Crain's Detroit Business Aug. 9, 2021, issue

Q&A: Roderick Hardamon on why he came home to Detroit. PAGE 22

TWO MEN, A LOT MORE Michigan company joins franchising giant.

PAGE 3

CRAINSDETROIT.COM I AUGUST 9, 2021

Waiting on the rent

BAY OF PROMISE

Landlords struggle with moratorium

BY ARIELLE KASS

CRAIN’S MICHIGAN BUSINESS: TRAVERSE CITY

Kathy Deja intended to rent a Lincoln Park house two miles from her own home to family members who wanted to live nearby. But during the pandemic, everyone moved in together and she needed another tenant to help cover the expenses.

She found one in November.

Since then, her husband and her son — who both work in the auto industry — have been subject to months-long shutdowns. And the tenants got laid off, too. Since January, they haven't been able to pay their $1,150 monthly rent.

It's caused Deja to drain her savings, she said, and she took a hit to

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The Grand Traverse Bay is fertile in natural beauty.

But the Traverse City region is also fertile with entrepreneurship, from drone startups to makers of surgical tools. This month’s Crain’s Detroit Business looks at Traverse City beyond the cherries. PAGE 10

her credit score as she covered costs for the rental house on her credit card. She said she didn't want to put the renters out. Nonetheless, she moved forward with eviction proceedings.

"It's not just the financial but the mental stress, the emotional stress," she said. "I can't allow somebody else to take me down."

After months of trying, Deja's tenants were approved this summer for COVID Emergency Rental Assistance funds that cover the bulk of the past-due rent — and payments until October. It was a relief for Deja. But plenty of other See EVICTION on Page 18

Kathy Deja had tenants in her rental house who weren’t paying rent. | CONTRIBUTED

Beyond booze: Alcohol-free drinks find their moment Spirits, wines, craft ‘beer’ minus booze take bigger share of libation pie

BY ALLISON NICOLE SMITH

When Jason LaValla was a corporate lawyer at a food and beverage startup in New York City, he noticed a gap in the beverage market.

An infrequent drinker, LaValla was disappointed by the booze-free options whenever happy hour

rolled around.

“A lot of alcoholic beverages, especially more these days, are special: They are thoughtfully sourced, produced and presented in a way that is intended to convey something a little bit extra,” said LaValla.

“I just I wanted to create something, so that when I wasn't drink-

ing, I could feel special, too.”

So, in 2017, he left his job and moved to Detroit, where after a year of development, recipe-testing and brand design, LaValla launched Casamara Club, a line of non-alcoholic libations designed to reproduce the qualities of Italian amaro, or herbal liqueurs.

But LaValla struggled at first to persuade wholesalers, grocery stores and restaurants to take a chance on amaro-inspired sodas at a time when the market for non-alcoholic beverages was very niche.

“At the time, it was a little bit — well, 'controversial' is the wrong word because it wasn’t even controversial to people. It was just boring.” LaValla said.

But during the last year and a half,

business has reached an all-time high. Although COVID-related closures among bars and restaurants initially had LaValla worried, the growing trend toward healthy non-alcoholic alternatives accelerated by the pandemic has been a boon for business. Sales have doubled since last year, and the brand has repeatedly sold out of its products.

See BOOZE-FREE on Page 19

NEWSPAPER

VOL. 37, NO. 29 l COPYRIGHT 2021 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

PAGE 9 ▲

UM’S MARK SCHLISSEL

NEED TO KNOW

GAME-TIME DECISION

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` ROCKET MANDATES WEEKLY COVID TEST FOR UNVAXXED THE NEWS: Rocket Companies Inc. (NYSE: RKT), the city’s largest employer, will soon require all of its unvaccinated employees to have weekly COVID-19 tests. The Detroit-based mortgage giant announced Wednesday afternoon that the new policy would take effect Aug. 23.

WHY IT MATTERS: The move represents one of the more aggressive vaccination requirements by a private employer in Michigan so far in the pandemic.

Health systems and universities have gone a step further and required employees to get their shots or get fired.

` GRANHOLM TOUTS GOALS FROM BIDEN, BIG 3 ON EVS THE NEWS: Secretary of Energy Jennifer Granholm touted President Joe Biden’s ambitious goal -- half of all vehicles sold in the U.S. will be emissions-free by the end of the decade -as she toured General Motors’ electric vehicle assembly plant here Thursday. “We’ve got the Detroit 3 at the White House, and we’re here showing exactly what they’re talking about,” Granholm said, referring to the CEOs of GM and Ford, and the COO of Stellantis’ North America unit, who joined Biden on the south lawn of the White House for Thursday’s announcement.

WHY IT MATTERS: The aggressive goal has the backing of Ford, GM and Stellantis, which are increasingly hyper-focused on an electric future.

` LINEAGE ACQUIRES MICHIGAN COLD-STORAGE COMPANY THE NEWS: Novi-based Lineage Logistics LLC has purchased St. Joseph-based competitor Hanson Logistics, bolstering its food storage and shipping dominance in the Midwest.

The cold storage and logistics giant announced Wednesday it acquired the family-owned company based in southwest Michigan.

WHY IT MATTERS: The deal comes with seven distribution warehouses in Michigan and Indiana, spanning 46 million cubic feet of capacity in the region where Lineage is headquartered.

The company has compiled a run of dozens of acquisitions in the past several years that have made it the world’s largest cold-storage company.

` ASCENSION TO PAY $2.8M OVER UNNEEDED PROCEDURES THE NEWS: Ascension Michigan agreed to pay $2.8 million to settle a

lawsuit alleging the health system submitted false claims for federal payment for alleged medically unnecessary procedures performed by one of its oncologists, the U.S. Department of Justice announced Thursday. The government alleges the gynecological oncologist, who is not named because the suit was sealed as part of the settlement, performed “radical hysterectomies and chemotherapy.” A peer review performed at the hospital’s request determined less aggressive surgeries or medical interventions were appropriate.

Eastern Market cancels tailgating for Lions games THERE WILL BE NO TAILGATING for Detroit Lions games this season at Eastern Market, a longtime pregaming staple and tradition for fans since the opening of Ford Field.

That’s the word from the Eastern Market Partnership, which said in an Instagram post Wednesday that it does not have enough staff members to host large crowds. Parking bans will be enforced at Eastern Market lots during home games, according to the nonprofit.

Dan Carmody, president of the Eastern Market Partnership, told Crain’s in an email that the nonprofit is at “less than half the staffing level” it would need to operate a tailgating event.

Tailgating at Eastern Market was canceled for the Detroit Lions’ 2020-21 season due to the pandemic.

WHY IT MATTERS: “Our agency will continue to hold accountable medical providers who perform medically unnecessary procedures and then inappropriately bill federal health care programs,” Special Agent in Charge Lamont Pugh III of the Office of Inspector General for the U.S. Department of Health and Human Services.

| EASTERN MARKET VIA INSTAGRAM

Corrections ` The 2018 base pay figure listed for Tony Michaels, president and CEO of The Parade Co., on Page 10 of the Aug. 2 issue should have been listed as $332,985. ` On the same list, Christopher Palazzolo should have been listed under health care executives, not foundation executives. He was president and CEO of Ascension Providence Rochester Hospital and Ascension

Genesys Hospital in 2019, as well as president of the Ascension Providence Rochester Foundation. ` Jill Hunsberger of Eastern Michigan University Foundation was incorrectly listed under Fundraising Foundations on Page 10 of the Aug. 2 issue.

William Shepard, VP for Advancement/Executive Director of Eastern Michigan University Foundation should have been listed under Fund-

raising Foundations instead. Shepard’s 2019 total compensation was $350,447. ` A story on Page 9 said the bonuses of Detroit Institute of Art Director Salvador Salort-Pons and other executives at the museum had been held back in 2020. The DIA eliminated bonuses for executives in 2016-17. Salort-Pons’ compensation is not tied to performance.

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HEALTH CARE

Recovery Park faces new conflicts with investors Could impact greenhouse plan, future operations

BY SHERRI WELCH

Dentist Molly Doyle in an exam room at Motor Mouth Pediatric Dentistry in Dearborn | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

‘RODEO DENTISTRY’ High demand for OR during pandemic space leaves dentists for special-needs children scrambling

BY DUSTIN WALSH

Molly Doyle stretches her shoulder as she preps a syringe of Versed — a brand of midazolam drug engineered to sedate patients for medical procedures. The pediatric dentist is prepping for her first of three procedures for the day. This one is the last four of 12 crowns on a 4-year-old child.

Doyle’s shoulder is injured from a previous special needs patient who, unaware of what was happening, violently squirmed and thrusted to evade the dentist’s drill.

Doyle’s patients, and the pa-

tients of the other dentists at Motor Mouth Pediatric Dentistry in Dearborn, are awake though not lucid during these often complicated procedures. The child patients are outfitted with a nose tube, pumping nitrous oxide into their lungs to maintain sedation. But no one’s laughing.

The dentists would prefer patients to be fully anesthetized, asleep during the drilling and wrenching of dental work, in a hospital operating room. But OR space is limited and more so since the pandemic as hospitals and anesthesiologists choose to sidestep

dentists for more profitable procedures like hip replacements or bypass surgeries.

Medicaid only reimburses anesthesiologists about $200 for dental procedures, where a typical general surgery is upward of $2,000.

Hospitals lose money allowing dentists to use their ORs for the average 90-minute procedures. Spectrum Health in Grand Rapids estimates it loses upward of $3 million per year for dentist use of ORs, according to the Michigan Dental Association.

See DENTISTRY on Page ?

Conflicts between Detroit nonprofit Recovery Park and investors over its plan to develop a commercial greenhouse on Detroit’s east side to create jobs for returning citizens have spilled over into the courts and state regulatory offices.

Recovery Park in June filed a breach of contract suit against RPD Holdings LLC and principal Darin McLeskey in a bid to enforce a purchase agreement that would enable it to buy more than 350 parcels of land assembled for the nonprofit for $500,000.

At the same time, Recovery Park and CEO Gary Wozniak face cease and desist orders issued by the Michigan Department of Licensing and Regulatory Affairs to end its offering of unregistered securities in the form of promissory notes to investors. In notes in exchange for investment, Recovery Park promised to pay investors back with interest.

The legal issues, which compound the loss of millions of dollars in investment in Recovery Park Farms, a for-profit subsidiary of nonprofit Recovery Park, last year, could impact not only the future of the greenhouse project but the nonprofit’s ongoing viability.

Land loss and lawsuit

Dentist David Vazquez at Motor Mouth Pediatric Dentistry in Dearborn. | NIC ANTAYAFOR CRAIN’S DETROIT BUSINESS

Despite the loss of the land and financial backing, Wozniak continues to show up every day to Recovery Park’s longtime headquarters on Chene, a building now owned — and occupied — by RPD, McLeskey and his staff.

After working for more than a decade to launch its first social enterprise, Wozniak told Crain’s in 2019 that Recovery Park expected to finally break ground to erect a greenhouse late that year.

As envisioned, the $10 million project on East Palmer Street near See RECOVERY on Page 20

M&A

Two Men and a Truck eyes further growth under ServiceMaster’s umbrella

BY CHAD LIVENGOOD

Two Men and a Merry Maid are now sharing an umbrella.

The opportunity to offer customers a one-stop shop for residential moving with a host of other homebased services was a driving factor in ServiceMaster Brands’ acquisition last week of Two Men and a Truck International Inc., the moving company with 380 franchises that has grown organically from Lansing for the past three decades.

ServiceMaster, which has a network of 2,100 franchises in all 50 states with its own property cleaning and disaster restoration services,

Two Men and a Truck has grown to national scope over the past three decades. | TWO MEN AND A TRUCK VIA FACEBOOK

owns home cleaning service Merry Maids, furniture repair service Furniture Medic and housing inspection services AmeriSpec that pair well with the Michigan-based moving company, said Randy Shacka, president of Two Men and a Truck.

“Our path for the future is extremely bright when we look at the growth opportunities,” Shacka said in an interview Crain’s the day after the sale was announced.

Two Men and a Truck is coming off a July that was the best month in the company’s 35-year history, a 41 percent increase in second-quarter revenue compared with the same quarter in 2020, Shacka said. In the

year that ended in April, the company posted $553 million in U.S. sales, according to an S&P Global Ratings credit report.

New growth opportunities include using ServiceMaster’s network of brands and franchisees to plant Two Men and a Truck in new markets across the country, Shacka said.

In the five years preceeding the coronavirus pandemic, Two Men and a Truck was adding eight to 10 franchises annually. This year, the company is on track to add up to 18 new franchises, Shacka said.

See TWO MEN on Page 20 AUGUST 9, 2021 | CRAIN’S DETROIT BUSINESS | 3

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Christopher Ilitch delivers remarks Tuesday at an event announcing the $2.6 million renovation of Historic Hamtramck Stadium, which is partially being funded by the Detroit Tigers Foundation. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

Ilitch’s lips zipped on Ross’ flip to District Detroit for UM center Christopher Ilitch had little to say when I asked him last week about discussions his family’s real estate company has been having with billionaire Kirk developer StePINHO phen Ross.

The president and CEO of Ilitch Holdings Inc. was more than happy to talk with the media about Historic Hamtramck Stadium, his family’s Detroit Tigers baseball team, General Manager Al Avila, the team’s rebuilding, free agents, Miguel Cabrera and his race to 500 home runs, COVID-19 restrictions at Comerica Park and other topics, however.

I suppose that makes sense.

After all, he was in Hamtramck as part of an announcement of a $2.6 million renovation of the historic stadium, which was once the home of the Negro National League’s Detroit Stars as well as other teams in the 1930s.

The Detroit Tigers Foundation, Ralph C. Wilson Jr. Foundation, Kresge Foundation, Friends of Historic Hamtramck Stadium, Wayne County, Michigan Municipal League Foundation, Hamtramck Parks Conservancy and the National Park Service are funding the renovation. A very cool project.

But back to the other matter at hand: Mum’s the word on Ross when I broached the subject and asked Ilitch if it was his company that was buying properties west of the Fox Theatre.

“I’m not going to comment on all of that sitting here today,” Ilitch said, surrounded by print, TV and radio media and microphones.

“I think today is really about Hamtramck Stadium, the renovation, it’s about honoring the Negro Leagues and I think it’s about acknowledging the excitement of our Detroit Tiger ball club. But there will be a day, I think, to talk more about our development efforts in the city. I will say I’m exceptionally proud of the balanced and steady approach that our organization has taken toward devel-

planned University of Michigan graduate school initiative, in the Ilitch family’s District Detroit area instead of on Dan Gilbert’s former Wayne County Consolidated Jail site.

If it happens, that could be seen as a boost to the District Detroit, which was proposed in 2014 as a sweeping, 45- to 50-block sports and entertainment district with bars, restaurants, shopping, apartments, offices and green space, but to date precious little of that grand vision has actually come to fruition.

But questions on the Ross-Ilitch negotiations and plans remain, and whether they actually materialize remains to be seen.

Taubman Company has installed signs in its 26 mall parking lots warning people about the dangers of leaving animals and children in parked cars. | COURTESY OF TAUBMAN COMPANY LLC

“I’M EXCEPTIONALLY PROUD OF THE BALANCED AND STEADY APPROACH THAT OUR ORGANIZATION HAS TAKEN TOWARD DEVELOPMENT.” — Christopher Ilitch, president and CEO, Ilitch Holdings Inc.

opment. We’ve done a lot of great work over the past years. We’ve got a lot of projects in flight today and I look forward to continuing those efforts and the positive benefits that come from them.”

(If the “balanced and steady” phrasing sounds familiar, that’s because it appeared in this space two weeks ago, when the Ilitch family’s Olympia Development of Michigan real estate company sent a lengthy emailed statement defending its track record in The District Detroit area.)

In case you missed the news a few weeks ago, Ross, the head of New York City-based Related Cos. and a Detroit native, has been in discussions with Olympia about placing the Detroit Center for Innovation, a

PETA, Taubman new best friends People for the Ethical Treatment of Animals has given Bloomfield Hillsbased shopping mall developer and operator Taubman Company LLC an award for installing signs in its 26 mall parking lots warning people about the dangers of leaving animals and children in parked cars.

Those malls include Twelve Oaks Mall in Novi and Great Lakes Crossing Outlets in Auburn Hills.

“Even ‘quick errands’ can end in tragedy, as temperatures inside parked cars can soar to triple digits within minutes,” Tracy Reiman, executive vice president of PETA, said in a news release. “By answering PETA’s call for warning signs, Taubman is helping to prevent animals and children from enduring terrible heatstroke deaths.”

In addition to some kudos from PETA, the organization is also giving Taubman Company a framed certificate and a box of vegan chocolates.

“We thank PETA for this acknowledgement and hope it raises awareness of hyperthermia this season, while also helping to mitigate the many other security and safety issues that may arise when children and pets are left unattended in vehicles,” Maria Mainville, director of strategic communications, said in a statement.

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

REAL ESTATE

A zoning fight over warehouse space rankles Huron Township Developer of Amazon buildings on former Pinnacle site wants to build one for Home Depot

BY KIRK PINHO

A year ago, Huron Township put the brakes on construction of any new warehouse or distribution space after approving two large new buildings on an old horse-racing track.

But now the developer constructing those buildings totaling 1.27 million square feet for Amazon.com Inc. on the former Pinnacle Race Course site wants to build another one there — this one 450,000 square feet for a Home Depot distribution center after receiving a request from the home improvement giant late last year.

The issue has boiled over at the township board, where trustees — in defiance of a unanimous planning commission recommendation — on Wednesday night narrowly granted the developers — Detroit-based Sterling Group and Texas-based Hillwood Enterprises LP — an amendment to the township’s zoning rules that allows them to build the new structure for Atlanta-based Home Depot on 60 acres of the remaining 400 acres of the property.

Among the issues to become better understood during the warehouse/distribution building freeze were things like the impact of truck traffic on the southern Wayne County community as well as other issues.

A pair of new buildings for Amazon.com Inc., including this one in Huron Township, are being built on the site of the former Pinnacle Race Course. That property is also where the developers want to put a new distribution center for Home Depot. | RENEE SPRINDYS

As a way to mitigate concerns over truck impact, the township and Sterling/Hillwood, plus Wayne County, have proposed a revised Sibley Road design that would discourage truck traffic and be more attractive to other commercial, retail and pedestrian uses, according to a memo from John Enos, the township’s community development director.

The $8 million to $9 million cost for the road’s redesign and construction would be paid by the developer and Wayne County.

The redesigned road would include things like narrower lanes, limited turnaround capabilities for large trucks, pedestrian crossings and other

features that would limit truck traffic.

That doesn’t quell some of the anger over the project, however.

‘Truck City’ The 4-3 township board vote on Wednesday night flies in the face of a unanimous 9-0 planning commission recommendation in July to not approve the amendment that allows the new building, which would be built at the northeast corner of Prescott and Wahrman roads.

Planning commissioners said Sterling Group and Hillwood previously signed a resolution agreeing not to further develop warehouse/

distribution space beyond the Amazon buildings on the Pinnacle site, which spans some 650 acres. They also said reversing course paves the way for future backpedaling, and that the amendment is “not justified by a change in conditions.”

A former planning commissioner, RP Lilly, who served on the commission from 1998-2008, questioned the precedent during a public comment session on Wednesday night.

“I cannot remember in my 10 years of experience (on the planning commission) of a township board ever refusing to acknowledge a 9-0 recommendation from the planning commission,” Lilly told township

board members. “You might be able to set a record for yourselves if you upset that.”

A current planning commissioner, Debbie Musallam, wondered why the commission’s unanimous recommendation was being ignored.

“If you’re not going to listen to us, you might as well put a bunch of mannequins up there and do what you want anyways,” she said.

One woman who addressed the board but didn’t give her name believed the township’s reputation was at stake.

“If you vote for this thing, you will be known as the ones who made Huron Township ‘Truck City,’” she said.

Hot commodities Enos, in an interview, said the township is aware that it has finite amounts of land for industrial development and called warehousing and distribution space — hot commodities given the growth of Amazon and the accelerated shift toward online shopping — “more of a low hanging fruit in terms of uses that are being proposed in Southeast Michigan.”

See WAREHOUSE on Page 6

AUGUST 9, 2021 | CRAIN’S DETROIT BUSINESS | 5

HEALTH CARE

Parkinson’s disease strikes more patients as treatment improves Ailment affects growing number of people; study suggests COVID could increase cases

BY JAY GREENE

Parkinson’s by the numbers

Ronald Rutkowski of Spring Lake is one of about 30,000 people in Michigan and 1.2 million nationally living with Parkinson’s disease, a mysterious chronic ailment that has been affecting a growing number of people the past decade as they age.

A salesman for a builder, Rutkowski, 59, has been living with Parkinson’s the past 18 years. Each day he takes four medications and nutritional supplements that allow him to remain active and continue to work full time.

“Exercise is the key, as is eating right.

I still hunt and fish. There are certain things I can’t do,” said Rutkowski, who spoke softly, slowly and deliberately.

“I go to bed earlier and some days I have a hard time getting dressed in the morning. If I get upset or nervous, I start shaking like a leaf,” he said. “I try and pace myself.”

Parkinson’s disease affects 1 percent of people over the age of 60. While symptoms usually begin after the age of 40, younger patients in their 20s can be affected, said Dr. Roger Albin, professor of neurology, associate chair for research and co-director of the Movement Disorders Clinic at the University of Michigan Medical School.

Famous people with Parkinson’s include actor Michael J. Fox, 60, who developed the disease at age 29, and the late boxer Muhammad Ali. Rock singer Ozzy Osbourne, 71, announced in early 2020 that he has been suffering for years from a form of Parkinson’s called Parkin.

Medical scientists believe gene mutations cause up to 15 percent of all Parkinson’s, but some experts also speculate Parkinson’s can be triggered by environmental factors such as industrial chemicals and pesticides, including Agent Orange, the chemical used to spray vegetation during the Vietnam War. “There’s some data that there are environmental factors, but the associations are not super-strong and proving them is really quite hard,” Albin said.

Dr. Patrik Brundin, a leading researcher in Parkinson’s and director of the Center for Neurodegenerative Science at the Van Andel Institute in

` Approximately 60,000 Americans are diagnosed with Parkinson’s each year.

WAREHOUSE

From Page 5

“From the township’s standpoint, they felt they had a good amount of that and, with the approval of Amazon, they would want to provide areas in the township — the remaining 400 or so acres (of the Pinnacle site) — for other types of industrial development,” Enos said.

Of the 6.4 million square feet of new industrial space under construction in metro Detroit in the first quarter, the most recent for which data was available, some 5.7 million square feet was warehouse or distribution space, according to a report from the local office of Newmark Knight Frank, a New York City-based brokerage.

The market has a vacancy rate of just 4 percent, and the asking rents are $5.27 per square foot per year. In southern Wayne County, where Huron Township is located, warehouse/ distribution space commands slightly less, about $5.22 per square foot per 6 | CRAIN’S DETROIT BUSINESS | AUGUST 9, 2021

` More than 10 million people worldwide are living with Parkinson’s.

Albin

Brundin

Lanigan

Rutkowski

Grand Rapids, said the disease can be triggered by age, genetic predisposition and a history of infections.

“Some people who get Parkinson’s in western Michigan report anecdotally that they have been involved in spraying crops with pesticides, which has been suggested as a possible trigger. It’s not proven,” Brundin said.

Last fall, Brundin co-authored a paper that also suggested a COVID-19 infection could cause Parkinson’s-like symptoms in the weeks following exposure. While only three cases have been documented worldwide, according to a report in Trends in Neurosciences, Brundin and other experts believe more will be discovered.

“As we continue to grapple with the COVID-19 pandemic today, we also must consider its implications for the future,” said Brundin. “Evidence is mounting that side effects of COVID, such as inflammation and damage to the vascular system, could lay the foundation for development of Parkinson’s.”

Some patients who have contracted COVID-19 also have complained about lingering health problems, what is popularly called “COVID long-haul syndrome.” Symptoms include heart and kidney problems, lung damage and neurological issues such as blood clots and joint pain.

“COVID-19 is clearly a major and ongoing public health threat, but the consequences of infection may end up being with us for years and decades to come,” Brundin said.

Albin said he wasn’t surprised to read Brundin’s report because doctors believe viral infections could cause Parkinson’s later in life.

“There are historical precedents for this happening” after widespread infections in the population, Albin said.

“You could have a viral illness affect the brain because of age-related changes.

It might actually reduce the safety factor so that if you did have other problems come up, you’re more likely to develop Parkinson’s.”

Doctors say COVID-19 could weaken Parkinson’s patients. Rutkowski said he was vaccinated for coronavirus earlier this year and has taken extra precautions to avoid exposure. “I wasn’t worried. I wore my mask and kept my distance,” he said.

year.

Danny Samson, chief development officer for Sterling Group, told the township board that after dispelling what he called “a fair amount of misinformation,” some “folks have been open minded, have been able to understand that what we are talking about is not doomsday and can be very contributory and beneficial to the community beyond the simple tax base.”

And Jeremy Caddy, the township treasurer, echoed that there was “misinformation.”

“I’m going to cut to the chase and be brutally honest. There is a lot of misinformation … My fear is if we don’t control the rules of the game on this property now and we deny this, we are getting manufacturing, high impact manufacturing, they’ll get a tax abatement ...” Caddy said.

user of a pair of new buildings — one totaling 516,760 square feet and another totaling 752,400 square feet — on the former Pinnacle site in December. The buildings, located at 33700 and 33701 Prescott, were to cost at least $47.4 million.

That construction cost is about $37.35 per square foot. At that rate, a 450,000-square-foot building for Home Depot would cost about $16.8 million.

In December 2019, the joint venture between Sterling Group and Hillwood finalized a $4.9 million purchase of the 650 acres of land that used to be the Pinnacle Race Course.

Post It Stables Inc., the previous Pinnacle owner, failed to redeem the land from tax foreclosure earlier that year. The race track was open 2008-10 and it had been listed for sale for $8 million several years ago. The county spent $26 million during the Robert Ficano administration putting infrastructure to the site to get the track open.

Hillwood, which is run by Ross Per-

A big deal Amazon, the Seattle-based e-commerce behemoth, was revealed as the

Parkinson’s early signs While there isn’t a blood test or a cure for Parkinson’s, Albin said the disease can be managed. Modern treatment, which started in the late 1960s, includes medication and surgical therapy.

Unfortunately, a large percentage of people who begin to exhibit Parkinson’s symptoms and feel something is wrong with their body don’t seek immediate care, Albin said. The main signs are tremor, slowness of movement, stiffness and poor balance.

It took Rutkowski a year to see a doctor.

“I was working on the house and thought I had a stroke. I was shaking a lot,” he said. “I hesitated because I don’t like to see doctors. That caused a lot more problems. People don’t want to believe they have Parkinson’s. I tell people now the earlier you get treatment, the better it will be.”

Mary Sue Lanigan, CEO of the Michigan Parkinson Foundation in Bingham Farms, said many people get worse when they hesitate to see a doctor.

“They appear rigid, they have balance issues, they fall,” she said. “They have cognition problems, they freeze

` Incidence of Parkinson’s increases with age, but an estimated 4 percent of people with the disease are diagnosed before age 50. ` Men are 1.5 times more likely to have Parkinson’s than women.

and are stuck in one place.”

Rutkowski sees his doctor at Mercy Health St. Mary’s Hospital in Grand Rapids every three months, depending how things are going.

In 2007, he had a deep brain stimulation surgery, one of the treatments for Parkinson’s that reduces tremors, or dyskinesia, the involuntary movements.

“I was shaking so much and I didn’t want to be overmedicated..., so deep brain stimulation helped me,” Rutkowski said.

Albin, who heads up a movement disorder clinic that treats about 3,000 patients at Michigan Medicine, said medication is the first option. Patients also may need physical, occupational and speech therapy.

For those with severe tremors, deep brain stimulation can be a good surgical option when medications aren’t working well, Albin said. It helps relieve stiffness, allows more movement and may also reduce the severity of tremor.

“A device, which acts like a pacemaker for the heart, is surgically installed” to deliver mild electrical pulses to stimulate the brain’s motor region, Albin said. “It helps speed movement.”

Medications help because Parkinson’s is caused by the deterioration of nerve cells that make a chemical called dopamine. Drugs such as Levodopa help increase dopamine levels in the brain that can improve conditions.

Mental health is another side effect.

“Some have mood disorders that we and other a lot of groups have advance practice providers (physician assisot Jr., did not respond to an email last week. A message was sent to Sterling Group seeking additional comment.

The two Amazon buildings were sold as part of a $2 billion deal — reportedly the largest U.S. industrial deal by total cost during the COVID-19 pandemic — to a joint venture between San Francisco-based Stockbridge and the National Pension Service of Korea.

The deal overall includes 23 logistics buildings totaling 14.3 million square feet across the country, according to a press release.

Warehouse boom The Home Depot building would be the latest large warehouse to crop up the last few years in metro Detroit.

Most notably, Amazon has well north of 10 million square feet built or under construction in places like Huron Township, but also Detroit, Pontiac, Shelby Township, Romulus, Hazel Park and elsewhere.

Speculative projects have also been

tants and nurse practitioners) handle them with counseling and medication management,” Albin said.

Brundin works closely with Pine Rest Christian Mental Health Services near Grand Rapids to help Parkinson’s patients with depression. He said more primary care doctors should collaborate more with mental health providers.

Rutkowski said he hasn’t experienced depression, primarily because he stays busy and volunteers as an advocate for Parkinson’s patients. “I get disappointed sometimes when I have difficulty getting up. It is a challenge, but it is part of your life now,” he said.

Access to care limited Few Parkinson’s specialists live in rural or non-urban areas, causing transportation problems for patients.

“Most movement disorder doctors live in southern Michigan or Grand Rapids,” Lanigan said. “Access to care and travel is a problem.”

Brundin, whose father was diagnosed with Parkinson’s when he was 13, said telemedicine can help reach patients in remote areas or for those homebound.

“Parkinson’s is an underserved specialty with 68 percent of people not seen by specialists,” said Brundin,” a Swede who came to the U.S. in 2010 to head up research at Van Andel. “It is beginning to change the last five to seven years.”

Support groups increasing The Michigan Parkinson Foundation was founded in 1983 by Dr. Raymond Bauer, a neurologist at DMC Harper Hospital. It now has 70 support groups across Michigan, including Tuesday night online meetings, Lanigan said.

Bauer’s vision was to help educate the public about Parkinson’s and help people live fuller lives. The average age of a Parkinson’s patient is 58 and some live well into their 80s, Lanigan said.

“Home care is very expensive and as people grow older they can get serious health issues as they age,” said Lanigan. built or are under construction or in pre-construction phases in places like Lyon Township, Shelby Township, Harper Woods and Detroit.

Kansas City-based Flint Development is proposing 2.3 million of speculative space at the former Ford Motor Co. Wixom plant site as well as on about 45 acres in Pontiac on land owned by defense contractor Williams International Co. LLC. Another developer, Riverside, Mo.based NorthPoint Development LLC, has town down the former Cadillac Stamping Plant in Detroit so it can erect a 682,000-square-foot building in its place. NorthPoint is also working on projects in Warren at a former General Motors Co. property as well as the Eastland Center property in Harper Woods.

Ashley Capital, based in New York but with an active office in Canton Township, also has several projects in the pipeline and underway.

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

REAL ESTATE

Fort Pontchartrain hotel plans to renovate, reopen the Top of the Pontch

BY KIRK PINHO

The newly renamed Fort Pontchartrain hotel in downtown Detroit is expected to be renovated next year, and the Top of the Pontch restaurant is slated to reopen.

A press release Wednesday announced details of the changes — including a formal confirmation of the name change to the Fort Pontchartrain, a Wyndham Hotel, from Crowne Plaza Detroit Downtown Convention Center — planned for the 25-story hotel at 2 Washington Blvd. The renovation budget was not released.

Crain's first reported the name change July 23.

The Top of the Pontch closed four years ago and became event-only space, Eater Detroit reported at the time. It opened in 2014.

A press release Wednesday said the restaurant will open for breakfast and dinner and will offer a "casual concept" with a midwestern focus.

"The restaurant is going to be more comfortable with a range of items from a burger to top-shelf steaks, but would allow guests without a dress code as they had in the past," Sherri Cavanaugh, director of sales and marketing for the hotel, said in an email. "We want the space to be seen and frequented for every day — not just a special occasion."

She said the goal is to have the restaurant open by the fourth quarter, pending staffing.

Signage reflecting the hotel's new name is expected to go on the building by the end of the month.

Renovations to guest rooms — including new TVs, flooring and decor — are planned, as are improvements to common areas, Cavanaugh said.

The Crowne Plaza — which was originally named the Hotel Pontchartrain, in an homage to an earlier downtown hotel — reopened almost exactly eight years ago after a $5 million renovation to its rooms, restaurant and lobby, Crain's reported in July 2013.

The 25-story hotel, which has 367 guest rooms, is owned by a Mexican and European investor group called Operadora de Servicio Para Hoteles de Lujo.

There had been plans over the years to build a 28-story second tower but those plans fizzled nearly three years ago after a labor dispute with City Council.

The ownership group bought the Hotel Pontchartrain out of bankruptcy for $8.5 million in 2012.

The hotel was built in the mid1960s.

Its name was an homage to the Hotel Pontchartrain, which stood from 1907 to 1920 at the corner of Cadillac Square and Woodward Avenue downtown before it was demolished, to be replaced by the First National Building, according to Historic Detroit, which tracks Detroit buildings and architecture.

But the name's roots in Detroit go

back further than that: Fort Pontchartrain du Détroit was established in 1701 by the French, lead

by Antoine Laumet de la Mothe Cadillac, as a permanent military outpost that was the first European settlement of Detroit.

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

The Fort Pontchartrain hotel is expected to undergo a renovation next year. | COSTAR GROUP INC.

LEARN ABOUT YOUR HOMETOWN WITH THESE FREE DETROIT HOMECOMING PRE-EVENT WEBCASTS AUGUST 17 — COMING HOME A two-part discussion featuring “boomerang expats” who’ve moved back to Detroit and a second panel filled with suggestions on how you can own and run a company

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FOR A LIST OF ALL THE SPEAKERS AND MORE DETAILS, REGISTER AT https://cvent.me/n9NoN3

AUGUST 9, 2021 | CRAIN’S DETROIT BUSINESS | 7

COMMENTARY

How Beaumont-Spectrum merger will benefit Michigan DANIEL SAAD FOR CRAIN’S DETROIT BUSINESS

BY JULIE FREAM AND ROBERT ROTH

EDITORIAL

Time to get tougher on employee vax incentives

I

ncentives come in many forms.

For employers trying to encourage workers to get vaccinated, the trend so far has favored the carrot approach: gift cards, days off, lottery drawings.

The approach — besides being unfair to those who got vaccinated at the first opportunity — has largely fallen flat. There’s been a slight uptick nationally and in Michigan in vaccinations as the Delta variant surges, but otherwise, the vaccine-resistant are clearly not moved by free Starbucks and a little PTO. Even million-dollar state government payouts haven’t moved the needle much.

Now comes Rocket Companies Inc. with the stick. Its solution may well be the best yet — and a roadmap for companies to follow.

The Detroit-based mortgage giant on Wednesday announced it would require unvaccinated employees to undergo weekly COVID testing and to mask up in the office.

It’s a simple, fair, cost-effective mandate without a mandate. Those who don’t want the shot don’t have to get it. But the time-consuming and potentially uncomfortable weekly testing may well push some fence-sitters into rolling up their sleeves.

“As the Delta COVID variant continues to spread, we will remain vigilant and take every action we deem necessary to protect our people and our hometowns,” the company said in a statement.

The testing requirement starts Aug. 23. It’s a significant decision not just for Rocket but for the fate of downtown Detroit, which became a ghost town as office workers disappeared during the pandemic.

Rocket Companies, which includes Rocket Mortgage, Rocket Auto and other financial services firms controlled by billionaire Dan Gilbert, employs about 26,000 people and began bringing workers back to offices in early June.

Health care systems and universities have obvious incentives to simply mandate the vaccine, whose efficacy is borne out by hard

data every day. For now, though, private companies appear to be understandably reluctant to require their workers to get the jab, even though it’s perfectly legal.

But the luxury of choice may not last. The Delta variant is changing the equation for many companies who were counting on a smooth return to the office this fall.

COVID-19 cases, hospitalizations and vaccinations are on the rise in Michigan, averaging about 905 new cases per day last week from 377 average the week prior.

The state reported 294 COVID-related hospitalizations across the state last week, up from 256 the week before. Deaths are also slightly up, but remain at near the lowest levels of the pandemic thanks largely to the proven efficacy of vaccines.

Meanwhile, the U.S. Centers for Disease Control and Prevention has identified 44 counties in the state with either a high or substantial level of coronavirus transmission, up from just 10 late last week.

Rocket’s approach is not a one-sized-fits-all solution, to be sure. Many smaller companies lack the resources to coordinate wide-scale testing, and in this tight labor market, the fear of driving employees away is real.

But for downtown’s largest and most visible employer, it’s a timely response that could very well save jobs. Restaurants and other small businesses downtown are desperate for the foot traffic generated by the folks streaming in and out of One Campus Martius and other downtown offices.

It’s time for businesses to get serious about the repercussions from an unvaccinated workforce. We are hopeful that FDA approval of the vaccine — expected any day now — will provide much-needed muscle for employers to make their case and ease vaccine resistance.

In the meantime, sheer inconvenience may well do the trick in getting business back to business in the way that only vaccination can.

B

eaumont Health and Spectrum Health share a commitment to improving the health of individuals throughout Michigan. It is at the core of everything we do.

Driven by that commitment, in June, we anJulie Fream is nounced our intention to board chair of create a new health sysBeaumont tem For Michigan, By Health.

Michigan.

As board chairs of Beaumont Health and Spectrum Health, and business leaders in the manufacturing sector, we know the importance of high-quality, affordable health care.

In the weeks since our announcement that we are exploring creating a Robert Roth is new health system togethboard chair of er, leaders of our organizaSpectrum tions have had conversaHealth. tions with doctors, nurses, team members and Michiganders about the future of health care in our state. We are energized by the passion and ideas that we have heard as well as by the questions they have asked.

This feedback is important to us and aligns with our plan to provide care and coverage that is exceptional, equitable and affordable for the communities we serve.

Exceptional quality Quality and safety will always be at the center of our work. The drive toward high-quality care for our patients and members never ends.

In health care, we are always pushing to reach the best possible clinical results and health outcomes. Clinical quality is a strength at both organizations, and sharing these best practices will raise the bar for all hospitals and physician practices. Collaboration among our expert doctors and clinicians alongside Priority Health will enable us to share knowledge and raise the bar for care delivery across the state.

By bringing together our complementary clinical strengths, such as Beaumont Health’s U.S. News & World Report nationally ranked specialties, Spectrum Health’s top 50 children’s hospital and adult three-star (the highest level of quality) Coronary Artery Bypass Graft cardiac surgery program, and Priority Health’s highest-quality (four of four apples) Medicaid program and highly rated (four stars) Medicare Advantage program, we will advance care quality for all Michiganders.

Equitable care for all With a bedrock of quality care and health outcomes, we will focus on care that is acces-

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com.

Please include your complete name, city from which you are writing and a phone number for fact-checking purposes.

8 | CRAIN’S DETROIT BUSINESS | AUGUST 9, 2021

sible in every way for those we serve. Our collective efforts to promote health equity will be prioritized.

We know that convenient access to care — particularly for underserved communities — is essential to achieving health equity.

And, we know that true access requires that care be available, acceptable, appropriate and meets people as they are, wherever they are.

As one team, we can direct more resources toward removing social barriers to care, reaching more communities in need, and closing Michigan’s health care equity gap.

Together and with Priority Health, we will find new and unique ways to meaningfully improve health outcomes for patients by preventing and managing chronic conditions like diabetes and heart disease that affect more than 60 percent of Michigan adults and contribute to rising health care costs.

We can identify programs that are working to improve health outcomes for the underserved and develop new services that help people stay healthy and out of the hospital by using our community-based resources.

Affordability on the horizon As employers, we know that health care costs are a concern. That’s why affordability is part of this conversation.

Beaumont Health and Spectrum Health QUALITY AND will work to provide the communities we SAFETY WILL serve with greater health care value by ALWAYS BE AT collaborating with THE CENTER OF Priority Health and other health insur- OUR WORK. ance plans to develop value-based care models that emphasize health, well-being and preventive care.

These care models focus on getting and keeping consumers healthy rather than spending the majority of an individual’s health care dollar on sick care.

For those with chronic conditions, it means helping them have easy access to care in their primary care office or at home — yes, even a series of house calls may be more cost-effective than a hospital visit.

Across Michigan, our new system will be a leader in collaborating with other health champions to deliver models of care that work better and are more affordable while delivering higher quality and better community outcomes.

Ultimately, the new health system we are creating together is about you — the people we care for throughout our state. Our leadership teams are working diligently to further define how our health systems will work together to realize the full potential of our planned new organization. We are enthusiastic about the path forward and the future of health care in all of our communities.

In the meantime, we understand our patients, members and communities have questions about our future together. We encourage patients to visit ForMichiganByMichigan.org to learn more.

Sound off: Crain’s considers longer opinion pieces from guest writers on issues of interest to business readers. Email ideas to Managing Editor Michael Lee at malee@crain.com.

CRAIN’S VIDEO SERIES

UM’s Mark Schlissel on how you pivot a $10 billion business overnight Mark Schlissel’s background studying infectious diseases came into focus in 2020.

But as the leader of the University of Michigan with over 40,000 employees and 40,000 students that does “business” in fields ranging from health care to sports and is almost a city unto itself dealt with the COVID pandemic, the university’s countless other experts were called upon to weigh in.

It was the pivot of all pivots.

Schlissel spoke with Crain Communications CEO KC Crain last week about dealing with that crisis, lessons learned from it that will stick, and what UM’s future endeavors in the city of Detroit might look like. | BY KC CRAIN

` It’s not slow.

I have to be careful. ` How are you doing?

Still trying to keep up with the pace of a very changed world. ` Your background is very scientific.

What made you want to do this job, which is very far from where you began?

I was a kid who grew up thinking he was going to be a medical doctor, you know, the sort of Marcus Welby model or Dr. Kildare model of a different generation. But I went to college at Princeton. And there you had to do lab research if you were a science major.

And I fell in love with lab research with biochemistry. And so I did go on to medical school. But I also got a Ph.D. at the same time from Johns Hopkins studying developmental biology. I did a residency in internal medicine. So I’m board-certified as an internal medicine doc, and then I did postdoctoral research up at MIT studying the immune system. And as a faculty member for 20 years at Hopkins and Berkeley, I ran a research lab studying antibodies and vaccines and how the body responds to viruses. ` Did you dust off any of the old notes?

It wasn’t a matter of dusting off. We were living it. ` And so 20 years doing lab research, getting smarter about how the body works, and viruses and things like that. How did you get into the business side of things?

It’s really interesting. The way it works in the academy is senior faculty members step up and take a turn leading things. So you run a search committee, you run a graduate program, you chair a department, and then you all the while do your own research and your own teaching. And I kept doing things, enjoyed them, I got asked to do the next thing maybe

INTERVIEWS BY CRAIN COMMUNICATIONS CEO KC CRAIN WITH PROMINENT BUSINESSPEOPLE. TO WATCH THIS INTERVIEW, GO TO CRAINSDETROIT.COM/ ONEONONE.

` You basically run a $10 billion company.

And it’s a complicated business. We do everything from education to all different types of research, to cultural presentations to sports entertainment.

` KC: Welcome to Detroit.

Schlissel: It’s a pretty morning. And the city’s never looked better. ` You just mentioned to me you bought a new car. You know, we also have some automotive publications.

And I’m sure our audience would be thrilled to hear about that small little change you made.

Being in Michigan and wanting to support the state when I first came here, I looked at Ford and GM for my official university car. I had a Fusion for five or six years. But then I fell in love with the advertising around the Mach-E, the new Mustang, and it fit really well with our carbon-neutrality work on campus being 100 percent electric, and it’s a beautiful car. It’s comfortable. It’s fun to drive. It’s a gadget on wheels.

THIS IS THE LATEST IN A SERIES OF

University of Michigan President Mark Schlissel | UNIVERSITY OF MICHIGAN

other people didn’t want to do them, so I was the last guy standing. And then I started getting headhunted for things.

So when I was a chair of a molecular biology department at Berkeley, the provost there asked be to be the dean for biology. Then search firms started pinging me for leadership jobs at the next level around the country. And that’s how I ended up at Brown as the provost or the chief academic officer.

And then when you were provost in the Ivy League, it’s kind of like being on the farm team to be a president.

And Michigan was searching, a few people recommended me, and the rest is history.

to give students off Thursday and Friday and give the faculty off Thursday and Friday, and Monday morning, they were in class again, but this time it was online ... But there was that Thursday or Friday, and they didn’t come back after the weekend. And we went remote. And in the weeks thereafter, you know, the governor basically pulled the economy back and everybody was working remotely shortly thereafter.

` How do you pivot like that in three days?

You’ve got lots of good local leadership and lots of smart people and you know, people that are willing to embrace the moment and experiment. And you know, we really didn’t have a choice. ... The idea was to focus on people’s health and safety, while we maintained as much of the mission of the university as we could. We prioritized keeping people employed as we went into a kind of work-at-home mode, keeping people healthy, keeping the health system up and running. It was a lot to do and a lot of uncertainty. The other really interesting thing, KC, is it’s a great example of having to make decisions under the setting of uncertainty. We know a ton more about the virus now than we knew about it when we first started. ... It really took a while of decisions with incomplete information to keep trying to get it closer to right.

` So how do you deal with that?

I rely a lot on people who are really smart and have lots of expertise. ...

Our executive team was meeting on an incredibly regular, hours-a-day basis. We call in experts as needed. But one of the really interesting learning experiences of this is: Usually relying on expertise does the trick, but it turns out in a community that’s undergoing something that really hasn’t happened to it before ... there’s a lot of fear and a lot of anxiety. And people want to be heard, they want their leadership to understand what the experience of the pandemic is like for them. So we can think about it, you know, as a virologist, or as a medical doctor, or as an immunologist, how do we keep people safe, but we also have to take account of how they’re feeling about things and what their lived experiences are like and what their fears and anxieties are, whether they’re rational or not.

And that was a big part of the learning curve for me, is understanding how to incorporate not just expert opinion, but the lived experience of the tens of thousands of people.

See SCHLISSEL on Page 18

` And how did you decide on Michigan? I’m sure there were many offers.

There are lots of places that wanted me to come and visit but Michigan’s amongst the handful of places that if you don’t go and look, you might have passed up the opportunity of a lifetime. ` We all obviously went through this major disruption. We’ve talked to people that run automakers that have shut plants down, then figured out how to keep employees safe.

You kind of have both sides of it. But take us back to January last year.

Back in January of 2020, (COVID-19) was on the radar screen, but it was at a distance. And we’ve had a number of pandemics around the world that have only reached our shores in very tiny numbers, you know, Ebola, SARS, various epidemics of influenza. This one was on people’s radar screen, it was scary, it was spreading. And it became pretty clear in February that the United States was going to become quite heavily involved with COVID-19.

But I remember a Thursday in March, I can’t remember the exact date. But the leadership team got together, the trends were all heading in the wrong direction. Seattle was overrun, New York City was starting to get infections, it was only a matter of time until we had our first case in Michigan, we hadn’t had a case yet. And we decided to go remote. So you know, we decided

Resiliency starts with understanding Resiliency combats uncertainty, and it starts where experience and perspective meet. That’s why Deloitte offers informed articles and webinars on economic factors, sector impacts, government funding, talent implications, responsive leadership and more, all from sector and business subject matter specialists.

Stay informed at deloitte.com/us Copyright © 2021 Deloitte Development LLC. All rights reserved.

AUGUST 9, 2021 | CRAIN’S DETROIT BUSINESS | 9

CRAIN’S MICHIGAN BUSINESS: TRAVERSE CITY

PANDEMIC PIVOT

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Company helps local growers, sellers market their food, wares

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PAGE 12

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ARROWHEAD INCUBATOR

BOLSTERING THE BUSINESS ECOSYSTEM Traverse City region blooms with a diverse economy JC and Steve Bailey, owners of Bailey’s Farms, part of the Arrowhead Incubator.

Executive launches incubators for health care startups, Native American entrepreneurs | BY TOM HENDERSON Lauren Bigelow overcame bad

timing to help launch two niche business accelerators within the 20 Fathoms incubator in Traverse City, one focusing on digital and telehealth health care services, the other helping grow early stage companies owned by Native Americans and to help Native Americans win federal, state and local government procurement contracts.

Bigelow is a longtime fixture in the entrepreneurial ecosystem in southeastern Michigan. From 2010-2016 she was executive director of the Accelerate Michigan Innovation event in Detroit, which awarded $500,000 to the winning early-stage company in the biggest and most prestigious pitch event in the state. She continues to teach a graduate level course on energy financing every winter at the Ross School of Business, which she has been doing since 2013. And she was recruited to take the reins of 20 Fathoms, an incubator launched in July 2018.

10 | CRAIN’S DETROIT BUSINESS | AUGUST 9, 2021

“WE WANTED TO IDENTIFY THE BEST TECHNOLOGY THAT CAN MOVE THE NEEDLE ON RURAL HEALTH CARE.” — Lauren Bigelow, executive director, 20 Fathoms

Bigelow started at 20 Fathoms — named for the distance one can see in the clear waters of Grand Traverse Bay — in January 2020, two months before the pandemic hit. “Helluva timing,” she said.

She decided to forge ahead with a planned incubator-within-the-incubator called HealthSpark Accelerator. The previous July, 20 Fathoms won a $750,000 grant from the U.S. Economic Development Administration as part of the EDA’s Regional Innovation Strategies Program.

Health care technology was a core piece of the application. The grant came with $750,000 in funds from other Traverse City entities.

Bigelow needed to have the accelerator go virtual, and she also decided to broaden its horizon

dramatically, opening it up to startup and early-stage health care companies nationally that provide digital and telehealth services.

“We wanted to identify the best technology that can move the needle on rural health care,” she said.

In May 2020, Bigelow recruited another brand name, Jack Miner, to run it. From September 2016 to April 2020, he was the managing director of Cleveland Clinic Ventures, and from 2013-2016 was director of the venture center in the office of technology transfer at the University of Michigan. There, he managed an annual budget of more than $2 million and helped spinoff companies from UM get $2 billion in followup funding.

See 20 FATHOMS on Page 14

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In this package ` Executive launches incubators for health care startups, Native American entrepreneurs. PAGE 10

` Automotive and aerospace parts manufacturer prepares for a post-pandemic bounce. PAGE 14

` Drone startups fly higher after altering their paths. THIS PAGE

` Thompson Surgical finds niche meeting surgeons’ needs. PAGE 15

Drone startups fly higher — after altering their paths Interactive Aerial, Hybrid Robotic find increased revenue from selling components, services

ARROWHEAD INCUBATOR

BY TOM HENDERSON

The drone technology program at Traverse City’s Northwestern Michigan College has produced two companies, Interactive Aerial Inc. and Hybrid Robotic Inc., that are sharply increasing their revenue, have happy customers and are hiring.

Both of them have done so by adapting to market needs in ways not foreseen in their original “flight” plans.

Most of their combined revenue isn’t coming from building and selling drones, as their founders originally intended, but from selling components and services that were in more demand than completed drones and easier to make and sell.

Interactive wanted to make drones to do interior inspection of such large spaces as cargo and ballast holds on ships, large storage tanks for chemical and oil companies and refineries, and of large smokestacks and boilers for the pulp and paper industry. When the company realized companies didn’t want their own employees operating drones in interior spaces, it began offering inspections as a service, then expanded that with a patent-pending non-drone interior inspection system called the Zenith, which is a camera on the end of a line dropped into an interior space and controlled remotely.

Interactive counts Midland-based Dow Chemical Co. and Cincinnati-based Procter & Gamble Co. as Zenith customers.

Hybrid’s plan was to build a large drone called the Catalina that could fly equipment for a landing on water, then lower cargo such as cameras to inspect underwater fuel pipes or remote-controlled robots for law enforcement to investigate accidents and search for missing bodies.

It hopes to have a finished drone ready for demonstration in the first quarter next year and to be selling it in the third, but meanwhile has a fast-growing business selling other components, such as winches and search and recovery robots, also known as SARBOTs. Casey Cowell was an early investor in both companies through Boomerang Catapult, his early-stage Traverse City-based investment company. Cowell founded U.S. Robotics Inc. in Chicago in 1976 with $200 when he was 23 and grew it to be the world’s dominant maker of computer modems. The company went public in 1991 and was sold to 3Com Corp. in 1997 for $6.6 billion.

The company also made the Palm Pilot. Cowell was president and CEO until 1996.

He said it was crucial that both drone companies were smart enough to pivot from original business models.

The Zenith inspection system at a coal silo at a powerplant in Nebraska. | INTERACTIVE AERIAL INC.

“The original plan to build drones was extremely complicated. There was a long sales cycle, and it’s hard to convince buyers to buy. But they pivoted and Stephens are writing orders. They are making it happen,” he said.

Jason Slade is director of technical programs at NMC, which includes the 10-year-old drone program, one of the oldest in the country.

“Interactive Aerial launched in our maker space at the college.

They were hyper drone-focused, and it’s been interesting to see how they have adapted as they realized there were other markets out there,” he said. “Hybrid used them as a model. They saw they had to have some breadth. Interactive was nimble, and it was OK for them to be, too.”

Interactive Aerial was founded in 2016 by three NMC students, Justin Bentsen, now the hardware engineer; Chris Schmidt, the software engineer; and Pierce Thomas, manager of production and inspection services; as well as Christian Smith, the company president who grew up in Midland with Bentsen and at-

tended the University of North Dakota for its manned aviation and flight school program before joining them in Traverse City.

Early funding was from friends and family, with the company generating revenue early on. For three years, three of the co-founders actually slept on mattresses in the office, pouring as much money as possible back into the business, hiding the mattresses in closets when visitors arrived. The fourth was able to live with his parents.

The company’s CEO is Mark Stephens, whose path to the head of the company was unusual, to say the least. He met the three NMC co-founders when he was a 65-yearold taking classes in the drone program at the school, and they were the student instructors teaching his classes.

In 1980, he founded a plastic injection-molding company in Ironwood in the Upper Peninsula called Ironwood Plastics Inc. By 2010, when he sold it, it had 300 employees in Michigan and Wisconsin. He remained with the company for more than three years, then moved to Traverse City.

He didn’t move to Traverse City to retire. He knew he would be active in business, he just wasn’t sure how.

“I didn’t know a single person, so I started networking,” he said. “Four

people told me someone needed to start a drone company because there was a great drone program at the college, but that kids go through the program then leave.”

So, in 2015, Stephens, a mechanical engineer, enrolled in the school to check the program out. That year, Interactive’s founders got the idea to develop a drone for internal inspections. “All the hype was doing outdoor drones. We thought, ‘Why not make a drone that can go inside things?’” said Smith.

After the company was founded, Stephens followed its progress. In 2019, he became its lead investor and CEO, helping raise an investment round of $700,000.

Smith said the company doubled revenue each of the two years before COVID-19 and would have doubled last year too if not for the pandemic.

He said the company will double revenue this year and will become profitable by the end of the year. Stephens said revenue projection for this year of more than $700,000 should easily be bypassed and he expects the company will be able to fund growth out of cash flow and not need more equity funding.

The company has 11 employees, now, up from four in 2019, and has four distributors globally in about a dozen countries, including China, Canada and Indonesia. Smith said

the company only uses U.S.-made materials, such as carbon fiber components and circuit boards, for its drones and the Zenith. It does 3D printing on premises and uses Grand Traverse Tool to machine parts it can’t make itself, as does Hybrid Robotics.

“I come from a family business, so I know all the problems you can have with too many partners. Generally I don’t like to invest in companies with too many shareholders. Bad things can happen,” Stephens said. “But I’m glad I got involved.”

Brad Owens is president of Alternative Marine LLC, which operates unmanned underwater robots and does interior inspections of cargo holds and ballast holds for Great Lakes ships and underwater inspection of such things as propellers and shaft.

Though he is licensed to operate drones, he didn’t trust himself to operate them in enclosed areas, so he began hiring Interactive Aerial.

Impressed by the Zenith system, he says he will be using it next winter when the busy inspection season begins.

“I really enjoy working with these guys, and this takes it to a whole new level,” he said.

See DRONES on Page 12

AUGUST 9, 2021 | CRAIN’S DETROIT BUSINESS | 11

FOCUS | TRAVERSE CITY

MAKING A DIFFERENCE

As pandemic hits, company helps small growers, sellers of local foods pivot, market their wares

BY TOM HENDERSON

Traverse City-based Local Difference LLC, which does business as Taste the Local Difference, was the right organization at the right time when farmers and food markets across the state needed to change their business models after COVID hit last year.

The company helps small growers and sellers of local foods market their wares, creating social media campaigns and helping design or improve websites, all of which became crucial as walk-in or walk-up customers suddenly disappeared. And it has begun offering its services elsewhere in the country, as well, signing a contract last December to help a nonprofit in Montana that represents growers there.

Annie Olds, the regional director of the northwest region of the Michigan Small Business Development Center, got $260,000 for her 10-county region as part of the CARES Act funding that flowed through the state SBDC headquarters at Grand Valley State University to help local businesses try to offset some of the loss of revenue caused by the pandemic.

Taste the Local Difference got $60,000 of that. “I was able to hire consultants to provide one-on-one coaching and to provide other services to growers, and Taste the Local Difference became one of our local partners,” she said. “Never in my history with the SBDC have we talked about marketing so much with our clients. But with the pandemic, foot traffic being halted overnight, they needed to pivot to online and social marketing.”

Olds’ advice wasn’t just theoretical. She and her husband own a small

DRONES

From Page 11

Hybrid Robotics Hybrid Robotics got some attention and money when Matt Goddard, its CEO, did a five-minute presentation at a pitch event in October 2018 put on by TC New Tech, a nonprofit that puts on pitch events every month to showcase five early-stage companies. It won the top prize of $500 and the attention of Cowell.

“We were fresh out of college and ready to go,” said Goddard. “Casey walked up to us after and said, ‘I want to start a company.’”

Boomerang made an investment early in 2019 as part of a friends and family funding round of $200,000, and an S-Corp. was formed.

Goddard, the president, was a combat engineer in the U.S Marine Corps from 2009-2014 in Afghanistan and South Korea, whose specialty in the Middle East was finding improvised explosive devices, first with metal detectors and then with unmanned aerial devices. “I fell in love with drones,” he said.

A native of Eastpointe, he had 12 | CRAIN’S DETROIT BUSINESS | AUGUST 9, 2021

pork and beef farm in Kalkaska.

Tricia Phelps, TLD’s CEO, said her company ended up helping 13 growers in Olds’ region through the CARES Act. “We rebuilt their entire e-commerce platforms. We rebuilt their websites and their branding. We met with clients and talked them through the customer discovery process,” she said.

One of the beneficiaries was the Sara Hardy Downtown Farmers Market in Traverse City, where growers in Grand Traverse, Antrim, Kalkaska, Wexford, Leelanau, Benzie, and Manistee counties have been selling their goods for more than 30 years.

Jean Derenzy is CEO of Traverse City’s Downtown Development Authority, which runs the market. It is open from the beginning of May through the end of October, with vendors gathering from 8 a.m. till noon on Wednesdays and Saturdays.

Derenzy said she had been working with TLD for several years, with Phelps on the market’s advisory board and helping farmers improve their marketing and online presence and helping them launch blogs and newsletters. Derenzy said Taste the Local Difference had a big impact after COVID hit, quickly establishing an online ordering system and arranging a schedule for buyers to arrive and pick up food.

“We wanted to keep having an in-person market, but that was impossible. We could not have done this pivot alone,” she said. “Going online would have been a heavy lift for us, getting information online, posting photos, teaching vendors what they had to do. There was a lot to do and they got it done in four weeks. It was an incredible feat we couldn’t heard about the NMC drone program and upon leaving the service enrolled.

His co-founders are Aaron Bottke, head of R&D; and Ryan Mater, operations manager.

The company began in the maker space at NMC, then soon graduated, in true entrepreneurial fashion, to 800 square feet in a garage.

Goddard said they quickly realized getting a big drone capable of landing on water and taking off was going to be expensive and time consuming.

“A drone that can land on water and then launch a submersible on a 300-foot tether is very complicated,” said Cowell. “Then to return to the surface, reattach to the drone and fly, again, there’s a lot of pieces to that puzzle. It’s very expensive and a long sales cycle. Are there smaller markets for subsets of products? It turns out there are. They’ve knocked down some impressive orders and are a real company, now.”

“The market needed a lot of the technology we were building,” said Goddard, including winches, underwater lights and unmanned robots.

He says he has about 20 customers.

“Adapt and overcome. That’s what we say in the military, and that’s what

The Sara Hardy Downtown Farmers Market in Traverse City.

Growers and sellers had to pivot during the pandemic. |

Jody

TRAVERSE CITY DOWNTOWN DEVELOPMENT AUTHORITY

have done without them.”

Derenzy said that 49 growers ended up selling $165,000 worth of product to 2,900 online customers. She said vendors arrived at 6 Olds a.m. Wednesdays and Saturdays and volunteers delivered orders to customers as they arrived at the parking lot.

“I can’t tell you how rewarding it was last May, being outside, getting produce to customers. Were we tired? No, we were exhausted. But it was so exciting,” said Derenzy.

Another beneficiary was Light of Day Organics, a grower of organic teas in Traverse City made from various fruits, herbs, roots and bark. The farm grows more than 100 botanicals for its teas.

“Taste the Local Difference is an entity that we have the utmost respect for and will forever be cheerleaders for,” said Angela Macke, who

started the farm in 2003. “Taste the Local Difference most recently awarded us a grant to help transition us to an updated and improved website platform. The process was entirely positive, professional and efficient, and we could not be more grateful.”

Phelps, who previously managed several farm markets, has been with TLD since 2014, when it was transitioning from being a grant- and donation-supported nonprofit to a feefor-service business. TLD began 15 years ago as part of a 501(c)3 in Traverse City named Groundwork Center for Resilient Communities.

“Going to a revenue model has made us more self-sustaining,” she said. “To continue on, it needed to sustain itself.”

Jody Trietch is the majority owner of TLD. Last August, she bought control of the company from Casey Cowell, founder of Boomerang Catapult, an investment firm in Traverse City that had bought it in 2018. Trietch was and remains Boomerang’s CFO. “Her interest was in owning and running a business. She had come on

Matt Goddard, CEO, Hybrid Robotics | TOM HENDERSON/CRAIN’S DETROIT BUSINESS

had to be done here.”

One client became the History Channel gold-hunting series, “The Curse of Oak Island,” one of whose stars, Marty Lagina, is a Traverse City resident. Goddard said the show uses its equipment to film some B-roll footage using Traverse City as a back-

drop.

Another client is BlueLink Technology Partners LLC of Escondido, Calif. The company makes and distributes component parts and systems to makers of unmanned underwater vehicles, called remotely operated vehicles or autonomous

as a board member but wanted a bigger role,” said Cowell. “Jody is quick, smart, hardworking, a self starter. She has a knack for drilling into issues quickly. She’s got the whole package.

And she works well with people.”

Trietch was finance director for the city of Benton Harbor from 2012-15; the CFO for the city of Flint for a year, 2015-16, during its transition from state control to home rule; and the finance director for the city of Traverse City from July 2016 to November 2017 before joining Boomerang.

She says owning a food-related business was of particular interest to her, having graduated from the Morrison School of Agribusiness and Resource Management at Arizona State University. “Building strong communities through agriculture is a passion of mine,” she said.

“Taste the Local Difference has gotten more robust since Jody bought it,” said Olds.

Trietch said TLD is profitable, thanks in large part to its annual free Taste the Local Difference food guide.

Published in June with a statewide underwater vehicles. It also sells vehicles to sheriff ’s departments and state police for use in investigating boating accidents or for the recovery of bodies underwater as a result of accidents or floods.

Jeff Conger is president of BlueLink. He said got to know the team at Hybrid and officials in the drone program at NMC two years ago. He says he got Hybrid into some trade shows with him for free.

He said he joined Hybrid’s advisory board and became a customer in 2020 when a company in Torrance, Calif., that had been supplying him with robotic arms discontinued making them. “Aaron said, ‘We can make you an arm.’”

He said he was impressed with various components Hybrid had designed as part of the winch system that attached to the Catalina to lower an automated underwater vehicle into the water and later bring it to the service. He said the parts were better-looking and more efficient than similar parts he was buying from his previous supplier.

“I just love innovation and people doing cool stuff. I like seeing the younger generation, people half my age, doing cool stuff,” he said. “Their

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Helping control costs to drive more health care value Jody Trietch and Tricia Phelps | GARY L HOWE /TASTE THE LOCAL DIFFERENCE

distribution of 185,000 copies, the 2021 ad-heavy guide is 112 pages and includes maps of various regions of the state, with listings of local restaurants, farms, farmers’ markets, wineries, breweries, fisheries and retail outlets featuring local food and drink.

When Cowell bought TLD, it had two full-time employees and five part-timers. Trietch says those numbers are now at seven and four, respectively.

Trietch said that TLD engages with 3,764 food businesses in the state, with more than 600 buying various services.

Until recently, Trietch was volunteer treasurer of Goodwill Industries of Northern Michigan and is president of Impact 100 Traverse City, a nonprofit whose focus is recruiting more women to philanthropy. The original goal was to get 100 women to donate $1,000 each for a donation of $100,000 to a nonprofit in northwestern Michigan each year.

The organization was successful enough last year to donate $105,333 to each of three organizations in October — Habitat for Humanity; Michael’s Place, which helps children and adults recover from the trauma of a suicide by someone they know and love; and Newton’s Road, a pro-

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designs were beautiful. My concern had been that they were very young and didn’t have a lot of industry experience, but my engineers loved their designs.”

Conger said he has had Hybrid build SARBOTs or supply other components for the Utah Department of Natural Resources, the San Bernardino (Calif.) Sheriff ’s Department and the Oregon State Police. “I have them

vider of STEM-related services to youth.

Taste the Local Difference signed a licensing agreement in December with Abundant Montana, which is part of an organization called Alternative Energy Resources Organization, which Montana farmers formed in the 1970s to improve farming practices and increase yields. Helena-based Abundant Montana helps fund initiatives around the state and provides educational and other resources to small food producers.

After COVID hit and drastically altered the landscape for getting food and customers to markets, officials at an affiliated organization, Hopa Mountain, which helps Native American tribal leaders increase food production, came across Taste the Local Difference’s website. Lindsay Ganong, who was then the program director at AERO, began discussions with Phelps, leading to TLD’s first out-of-state contract.

Phelps said she is negotiating with food networks in other states, including Vermont and Illinois, and hopes to announce other licensing agreements soon.

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2 completely slammed. They barely have time to catch their breath, designing new stuff for me. Hybrid has done an amazing job compared to what my old suppliers were doing.

Aesthetics as well as function. It doesn’t just work well, it looks good, too. I’ve got eight to 10 products in mind for them to design. We can start selling them as soon as they come up for air.”

Hybrid has four employees and two interns, now, with Goddard saying he will be hiring five or six employees in the next two months to handle the expanding business for Conger and other clients and plans to add nine to 10 employees over the next year.

He said the company has had sales of about $200,000 in the last five months and projects up to $1 million over the next year.

He said he will begin raising an equity round of about $500,000 to fund growth soon. He said he expects Boomerang to write another check and is hoping the Traverse City-based Northern Angels will write their first check, too.

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson

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COLLEGE OF BUSINESS AUGUST 9, 2021 | CRAIN’S DETROIT BUSINESS | 13

FOCUS | TRAVERSE CITY

READY FOR LIFTOFF

Parts manufacturer prepares for a post-pandemic bounce-back

BY TOM HENDERSON

When the pandemic hit a year ago, Skilled Manufacturing Inc., a tier-one supplier of automotive and aerospace components and components for makers of medical devices, started shuttering its three facilities in Traverse City and laying off its 300 employees.

“Our auto business shut down entirely one week and the next week, our aerospace business shut down,” said owner and CEO Dodd Russell, a member of the Grand Traverse Band of Ottawa and Chippewa Indians.

But, “several days later, GM called and said, ‘We need your help.’”

The call from his longtime customer was to ask if Skilled Manufacturing could quickly ramp up the manufacture of some components GM needed to help make hundreds of thousands of ventilators as part of the federal government’s Operation Warp Speed.

“As soon as I got off the GM phone call, I called some of my guys and said, ‘Come on in, we gotta go to work.’ They were here in 45 minutes.”

A little later that day, GM e-mailed Russell some blue prints for parts.

“Saturday morning we got the call.

Two hours later we got the blue prints. That night we had built prototypes,” he said.

Russell said his company ended up building 12 components for venti-

20 FATHOMS From Page 10

Miner was such a brand name, alas, that on Feb. 21 this year, five days before the deadline for applications for the first cohort of 10 companies for the 12-week program, Miner was named by the state of Maryland to be chief investment officer of its Technology Development Corp., overseeing its three venture-capital funds.

In all, Bigelow was able to recruit more than 125 health care experts from around the country to serve as mentors and give advice on such things as protecting intellectual property, negotiations, procurement, networking and fundraising. Companies were promised more than 100 hours of individual attention from the experts.

They included a cadre of southeastern Michigan experts in starting and growing health care companies, including Jen Baird, who has launched a series of successful startups and is currently CEO of Ann Arbor-based Fifth Eye Inc., which provides clinicians quick diagnosis of a condition called hemodynamic instability; Adrian Fortino, manager of the Ann Arbor office of the Mercury Fund, a health care investor based in Houston; Allison Murdock, an analyst with Invest Detroit Ventures; Stephen Rapundalo, president and CEO of Ann Arbor-based Michbio, an bioindustry trade association; Bryce Pilz, director of licensing with the tech transfer office at UM; and Steve Schwartz, co-founder and CEO of Genomenon Inc., a well-funded company that uses artificial intelligence to organize ge14 | CRAIN’S DETROIT BUSINESS | AUGUST 9, 2021

lators made for Bothell, Wash.-based Ventec Life Systems and Mill Valley, Calif.-based Hamilton Medical Products Inc. GM made ventilators for Ventec.

Hamilton, which was also part of Operation Warp Speed, contracted with Skilled Manufacturing directly, on the recommendation of GM. Russell said the company made parts for 400,000 ventilators in the facility normally housing aerospace manufacturing, in a business park near the Cherry Capital Airport. “The plant ran 20 hours a day for 90 straight days,” said Russell.

Despite things getting somewhat back to normal, employment is still down at Skilled Manufacturing, to 180 from 300 before the pandemic.

“It took one week for our aerospace business to shut down. It’ll take two years to come back,” said Russell. The auto supply business was and remains its largest revenue producer.

Skilled Manufacturing makes airplane engine components and systems delivering fuel to the combustion chamber and fresh air to the passenger cabin. That business was hit hard when production for the Boeing 737 was put on hold after several crashes, and hit hard again when the pandemic emerged and airline traffic, and the need for new planes, stopped.

Skilled is a tier-one supplier to Boeing. On June 29, United Airlines nomic data to help doctors treat patients.

National participants included Aashima Gupta, director of global health care solutions for Google Cloud; Salim Hasham, global head of business transformation partnerships at Google; Ann Mond Johnson, CEO of the American Telemedicine Association; Cathy Lester, executive director of health care for Verizon Enterprise Solutions; and Peter Rasmussen, chief clinical officer at The Clinic, a joint venture between the Cleveland Clinic and Boston-based Amwell that focuses on digital health care.

Participants in the first accelerator were: ` Caregivers Insight, Midland — Offers a mobile app for in-home care by providing caregivers that documents a client’s well-being `Eebu Health, Ann Arbor — Its technology helps hospitals track patient follow-up and more fully engage patients in their care decisions. `Floreo Inc., Washington, D.C. — Teaches social, behavioral, communication and life skills for individuals with Autism Spectrum Disorder and related diagnoses. `IndividuALLytics, Ann Arbor — Provides focused, personalized treatments for complex chronic diseases and mental health disorders. `Innsightful, Sunnyvale, Calif. — Uses artificial intelligence to help students understand and manage their well-being using a wearable device and app. `Mobile Encrypted Data Xchange, Buffalo — Its encrypted data provides secure and easy provider-to-patient and provider-to-provider communications. `Nurse Disrupted Inc., Fitchburg, Wis.

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announced an order to buy 150 of the 737s.

“We have a lot of product on that plane,” said Russell.

A history in the business Russell has a long background in the automotive supply chain. His fa-

ther, Bill Russell, owned a tier-one auto supplier, Nish-Nah-Bee Industries, that occupied the same building in the city’s industrial park by the airport where Skilled Manufacturing made the ventilator components.

“I did everything in my dad’s business,” said Russell. “I started cleaning toilets when I was in high school, and

Alaura Anderson, owner/president of Arrowhead Bookkeeping | ARROWHEAD INCUBATOR

— Creates cost-effective telehealth video kiosks for clinics with few resources. `Rad AI Inc., Berkeley, Calif. — Its technology claims to provide a 25-percent savings in time to health systems and radiology groups in assessing and responding to radiology of patients. `Tellescope, Cambridge, Mass. — Offerse a patient engagement platform to improve patient care. `Vironix, Austin, Texas — Its technology provides early detection, monitoring, and wellness software for chronic and infectious lung and heart diseases.

The companies in the first cohort held a virtual demo night/pitch event, also virtual, to would-be clients and investors on June 30.

Bigelow said 20 Fathoms will begin accepting applications this fall for next spring’s cohort, which will remain virtual and have a national focus on advisers and participating companies.

Arrowhead Incubator The Arrowhead Incubator, which is housed in offices at 20 Fathoms, was incorporated as a 501(c)3 nonprofit last fall to support Native American businesses that grew out of a program called New Mexico Community Capital, which is one of its partners. The goal, said Shiloh Slomsky, Arrowhead’s first executive director and a member of the Little Traverse Bay Band of Odawa Indians, is to provide foundational business courses and resources to Native American entrepreneurs using culturally connected methods, and provide well-paying jobs not reliant on the gaming industry.

Participants learn how to write a business plan, apply for a loan, price their products, create a budget and network, among other things.

“The Arrowhead Incubator has an amazing potential to be impactful not just in northern Michigan but to scale

I went back to working at the company when I got out of college in 1991. I worked on the line, I did sales.”

His dad closed the business down and retired in 1997.

Eighteen years ago, Russell bought a majority share of Skilled Manufacturing and became its CEO. It has been a tier-one supplier for on a national basis,” said Bigelow.

“Working with its partners in New Mexico, it can get Native Americans access to resources and equity.”

Slomsky co-founded the incubator with two other Native Americans, Kyle Anderson and Thomas Wilbur.

Slomsky stepped down as executive director in July, after the first cohort of eight companies finished the program.

Anderson replaced her as interim director and is chairman of the incubator’s board. Anderson had been a member at 20 Fathoms when he and Slomsky made a pitch last year to the board of directors at 20 Fathoms about housing a Native American incubator.

The board quickly approved.

In October last year, the incubator was awarded a SEDS-GO grant of $200,000 from the Administration for Native Americans, a unit of the U.S. Department of Health and Human Services. SEDS-GO stands for social and economic development strategies for growing organizations, and is designed to improve services for Native American communities.

In July, Arrowhead was awarded a grant of $264,000 by the Native Procurement Technical Assistant Center of the federal government’s Defense Logistics Agency. Starting this fall, the grant will allow Arrowhead to provide assistance at no cost to Native American businesses in procuring federal, state and local government contracts.

The incubator is hiring two staff to help administer that program.

Eight companies participated in the first eight-week cohort that ended in May. They are: `Arrowhead Bookkeeping, Traverse City — Alaura Anderson, a member of the Grand Traverse Band of Ottawa

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Dodd Russell, owner and CEO, Skilled Manufacturing, which made ventilator parts for GM. | TOM HENDERSON/CRAIN’S DETROIT BUSINESS

more than 40 years.

“People think tourism is the largest economic driver in the five-county region. It’s not. It’s manufacturing,” said Russell. “We’re a global supplier nobody knows about.”

The company also has a die-cast aluminum parts business in Kunshan, China.

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and Chippewa Indians, launched Arrowhead Bookkeeping in 2020 to provide startups and small businesses with bookkeeping support. `Bailey’s Farms, Traverse City — J.C. and Steve Bailey started out as hobby foragers in their back yard. Today, their farm is home to six goats and 500,000 bees and they make a variety of sustainable products, including seven flavors of kombucha. Steve Bailey is a member of the Grand Traverse Band of Ottawa and Chippewa Indians. `MPC Backwoods, Kaleva — A wholesale retailer transitioning into e-commerce and providing purses, knives and other Native American goods.

In 2007, just before the Great Recession hit, Russell decided to expand into aerospace and attended a Jet Propulsion Laboratory conference in Los Angeles.

“I thought it would be an easy business to get into. It was the worst time you can start a new line of business, a real smart move.”

He said he was in the check-in line at the Hilton Hotel next to the Los Angeles airport. A woman asked him what he did. He said he owned an automotive machining business that was a certified minority supplier with the Michigan Minority Business Council and wanted to break into the airlines supply chain.

By happenstance, a woman behind him heard what he said and introduced herself as the head of diversity for Raytheon Co. “‘Can I buy you a cup of coffee?’” Russell recounted.

She asked him a bunch of questions about his business, then took him to the Raytheon booth at the convention. He almost immediately landed a $350,000 contract to make replacement shims for the landing gear of the F-16 fighter jet.

Russell said he is hiring now and is pretty sanguine about the aftermath of the pandemic.

“Long-term this will be good for us. There will be more strategic planning. How do you keep your people safe? What does it mean to have a safe and healthy work environment?” he said.

Contact: thenderson@crain.com (231) 499-2817; TomHenderson2 `Financial Literacy Services by Indigi Qkwe, Grand Rapids — Nicole Raphael offers financial literacy services and helps Native Americans buy homes through Section 184 of the Indian Home Loan Guarantee Program. `Daniwin Gashki LLC, Westland — This home-rental company is owned

by Andrew Myrick, a members of the Grand Traverse Band of Ottawa and Chippewa Indians. It buys and fixes up homes and has six properties, in Melvindale, Redford, Westland and Ohio. The company plans to start acquiring former ancestral lands of the Grand Traverse Band. `Chippewa Creations, South Haven — Pamela Harris-Kenwabikise spent 20 years making dream catchers and other Native America-themed art as a hobby before launching Chippewa Creations as a business last year. She creates a wide range of shapes and sizes of dream catchers as well as cards and bookmarks honoring Beaver Island traditions. `Onaabandan, Suttons Bay — This company personalizes household items using Anishinaabemowin, the sacred language of the Anishinaabe, the First Nations people of the Traverse City region. `3 Sisters Consulting LLC, Lansing — 3 Sisters Consulting LLC offers consulting services dedicated to supporting connections between women, both Native American and non-Native.

The incubator will welcome a second cohort next spring, with details yet to be determined.

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2

BUILDING A BETTER RETRACTOR Thompson Surgical finds niche making devices that meet surgeons’ needs in operating room

BY TOM HENDERSON

Traverse City-based Thompson Surgical Inc., one of the largest makers of surgical retractors in the world — devices that hold back skin, muscle and organs to allow surgeons better and cleaner access during surgeries — grew out of a need for a class project.

Dan Farley, now the chairman of the board, needed a project for an industrial design class at Michigan State University. His father, Albert, was a neurosurgeon and suggested he design a better retractor than what he was able to buy and use.

After Farley graduated in 1981, he took a sales job in Chicago with Johnson & Johnson and tried get the company to make and sell retractors based on his design.

“They weren’t interested,” he said.

But while selling medical devices for J&J, he came across another retractor, patented and sold by Richard Thompson, an anesthesiologist who had designed it to keep mouths open and tongues out of the way during tonsillectomies. “I saw there was a market for retractors, so I quit,” said Farley. That was at the end of 1982.

By then, Thompson had retired but had continued selling his retractors, operating out of his garage in San Mateo, Calif.

“I wanted Dr. Thompson to sell my retractors to neurosurgeons. Instead, he offered to sell me his company,” said Farley. “My wife and I laughed, because we had no money. But he offered to sell me the company over time and gave us $15,000 in inventory. It was a handshake deal.”

Farley slowly grew the business in Chicago before making the break to Traverse City. He said he had grown up in the Saginaw area and had vacationed in Traverse City and had spent his honeymoon there. He said the beauty of the area was an attraction, but the main selling point was escaping Chicago traffic. “The traffic was driving us crazy. Our kids weren’t in school yet, and we decided on a better lifestyle.”

What makes Farley’s retractors unique and, as it turns out, highly marketable, is that they attach to the tables patients lie on during surgery.

Previously, retractors were held by technicians or nurses in the operating room, something that could be arduous during surgeries that could last for eight or 10 hours. His retractors required no hands-on assistance during surgery, which freed those technicians or nurses to be of use elsewhere in the hospital.

Today, the company holds 38 patents for its retractors and other medical devices. “We also have several applications in the works and continue to add more and more each year, which will grow our patent portfolio,” said Stephanie Myers, the company’s manager of business affairs and professional development.

She joined the company 15 years ago as a new-product manager, the interface between surgeons and company engineers in designing new instruments. “The majority of our efforts go towards the development of

Stephanie Myers with part of a retractor | TOM HENDERSON/CRAIN’S DETROIT BUSINESS

Farley

surgical retractors, though we do make accessories and special products that work with retractors or assist exposure in general, such as surgical lighting systems or suc-

tion tips,” she said.

Myers declined to give sales figures but did acknowledge that “almost every major hospital in the U.S. owns a Thompson retractor. In addition, we sell to over 75 other countries around the world.”

She said Thompson also sells a high volume of retractors to other makers of medical devices, in particular Medtronic plc (NYSE: MDT), a Minneapolis-based maker of medical instruments that incorporates Thompson retractors into its surgical systems.

“It keeps them from having to work around our patents,” said Myers.

“They’ve really elevated our business.”

The company makes retractors for, among other things, spine surgery, transplant surgery, obstetric surgery, plastic surgery, hip surgery, cardiac surgery, urology surgery and laparoscopic surgery. Each retractor system contains a modular frame and a blade kit with dozen or more blades that might be needed by the surgeon to deal with the various kinds of anatomy encountered during an operation.

Steven Bolling, M.D., is a heart surgeon who has been a longtime user of Thompson retractors, retractors he actually helped design. He has been a heart surgeon for 35 years, specializing in mitral valve surgery at the University of Michigan Health System. He is also a professor at the university.

He said he had long been unhappy with retractors used during openheart surgery. “Mitral valve repair is a complex surgery, and I didn’t have what I needed in the retractors that were available,” Bolling said. “I began tinkering around in my basement. I came across Dan and Stephanie and gave them some ideas. We worked on a design and I got what I needed,

with different blades and baskets.”

That was about 12 years ago, and he and UM have been customers ever since.

“Dan’s company makes high-quality, high-end retractors.

They’re very responsive, good people to work with. You go to giant medical-equipment providers and you, as one person, don’t mean much to them. You do to Dan and his team,” said Bolling.

Thompson employs more than 60 at its three facilities on East Cherry Bend Road, just northwest of Traverse City at the base of the Leelanau Peninsula. Sales and marketing are in one building, engineering and quality control in another and a 15,000-square-foot manufacturing facility in the third. Myers said the company has bought another building with the ability to add another 10,000-square-feet of manufacturing if needed.

Myers said one big aid in recruiting is Thompson did an employee stock ownership plan or ESOP in 2014, which makes employees co-owners. “We’ve experienced a lot of growth since 2014,” she said.

Farley said he was motivated to do the ESOP as a way to protect and empower employees.

“One of our main competitors sold the company. The company that bought it moved the manufacturing to a different state and let all the employees go,” said Farley. “I’d had offers to sell but didn’t want that to happen. My financial adviser recommended an ESOP, and I’m glad he did. Employees are part-owners from the get-go.”

Thompson was an essential business and remained open during the pandemic, but the business was hit hard, since most sales are to hospitals, which sharply curtailed or halted elective surgeries for months when the pandemic was raging.

Business has picked up dramatically, which is why Farley bought another building if more manufacturing space is needed. And Myers said the company has posted two job openings and soon will post two more.

Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2 AUGUST 9, 2021 | CRAIN’S DETROIT BUSINESS | 15

DETROIT

Detroit cultural institutions still recovering from flood damage Basements flooded, artwork was damaged and some buildings shut down for repairs

BY ALLISON NICOLE SMITH

On July 25, Rebecca Salminen Witt, the chief development and communications officer at the Detroit Historical Society, slipped on her kayak boots and tromped through ankle-deep water that had flooded the basement of the Detroit Historical Museum in Midtown. The museum’s staff of 52 employees showed up with mops, squeegees and brooms in tow.

Over the course of a month, recurring floods hit Detroit — and the city’s arts and cultural institutions in and around Midtown and downtown were hit especially hard. Basements flooded, one-of-a-kind artifacts and artworks were damaged and many buildings shut down temporarily for repairs, even before they could fully recover from the most recent severe storms.

“It’s particularly high stakes for cultural institutions because the artifacts are priceless — they cannot be replaced,” Salminen Witt said.

On June 26, the downpour reached about 6 inches in one day. Streets turned into canals, cars floated away, basements were submerged and many residents were left stranded.

It was the worst rainfall the city had endured since a 4.57-inch rainfall that led to widespread flooding in 2014.

There was more to come. A second major flood hit July 16, reaching as high as 3 inches.

Then July 26 brought several more inches of rain and tornadoes in some outlying areas, leaving 140,000 people without power.

In response to the first flood, Detroit Historical Museum staff had to uninstall three exhibits and move them to higher ground, Salminen Witt reported. Two of them had just been reinstalled the previous Friday when the museum flooded again.

“With climate change, big storm events like this are going to happen more and more. Our last so-called ‘storm of the century’ happened in 2014 — just seven years ago,” Salminen Witt remarked with a dry laugh. “I think we can all just look forward to this happening more and more.”

The Detroit Historical Museum isn’t alone.

Edward Foxworth III, the director of external affairs at nearby Charles H. Wright Museum of African American History, said about 35,000 artworks

Exhibition development manager Casie Blovsky rebuilds a module that was damaged in flooding at the Detroit Historical Museum in Detroit. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

said. None of its collection was permanently damaged, he said.

The Main Library will remain closed until after Labor Day because of damage and necessary remediation efforts.

Following the June 26 flooding, the Detroit Institute of Arts removed all of the water within 24 hours, while fans and dehumidifiers were brought in to dry the basement over the next several days, said Christine Kloostra, the museum’s marketing director. No artwork was damaged.

“We hired a mitigation contractor that worked in the building for several days after the flood,” she said. The cleanup has since been completed, with the museum resuming regular business hours after being closed for a couple of days.

“Streets of Old Detroit,” a basement-level exhibit that guides museum visitors past 19th century storefronts along cobblestone streets and one of the Detroit Historical Museum’s most popular attractions, has suffered the most damage over the last month.

One of the museum’s temporary exhibits, “Detroit’s Brewing Heritage,” has also flooded multiple times; some artifacts, like old-fashioned beer cases, were soaked “WE ACTUALLY HAD STORMWATER COMING and had to be out.

UP THROUGH OUR DRAINS, THROUGH THE dried “That’s not all that precious of TOILETS, THROUGH THE SINK.” a thing val— Rebecca Salminen Witt, chief development and ue-wise,” Salmicommunications officer, Detroit Historical Society nen Witt said. and artifacts were hauled away from “It’s OK if they look a little rough bethe premises because of water dam- cause that’s kind of how they were.”

At the Michigan Science Center, a age and exposure to humidity after partial reopening is slated for the June 26 flooding.

Ninety percent of the artwork mid-September pending completion emerged unscathed, but the remain- of repairs.

“MiSci remains partially closed ing 10 percent will require additional evaluation to assess damage, Fox- while our team continues to address worth said. Some of the artwork to be the impacts of heavy rainstorms on evaluated includes a sculptural exhib- the lower levels of our facility,” spokesit of 44 busts of former President woman Elizabeth Weigandt said in a statement to Crain’s. “We have been Barack Obama.

The Detroit Public Library boxed hard at work in remediation, ensuring up roughly 2,500 books that were that all safety protocols are met.”

As a result of flooding and water freeze-dried and sent to a facility in Tennessee to be cleaned, Assistant damage, the Detroit Symphony OrMarketing Director A.J. Funchess chestra’s Max M. and Marjorie S. Fish16 | CRAIN’S DETROIT BUSINESS | AUGUST 9, 2021

er Music Center has closed until further notice. The DSO declined interviews, saying it had no new updates beyond its initial statement released after the June 26 flood.

Although the late July storm was less severe than the June 26 flood, many arts and cultural institutions still found they had a mess to mop up.

“It was not as much,” Foxworth said, “but it was just enough to wet the floors and for us to say, ‘Oh my gosh, wait, we just cleaned this.’”

“Water incursions were localized to a few storerooms where it was minor,” Kloostra said.

Salminen Witt expressed relief that the “Boom Town” exhibit on Detroit in the 1920s wasn’t impacted during the most recent storm; it’s the most difficult exhibit to dismantle because of its delicate costuming and artifacts, she said.

Most institutions Crain’s surveyed reported more damage was done to the facilities themselves than to artifacts or artworks.

“In the Cultural District, we have a lot of older buildings and infrastructure,” Funchess said. “The real issue is whether or not these facilities will be able to withstand the force, whether it’s from water, snow or ice.”

The Wright Museum’s Orientation Theater, which seats about 150 people, filled with about 4 feet of water during the first flood and was “totally damaged,” Foxworth said. The Wright Community Gallery, which showcases the work of local up-and-coming artists and can hold up to 350 guests, also suffered damage, along with two new exhibit spaces that had been under construction to make way for future galleries.

Over the weekend, elevators that have been around since the Detroit Historical Museum was established in 1951 flooded. Numerous exhibit panels were also damaged and will have to be sent out to vendors to be reprinted.

Several institutions said they had to replace carpet, flooring, drywall and more as a result of recent flooding.

The Detroit Historical Museum has racked up about $20,000 in estimated damages, Salminen Witt said, with

“bills still rolling in.”

Foxworth and Funchess declined to comment on estimated repair costs, but said they have filed claims with various agencies, such as the city, the Federal Emergency Management Agency and 501(c)(3) insurance.

Insurance coverage aside, the fiscal and emotional costs take a toll.

The recent spate of floods has eroded more than just flooring and paint at “cash-strapped” institutions like the Detroit Historical Museum, Salminen Witt said.

In July, the museum’s full-time workforce fell 9 percent. While some reduction was the result of attrition, two full-time positions were dropped to make ends meet.

“Having things like [floods] happen over and over again is a real drain on the morale of the staff — with the workforce reduction, everybody is trying to get used to doing more with less,” Salminen Witt said. “I have five new responsibilities added to my normal job duties, and how is this gonna work?”

The Detroit Historical Museum lost $5,000 in revenue from parking and admissions.

Part of the problem is the city’s overtaxed and outdated sewer system, which combines stormwater and wastewater and is increasingly vulnerable as climate change dumps inches of water in a matter of hours, overpowering the Detroit’s pipes and pumps.

“We actually had stormwater coming up through our drains, through the toilets, through the sink,” Salminen Witt said. “You can always tell when the existing stormwater system in the city is overwhelmed because there’s mud on the floor.”

There are only three drains in the basement of the Detroit Historical Museum, where the popular Streets of Old Detroit exhibit is displayed.

The American Society of Civil Engineers’ 2018 report card ranks Michigan’s stormwater infrastructure as a D+ on an A-to-F scale. The organization also reported $2 billion in stormwater needs across the state.

At a news conference last month, Mayor Mike Duggan said efforts are

Floodwaters from the June 26 flood at the Detroit Public Library. | DETROIT PUBLIC LIBRARY

underway to strengthen the city’s stormwater system, including the installation of a $95 million retention area on the west side. He also noted the city was exploring the option of separating its sewage and stormwater systems.

Several arts and cultural institutions surveyed by Crain’s said they are looking into new green infrastructure technology to mitigate the effects of climate change in the future.

At the Detroit Historical Museum, bioswales and a green roof are on the table, Salminen Witt said.

“What we want to try to do is make the Wright Museum a demonstration space on what good practices look like that other people can take to their homes and communities,” said Leslie Tom, the museum’s chief sustainability officer.

After the 2014 flood, the Wright Museum partnered with the Michigan Science Center to build and manage stormwater diversion efforts. Today, the museum diverts around 190,000 gallons of stormwater each year, an achievement they hope to build upon in the future with more green infrastructure initiatives.

Just before the coronavirus pandemic hit last year, the Wright also put in a vapor barrier into its new roof system, “so that when we do find more money, all the infrastructure is already there to do a green roof on top of our theater,” Tom said.

Motown Museum and the Museum of Contemporary Art Detroit either did not respond to inquiries from Crain’s or were not available to comment. The Detroit News reported that the Motown Museum moved up its planned closure for its renovation and expansion project because of flood damage.

Despite the recent challenges, Detroit’s arts and cultural centers are optimistic about the future.

When the Detroit Historical Museum reopened Thursday, Salminen Witt reported 39 visitors.

“The future looks extremely bright,” Foxworth said. “In 90 days, people will come into a facility that has an upgrade.”

FINANCE

Rocket makes solar power its newest business venture Executives say it makes for natural progression as solar installations on the rise Investors earlier this year wanted to send shares of Rocket Companies Inc. (NYSE: RKT) “to the moon.” The parent company of Rocket Mortgage, however, is now looking to the sun for its newest consumer finance business venture.

The Detroit-based Rocket Companies announced last week that it would launch a solar power business in the coming months, with a solar advisory aspect for consumers looking to switch their power generation needs, while also originating the financing for a solar investment and doing the installations.

Rocket Companies, which serves as the umbrella organization for a host of financial services businesses controlled by Detroit billionaire Dan Gilbert, plans to start testing the solar business in the fourth quarter of this year and launch widely in early 2022, according to a statement.

In the more immediate term, Rocket Mortgage has released a rate-and-term refinancing option for consumers, which the statement said will give “homeowners the ability to consolidate any solar panel loan with their mortgage for one low interest rate.”

The company’s news release says this program provides advantages over cash-out refinances because the rate-and-term mortgage provides for “significantly more flexible guidelines than a cash-out,” according to the release.

“Beyond the lower interest rate, this new mortgage program also gives homeowners the ability to leverage the full value of their existing federal solar Investment Tax Credit (ITC) and any other local tax credits they may qualify for,” reads the release.

The potential size of the solar power business for Rocket remains unclear. Company executives declined to provide any revenue projections from the new business offering, and said it’s still to be determined what kind of headcount the solar initiative will have behind it. Rocket Companies as a whole employs more than 26,000 people and last year reported a $9.4 billion profit.

Executives at the company say the

BLOOMBERG

BY NICK MANES

entry into solar makes sense given the broad swath of consumer financial products the company already offers, starting with mortgage lending, home Gurman listings and auto financing, generally all done through proprietary digital technology.

“From a client standpoint, we have another opportunity to leverage a platform that we’ve built to really provide a great service for people,” said Joel Gurman, an executive vice president at Rocket Mortgage who’s leading the solar initiative.

“And that client base is significant,” Gurman added in an interview with Crain’s on Monday after-

noon. “Not only the clients that we’ve worked with, but certainly the (Rocket) brand and how people recognize that brand as one of the best and the strongest brands ... across the country right now. And we really want to make sure that we’re continuing to grow and benefit those clients and recognizing the strength of that brand.”

The company, in its news release, described the nascent solar business as working like this: “The company’s Rocket Cloud Force will serve as solar advisers, a dedicated group of team members with extensive training in the industry. The team members will help clients determine if solar panels are the best choice for their home. They will then connect homeowners to a simple, digital financing application. Once financing is handled, the Rocket Cloud Force will facilitate the instal-

tion beds as well as over 2,000 square feet for nurseries with staff lockers, a breakroom and storage room. Website: roncelli-inc.com

of Technology, Atlanta, Ga., and the University of Tennessee-Knoxville, Knoxville, Tenn., on a collaborative research center designed to boost U.S. leadership in engineering research and global competitiveness. A $700,000 grant from the National Science Foundation, matched by $900,000 from industry, will support establishment of the OU site of the Industry-University Cooperative Research Center for Composite and Hybrid Materials Interfacing. The center will consist of three independent but coordinated sites at each of the partnering universities. Georgia Tech will focus on the aerospace industry, Tennessee-Knoxville on infrastructure and biomedical applications, and Oakland on automotive applications, including automobiles, ground vehicles and farm equipment. Website: oakland.edu

DEALS&DETAILS ` CONTRACTS `Autobooks, Detroit, an invoicing, payments and accounting platform for small businesses, has a partnership with Bottomline, Portsmouth, N.H., a financial technology provider. Autobooks’ invoicing, receivables and accounting tools will be combined with Bottomline’s Digital Banking IQ platform, helping financial institutions attract and retain small businesses, by providing back-office services and becoming their system of record. Websites: autobooks.co, bottomline.com `Roncelli, Sterling Heights, a construction management firm, is providing construction management services for the build-out of the NICU relocation at the Beaumont Troy Campus. The new 15,000-square-foot project will have 15 licensed NICU beds and 10 observa-

`Sunvera Group, Bingham Farms, a management services organization providing support services to ophthalmology practices, is partnering with TruVista Surgery Center, Troy, an ophthalmology and vision care surgery center, to provide specialty eye care.

Websites: sunveragroup.com, truvistasurgerycenter.com `Kumanu, Ann Arbor, a well-being technology firm, has a partnership with Aunt Bertha, Austin Oaks, Texas, a social care referral network. Websites: kumanu.com, findhelp.org ` Oakland University, Rochester, is partnering with the Georgia Institute

lation of a new solar solution.”

Costs for the consumer when switching to solar can vary widely, thus it’s not clear the specific revenue potential for Rocket in undertaking such a business venture.

However, the average cost of a residential solar system was $2.85 per watt for the first half of 2020, according to a report from the U.S. Department of Energy’s National Renewable Energy Laboratory, and cited

by Bankrate. Additionally, the Bankrate report noted that the average size of a residential photovoltaic (PV) power installation is about five kilowatts, according to the Solar Energy Industries Association.

Residential solar power is on track for its biggest year ever this year, according to a recent market report by Wood Mackenzie, an energy consulting firm based in the United Kingdom, done in conjunction with

the Solar Energy Industries Association.

“Many installers reported that project backlogs stabilized throughout the quarter after having grown to borderline unsustainable levels during the latter half of 2020,” the report says. “Issues related to obtaining permits and gaining permission to operate have eased somewhat.

Companies are now focused on scaling operations to keep up with growing sales activity. Early signs show that this spring’s sales season is breaking records. But the market is not uniform — some installers have only just returned to pre-pandemic sales levels.”

Wood Mackenzie forecasts consumer demand for solar power to grow 19 percent year-over-year.

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

Advertising Section

CLASSIFIEDS To place your listing, contact Suzanne Janik at 313-446-0455 / sjanik@crain.com or, for more information, visit our website at:

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SCHLISSEL

From Page 9

` Are there any opportunities that you guys see coming out of the pandemic that you can take advantage of?

All of higher ed is working to figure that out. Now, what are the aspects of the pandemic that although unwelcome, initially, were sufficiently disruptive and provoke enough creativity to teach us new things that are new opportunities? In the health care business, for sure, telemedicine got a huge boost. It went from being a tiny fraction of our patients having online visits to almost everybody for routine care and for follow-up care.

And a lot of that’s going to stick. ...

We also learned that there’s a lot of content that can be delivered online.

But the online experience can’t really replace what you and I are doing now.

Where if we had half-dozen people sitting around the table discussing a piece of literature or trying to work out a scientific puzzle or engineering problem. The face to face is still where the sweet spot is of our part of higher ed, even as good as the technology is. ... ` Think back to even pre-COVID in an organization this big, what are some of the biggest challenges you’ve faced?

Well, you know, you think about a challenge that was exacerbated by the pandemic, is we’re very decentralized.

We have 19 schools and colleges, and each one has a dean. And within wide parameters, they each run their own “business.” So the business school is very different than the music theater. ... So very independent, separate schools and colleges, large research institutes that had a degree of autonomy, the massive health system, the athletics program. The pandemic told us we need better ways to make centralized decisions under the appropriate circumstances and our culture has to adapt to a greater degree of central decision-making than it’s used to. ... The academy gets teased or made fun of and we study things to death before we make decisions. We set up committees and everybody wants to have a say, and that’s just the tradition. And that’s how we got to be a 200-year-old business. Most entities don’t last 200 years. So there’s something about that culture that actually serves us. ... And the decentralization and the lack of coordination of some of our business practices came back to bite us during the pandemic. So we’ve learned that we have to hit a sweeter spot between local autonomy and central organization and coordination. ` Let’s talk about sports for a minute. ... So $10 billion. What percent of the revenue is from sports?

People think of it as such a huge aspect of Michigan, and culturally it’s a huge aspect. But the athletic budget in 2019, sort of the last normal year, was $193 million (out of $10 billion), and it’s one of the largest in the country, approximately 900 intercollegiate student athletes out of 46,000 total students. ... It’s large in its impact and its visibility but it’s relatively modest in its finances. ... They earned and they spent $193 million that year. ` About the new ruling allowing student-athletes to earn money for use of their likeness: How does that play into those 900 students and their experience in college?

My view on this has evolved. I used to be much more of a purist and

figured these young people were students, and they happen to be gifted at a sport. And they came here and they got to play their sport, they got fantastic training, great coaching, wonderful exposure, but they got a Michigan degree at the end. And for 99 percent of them, that’s actually the valuable part, because most of them don’t go on to earn their living as athletes even at a place like Michigan. But I’ve really come to the view that (student-athletes) deserve opportunities based on their talents, just like any other students. It used to be that a student in the music school could get a gig playing at the president’s house, and I would pay him. ... If a student-athlete did that, they would be in violation of NCAA rules in the old days. So the ability to use your name, image and likeness and benefit from it, you know, good for them. We just need to be sure it doesn’t corrupt the recruiting process, it doesn’t distract from their studies, it doesn’t diminish their commitments to their athletic program. ` We’re almost coming up on fall.

We’re gonna be back on campus.

(As of July 28) about 80 percent of the students that will be on campus this fall have submitted and we’ve validated their vaccination status. ...

We’d like the students to have a normal experience. We’d like them to use the lounges and to sit around the dinner table for hours, maybe go to a party, just fool around, have a party and not worry about who’s in their room. ...You know, they spend countless hours together on campus. And our students come from all around the country and all around the world. And if you think about it, you know, they’re sampling the state of the virus in every state in the country, and they’re bringing it to Ann Arbor. So we want to protect the community that hosts us too by having as much vaccination as possible. ` We started this conversation talking about the view out the window, a beautiful day in Detroit.

Across the street, there is a empty parking lot over there that was part of a failed jail project. And everyone got very excited, including myself, that Stephen Ross and Dan Gilbert were going to put in an innovation center, partnering with you. What happened?

The inside baseball part I wasn’t really part of. ... We were scheduled to provide the academic content, we were going to run graduate level and certificate education, and then education more geared towards the community surrounding the site.

Bedrock decided to go a different direction with the property, which actually, they have interesting ideas that I’ve heard about. I can’t really speak about them. But I wish them the best. And what I’m doing is in consultation with the board of regents, you know, figuring out how to continue this ambition of using the Block M to help drive the Detroit economy and the Southeast Michigan economy. ... ` So it’s not dead.

Right now, it’s in a state of flux. Steve Ross is working on identifying another site for the project. And I’m working with the regents to see whether this is really the way we want to impact the city of Detroit.

Because the world has changed, too. ` So we don’t have a location yet?

Not yet. But you know, the university remains committed to its role in the city of Detroit. It’s both part of our mission and a tremendous opportunity.

18 | CRAIN’S DETROIT BUSINESS | AUGUST 9, 2021

Senate Majority Leader Chuck Schumer speaks as Rep. Alexandria Ocasio-Cortez, a Democrat from New York, left, and Representative Cori Bush, a Democrat from Missouri, right, listen while protesting the expiration of the eviction moratorium outside of the U.S. Capitol on Aug. 3. President Joe Biden partially restored the moratorium that day. | BLOOMBERG

EVICTION

From Page 1

landlords and tenants continue to struggle as CERA money is slow to be distributed and confusion surrounded the extension of the federal eviction moratorium, which ended in July only to be hastily re-upped last week by the Centers for Disease Control and Prevention.

The extension was intended for areas that saw high or substantial spread of the coronavirus, and did not originally apply in Wayne County, where the spread was only moderate. But that changed Wednesday afternoon when the county entered the substantial transmission category, said Melanie Barbaza, assistant to the chief judge at the 36th District Court.

Evictions are again paused for those who can't pay rent — this time, until Oct. 3.

Barbaza said she didn't think anyone had been evicted in the interim.

Ted Phillips, the executive director of the United Community Housing Coalition, said as many as 600 households in Detroit could have been at immediate risk had the lapse been permanent. In another 9,000 households, eviction proceedings had been filed but were still pending.

"There's the potential for a whole lot more cases," he said.

Phillips said those who are evicted lose everything when their belongings are unceremoniously tossed into a Dumpster — kids' records, medicine, family bibles. The continued moratorium will give more people the chance to maintain stable housing and will keep people out of shelters and other precarious housing situations.

"It has been a real struggle," he said. "People will run wherever they can."

More than 18,000 applicants have been approved for more than $117 million in rent relief, but there are still thousands of outstanding applications and more than $400 million left to be distributed, said Anna Vicari, a spokesperson for the Michigan State Housing Development Authority.

Keeping people in their homes is important as a means of limiting the spread of the coronavirus, said Mar-

garet Dewar, a professor emerita of explain that she has no recourse urban planning at the Taubman Col- when a tenant won't pay and won't lege of Architecture and Urban Plan- apply for relief, she said. ning at the University of Michigan.

For some owners, she's floating Otherwise, people move in to shel- maintenance and repair costs that ters or double up with friends or fam- total thousands of dollars. Champlin ily and community spread is in- said all she can do is hope the CERA creased. money becomes available and she "It's not good at all," she said. gets reimbursed.

"What's needed is time to get the As the principal of management money out." companies Suite Properties and ReGroups like Phillips' have been serve Management Co., Eric Wizenknocking on doors and making calls berg said he didn't get paid his manto let tenants know there is money agement fee unless rent was coming available to help. Still, the moratori- in. At 60 percent of the 700 or so units um, coupled with the slow pace of he managed in Detroit, it wasn't. Dedistribution, has been frustrating to linquency is around seven figures, landlords and others who cannot Wizenberg said, and he's relied on move to fill their properties with peo- Paycheck Protection Program loans ple who can pay. to keep his employees on board.

Derrell Grant, the owner of D. Kevin Callahan, a real estate attorGrant Holdings and J.P.A. Holdings, ney at Callahan Law PC, said a lot of said he still had to make repairs on his clients are frustrated and defeathis properties, though he wasn't re- ed as they wait for funds to be receiving income from some of them. leased.

Grant owns 68 single-family homes, "We're getting to that point where the bulk of them in northwest De- people are going under," he said. "It's troit, and said the tax and insurance mom and pops suffering the most." costs continued, although as many as Organizations like Wayne Metro25 occupants weren't able to keep up politan Community Action Agency with rent. He's since gotten some are working to get the funding out. rental relief money.

Letting the eviction moratorium stay Justin Lindenmuth, the broker/ in place allows more time for money owner of Lindenmuth Realty, said to be distributed, making landlords the moratorium has hit him "really hard."

Lindenmuth, who is “WE’RE GETTING TO THE POINT WHERE based in Texas, owns PEOPLE ARE GOING UNDER. IT’S MOMS about 100 Detroit-area houses. He said AND POPS SUFFERING THE MOST.” collections dropped — Kevin Callahan, Callahan Law to about 10 percent of what he expected in the early months whole, said Louis Piszker, its CEO. If of the pandemic. His lender modified evictions begin en masse, both the his loan, he's deferred some routine tenants and the landlords suffer. maintenance and he worries he'll "The resources are here," he said. have to exhaust his cash reserves and "We're always operating with a sense start selling properties if he doesn't of urgency." get government relief. Lindenmuth Wayne Metro has distributed more said he's owed about half a million than $31 million, averaging $8,043 dollars in back rent. per home. Landlords had largely "It feels like landlords are taking been cooperating with the program, the brunt of it and it doesn't seem re- Piszker said, since they know it's the ally fair," he said. "This is going to be most likely way they'll be repaid. the death knell for a lot of landlords."

Both sides, Callahan said, want the Also taking the brunt of it? Proper- same thing.

"My clients want to see people ty managers like Berkeley Champlin, whose Doyenne Detroit manages have stable housing," he said. "We rentals for investors — many of them want to keep people in their homes; we want to get people paid." foreign owners.

Champlin said some of those owners blame her directly when the ten- Contact: arielle.kass@crain.com; ants aren't paying rent. It's hard to (313) 446-6000; @ArielleKassCDB

BOOZE-FREE

cases of N/A CEO, a nonalcoholic version of the brewery’s top-selling CEO Stout.

From Page ?

A more crowded market

“It’s been pretty overwhelming to go from justifying our entire existence to feeling like we’re a leader in something exciting,” said LaValla.

Casamara Club plans to capitalize on its surge in popularity, including new flavor releases, as well as a line of canned nonalcoholic drinks in collaboration with craft nanobrewery Batch Brewing Co. in Detroit’s Corktown neighborhood.

Wellness trends The pandemic has given rise to various health and wellness trends, but demand for nonalcoholic beverages, including beers, wines and spirits, has surged. The trend is driven by health-conscious millennials, 66 percent of whom say they are reducing their alcohol intake, according to data from Nielsen. Nonalcoholic beer sales spiked 38 percent in 2020, even as sales for regular beer declined.

From booze-free beers and nonalcoholic spirits to sparkling and hops-infused waters, craft outfits in and around Detroit are gradually carving out space for themselves in a less-boozy landscape.

Nonalcoholic beverages have thrived in Europe for years, and recently brewing giants have sought to try out their popularity in the U.S. Last July, Budweiser Zero launched, the brand’s first-ever nonalcoholic beer. Heineken 0.0 entered the U.S. market in 2019 and leads the pack as the top-selling nonalcoholic beer in the country. An alcohol-free version of Guinness, called Guinness 0.0, will be pilot tested in four states, including Michigan, in 2022, a representative from Diageo Beer Co. told Crain’s. There are also alcohol-free “spirits,” such as the U.K.based Seedlip, which was released in the U.S. in 2017.

Among craft breweries, Connecticut’s Athletic Brewing and New York’s Brooklyn Brewery are some of the sector’s heavy hitters in alcohol-free drinks. But excitement for nonalcoholic alternatives is growing in Michigan as well.

San Diego-based Two Roots Brewing Co. acquired Auburn Hills-based Rochester Mills Production Brewery in 2019, a move the company’s marketing director David Youngman called “geographically strategic” in terms of distribution and expansion.

Earlier this year, Two Roots launched three nonalcoholic beers in Michigan through its production facility and taproom in Auburn Hills.

“We’ve had people order the nonalcoholic beer without realizing that it did not have alcohol,”

Alcohol-free drinks with local roots: Top left, Casamara Club. Top right, Right Brain Brewing. Below, Two Roots. Demand for nonalcoholic beverages has surged during the pandemic. | CONTRIBUTED PHOTOS

Youngman.

“The same sort of thing is happening here with macro nonalcoholic versus craft nonalcoholic,” he said. “Flavor and variety are definitely something that the consumer is looking for, and they’re not going to settle for an inferior product if we’re able to supply that.”

Ashley Price, who worked for 14 years as the principal beer buyer at Royal Oak-based Holiday Market, said that it was a struggle at first to add to the store’s booze-free inventory.

“There just weren’t a lot of options out there, and the options that were available were honestly pretty boring,” he said. “Most bars aren’t even carrying things “WE’VE HAD PEOPLE ORDER THE outside of NONALCOHOLIC BEER WITHOUT O’Doul’s.”

The lack of REALIZING IT DID NOT HAVE ALCOHOL.” nonalcoholic — David Youngman, Two Roots Brewing Co. craft beer that tasted like real beer is precisely what motivated Jim Schwerin, Youngman said. “They had no owner of Grand Rapids-based clue, which is testament to the Schmohz Brewery, to create Michproduct itself.” igan’s first alcohol-free beer in The spike in nonalcoholic beers 2008 — a pale ale called the “120.” echoes the explosion of craft beer “A buddy of mine had an issue in the 1990s that has continually with drinking and driving and was taken market share from big dorelegated to drinking nonalcoholic mestic beer brands, according to

beer for a year,” said Schwerin. “He kept pestering me to see if I could produce one that was better-tasting than what he was getting.”

The “120” is one of Schmohz’s top five-selling beers, Schwerin said.

As flavor profiles improved and options expanded, so has consumer interest. According to Price, the Holiday Market’s booze-free inventory jumped from a dozen craft beer brands to 50 by 2019, not including nonalcoholic wines and spirits, as well as hops-flavored sparkling waters, teas and kombuchas.

Price is set to open Metropolitan Variety Store in Detroit’s West Village neighborhood in about six weeks with chefs Brendon Edwards and Hailey Enszer, where they’ll carry at least 40 different nonalcoholic products. Price also estimates those products will make up 5 percent to 10 percent of the total sales.

“It’s not an option not to have options anymore,” said Tom Halaska, the sales director at St. Louis-based WellBeing Brewing. According to Halaska, the brand secured 60 new accounts in just six days with various wholesalers, grocery markets and bars across Michigan. “We didn’t have a single

account turn us down.”

A family-owned food and beverage wholesaler called M4 CIC went from seven to 20 pallets dedicated to alcohol-free products at its warehouse in Ann Arbor since last year, the company’s co-owner Michael Turriff told Crain’s.

DeWitt-based Reputation Beverage Co. is one of several local breweries that are dipping their toes into nonalcoholic alternatives. Since the brand launched its kombucha, coffee and tea products in 2019, owner Eric Elliot has experimented with a variety of nonalcoholic beer recipes, including a pale ale and a chocolate coffee-style drink.

“There’s obviously a huge market for it,” said Elliott, who co-founded Ellison Brewery + Spirits in East Lansing before leaving in 2018. Although he doesn’t have concrete plans to roll out nonalcoholic beers to the public yet, Elliott noted, “When I’m ready to pull the trigger, I think the sales will be there to justify it.”

Right Brain Brewery in Traverse City debuted a nonalcoholic IPA called Out on Bond this weekend, with 20 cases on sale through its taproom, said owner Russell Springsteen.

Last summer, he sold 20 or 30

New products on the market have added competition for brands that have been around longer. “We’re probably down 50 percent from where we were two years ago,” said Schwerin.

Schmohz also switched distributors after their previous distributor closed, which has posed challenges. “They’re slow to accept a nonalcoholic beer, and so we’ve got to convince them that it’s worth their effort to sell it,” Schwerin said.

Schwerin hopes to release a couple of new nonalcoholic flavors, including “a red and a dark,” but those plans are “on hold” until business picks back up.

But when it comes to nonalcoholic beer, mainstream production may have a ceiling, as there are a few significant barriers to entry.

“A lot of the processes by which these are made are proprietary, so if you don’t already know how to make it and make it cost-effective, then it can be very expensive,” said Price.

Springsteen said he “got lucky” when a retired brewer from a macro brewing company visited the facility one day and shared his recipe for brewing nonalcoholic beer.

There are two overarching methods: Either you extract alcohol from fully brewed beer or you block the formation of alcohol during the fermentation process.

“It’s honestly pretty hard to get the flavor profile of real beer,” Elliott said.

“It requires a whole lot of attention,” said Springsteen. “It’s a different way of brewing, and you don’t have a lot of room for error.”

According to Christopher Lasher, the marketing director at Griffin Claw Brewing Company in Birmingham, they’re interested in releasing commercial nonalcoholic beer options, but won’t be able to any time soon because of the investment costs in new equipment, which he said can cost upwards of $250,000, depending on the size of the brewery.

In other words, brewing nonalcoholic craft beer isn’t for dabblers or hobbyists. “I don’t see this going the way of seltzers where everyone starts producing seltzers,” said Youngman.

But for brewers who aren’t ready to invest in the necessary startup costs, there are plenty of nonalcoholic products outside of craft beer.

Griffin Claw has been approached by another company to make a nonalcoholic spirit infused with CBD, said Lasher, though he noted they “haven’t gotten too far in talks.”

After a year or so of development, Beards Brewery in Petoskey launched Michigan Hop Water, its line of hops-infused, nonalcoholic beverages in 2020. So far, they’ve sold 618 cases, or 14,832 cans, in 2021.

If there’s one thing brewers, sales reps and wholesalers unanimously agree on it’s that the trend toward healthier nonalcoholic drinking is here to stay.

“They’ve come a long way,” said Turriff, “and they’re not going anywhere.”

AUGUST 9, 2021 | CRAIN’S DETROIT BUSINESS | 19

RECOVERY

From Page 3

Chene would have established Detroit’s first commercial-scale hydroponics grower and brought farming — albeit a different type — back to a part of the city that was once home to flower and vegetable seed producer D.M. Ferry & Co. But only months later, in February 2020, high-profile investors James M. Nicholson, chair of PVS Chemicals Inc.; Stephen Polk, CEO of Birmingham private investment firm Highgate LLC; and Walter “Tripp” Howell III, retired international director of Jones Lang LaSalle in Washington, D.C., and an ex-pat of the Detroit area, pulled out of the project and a $4 million planned investment in it for undisclosed reasons.

Nicholson and Polk are now backing a similar, for-profit hydroponics growing venture, Lakeland Fresh Farms in Chesterfield Township.

They are joined at the new company by the former CEO of for-profit subsidiary Recovery Park Farms, Joe Corace, and other former Recovery Park employees, something that led Recovery Park supporters to call for an investigation in late May. Recovery Park was forced to lay off most of its staff when the investors pulled out. It also released escrowed deeds in lieu of foreclosure for more than 350 properties it had assembled with backing from RPD Holdings LLC to the holdings company. It couldn’t exercise its option to buy the land at that point, so RPD amended the purchase agreement to give the nonprofit more time.

Launched by McLeskey, a real estate broker and Realtor, and real estate investor Randal Lesson, RPD had provided financing for the purchases and held the properties to “sell” to the nonprofit at cost, believing they would be used for charitable purposes that would also enable RPD to take charitable deductions.

By April 2020, Recovery Park had the funds to buy the land and put down a $10,000 deposit on the $500,000 purchase. But RPD pulled out of the deal in late May, just days before the June 1 closing, according to the breach of contract lawsuit Recovery Park brought against RPD and McLeskey the same month.

Filed in Wayne County Circuit Court, the suit also accuses McLeskey of defamation of Recovery Park and CEO Gary Wozniak.

It seeks to enforce an agreement that would allow it to buy the land

TWO MEN

From Page 3

Two Men and a Truck has targeted 100 “mini markets” in places such as Missoula, Mont., and Cheyenne, Wyo., where there’s room in the market for a host of moving services for home owners and businesses, Shacka said.

Just months before the pandemic, the company launched a new junk-hauling service and long-distance crate-shipping service for cross-country movers to compete with some of the more established national brands, such as 1-800-GotJunk? and PODS. The junk removal and crated services have created “revenue channels for these mini market operators coming in that we didn’t have a few years ago,” Shacka said.

Shacka said the junk removal ser20 | CRAIN’S DETROIT BUSINESS | AUGUST 9, 2021

Recovery Park’s high tunnels have been cleaned up or refurbished since spring. | SHERRI WELCH / CRAIN’S DETROIT BUSINESS

from RPD and its principal, with a portion of the land’s value made as a charitable contribution, and to block further alleged defamation.

Recovery Park said in its complaint that it spends $1,000 per week to maintain the properties, but property taxes have not been paid. It claims it’s lost additional investment and financing for the project as a result of not completing the land purchase from RPD, and the delay and defamation it alleges are hurting its abilities to secure additional financing.

Recovery Park is asking the court to prevent RPD from selling the property to other parties, to pay all required taxes on the properties, to enforce the sales agreement, award unspecified damages and order McLeskey to restrain from defamatory statements regarding Recovery Park and Wozniak and a public retraction of the alleged defamation.

Calls and emails sent to Wozniak and the attorney representing the nonprofit in the lawsuit were not returned.

McLeskey referred all comment to his attorneys, who did not respond to Crain’s requests for comment.

In the response to the suit filed in Wayne County Circuit Court, attorneys for RPD and McLeskey said they were fraudulently induced to invest in the nonprofit.

They pulled out of the deal to sell the land to Recovery Park after learning it was developing plans to flip some part of the properties to Detroit real estate speculator Matthew Tatarian for a profit, something they

viewed as counter to the charitable use it believed was intended for the properties.

RPD planned to claim charitable deductions in connection with that support and sale of the properties at cost, something it could only do if the land transferred to a charity and the property was used for charitable purposes, its attorneys said.

“The plaintiffs have attempted to pull a reverse ‘bait and switch’ where the nominal purchaser (here the Plaintiffs) acquires property for charitable purposes and then transfers the same property to a profit-making entity,” they said.

Most of the properties were acquired from the city of Detroit and had development requirements and reversionary clauses, which expired on Oct. 31, 2020, attorneys for RPD and McLeskey said.

RPD’s and McLeskey’s attorneys argue Wayne County Circuit Court lacks jurisdiction over the case, and the proper jurisdiction is the Wayne County Business Court.

The exact instances of the alleged defamation, exact language of the defamation and who it was directed are not stated, RPD’s attorneys said in the response. They seek dismissal of the case and claims of defamation against McLeskey and the recovery of costs to defend the suit.

In a response filed Friday, Recovery Park’s attorneys said RPD and McLeskey never asked who Recovery Park’s investors were, how plaintiffs obtained the money to purchase the land or what the organization planned to do with the properties. Its

clients were under no legal duty to disclose that information.

“If these matters were important to defendants, they should have inquired and made them terms of the agreement. Their neglect in doing so does not equal fraud on the part of Plaintiffs,” attorneys for Recovery Park said in the response.

A status hearing in the case is scheduled for September.

vice is now available in 15 markets.

“We’re expecting to double that in the next three or four months,” he said.

The terms of ServiceMaster’s acquisition of Two Men and a Truck were not disclosed as both companies are privately held.

But ServiceMaster, which is owned by the Atlanta-based private equity firm Roark Capital Group, took on $180 million in new debt as part of the financing for the sale, according to a S&P Global Ratings credit report dated July 23.

ServiceMaster’s purchase of Two Men and a Truck ends nearly 35 years of ownership by the Sorber family. The company was founded by teenage brothers Brig Sorber and Jon Sorber in the mid-1980s and their mother, Mary Ellen Sheets.

Sheets retired and exited the business about four years ago, leaving her sons Brig and Jon and daughter, Mel-

anie Bergeron, the sole shareholders.

Brig Sorber most recently served as executive chairman and Jon Sorber retained the title of executive vice president. All three siblings had remained active in franchisee relations in recent years, Shacka said.

Under the deal, Bergeron and her brothers no longer have any role or affiliation with the company, Shacka said.

Family ownership of Two Men and a Truck “ultimately ended the best way it could from a partner we feel can help us continue the growth and really continue to provide an opportunity for people in the future,” Shacka said.

“They’ve always been open to evaluating opportunities as we’ve grown tremendously over the last several years,” Shacka said of the Sorber family.

Sorber family members were not granting interviews following the sale

of the company they grew from one pickup truck to a fleet of 3,000 moving trucks in 46 states, Canada, the United Kingdom and Ireland.

“It’s kind of the American dream story — somebody with a broken down ’66 Ford pickup truck building a company with over 3,000 trucks and 380 franchise locations here in the U.S. and expanding internationally with franchising,” said Shacka, who started in the company as an intern in 2002 and rose through the ranks to become president in 2011.

As part of ServiceMaster’s acquisition, Shacka is remaining the company’s president alongside CEO Jon Nobis, who joined the company in 2013 as chief information officer and later succeeded Brig Sorber as CEO. Two Men and a Truck’s corporate office and 180 employees in Lansing will remain there, Shacka said.

“Everything is staying the same,” Shacka said. “Their philosophy com-

Cease and desist orders Recovery Park said in court filings that it has the $500,000 to repurchase the land in hand and is fully prepared to close on the property. But cease and desist orders prompted by undisclosed complaints made to the attorney general’s office and the Michigan Department of Licensing and Regulatory Affairs, could interfere with its ability to secure new investment to fund development of the properties and operations.

Following an investigation, in late July , the state department sent Recovery Park and Wozniak orders stating the promissory notes they’d been offering to investors were in violation of the Securities Act since they were unregistered. It ordered them to immediately stop selling and offering unregistered securities, warned them of the penalties for willful violation of the act, and gave them 30 days to request a hearing.

The complaints made to LARA, copies of which were obtained by Crain’s, include one from Nicholson sent in late October.

“The speculative venture that Re-

covery Park was promoting collapsed when the lead investor declined to continue to participate,” he said in the complaint.

Nicholson wrote that he had requested documentation from Recovery Park affirming that the loan notes were in default and that the nonprofit would be unable to repay the money it owed. “Recovery Park has declined to do so,” he said.

“My legal counsel informs me that your office is tasked with regulating Recovery Park and is the only entity that can force dissolution. I believe it is clear that Recovery Park is functionally bankrupt,” Nicholson said, noting that he had been told of numerous creditors and default judgments.

Nicholson said by his “back of the envelope estimate,” Recovery Park owed creditors over $3 million at that point, yet held virtually no assets. “... Yet it continues to employ its management,” Nicholson said in the complaint.

A complaint submitted by Howell in December echoed Nicholson’s.

Nicholson declined comment Friday through a representative.

Last week, Wozniak requested an informal, prehearing meeting with the Department of Licensing and Regulatory Affairs on the investigation, but neither the meeting nor a formal administrative hearing date had been scheduled as of last Thursday Communications Director Suzanne Thelen said in an email.

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

ing in was we’ve been growing this brand tremendously. They want to keep doing that and keep supporting that effort and not coming in to make changes.”

Memphis, Tenn.-based ServiceMaster’s commitment to keep Two Men and a Truck’s corporate offices based in Lansing provided a “big shot of confidence” to longtime employees who have worked for years in the family-owned business, Shacka said.

“We’re not losing any workforce,” Shacka told Crain’s. “If anything, we’re going to be expanding with how fast we’re growing and the synergies” with ServiceMaster’s other brands.

“It’s been a good run and we’re going to keep running with it as long as we can while we’re expanding and growing,” he added.

Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

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The result, particularly for practices like Motor Mouth’s filled with low-income Medicaid patients, is an office ringing to a cacophony of screams from uncomprehending children.

Rodeo dentistry Motor Mouth performs these procedures — where the child is sedated but still awake — on roughly six patients per day, four days per week.

David Vazquez, proprietor of the office and a pediatric dentist, said he’d prefer to see about four of those six patients in an operating room under anesthesia.

“I have a large Medicaid population of kids with lots of problems,” said Vazquez, talking over the playful “Let It Grow” song from the Disney’s “The Lorax” that is playing in a procedure room and waiting for sedation to calm his young patient. “Many of our patients are kids with special needs — on the autism spectrum, or neurological disorders or who have sickle cell anemia — that just don’t do well with sedation.”

Vazquez and his dental assistant help the young patient into the chair, which is outfitted with Velcro straps to prevent tiny arms and legs from becoming weapons. Vazquez positions himself tightly near the child’s head and rests his forearm near her jaw to keep her head stabilized during the procedure. He calls this

“rodeo dentistry,” having to prepare his body to safely perform with drills in a tiny mouth.

“I keep could keep them (operating rooms) busy all month,” Vazquez said. “But the hospitals don’t make enough off of us to make it worth their while.”

Motor Mouth is able to secure space in one operating room for one procedure at Children’s Hospital of Michigan in Detroit just once a month, he said.

Doyle, returning to the prep lab to prepare for another round of crowns on her young patient, says the mother of her patient didn’t observe the procedure, instead choosing to sit in the waiting room.

“Honestly, it’s better,” Doyle said.

“This isn’t fun for me or anyone else.

If the parent’s in the corner crying, that’s one more person I have to look out for. It’s just not your best work in this capacity. It’s ultimately difficult for me, the child and the parent.”

Hospitals posit the lack of operating room space for dental care, while problematic, is a consequence of more acute care requirements from patients, especially during the COVID-19 pandemic.

“Currently, operating room access is limited throughout the state, and difficult decisions have to be made on which types of procedures can be performed,” said Michigan Health and Hospital Association CEO Brian Peters. “Hospitals have an obligation to prioritize the patients under the care of their employed physicians and surgeons. In addition, hospitals throughout Michigan continue to op-

erate at high capacity while caring for high volumes of non-COVID-19 patients, which we believe is a consequence of delayed care from the pandemic. The postponement of nonemergency medical procedures at the beginning of the pandemic is one specific example that has led to further demand for operating room space.”

Matthew Denenberg, vice president of medical affairs for Spectrum Health, said the hospital is obligated to care for patients with the most acute needs. That isn’t often dentistry.

“Our goal is to ensure operating room access for pediatric patients who require medical or oral surgical procedures of appropriate complexity,” Denenberg said in a statement to Crain’s. “As such, we have limited dental procedures in hospital operating rooms to high acuity procedures and appropriate clinical situations and are working with local dentists and physicians to offer lower acuity care in lower acuity settings.”

Filling the decay The funding model is complicated and no easy fix is evident, said Jeffrey Johnston, chief science officer for dental insurer Delta Dental of Michigan.

The legislative charter that allowed Delta Dental to form in 1957 only allows Delta Dental to reimburse board certified dentists, so it can’t reimburse hospitals and anesthesiologists.

“Even if they were reimbursed at a

competitive rate for services, dentists simply don’t bill out as much as say a cardiologist does for an angioplasty,” said Johnston. “Your typical operating room dental procedure probably tops out at less than $7,000, which is almost nothing compared to a knee replacement or bypass.”

And dental plans have maximum payouts, which allows the coverage to be cheap enough for customers. Delta Dental’s maximum payout is $2,000 annually for its most expensive plan, meaning an expensive operating room procedure would have to be covered out of pocket by the pediatric patient’s parents when it exceeds $2,000. Which is far too rich for the patients often requiring these procedures.

“When you look at the population, the greatest need for this care is in the Medicaid population,” Johnston said.

“But they also have the lowest amount of funds to pay out of pocket.”

Delta Dental is promoting two solutions to the problem: bringing pediatric anesthesiologists to the dentist office and to offer extended benefits to low-income dental patients to prevent 4-year-olds from needing 12 crowns in the first place.

Currently, pediatric anesthesiologists are certified by the Michigan Board of Medicine not the Board of Dentistry, therefore not allowing them to perform anesthesiology outside of medical establishments like a hospital or outpatient surgery center.

But Gov. Gretchen Whitmer signed a package of bills May that covered a wider use of anesthesiology services across the state. Under

House Bill 4067, which doesn’t go into effect until Sept. 1, 2022, the Dentistry Board can certify specialty fields such as oral radiology, oral public health and dental anesthesiologists.

Vazquez said it’s a win for pediatric patients and dentists.

“For us to use an anesthesiologist here, in this setting where we’re comfortable and the kids are more comfortable is a big deal,” Vazquez said, taking a break from the drilling and screams of his young patient. “She won’t remember this. The drugs give a temporary amnesia. But she’s scared. She wouldn’t be under the right anesthesia.”

But there are only a limited number of pediatric anesthesiologists in the country capable of performing in the dental space, Johnston said. So prevention remains the biggest step to combating the issue.

In the fall, Delta Dental is planning to increase its funding for low-income patients. This is allow for more teeth cleaning visits and other preventive care. The insurance provider will also pay for dentists to take online courses from the University of Pennsylvania specializing in special needs patients.

“We need to encourage dentists to see more special needs patients,” Johnston said. “If we can increase (dentistry) utilization in children, we can prevent all these problems and prevent these children from even needing and operating room.”

Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh AUGUST 9, 2021 | CRAIN’S DETROIT BUSINESS | 21

THE CONVERSATION

Developer Roderick Hardamon was always drawn back to Detroit Urge Development Group LLC: Roderick Hardamon’s journey to real estate development in his hometown of Detroit wasn’t without bumps. The Morehouse College graduate spent the majority of his professional career starting in 2000 working in M&A, investment services and banking primarily for CitiGroup, with time in New York City as well as Hong Kong, Korea and Singapore. But the Renaissance High School graduate always had a thing for Monopoly, and he caught the Detroit real estate bug in the early 2000s with some small multifamily investments. The self-described comic book nerd and fitness enthusiast hasn’t shaken it since. Today, his company, Urge Development Group LLC, is working with other developers and building a new 30-unit apartment building called Osi Art Apartments @ West End and is working to get a new 38-unit building on West McNichols near Livernois out of the ground. | BY KIRK PINHO `I think it makes sense to just get a short update on where things stand with your two projects near Woodbridge and McNichols.

The project on Grand River, which is the Osi Art Apartments, we’re in middle construction now. We’ve gone through environmental mediation, our initial groundwork and we are in the process of putting in foundations, including ready to go vertical. Things are progressing. Because of COVID, things have been slower than we’d like, but we are making good progress and things are continually moving forward. The McNichols project between Monica and Prairie, we are actually in the process of finalizing our construction financing.

So I expect them to be wrapped up in the next month or two and breaking ground shortly thereafter. `You weren’t always in real estate development. You were in finance in New York, if I remember right. What’s the career trajectory here?

I’m a native Detroiter. I graduated from Renaissance High School and graduated from college in Atlanta at Morehouse College. The first part of my career, I spent almost 20 years working on Wall Street. I worked at various forms of CitiGroup. I worked at Solomon Bros. in investment banking. I started my career in investment banking, mergers and acquisitions, so buying and selling companies was my trade, and I did that for other clients and then internally for CitiGroup for the better part of about 12 years and had a great experience in New York. Worked in Hong Kong for awhile, worked in Korea and Singapore, so I had a great global viewpoint ... But somehow I’ve always been drawn back to Detroit. I tried to come back my first time, probably

10 or 15 years ago, but the timing just didn’t quite work. But as I was rethinking my career steps. I realized that my passion and my family was here. This has always been my beachhead and home. `We’re going to come out of this all at some point, I think. What’s it like right now as it pertains to development and COVID in Detroit?

I think everyone is, I would say, cautiously optimistic. Everyone wants the market to come back and everyone is hopeful, but I think there is some acknowledgment that it’s going to take some time as we see these new variants. We’re not out of the woods yet. We are still getting support for our transactions for mixeduse projects. Right now, conversations for mixed-use multifamily have been a bit easier and adding commercial to the mix has made the commercial more viable because we have the risk mitigation of the residential component. `There’s a lot of implications in the charter revisions with regards to affordable housing, with regards to the community benefits ordinance.

What what do you think are positives and negatives of this?

In general, I’m very supportive of measures that provide transparency, support to local Detroiters, give them access to decision making in general.

My challenge with the Proposal P ordinance is that I think it adds layers of bureaucracy, burdens and hurdles to an already burdensome process. While we are business owners, most developers are small businesses. That proposal adds significant constraints, adds significant process time and other significant costs to projects that barely work today. Most of us are taking a very long view on the

success of our projects in Detroit. `Historically, access to capital has been an issue for Black and brown developers. Have you seen any changes for the better on that?

It’s still very hard.

This is hard for everybody. Every small business, it’s hard for everybody to get funding. But it’s even harder for Black and brown folks.

So while the social lender construct, they are great partners in the city — the Invest Detroits, the LISCs, the Capital Impacts — in providing support, and the city of Detroit is very helpful in using their tools to support that process, and the state of Michigan and MEDC is very helpful to leverage their resources to support the process ... there are great partners. What I can say is that I am encouraged right now by the activity at the tables I’m at about how to provide more access. How do you provide equity funding? How do you provide more flexibility to the debt structures?

How do you do things that ease barriers of entry and also provide greater support and opportunity for success, because one thing I’m very mindful of is if you give someone capital, but without a structure and a system that leads

to the end, it’s a bridge to nowhere. I don’t want to build a bridge to nowhere.

I want to build a bridge to success that creates generational wealth. ` When you’re not building new buildings, what takes up your time?

I’m a massive fitness buff at this point in my life. I wasn’t always. I work out four or five days a week intensely, and it helps me kind of manage stress and blood pressure and clear my mind and creates personal space. I’m a massive comic book head. I say this proudly that I’m a comic book nerd. I watch every Marvel and DC movie and I still read comic books.

When I was 5 years old, it was Avengers edition No. 3. I go way back. I still have those in plastic. I have the digital subscription on my tablet. I love fantasy novels, but really, fitness and comic books are my two things, and I spend time with my family.

My kids are growing up.

Roderick Hardamon, CEO, Urge Development Group LLC

READ ALL THE CONVERSATIONS AT CRAINSDETROIT.COM/THECONVERSATION

DAC chef Shawn Loving fuels USA basketball at Tokyo Olympics

22 | CRAIN’S DETROIT BUSINESS | AUGUST 9, 2021

REPORTERS

Jason Davis, small and emerging businesses.

(313) 446-1612 or Jason.davis@crain.com Annalise Frank, city of Detroit.

(313) 446-0416 or afrank@crain.com Arielle Kass, residential real estate.

(313) 446-6000 or arielle.kass@crain.com Nick Manes, finance and technology.

(313) 446-1626 or nmanes@crain.com Kurt Nagl, manufacturing.

(313) 446-0337 or knagl@crain.com Kirk Pinho, senior reporter, real estate.

(313) 446-0412 or kpinho@crain.com Dustin Walsh, senior reporter, health care.

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RUMBLINGS

THE BLOOD, SWEAT AND TEARS are made possible by breakfast, lunch and dinner.

Just ask Chef Shawn Loving, who has been in Tokyo cooking for the USA women’s and men’s basketball team as they battle for Olympic medals. The kitchen at the world stage is a familiar place for Loving — and all he’s known is gold.

But Loving is too focused on feeding elite athletes to contemplate his role.

“I would rather focus my remaining energies on keeping the teams fueled for the efforts on the court,” Loving said in an email responding to a request for an interview from Crain’s. “For many, this is a once-ina-lifetime opportunity.”

Both the men’s and women’s team will come home with medals. By the time this story is printed, we’ll know

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Chef Shawn Loving looks over a list at a kitchen in Tokyo where he has led culinary operations for the USA men’s and women’s basketball teams at the Olympic Games. | DETROIT ATHLETIC CLUB VIA TWITTER

which color. The teams sailed to a spot in the finals, a testament to their dynasty status at the Olympic Games.

Loving has been fueling the teams for

more than a decade.

He served as chef for USA men’s and women’s basketball for the 2008 Olympic Games in Beijing and for

the 2016 games in Rio de Janeiro.

Both teams finished in first place both times.

One might say the recipe for success was cooked up in Michigan. Loving, a resident of Farmington Hills, was hired as executive chef of Detroit Athletic Club in January. Before that, he served as chair of the culinary arts department at Schoolcraft College in Livonia starting in 2007. He has also worked as a nutritional adviser and chef for the Detroit Pistons.

When players took to social media last year to complain about the Fyre Festival-like fare at the NBA finals in Orlando, Loving came to the rescue.

After taking over culinary operations inside the COVID-19 “bubble,” players had one less thing to worry about.

“Making an impact keeps you going,” he told Crain’s a year ago.

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