their bene ts,”

“Things were really bad before, and they were headed worse.”

Sandy Baruah, CEO, Detroit Regional Chamber

Arielle Kass

Top: Piles of trash await disposal as the Detroit Blight Authority cleans up 14 blocks of the Brightmoor neighborhood in 2013. Brad Dick, Detroit’s chief operating of cer, said dumping continues to be an issue as the bottom pile is from July. | PHOTOS BY ALAMY AND ARIELLE KASS

In this le photo from 2013, graf ti artists Melo and Ayem created this multicolored bankruptcy mural along Van Dyke Avenue in Detroit as a way to represent the many layers they see in the subject. | NATHAN SKID

Sandy Baruah, CEO of the Detroit Regional Chamber

Van Overbeke said. “It is a signicant impact over a period of time.”

On top of that, some retirees were also subject to an annuity clawback that they’re still paying.

Steve Watson, Detroit’s budget director and deputy CFO, said the city’s focus is to make sure it pays the bene ts it already owes. To that end, Detroit has done a lot of work to build up a retiree protection fund that will help cover pension payments and build such payments into the normal budgeting process.

Any restoration of bene ts, he said, would involve a lengthy process negotiated with unions — and only if the city can a ord it. Duggan said he would expect the administration to meet with retirees before any action is taken.

Watson said the supplemental 13th checks could be on the table in addition to the restoration of other bene ts. But he said restoring cuts would add to the city’s unfunded liabilities and nothing would happen before next summer.

“We would only ever fund it if

the resources are in hand to fully pay it,” Watson said. “Retiree bene ts remains an open discussion. It’s something we’re going to examine closely over this next budget cycle.”

Garbage pickup, blight, nancial review

Detroit is still subject to a nancial review commission, Watson said, though close review has been waived for six years. With another ve years of waived oversight ahead, the city will be freed from that scrutiny no sooner than the summer of 2028. Currently, the commission review consists of regular nancial updates from the city.

Continued work to eliminate blight in the city is another legacy of bankruptcy. While the need for demolition of Detroit buildings predates the 2013 ling, some of the city’s blight issues can be tied back to bankruptcy-related cuts.

Duggan said many of those, like cuts to police o cer salaries that

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Properties leveraged in bankruptcy and the city’s current credit rating. PAGES 20 AND 21

hurt the city, have been restored.

Brad Dick, Detroit’s chief operating o cer, said illegal dumping continues to be an issue in the city. He thought the fact that Detroit reduced its bulk garbage pickup to four times a year could have led to people nding other ways to get rid of their belongings, and sticking to them. Dumping increased dramatically after the switch, he said, and though pickups are more frequent now, he suspected it might take more time to break bad habits.

Bulk pickup now happens every other week, but the city plans to restore weekly service next year, something Dick said he hoped would help combat the dumping issue. Detroit is also working on an anti-littering campaign, he said.

“I think that is a huge leap forward,” Dick said of the weekly bulk pickup restoration, which is currently out for bid. “ at one’s huge; that’s my favorite thing we’re doing.”

Other beauti cation e orts are still ongoing, including planting more trees in the city. Dick said the city in some cases is still trying to win back the con dence of its residents, as well.

And there are sewage, sidewalk and wastewater management improvements that the city is still playing catch-up on, said Anika Goss, the president and CEO of Detroit Future City.

Development, infrastructure — “Bankrupt cities don’t do that,” she said. “ ere are areas that have not seen signi cant investment.”

Parts of the city still do not have an active mortgage market, said

the 300 national business leaders questioned said they were likely to invest in Detroit in the next two or three years and 82% said they thought the city represented a good or excellent investment opportunity, up from 71% in 2016.

But Rip Rapson, president and CEO of the Kresge Foundation, which funds the index, said he still gets questions when he speaks to community foundations around the country. ey’re fascinated by Detroit, he said — they want to know if it’s still as bad as it appeared.

“People are almost in disbelief” when he tells them about city assets like the RiverWalk, Rapson said. He said he thinks of it as a three-step program, and by the time he’s telling people about the city’s health now, they’ve largely forgotten about the bankruptcy ling that led them to ask the question in the rst place.

Still, he said, reputations can linger. It took a decade or more for New York to overcome the reputational overhang from its 1970snancial crisis, he said.

“Once you get a mental image of a city that’s about to turn its lights out, it’s hard to purge that image,” Rapson said. “ e good news is they’re open to seeing it di erently. We’ve got to have something to tell our story about. ... What we’ve done the last 10 years is create new stories.”

Ashley Williams Clark, the vice president and director of the Center for Equity, Engagement and Research for Detroit Future City. Clark said the city has made great strides — there are more market sales than distressed sales and more people are choosing to live in Detroit — but 15% of the city’s Census tracts still do not have any mortgage activity, according to a recent study.

“ ere are still limits to living in Detroit,” Goss said. “We still struggle to retain and attract Black middle class households here.”

Goss said Detroit’s small-businesses climate is still lagging, as well. Other cities, she said, have been able to be more creative in how they meet entrepreneurs’ needs.

“While it’s not direct, bankruptcy set Detroit back in ways we’re still building from,” she said. “ ere’s still a heavy lift to keep up with other similarly sized cities.”

Repairing a reputation

Detroit Future City, since 2016, has asked national business leaders questions about their view of Detroit. How did they feel about doing business in the city? Did they know it was out of bankruptcy? at last question was removed in the 2022 reinvestment index, as it’s called — Goss said it was redundant and irrelevant. e business community has moved on. But in 2019, 21% of national respondents thought Detroit was still in bankruptcy and 34% thought the city was emerging from bankruptcy. Another 30% said it was out of bankruptcy. Locally, 9% of both city residents and suburbanites alike thought the city was still in bankruptcy. About a third of each thought Detroit was still emerging from bankruptcy.

In the 2022 survey, two-thirds of

Duggan, too, said the solution to Detroit’s reputational issues is to show them what the city is like now.

“ e reaction of everybody is, ‘Oh my God, this wasn’t what I expected,’” he said of visitors to Detroit. “ e only way to counter reputational damage is to get people here. at’s what you’ve got to do.”

e city still has plenty of work to do in its neighborhoods, Rapson said, and as long as there is still a high level of blight in the city, it may be hard for people to completely get bankruptcy out of their minds. Because a bankruptcy ling is a single news events, and the comeback is much slower, it may be hard for Detroit’s progress to capture the same national attention.

But Rapson said he has found people’s lingering beliefs about the city are “completely shakeable.”

“ ey are cheering for Detroit,” he said. “ is is such an iconic place.”

Reputation matters, he said, because it’s a talent attraction question. It also a ects private investment in the city. Improving Detroit’s image makes it less daunting for workers and businesses alike to come to town, he said. And education and transit improvements, Rapson said, would help speed up the process.

He said it’s probably another four or ve years before the country has really moved on. But even now, with more work to do, bankruptcy often isn’t the rst thing he hears about anymore. People just want to know how it’s going in Detroit.

“It’s not like it’s this overhang that people can’t get out from under,” he said. “How long does residual memory last? e pre-bankruptcy urban neglect, those are hard images unless you put something else in front of them.”

Protesters hold a sign in front of the Theodore Levin U.S. Courthouse in Detroit on July 24, 2013, when Detroit began its rst court hearing after ling the biggest U.S. municipal bankruptcy. | BLOOMBERG

Paul Vela worked with the Detroit Fire Department for more than 23 years and now works as a service technician for a construction company as a way to get health care coverage he can no longer get through the city post-bankruptcy. | NIC ANTAYA

Where properties leveraged in Detroit bankruptcy are now

Kirk Pinho Alabama, Infrastructure Investor reported at the time, noting that the deal value was for around $220 million.

Over the course of its history-making municipal bankruptcy from 2013 to 2014, Detroit used one thing it had plenty of — publicly owned real estate — to help satisfy creditors who wanted something it had none of: Money.

Today, a decade later, the properties it parted ways with for pennies on the dollar to shrug o those creditors are in varying degrees of new or revived use.

A new glass-and-steel riverfront apartment tower is rising, to be completed early next year with “elevated but approachable” rents for its nearly 500 units. A hotel and o ce building are under consideration for that land, as well.

Needed upgrades were made to a downtown underground parking deck at Grand Circus Park, thanks to a partnership between a creditor and a conservancy.

But other properties have more undetermined futures. ey range from large development parcels on the east Detroit riverfront to a historic Albert Kahn-designed gem downtown still awaiting its next act, perhaps as a hotel.

In e ect, there were two primary holdout creditors who scrapped in court for months with the bankrupt city, which had nancially collapsed under the weight of some $18 billion in liabilities: Syncora Guarantee Inc., based in Bermuda, and Financial Guaranty Insurance Corp., based in New York City.

Here is a look at the latest with the real estate they received as part of their settlement agreements.

Where the properties are now

Over the course of the last decade, billionaire Dan Gilbert has happily taken much of the Detroit real estate Syncora got in the bankruptcy case o its hands.

Syncora settled a $333 million bankruptcy claim for $44.8 million in new debt, a lease to operate the Detroit-Windsor Tunnel, a longterm lease of a Grand Circus Park parking garage, development rights to the former Detroit Police Department headquarters building near Greektown and the nearly 12 acres of east Detroit riverfront land that is all now e ectively in the hands of Gilbert.

Neal Belitsky, president and CEO of American Roads, said the company’s lease with the city runs through 2040. American Roads was a Syncora subsidiary but was purchased in July 2018 by DIF Capital Partners. American Roads not only operates the U.S. side of the border crossing but also owns and operates four toll bridges in

An original agreement from 2018 concerning the 850-space, city-owned underground Grand Circus Park parking garage called for a joint venture between Detroit-based developer e Roxbury Group, a subsidiary of Syncora and Nashville, Tenn.-based Premier Parking to enter into a 30-year master lease agreement with Detroit to operate, manage and repair the underground garage.

James Van Dyke, executive vice president of the Roxbury Group, said a $22 million renovation of the garage was completed in 2019, up from the estimated $19 million it was anticipated to cost. Of note:

e Grand Circus Park parking deck project may be the rst in U.S. history to receive federal historic tax credit equity, as the deck is considered a contributing structure to the overall Grand Circus Park historic district.

Van Dyke said Syncora exited the agreement several years ago and the deck is now managed by Roxbury and Premier Parking.

“It turned out to be way more extensive than we thought,” Van Dyke said. “We actually essentially had to rebuild the parking deck, underground, in place. So what we’ve got, at the end of the day, was a completely rebuilt parking deck underground with new pillboxes (essentially garage entrances and exits), new elevators.”

How a deal was struck

e other Syncora properties have ended up in Gilbert’s sweeping Detroit real estate portfolio that is concentrated in downtown but has, in recent years, spread southeast to the riverfront east of the Renaissance Center.

First, Gilbert struck a deal with Syncora in February 2018 to develop the former Detroit Police Department headquarters building at 1300 Beaubien, a 261,000-squarefoot Albert Kahn-designed showstopper that has long been envisioned as a boutique hotel. But to date, it remains vacant.

Gilbert’s Bedrock LLC real estate development and management company said in a statement that it “will move forward” redeveloping the building “in connection with plans for the adjacent Gratiot site, once the county has completed their move to the new Wayne County Criminal Justice Center.”

e Gratiot site is best known as the downtown property that once housed a half-built county jail on which construction was halted af-

ter major cost overruns. After debates over what to do with the property — resume construction or demolish it — it was razed. For a time, there was a plan to put what is now known as the University of Michigan Center for Innovation on the site with New York Citybased Related Cos. teaming up with Bedrock, but those plans zzled and the UMCI proposal is now teed up for the District Detroit area.

Two years ago, Bedrock said it was instead turning the property at Gratiot and I-375 into an “innovation district” that is “dedicated to driving economic transformation and creating pathways for Detroiters into future high-growth industries.” In August 2021, Bedrock and the World Economic Forum said it was planning a headquarters for its Global Centre for Urban Transformation on the site.

Work has not yet started.

In addition to the DPD building, Gilbert has amassed the remaining riverfront land Syncora received, as well. But not before the creditor sued the city seeking additional time to develop it — a federal complaint that was ultimately dropped not long after it was led.

First, last year, a Bedrock a liate paid $1.3 million for the 2.11acre chunk of land that — in a particularly shrewd move of real estate trickery — became a surface parking lot under Syncora’s ownership so it could avoid the property reverting back to city ownership.

“ is acquisition both complements and enhances our current Bedrock holdings along the riverfront,” Cathy Clark, chief information o cer at Bedrock, said in an

emailed statement in February 2022. “We will continue to evaluate the ideal purpose for this site as we create a more holistic development strategy for the surrounding neighborhood.”

Also around that time, a second 6.79-acre chunk of Syncora property ended up in Gilbert’s control. Syncora assigned its development rights to the site, which includes parcels at 2200 Franklin St., 2263 E. Atwater St. and 281 Chene St. Gilbert’s team has been amassing a large real estate portfolio on the east Detroit riverfront, ranging from o ce buildings to hotels, land and parking decks and other property, dropping no less than $100 million in acquisitions during the buying spree.

Big development

e most glaring progress on a creditor property is the former site of Joe Louis Arena, where the Detroit Red Wings played until the team moved to its new home of Little Caesars Arena, along with the Detroit Pistons.

Insurer Financial Guaranty Insurance Corp. — abbreviated as FGIC — argued the city owed it over $1 billion on pension-related debt it insured, the Associated Press and Bloomberg reported at the time.

Instead, it got development rights to the city-owned arena property and its parking garage.

e vision at the time was to replace those with a hotel with at least 300 rooms standing no more than 30 stories and a mix of o ce, retail, recreation and residential space. e property sits on about 9 acres.

It was a rough slog the rst few years following the bankruptcy, with FGIC subsidiary Gotham Motown Recovery LLC suing the city in February 2018 for more time beyond the original Nov. 21, 2017, deadline to submit a redevelopment proposal for the property.

Gotham Motown Recovery LLC and the city reached a mediated settlement to extend the deadline to Jan. 15, 2020, and then another extension until June 15, 2021. But in July 2019, it was revealed that FGIC was in discussions with an unnamed developer on the property, and in October 2019, Crain’s reported that developer was Sterling Group.

Demolition on the arena property began in June 2019 and wrapped up in 2020.

Construction on the new apartment tower began quietly, with no fanfare, in February 2022 as contractors began site work. Since then, the 25-story building, called e Residences at Water Square, has been topped out and pre-leasing started late last month.

Other components that may be coming to the site are an o ce tower and perhaps a convention-style hotel, long desired on the site.

Behind the scenes, discussions on the hotel have centered around 600 rooms across 25 stories, with a pair of large ballrooms. A Marriott International Inc.-branded hotel ag is under consideration although no agreements have been signed. Construction could break ground as soon as the fall or spring.

person for Sterling Group seeking comment.

Messages were sent to a spokes-

The real estate is in varying degrees of use today

2.75 acres of Syncora land Bedrock bought for $5 million. | PHOTOS BY KIRK PINHO

The old Albert Kahn-designed Detroit Police Department building in Detroit (from left), the Grand Circus Parking Garage and the residential tower at the Joe Louis Arena site.

Detroit’s credit rating climb shows a city healthier than in decades

Detroit is poised to mark the 10th anniversary of its historic bankruptcy by tapping the municipal bond market for $100 million of nancing, most of which will go toward its program of reviving blighted neighborhoods.

e debt is scheduled to price on Tuesday, 10 years to the day after Michigan’s biggest city, groaning under debt and pension obligations and hobbled by decades of population loss, led what was at the time the nation’s largest municipal bankruptcy.

Mayor Mike Duggan said the city has already sold two previous phases of the bond program, and this is a continuation of the city’s long-running e orts to eliminate blight. “ is allows us to nish the job,” he said.

Duggan said there was no symbolism to the timing of the latest sale and a spokesperson for Detroit’s chief nancial o cer, Jay Rising, said it was not intentional.

“ e only reason bankruptcy comes up is because a reporter brings it up,” Duggan said.

e sale comes as credit analysts have been noticing improved nancial conditions in the city. While Fitch downgraded Detroit to a “D” rating in 2013 then withdrew its rating entirely in 2014 — and said it has no plans to rate the city again — both Moody’s Investor Service and S&P Global Ratings have continually upgraded the city in recent years. Both have rated Detroit on the cusp of investment grade, with a positive outlook, meaning they would expect to upgrade the city again in the next year or two. It’s Detroit’s highest credit rating since 2009.

Demand for the new securities should be solid, given the scal strides the city has made, investors say.

“ e municipal market has shown a capacity to move on when improvement has been shown,” said Gabriel Diederich, a portfolio manager at Robert W. Baird & Co.

At Moody’s, lead analyst David Strungis said there are some lingering challenges for the city, like

AUTO SHOW

From Page 3

It is still unclear which automakers will participate in September, though General Motors Co., Stellantis and Ford Motor Co. conrmed they will bring their full brand portfolios, Automotive News reported.

Organizers have refused to provide attendance gures from last year, other than saying it drew “hundreds of thousands of car buyers and families” and 10,000 auto industry attendees. ey have also declined to disclose the event’s budget.

the pension payments that are due for the rst time this scal year. He said he expects the payments to be a ordable for the next few years, but it remains to be seen how Detroit ts those payments into its normal budget, especially if the return on investments is lower than anticipated. While the city has a reserve in its retiree protection fund, a decline in assets could lead Detroit to deplete those savings more quickly than anticipated.

While the city’s Ba1 rating from Moody’s (and BB+ from S&P) has improved with good management, Strungis said it’s still “well below the median for the sector” of Aa3. (Baa3 is the lowest investment-grade rating, also known as BBB-.) e city’s post-bankruptcy nancial performance has been “pretty strong,” he said.

“Obviously, they’re still working on taking care of blight and improving their services,” he said. “We are interested in seeing that progress on that front.”

Spending reserves — or American Rescue Plan Act dollars — on blight remediation would be positive for the city, Strungis said.

e city has designated $75 million of this month’s debt o ering as “social bonds” as proceeds will be used to demolish and renovate vacant and decayed homes. e remaining $25 million will fund transportation and recreation programs.

Detroit returned to the bond market in 2018 with a $135 million sale, its rst time since the

e Detroit auto show’s changing identity is a bid to stay relevant amid sweeping changes in both the automotive and trade show industries. Many automakers are looking past the stagnant stage reveals with splashy debuts on social media, for instance, which is often less costly. At the same time, shows like CES in Las Vegas and the Battery Show in Novi — scheduled Sept. 12-14 — have become more competitive at luring auto companies.

New at the Detroit auto show this year will be an indoor EV track and the inaugural Mobility Global Forum, a “thought leadership symposium” focused on new mobility.

think there’s a viable path for us to continue to transition our business from the current traditional fuels to alternative fuels including hydrogen over the decade.”

e company is already in expansion mode on the administrative side as it looks to establish functions that stayed with BorgWarner after the spin-o . Made up of 12,900 employees across 44 locations in 20 countries, Phinia is looking to hire 150200 new employees, mainly at executive, high-pay levels, Ericson said.

e company had a $300 million cash balance at the time of the spin-o and is expected to generate more than $200 million in free cash ow per year. At the beginning of the month, it entered a $1.2 billion credit agreement with Bank of America NA.

About 44% of Phinia’s business is supplying light vehicles, and its largest customer is General Motors Co., which accounts for 12% of its revenue.

“We have a tremendous amount of exposure with the aftermarket, which we think will give us a lot of stability and decades of revenue and pro ts even with traditional vehicles,” Ericson said.

bankruptcy to issue bonds backed only by its promise to repay. e city followed with an $80 million sale in 2020 and $175 million in 2021. e last issue sparked strong demand and repriced at a tighter spread, with a bond due in 2036 with a 5% coupon yielding 2.22%, or 122 basis points over the BVAL benchmark, data compiled by Bloomberg show.

“I’d have to imagine wherever fair value is these days, they will get that or better,” said Jason Appleson, head of municipal bonds at a global asset manager PGIM Fixed Income. “ e market has been starved for high-yield paper. Detroit is a recognizable name, it’s got an improving trajectory, and frankly, it’s a small deal.”

e latest o ering continues a program to spruce up neighborhoods degraded by population loss and poverty. In 2020, more than 70% of Detroit voters approved a plan to issue $250 million in debt to renovate and demolish blighted properties, according to an investor presentation for this deal.

Randy Layman, a director for U.S. public nance with S&P who covers Detroit, said he thinks the city is healthier than it’s been in decades.

“Any entity can go through the bankruptcy process and come out the other side as if it never happened,” he said. “Detroit has really taken advantage of some of the opportunities.”

—Bloomberg contributed to this story.

e grant will support local jobs tied to the show, including riggers, carpenters, ironworkers and other tradespeople, according to organizers. It will also prop up AutoMobili-D, a growing piece of the show that will include 150 startups on the show oor, whose space is subsidized by the Michigan Economic Development Corp.

“All of these e orts, supported by the grant, help to supercharge the local economy,” Alberts said. “ e show’s attraction of global audiences — media, industry, suppliers and the public — pump millions into Michigan’s economy.”

e company is looking to make around 35 of those hires in metro Detroit, where it has 300 employees. Phinia is based at 3000 University Drive, which was the global headquarters for Delphi Technologies when BorgWarner acquired it in 2020. Phinia also has a remanufacturing plant in Troy for its aftermarket segment, which counts Delphi, Delco Remy and Hartridge among its brands.

e fuel systems segment generated $2.3 billion in revenue last year, while aftermarket accounted for $1.3 billion in sales. e spun-o units represented about 31% of BorgWarner’s overall revenue.

As light vehicles move increasingly toward battery electric as predicted, Phinia plans to supplant that business with its commercial vehicle and o -highway segments, which are growing signi cantly, Ericson said.

Battery electric is the rising star in the U.S., but elsewhere in the world, countries are demanding di erent clean fuel alternatives, and Phinia is tailoring its business model accordingly. It is investing heavily in hydrogen and recently converted its rst gas production line to hydrogen in Europe, for example. Aided by federal incentives, hydrogen is also gaining steam in the U.S.

The city of Detroit has started demolition on the Packard Plant property it owns at 1539 E. Grand Blvd., across from the Fernando Palazuelo-owned chunk of the massive, historic former auto factory. LARRY PEPLIN

Detroit Rescue Mission’s Chad Audi on how to stay exible as needs change

DETROIT RESCUE MISSION MINISTRIES: Chad Audi, president and CEO of Detroit Rescue Mission Ministries, a Lebanon native, came to the U.S. in 1991, landing in Oklahoma City to attend college. He moved to Michigan after a couple of semesters and earned a master’s degree in corporate and international nance from Walsh College. It was the late ’90s, and Audi, 54, was offered a good-paying job at a Dearborn auto supplier. But in the end, he turned it down to make half as much working at Detroit Rescue Mission; 26 years later, he’s still at the nonpro t and wouldn’t do anything else. The conversation below has been edited for length and clarity.

By | Sherri Welch

You were offered a job at the former automotive supplier Standard Products right out of college, right? How did you wind up at Detroit Rescue Mission Ministries?

A friend of mine called me to come in to help with DRMM’s audits because my background is in nance. So I started helping them, and I found there was a lot of problems at that time. I started volunteering every day from like seven o’clock in the morning until around 10, 11 at night. I caught the attention of the president at that time, and he asked me if I wanted to work for him. And my rst answer, naturally, was that he cannot a ord me. He asked me to sit down and listen to one of the testimonials of one of the individuals who was graduating from the DRMM at that time. She was a special education teacher with a master’s degree. And then she was describing how her life took a downturn and she got introduced to drugs, and then how she went to many drug rehab places, but it was like a revolving door until she came to Detroit Rescue Mission. at day, she was celebrating the rst time in 20 years of her addiction being sober for over a year. She actually broke my heart. I told Don (DeVos) I’d like to work for you, but knowing the circumstances, it’s going to be very hard. My o er with Standard was about $82,000. And I started with Detroit Rescue Mission, after a lot of negotiation, at $27,000 as director of nancial analysis.

What made you choose the nonpro t path and lower pay?

is is because my dad also got involved. I wanted a minimum of $33,000 to cover my expenses. So my dad o ered me $6,000 to close the gap of my salary. He thought that this is a good environment, and he believed, knowing me as his son, that I care for others and felt that there was an opportunity that I could help and grow the organization. He did not have to pay part of my salary (though), because the person who was heading up nance at that time, (who) was making $41,000 was diagnosed with cancer, and she passed away. So I slid into her position after being here

three months. See, that’s how God works in mysterious ways.

I keep joking to my dad that he should have given me the $6,000.

What was happening at DRMM at the time?

ey were they were having payless days for the employees because they had too many expenses and not enough revenue. And there was not good management. To present a nancial solvency plan took me about two years. We had to clean the slate and start over again, and that put us in a very good position. So we moved up from having at that time, about 18,000 donors, (to), within ve years about 95,000 donors, 65,000 who were actual active donors (giving) at least twice a year. Right now our database is about 130,000, and I have about 85,000 active donors. When I rst came in the organization (revenue) was $4.7 million. Today it is $23 million.

You have taken the organization into some new programmatic areas, right?

So the organization was known to do shelters. Our idea was (for) most people who come to our shelter we should nd a real permanent solution to their situation and not to keep them in the shelter. So we applied for and we got transitional housing money and started moving people from the shelter to transitional housing, where we o ered them case management, job training, job placement (and goal-setting) to help them get back on their feet. So naturally, we also needed to expand our inpatient treatment program and our outpatient programs (for) returning citizens, job training veterans’ services, dual diagnosis services — meaning people with mental health as well as substance abuse — and then a lot of youth programs... We also do educational services (and) entrepreneurial services. It was all in Detroit and then we expanded (with another shelter) to Highland Park.

en we moved to Roseville, to Mount Clemens, (and) recently in Wyandotte. Any place we think that there is need for help we go and help. We actually are right now the only food bank in Macomb County. So we provide

Read all the conversations at CrainsDetroit.com/TheConversation

food boxes to seniors and to people who are in need.

were debating about because, apparently, I’m not doing a lot.

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