Crain's Detroit Business Aug. 16, 2021, issue

THE CONVERSATION: Meet the CEO of Detroit’s newest public company. PAGE 22

ROSALIE VICARI:

One on One with restaurateur PAGE 9

CRAINSDETROIT.COM I AUGUST 16, 2021

CONDO BOUNCE

Detroit market sees record sales as supply glut shrinks | BY KIRK PINHO AND ARIELLE KASS

CONTRIBUTED

The Brush 8 townhome development on Detroit’s Brush Street.

AFTER 16 MONTHS WITHOUT A SALE at the Saint Charles condominiums near Detroit’s Islandview neighborhood, Matt O’Laughlin finally started closing on properties earlier this year.

O’Laughlin, a partner with @Properties, said condo showings — which cratered at the beginning of the pandemic — have finally started to pick up. Data shows the market as a whole has improved, too.

“It’s headed in the right direction,” O’Laughlin said.

Detroit’s condo market, which had 11 months of inventory earlier this year, is now down to 7.6 months of inventory in neighborhoods that range from downtown to areas east, north and west, according to new research from Detroit-based residential brokerage house Berkshire Hathaway HomeServices The Loft Warehouse.

That puts greater downtown on pace to have a healthy balance of supply and demand — generally considered four to six months worth of inventory — in the coming months.

The equilibrium could be short lived, however, as the costs of building materials have soared about 50 percent since February 2020, driving up construction costs and threatening to kneecap condo development projects, said Jerome Huez, owner of Berkshire Hathaway HomeServices The Loft Warehouse.

“I’m afraid there will be a price inflation because we won’t be able to provide the product that people want See CONDOS on Page 18

Blue Cross dips a toe into the provider business Newly acquired firm manages services, forms ventures with physicians

BY DUSTIN WALSH

Blue Cross Blue Shield of Michigan is even closer to the exam room after its acquisition last week of Royal Oak-based Triarq Health LLC as the health insurer looks to combat rising health care costs.

Triarq is a health care management services organization or MSO

that manages physicians’ offices, including administrative services, financial management, practice improvement and clinical decision support.

Triarq operates by selling management services directly to physician practices but also by forming joint ventures with a practice’s doctors that effectively serves as the op-

NEWSPAPER

VOL. 37, NO. 30 l COPYRIGHT 2021 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

erator of the practice. Triarq has agreements or joint ventures with more than 250 physician practices across the U.S. The firm employs 194.

Triarq’s management team will remain in place and the firm will operate as a wholly owned subsidiary in Royal Oak, the company said in a press release.

This is BCBSM’s first acquisition

of an MSO. Terms of the deal were not disclosed but the deal was likely lucrative as MSOs have become one of the hottest sectors for private equity in recent years.

The deal will provide capital for Triarq’s expansion. For the Blues, the acquisition is an experiment in creating a tighter, more coordinated network of physicians to reduce costs without expanding into direct ownership of physicians offices.

Aaron Friedkin, senior vice president of care delivery for BCBSM, said Triarq will reduce overall costs to patients and the insurer by bundling services under one bill.

“It operates similar to Medicare with the bundled payment program,” Friedkin said. “Triarq coordinates the efforts around, say, knee and hip replacements, but also ensuring the right coordination happens.

HOME TEAM

GIVING BACK

Detroit native Brown-Philpot joins StockX board.

PAGE 22

Garden Fresh’s Jack Aronson leaves a big legacy.

PAGE 3

See BLUE CROSS on Page 18

NEED TO KNOW

TRANSPORTATION

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT DETROIT POPULATION FALLS OVER 10% IN CENSUS RELEASE THE NEWS: The 2020 U.S. census shows Detroit’s population fell another 10.5 percent over the last decade, a finding that the city’s government is disputing. Census data released Thursday maps the country’s population changes over the last 10 years and will be used for political redistricting.

It records Detroit’s population as 639,111, down from 713,777 in 2010.

Detroit Mayor Mike Duggan alleged an at least 10 percent undercount in a statement Thursday afternoon.

WHY IT MATTERS: It’s the seventh decade of decline for the city in the census, which determines congressional representation and federal funding opportunities.

STORMS KNOCK OUT POWER AS WEATHER WOES CONTINUE THE NEWS: Michigan’s summer of weather woe continued last week, as severe storms knocked out power to more than 1 million customers of DTE Energy Co. and Consumers Energy Co. WHY IT MATTERS: The power outages come on top of several waves of flooding and sewer backups that have damaged homes, closed roadways and frustrated residents concerned about inadequate infrastructure.

charges Aug. 6 against Leonard Barr, 50, in U.S. District Court for the Eastern District of Michigan in Detroit.

Barr agreed to settle the case with a fine of $68,360 while not admitting to or denying the allegations, according to court documents. He also agreed to a suspension from practicing as an accountant before the SEC for at least five years.

QLINE TO MAKE RETURN IN SEPTEMBER THE NEWS: The QLine will resume service on Woodward Avenue the week of Sept. 27 for the first time since being shut down in March 2020 due to the COVID-19 pandemic, officials announced Wednesday. The streetcar, now operated by nonprofit M-1 Rail after it cut ties with an outside vendor running the line, will be free for passengers through the end of the year, according to a news release.

WHY IT MATTERS: Barr worked for the pizza chain in accounting from 1996 until 2020, when he “was separated” from the company in July, according to the complaint. The SEC says he traded on knowledge from the company’s earnings releases before they were made public by the company.

WHY IT MATTERS: The streetcar line has been plagued by low ridership, spotty service and questions about longterm financial viability.

DOMINO’S ACCOUNTANT SETTLES OVER INSIDER TRADING

CHAMBER WILL CHECK VACCINATION AT MACKINAC

THE NEWS: A former accountant with Ann Arbor-based Domino’s Pizza Inc. allegedly made $34,180 through insider trading. The Securities and Exchange Commission filed federal

THE NEWS: The Detroit Regional Chamber is planning to use a third-party mobile application to verify the COVID-19 vaccination status of every attendee at the Mackinac

SMART hires new CEO The Suburban Mobility Authority for Regional Transportation, commonly known as SMART, has hired a new general manager to replace John Hertel, who was fired over alleged misuse of the transit authority's resources.

SMART's board voted unanimously Wednesday to approve Dwight Ferrell for the job. He starts Sept. 20.

Ferrell comes to metro Detroit from a consulting job, but he was previously CEO of the SouthFerrell west Ohio Regional Transit Authority. He has more than three decades' experience in transit, according to a summary of his candidacy supplied by SMART. The board voted in March 2020 to oust longtime SMART leader Hertel the day after he abruptly resigned. The authority had received information alleging Hertel had been using a SMART facility for parking his own vehicles.

Twenty-four people applied for the top job, Khalil Rahal, chairman of the SMART board of directors and assistant Wayne County executive, said Wednesday. Deputy general manager Robert Cramer had been performing leadership duties in the interim, during the COVID-19 pandemic.

Policy Conference next month. The chamber plans to use the CLEAR Health Pass app from the biometric security company CLEAR, which is better known for its expedited airport security clearance service. Anyone attending the Sept. 20-23 conference at the Grand Hotel on Mackinac Island will be required to prove they have been fully vaccinated.

WHY IT MATTERS: It’s the first major business conference in Michigan to

E N T I R E B U I L D I N G AVA I L A B L E

publicly require attendees to prove they’re vaccinated, and it’s not without controversy: Senate Majority Leader Mike Shirkey, who hasn’t been vaccinated because he had COVID-19, said he won’t attend.

Correction Recovery Park exercised an option to buy properties from RPD in April 2021. A story on Page 3 of the Aug. 9 issue contained a wrong date.

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TECHNOLOGY

JACK ARONSON, 1953 - 2021

AI company BlueConduit sees growth opportunity Infrastructure bill calls for lead pipe removal

BY NICK MANES

Jack Aronson founded Garden Fresh Gourmet after making salsa at Clubhouse Bar-B-Q, his Ferndale bar and restaurant. | LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

A GIFT FOR GIVING

Jack Aronson remembered as pioneer who leaves behind big legacy

BY SHERRI WELCH

Jack Aronson lived to share what he had with others.

It didn’t matter if it was the salsa he made at the Ferndale bar and restaurant he operated with his wife, his knowledge of the food business or the millions of dollars he gained when he sold the company years later. Or even used dishwasher racks.

His innate impulse to give drove him into the months before his death, when, from his hospital bed

at Beaumont Hospital in Royal Oak he’d call his assistant again and again to ask her to order cookie trays or Jimmy John’s subs for the entire nursing staff.

Aronson, co-founder of Garden Fresh Gourmet, died last week at age 68 after a two-year battle with cancer.

“He was a great cook, and food was a gift he could give to people on a daily basis,” said Dave Zilko, Aronson’s longtime friend and business associate.

“That is what put him in the

restaurant business in the first place.”

Operating on instinct Aronson had no formal training as a chef. He operated his companies on instinct, said Zilko, who was vice chairman and an equity investor in Garden Fresh. Zilko now serves as CEO of a plant-based protein brand he co-founded, The Skinny Butcher; chairman of Fuel Leadership; and operating partner at Huron Capital.

See ARONSON on Page 20

“HE WAS A GREAT COOK, AND FOOD WAS A GIFT HE COULD GIVE TO PEOPLE ON A DAILY BASIS.” — Dave Zilko, Aronson’s longtime friend and business associate

An Ann Arbor-based software startup known for helping the city of Flint identify its lead water service lines sees ample opportunity for growth as a nearly $1 trillion federal infrastructure bill hurtles toward the finish line.

Abernethy Schwartz Partners LLC, which does business as BlueConduit, spun out of the University of Michigan and its Schwartz technology — currently being used by a handful of cities — uses machine learning and artificial intelligence to help predict where lead service lines may be located, saving some cities hundreds of millions of dollars in excavation and other costs.

Now, with a hefty piece of legislation to address the country’s dated infrastructure having cleared the U.S. Senate — which includes $15 billion to help with the replacement of lead pipes that can lead to water contamination such as was seen in Flint — the executives at BlueConduit expect to be busy for the coming year and beyond.

“One of the biggest barriers to (lead) service line replacement until now has been the funding. There just hasn’t been funding available,” said Ian Robinson, managing director for BlueConduit, adding that water utilities are largely unable to simply raise rates to fund upgrades.

“So having the infrastructure bill is a huge opportunity for water systems and cities in order to improve quality and provide clean drinking water to their residents. So this is an amazing opportunity.”

See BLUECONDUIT on Page 19

REAL ESTATE

The Detroit ‘haunted’ jail Airbnb that was, and then wasn’t Saga illustrates complex permitting processes, enforcement issues

BY ANNALISE FRANK

A nearly century-old Detroit police station without beds — other than concrete slabs in jail cells — surfaced as a lodging opportunity on Airbnb late last month. But the listing didn’t last long.

The building has a diverse history, both old and more recent. The longtime 6th Precinct police station on Detroit’s west side played a part in the city’s 1967 uprising. Eventually left vacant in the mid-2000s, the property was purchased from the city in 2013 for $15,000 by businessman Ed Steele, a man with a plan to renovate it for a secure cloud data center.

The last couple of years, the station with murals painted in its wood-

planked window spaces has been a target for paranormal investigations.

It was featured on the Travel Channel’s “Most Terrifying Places.” Visitors also toured the supposedly haunted building last fall, and it’s hosted other paranormal-themed events.

Steele took that enthusiasm for the unexplainable another step when he listed his building on the short-term rental website for $500 a night. It’s at 5658 Braden St. near Dingeman Park on McGraw Avenue in the Claytown area.

“Have you always wanted to spend the night in a real jail cell, but you don’t want the felony charges that would usually accompany it?” Steele’s now-deleted listing stated. “... This experience will be one of a kind for you

— the place is amazing to explore and enjoy. You shouldn’t expect comfort, but you can expect an amazing mixture of urban exploration, history, law enforcement artifacts and the mysterious.”

The listing allowed renters to explore 30 rooms, including the jail cells, a drunk tank, shooting range and evidence rooms. It offered a bathroom, refrigerator, TV and Wi-Fi for up to six guests.

Steele said he had planned to use the proceeds from the rentals to help finance his renovation process that’s been moving at a crawl for eight years.

The catch is that none of this was actually legal.

See JAIL on Page 21

The nearly century-old former 6th Precinct police station in Detroit at 6840 McGraw Ave. was purchased in 2013 from the city by Ed Steele. | ANNALISE FRANK/CRAIN’S DETROIT BUSINESS AUGUST 16, 2021 | CRAIN’S DETROIT BUSINESS | 3

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4 | CRAIN’S DETROIT BUSINESS | AUGUST 16, 2021

The Michigan Department of Transportation owns a 3.1-acre site on Woodward at Baltimore that houses an Amtrak station. The department has long sought to build an intermodal transit facility there and has sought input from private-sector developers on mixed-use efforts as well. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

A look at future of Detroit’s Amtrak site A mix of transit uses like passenger rail and bus — plus perhaps private development such as residential and retail. That’s one possible end goal for the AmKirk trak site in DePINHO troit’s New Center area.

The Michigan Department of Transportation met with developers earlier this year to discuss the future of that property on Woodward Avenue.

A document provided by the department shows that it met with local and national developers in February, garnering feedback on the private development potential for the 3.1 acre property at Woodward and Baltimore street.

MDOT wants a new intermodal transportation facility on the site, and there could be some mixed-use brought to bear on it, as well.

Hence, one of the reasons why Detroit-based Broder & Sachse Real Estate Services Inc., Detroit-based Roxbury Group, Detroit-based The Platform LLC and Farmington Hillsbased Friedman Real Estate took part six months ago. Others included New York City-based RXR Realty, Melbourne, Australia-based Plenary Group and Paris-based Meridiam Infrastructure, according to the document.

MDOT has explored private development on the property as a way to offset some of the $36 million to $45 million cost expected for the intermodal facility, which would conceptually include passenger rail, bus, and local and microtransit services, replacing both the Amtrak station and the MDOT-owned bus facility on Howard Street near the Lodge Freeway.

Greyhound, Indian Trails, Baron’s Bus and Miller Trailways operate out of the Howard Street property, said Michael Frezell, communications manager for MDOT. It won’t go out to bid for sale/redevelopment until all those operations are moved to a new facility at an unknown time.

Frezell also said MDOT is currently in the process of applying for a federal RAISE (Rebuilding American Infrastructure with Sustainability and Equity) grant — formerly BUILD and TI-

GER grants — through the U.S. Department of Transportation.

Getting a new intermodal facility on the property has been a long-term goal for the department, discussing going to the market with an RFP or RFQ seeking mixed-use developers for some of the site for years.

The department had planned on issuing an RFP in the summer 2019 but that never materialized.

MDOT purchased the land from General Motors Co. in 1994 for $889,000. The land actually consists of two parcels bisected by railroad tracks. The property north of the tracks houses an Amtrak station that is likely to be demolished. The land south of the railroad tracks is a surface parking lot.

The document MDOT provided to me recently shows that developers generally view the north side of the tracks as having more development potential than the south side, although the document does not provide a reason for that.

MDOT PURCHASED THE LAND FROM GENERAL MOTORS CO. IN 1994 FOR $889,000.

Several of the developers recommended building over the tracks, the document says.

In addition, office is not a likely option for the site due to low demand, developers said generally (they were conflicted about hotel use), although residential is an option away from the train tracks that run through the property.

They also said collaborating with nearby institutions like Wayne State University, the College for Creative Studies and Henry Ford Health System would be beneficial.

Developers generally recommended delaying an RFP/RFQ to give the market time to recover from the COVID-19 pandemic.

There were differences of opinion on when to “get the community involved,” according to the document, and all developers recommended including public incentives for the project.

That’s just a smidgen of the feedback from the roundtable.

But, as they say, we’ll wait to see what comes of this.

Ilitches pick Hayman to manage Eddystone Southfield-based Hayman Co. has been selected to manage the Ilitch family’s redevelopment of the Hotel Eddystone into 92 apartments at 110 Sproat St. “We understand the significance of the Eddystone and are committed to facilitating a dynamic and high quality of life for Detroiters who choose to live in it,” Andrew Hayman, president of the company, said in a statement.

Hayman Co. has 10,000 apartments under ownership and management in seven states, with about 4,500 in Southeast Michigan, Andrew Hayman said Tuesday morning. The company also has office, industrial and retail space totaling about 3 million square feet.

Hayman said it will have five to seven employees working the Eddystone, which is 13 stories across from Little Caesars Arena. Hayman said his company and the Ilitch family’s Olympia Development of Michigan have been talking for more than a year.

Walbridge offers lotto ticket vaccine incentives Dan Gilbert’s Rocket Companies Inc. announced last week that effective Aug. 23, it was requiring its unvaccinated workers to get tested for COVID-19 on a weekly basis and resume wearing masks in the office.

To me, that’s a pretty strong stick to encourage more of your workforce to get poked.

Detroit-based The Walbridge Group, a construction giant, is doing things a little differently.

Vaccinated employees each get $20 in scratch-off Michigan Lottery tickets (or the equivalent in other states where it operates) and two sick days in case they feel under the weather after the vaccine, according to CEO Mike Haller.

Southfield-based Barton Malow Co. is not incentivizing the vaccine nor punishing people who don’t get it, said Ryan Maibach, the contractor’s president and CEO. “That said, we’ve talked about the benefits of the vaccine and encouraged people to get it, but respect those that prefer not to. That approach is very consistent with our culture.”

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

HEALTH CARE

Wayne State establishes infectious disease research center Will focus on vaccine development, deployment, pandemic mitigation

BY DUSTIN WALSH

Wayne State University in Detroit.

— Dr. Mark Schweitzer, dean of Wayne State’s School of Medicine S:7.5"

We make it our business to help you with yours.

S:9.5"

Wayne State University announced last week the opening of a new center focused on the study of infectious diseases and strategies to combat future pandemics.

The Center for Emerging and Infectious Diseases will enhance training and research in the field of public health. The center is not a physical building but a collection of doctors, researchers and professors at the D etroit-based university. “ T h e COVID-19 pandemic has dramatically altered local, state and national mindSchweitzer sets toward infectious disease threats, including pandemic diseases,” Dr. Mark Schweitzer, dean of Wayne State’s School of Medicine and vice president of health affairs for the university, said in a news release. “The pandemic revealed deep and broad gaps in our clinical and public health infrastructure that responds to pandemics.

“In line with the mission of WSU to support urban communities at risk for health disparities, the center will have the expertise and capacity to support and collaborate with neighborhoods, hospitals and public health agencies to deliver stateof-the-art diagnostics, treatments and preventive strategies for the benefit of all residents in Detroit and other communities.”

Schweitzer will lead the new center.

The center will cost approximately $4 million annually to operate, mostly funded by external grants, the university told Crain’s in an email.

Work done at the center will focus on vaccine development, clinical vaccine evaluational, deployment strategies for the vaccine in underserved populations and research on pandemic mitigation efforts.

Directors of the new center include: Dr. Teena Chopra, professor of medicine in the division of infectious diseases; Dr. Paul Kilgore, associate professor of pharmacy practice; Dr. Marcus Zervos, head of infectious diseases division for Henry Ford Health System, professor of medicine and assistant dean of WSU Global Affairs.

Key faculty include Dr. Phillip Levy, professor of emergency medicine and assistant vice president of translational science and clinical research at WSU, and Matthew Seeger, professor of communication.

The center’s research will focus specifically on the populations of the city of Detroit, the university said in the release.

WSU mandated the COVID-19 vaccine for all students, staff and faculty amid rising cases. They must submit documentation proving their vaccination status to the university by Aug. 30.

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Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh BCB144280_Crains_Detroit_Business_6-21_Insert_F1.indd 1

AUGUST 16, 2021 | CRAIN’S DETROIT BUSINESS | 5 6/10/21 12:57 PM

RESTAURANT ROUNDUP

Ferndale stalwart Howe’s Bayou closed ‘for awhile’

Industrywide staffing woes take a toll

BY JAY DAVIS

partnering with Michigan Craft Beef to offer a beef dish served with duck fat potatoes, onion jam, haricot vert green beans and a red wine reduction sauce. A traditional English dessert, the Eton Mess, features strawberries, meringue and whipped cream. The full menu will be released prior to the opening.

Toria will operate 3-10 p.m.

Tuesday-Saturday for dinner, and brunch will be served 10 a.m.-2 p.m. Saturday and Sunday.

Howe’s Bayou restaurant in Ferndale is closed temporarily because of staffing issues, the owner announced Tuesday.

“Well not fun for me to say this, but we have to close the restaurant for a while until we can get enough staff to do the job right,” Howe’s Bayou owner Michael Hennes wrote in a Facebook post. “I hope this is a short break and we will see you all soon.”

On its own website Friday, New Vicari restaurant Howe’s Bayou had a banner saying, revives a classic name “Staffing problems force us to close for a bit. We’ll be back as soon as we A Grosse Pointe Farms property can do this properly.” purchased by restaurateur Joe ViThe problem is almost universal cari last fall has reopened. in the restaurant business.

Bronze Door, at 123 Kercheval A survey released last week by Ave., is open 4-10 p.m. Monthe Michigan Restaurant & Lodging day-Thursday and 4-11 p.m. Friday Association found that 90 percent and Saturday to start. of responding restaurants and esUnder the Joe Vicari Restaurant Group, Bronze Door returns to its sentially all responding hotels said roots: That was the name of the they are operating with inadequate restaurant from the 1960s until it staffing. was renamed The Hill Seafood & More than four out of five reChip House in the 1980s. It is one of spondents said they are operating three properties taken over last fall at least 10 percent below adequate

by Vicari. staffing levels and 29 The group entered percent are operating into a 50/50 partnermore than 30 percent below what is needship with The Hill ed to meet consumer owner Anthony demand.

Soave of Soave EnNearly 80 percent terprises. The Hill of restaurant and hounderwent a tel operators report$250,000 remodel, ed closing early or for Vicari said last fall. specific segments Bronze Door’s just during the day as a less than 6,000 direct result of inadesquare feet has seatquate staffing levels. ing for 90 guests and For full-service space for 44 in the restaurants that figbar area. A banquet ure exceeded 85 per- PizzaForno specializes in room has space for cent.

30-50 guests, acartisanal pizzas made to Anyone interested order in less than 3 minutes. cording to a news in working at Howe’s | CONTRIBUTED release.

Bayou can apply onThe restaurant ofline. fers traditional American fare, The restaurant, established in handcrafted cocktails and a curat1998 by Tom Brandel of Tom’s Oysed wine list. ter Bar fame, specializes in creole dishes such as jambalaya, shrimp Pizza vending machines and grits and gumbo. popping up

European-style café to open in Northville Two entrepreneurs are set to open their third downtown Northville business.

Toria, at 115 E. Main St., is set to open Aug. 17. The café, bar and bistro is owned by Alicia and Ryan Racine, who also run flower shop Adorn Fine Flowers and Sugar Lu’s candy shop.

The 700-square-foot restaurant has indoor seating for 40 guests and 20 outdoors. It will have a staff of 18.

Alicia Racine would not disclose how much they have invested in their new endeavor.

Racine touted Toria’s Caviar and Pringles dish. The restaurant is also 6 | CRAIN’S DETROIT BUSINESS | AUGUST 16, 2021

Pizza enthusiasts in Jackson and Ann Arbor will soon have yet another option.

PizzaForno, an automated pizzeria that operates 24/7, has plans for two locations outside Jackson and one in Ann Arbor. Jackson currently has two locations run by Adam Page, who works in the medical device space and Tim Ekpo, an orthopedic surgeon.

PizzaForno, founded in 2018 in Toronto, specializes in artisanal pizzas made to order in less than 3 minutes. The company saw 400 percent growth in 2020, according to a news release.

The pizzas are handmade daily with locally sourced ingredients at a local pizza topping operation, then delivered and placed into Piz-

Howe’s Bayou in downtown Ferndale is pausing operations until it can staff up properly. | HOWE’S BAYOU VIA FACEBOOK

Smokey Bones specializes in barbecue dishes such as pulled pork sandwiches. | SMOKEY BONES

zaForno units. Customers can order their pizza with a click of a button from pizza ovens, and the company plans a phone app to take orders by the fall.

Barbecue chain cooking up plans in Utica Zao Jun in Bloomfield Township will release a new lineup for National Bao Day. The buns are made from Chinese dough and filled with meat or sweets. | BLAKE GEORGE/BMG MEDIA

Smokey Bones, with 62 locations in 16 states, plans to open a new location in Utica in the Shelby Corners Shopping Center at the northwest corner of Hall and Schoenherr roads.

The Utica Smokey Bones will be the third Michigan location, joining restaurants in Grand Rapids and Lansing.

The Utica restaurant will feature Smokey Bones’ new prototype design and “virtual brands” The Wing Experience and Burger Experience for delivery and carryout only, according to a news release.

The restaurant will have a smaller dining room and a large bar area in the center.

Send us your tips and news

Toria, a restaurant specializing in European cuisine, is scheduled to open Aug. 17 in downtown Northville. | ALICIA RACINE

Tell us about restaurant and bar openings and closings, new product lines, new owners and chefs, bakeries, markets, suppliers and more. If you have something to share about the local food and drink scene, email jason.davis@crain.com and/or bvalone@crain.com.

FINANCE

Bank of Ann Arbor restarts proposal to acquire First National Bank in Howell Deal was on shelf amid pandemic economic concerns

BY NICK MANES

A proposed Michigan community bank acquisition deal, shelved last year due to economic fallout from the COVID-19 pandemic, is back on.

Arbor Bancorp Inc., the holding company for Bank of Ann Arbor, is taking off the shelf its February 2020 proposed deal to acquire FNBH Bancorp Inc., the holding company for First National Bank in Howell (OTC Pink: FNHM).

The total value of the rejuvenated, all-cash deal now stands at about $116.5 million, up from about $101.4 million in early 2020, before the pandemic began. The proposed deal is slated to close before year’s end, subject to various closing conditions and regulatory approvals. The combined bank is expected to have more than $3 billion in assets, up from $2.2 billion when first proposed.

The deal calls for shareholders of First National to receive $4.20 per share in cash for each share of FNBH Bancorp common stock outstanding.

The combined bank, under Bank of Ann Arbor branding, is expected to have more than 300 employees across 17 locations in Livingston, Washtenaw, western Wayne and Oakland counties.

In an interview with Crain’s, executives at both of the banks agreed that the landscape at the onset of the pandemic meant that it was best to retreat from dealmaking and focus more on internal matters.

“I think from a conservative position and a fiduciary responsibility, we (had) the responsibility to make sure that we can successfully get through the pandemic,” Tim Marshall, president and CEO of Bank of Ann Arbor, said of the decision to shelve the deal as proposed last year.

“And I think there were a number of institutions that did the exact same thing.”

Marshall said the overall improving economy, as evidenced by lower unemployment and other factors, meant it was time to dust off the deal.

“With the landscape today, with all the vaccines and with the government’s proven willingness to kind of step up and support the economy when it needs it, there’s just a lot more clarity going forward,” Ron Long, president and CEO of First National, told Crain’s. “It just feels like the right time to reconvene.”

Following the acquisition, Long will serve as a district president focusing on the bank’s Livingston County business.

The timing of the renewed deal falls in line with the broader trend of bank consolidation through M&A making a return, according to a July report from S&P Global, which tracks bank deals.

A total of 106 deals have been announced year-to-date through July 16, compared to 55 over the same period last year, according to the S&P report. The report notes that total deal value so far for 2021 has hit $33.92 billion, compared with $27.84 billion for all of 2020.

Locally, shareholders last week blessed the $2.6 billion acquisition of Flagstar Bank in Troy by a New York

City-area bank, and Huntington Bank completed its acquisition of TCF in June.

Bank of Ann Arbor has previously acquired and integrated Bank of Birmingham in Birmingham in January 2017, New Liberty Bank in Plymouth in May 2010 and UniFi Equipment Finance in Ann Arbor in January 2013.

Bank of Ann Arbor had nearly $2.4 billion in total assets as of March 31, according to a regulatory filing. The bank’s Trust and Investment Management Group has more than $2 billion in assets under management, according to a statement.

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

Tim Marshall, president and CEO of Bank of Ann Arbor (left), and Ron Long, president and CEO of First National Bank of Howell, last year shelved their planned M&A deal.

Now it’s back on. | LEISA THOMPSON

A PARTNER FOR HEALTH

Wherever you go around Michigan, you’ll find a Wayne State doctor, nurse, pharmacist or care provider nearby. Every day, these Warriors are changing — and saving — lives in hospitals and clinics, and their research continues to improve the quality of life around the world.

And, wherever you go around our campus, you’ll find students putting what they learn from experienced faculty into action throughout the city, teaming with experts across the spectrum of care to meet community needs. They go on to serve as health professionals who bring the compassion and expertise they developed in Detroit to people everywhere. We think this approach creates a very healthy partnership with our global community, and develops health care leaders who are Warrior Strong.

wayne.edu

AUGUST 16, 2021 | CRAIN’S DETROIT BUSINESS | 7

COMMENTARY

Behavioral health bills are nothing but a money grab

BY TOM WATKINS

NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

I

EDITORIAL

For unions, vaccines can’t be just another negotiation

L

ast week, the head of the nation’s largest teachers union, the American Federation of Teachers, did an aboutface and came out in support of vaccine mandates as teachers and students, many of whom can’t be vaccinated yet, head back to the classroom.

However, the union’s official policy did not follow, instead opting to instruct teachers union locals to negotiate vaccine mandates at the local level.

It’s the wrong approach.

Employers are increasingly contemplating or creating rules that require employees to get vaccinated in order to keep their jobs. One common thread runs through those requirements: Outside of health care, they are largely confined to nonunionized workplaces.

To their credit, many unions have advocated vaccines for their workers. But when it comes to requirements, it’s clear that it’s hard to shake the IT’S CLEAR THAT habit of not giving ground without getIT’S HARD TO ting something in return.

SHAKE THE Locally, we’ve HABIT OF NOT seen the state’s largGIVING GROUND est nurses union come out publicly WITHOUT against Novi-based Trinity Health’s vacGETTING cine mandate. DeSOMETHING IN troit schools came out with an aggresRETURN. sive policy on masking but hasn’t crossed the line on requiring staff vaccinations in a city with a woefully low inoculation rate.

Not one of Michigan’s heavily unionized school districts has pushed through such a requirement — we wonder why that might be. In Detroit, some teachers have picketed against their own union to demand a vac-

cine mandate as a condition of returning to classrooms.

A vaccine mandate seems especially enticing in the manufacturing business, where the costs to a company of a COVID-related shutdown can be astronomical and employees sometimes work in very close quarters. The United Auto Workers itself has largely avoided the question of vaccine mandates, saying that they amount to a local issue, but we’ve also not seen any move among the automakers to put some teeth behind efforts to get employees vaccinated.

We are sure there are many more examples playing out behind closed doors as companies work to get a handle on the reality of the delta surge. There seems little doubt that the difficulty of union negotiations acts as a big disincentive.

Unions reflexively consider any change to employment terms as negotiating points — a path to get leverage to extract other benefits or concessions.

But vaccination and other anti-COVID policies are too important and urgent to waste time at the negotiating table. The best policy for unions on mask mandates is at a minimum not to slow them down.

This isn’t an argument over the length of a lunch hour. Every extra day spent bickering is quite literally a life-or-death issue.

It seems clear many employers will seek to stiffen vaccine requirements once the FDA gives the shots full approval. For their members’ own sake, unions should not stand in the way.

MORE ON WJR Crain’s Executive Editor Kelley Root and Managing Editor Michael Lee talk about the week’s stories every Monday morning at 6:15 a.m. Mondays on WJR 760 AM’s Paul W. Smith Show.

t is not “those” people. It is 300,000 of our fellow citizens, people with serious mental illness, substance use disorders, children with emotional challenges and people with intellectual and developmental disabilities.

Tom Watkins is It is our family and former director friends. What happens of the Michigan to them, matters to us Department of all.

Mental Health, And their care is at state risk. superintendent Behavioral health isof public education, and sues skip no ZIP code president and and impact one in four CEO the Detroit people in our communiWayne ties. If it hasn’t impacted Integrated your family yet, it will.

Health Network.

Senate Majority Leader Mike Shirkey has introduced legislation (Senate bills 597 and 598) whose stated goal is to integrate behavioral and physical health care. All can agree this “stated” goal is laudable. Yet his proposed solution will not accomplish this goal, nor is it what consumers and families want.

This is a profit-driven assault on Michigan’s public behavioral health system. It will result in the transfer of $3 billion of our tax dollars to profit-driven insurance companies whose bottom line is to shareholders and CEOs, not consumers and service.

If you like the dismantling of care currently taking place under the auto no-fault “reforms,” you will love Shirkey’s bills. Today insurance companies and shareholders are getting the gold mine and some of Michigan’s most vulnerable are getting the shaft.

There ought to be great pause by the Michigan Legislature, the Department of Health and Human Services and the governor about this act.

Behavioral health care is currently provided by a network of primarily nonprofit community agencies with public oversight and accountability. These bills are about “profitizing” not privatizing the Michigan behavioral health system.

Family members and consumers are petrified about abrupt change driven by profits, losing long-term relationships with trusted therapists and new rules that limit service. Given the historic struggles to get what they have, their worries are not without merit.

Actions have consequences Having lost two brothers to suicide after struggles with substance use and mental health issues, I have witnessed when a system of care is driven by profit motives versus care, compassion and human decency.

It is not pretty, and the results can be deadly.

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 16, 2021

Clearly, we should always strive to maximize both services and taxpayer dollars.

This will not be accomplished by simply turning billions over to insurance companies.

When I was CEO of the Detroit Wayne Integrated Health Network, our team generated tens of millions in new revenue. These resources did not go to shareholders or CEO compensation; the savings were directed to providing a $2-an-hour increase to direct care staff, the backbone of the community-based system of care. Clearly, this decision would not be made when the bottom line is profit.

Compare this to a study on the national Medicaid health plans which found that Michigan had the second-highest rate of administrative costs, at 21 percent, leaving only 79 percent used for services to vulnerable people.

The bulk of behavioral health care in Michigan is paid for by the federal Medicaid program, which was signed into law by President Lyndon Johnson in 1965. Clearly, neither he nor Congress set out to create millionaires and billionaires off the backs of the elderly, poor and persons with disabilities. Yet, that is what is happening today.

There is little disagreement that the goal of integrating behavioral health care with physical health care EVERYTHING WE is both necessary DO SHOULD and admirable. The disagreement lies CREATE A LIFE OF over who controls DIGNITY AND the billions in annual Medicaid dollars SELFthat would be used DETERMINATION to make the changes.

The people relying FOR OUR on the system of care FELLOW want and deserve improvements. This CITIZENS, NOT legislation will not PROFITS FOR A address their concerns. It is opposed FEW. by consumers, families and providers and will be disastrous for them and taxpayers. Other states that have passed similar legislation have regretted the move, seeing service decline as a historic system of care was dismantled in the name of profit.

If the true goal is integration of care and not a legislative-aided $3 billion money grab by insurance companies, it must begin and focus at the consumer level, not at the financial level, and there must be public transparency, accountability and governance in order to protect Michigan’s most vulnerable citizens. These bills do not do that and must not pass. If they do, for the sake of people in need, the governor must veto them.

Everything we do should create a life of dignity and self-determination for our fellow citizens, not profits for a few.

Michigan has an opportunity to demonstrate all that can be achieved when we focus on doing the right thing for those in need. Will we?

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

Rosalie Vicari on keeping a restaurant group cooking during COVID-19 In the depths of the COVID surge late last fall, Rosalie Vicari spoke for many small business owners in a piece she wrote for Crain’s that touched quite a nerve.

The co-owner of Vicari Restaurant Group told readers that between government lockdowns applied unevenly and stimulus checks that were keeping workers home, it was getting harder and harder to keep workers who wanted to work employed.

Crain Communications CEO KC Crain checked in with Rosalie, who with her husband, Joe, is still opening new restaurants adding to the family’s portfolio of Andiamo and other restaurants. | BY KC CRAIN

Last year, you were kind enough to write a guest column for Crain’s Detroit Business. You told the story about your business and what happens when people make decisions on your behalf. It really resonated with our audience and was one of our 10 most-read stories. What is your writing background?

I have a background as an English teacher.

When you look back at last year, it seemed like the rules were changing every day.

That was the most frustrating part of the whole thing: You never knew. There was no clear direction of where we were going, and everything was last minute.

It showed though, how entrepreneurial restaurant owners are. You had to change your business model every day.

As everybody did. We weren’t the only people that were doing it. I just don’t know if the governor fully understood the magnitude of what happens when you just say, “It’s Monday and we’re closing the restaurant on Friday.” What happens to all the inventory and the perishables in those 25 stores? If we were given two weeks, then you can work through your inventory, and you don’t place orders. But it didn’t happen that way. There was no clear guidance of what was going to happen. Everything was sprung at us.

The same happened with opening. We just can’t open in three days, not when you’re dealing with people. It’s a lot of work and it’s a lot of planning to open again.

How do you deal with that, from a culture standpoint? How do you keep your team motivated through this?

The hardest part was the closure during December. We had to lay off 700 people — we employ over 1,000

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

nesses, and there have been some positive outcomes. Some examples are people have been able to digitize some of their business, mobile orders, seating outside and alcohol to go. Are there any other positives that you think will stay?

KC Crain: You’ve had quite a year.

Rosalie Vicari: I would say!

Can you give us a 30,000-foot view of how the restaurant business is being impacted?

In terms of people coming back to restaurants, the restaurants have been packed. People are clamoring to be out with their friends, to socialize and have dinner together. The struggle at our point is the unemployment issue, and not getting enough people to come back to work. The second issue that restaurants are having is the cost of goods. Some things are up three, four or five times. We’ve started to pull some things off the menu because they’re too costly to have even at market price. Those are two things that we’re struggling with.

The restaurants themselves have been super busy, which has been wonderful and great to see. We’re trying to manage the lack of workers and not overload everybody.

THIS IS THE LATEST IN A SERIES OF INTERVIEWS BY

Rosalie Vicari

— during the holidays, which was horrific for us. That’s what prompted the (Crain’s opinion) piece, because I didn’t think that people understood the magnitude of what happens, and how many people were impacted. It’s just not the people that worked inside the restaurant; it’s our vendors, our entertainers, valet company, it stretches across the board. Government was our partner, in that they decided what we were going to do, and it was hard.

The first closure, when everything was closed, you got it, you understood it was about keeping everybody safe.

The second closure, when there were just certain industries that were closed, it just made no sense. She closed restaurants, supposedly, because you have to take your mask off to eat, but you could go into the food court of a packed mall, take your mask off and eat throughout the mall. It made it, in some regards, harder for us to handle because of that. We got it. We’re all doing our part, as the governor would like to say, but everybody didn’t do their part. We did our part. We’re happy that it’s the end of it. We hope we don’t encounter it again. It was tough.

Nobody wrote a book on how to manage communication through a pandemic. How do you even come up with what to say to these people?

It’s not that we had a lot to come up with because they knew the situation.

It was the reality. We kept all our key people throughout the pandemic — our general managers, head chefs — the people that we couldn’t replace, not that it was easy to replace anybody.

We’re finding that the most wonderful thing about it is most people stayed with us. We’re so thankful. The thing that we heard over and over again is, “Thanks for speaking up for us, thanks for going to battle for us.” That was a wonderful thing.

I think that may have been one of the reasons people chose to come back to us, because they felt that they had somebody in their corner that was fighting for them and trying to help them. There were some people that said, “Oh, you’re a big company, you know you’re going to make it through.

Why are you making so much noise?”

I’m making so much noise because we had 700 people that weren’t getting a paycheck. It wasn’t so much about me and Joe and our business, it was about the people that work for us because that’s what has made us successful. We were trying to fight for them and get them back to work.

We’ve been talking a lot about the effects of COVID on people’s busi-

We’re being conscious that there’s still a variant out there and not packing our restaurants. We’re continuing to fight and continuing to change operations where we need to. We all learned how to do business differently, how to scale back and try to be as profitable with less. It was a definite 18 months of learning, learning about people in general, learning who digs in and fights and who just bails and doesn’t want to do it. When the times get tough, the tough get going — it really is the truth. I watched Joe every day during the second COVID (surge), get up and put his suit on, and go to work. During both COVID closures we gave away over $2 million in food with buy one-get one. He would go every single day and be at a restaurant to encourage the people that were there and thank them for continuing to come in and work.

People were a little afraid during that time, because we were in the middle of COVID. The people that work for us were awesome.

Thinking about both the business and the government, what would be your biggest takeaways moving forward?

The biggest takeaway is you have to listen to people more, and you have to listen to what they’re comfortable with. We think people are comfortable coming back into the restaurants, because they have been very full. But there are still people that are afraid to be out and afraid to congregate.

To address this, you move towards an online system, offer more carryout, cocktails to go and packages of food that people can cook at home.

We had a grilling class recently, and 400 people went home with food packages. We are trying to accommodate different things.

We did our first Zoom things online, like virtual wine classes. It was fun, but you missed the interaction of sitting and opening a bottle of wine with people. It was what it was at that time.

Going forward, we’ll probably continue to touch base with some of those to see how they impact our customer base. We’ve increased patio sizes, so if we ever have to close down again at least we have bigger patios.

See VICARI on Page 16

Charting a path for a resilient world How can businesses thrive in today’s new normal? It begins with resilient leaders like you, who quickly connect today’s resources to meet tomorrow’s challenges. Learn more about the insights and services that can help you build greater organizational resilience—and help us all build a more resilient world.

To start on your path to resilience, visit deloitte.com/us/covid-19 Copyright © 2021 Deloitte Development LLC. All rights reserved.

AUGUST 16, 2021 | CRAIN’S DETROIT BUSINESS | 9

MENTAL HEALTH Adding PAs, NPs could expand access to care, but opposition lingers.

HEALTH CARE

INTO THE FOREFRONT Physician assistants expand roles as laws change, acceptance increases

BY JAY GREENE As physician assistants are being accepted more as part of multidisciplinary care teams at hospitals and as trusted providers in medical office settings, they also are opening independent offices, creating more access points for patients and taking on clinical leadership roles within health care organizations.

PAs — who are considered advance practice providers like nurse practitioners, certified registered nurse anesthetists, certified nurse midwives and certified nurse specialists — diagnose illnesses, write prescriptions and counsel patients on preventive care.

In 2017, Michigan’s Public Act 379 granted more autonomy to PAs, eliminating the state’s strict ratio requirements that limited the number of PAs who could provide care under a single physician’s oversight. Nearly 30 states have expanded PA scope of practice in recent years, including New Jersey, Minnesota, North Dakota, Vermont and Massachusetts.

10 | CRAIN’S DETROIT BUSINESS | AUGUST 16, 2021

“WHAT WE ARE TRYING TO DO IN MICHIGAN IS CREATE AN ENVIRONMENT WHERE WE’RE INDEPENDENT WITHIN THE WORK THAT WE DO.” — Michelle Petropoulos, president of the Michigan Academy of Physician Assistants

Under collaborative practice agreements with physicians, Michigan PAs are now defined as independent “prescribers” with full prescriptive authority. They can be licensed individually to write prescriptions for various controlled substances.

PAs also make house calls in private homes or go on rounds in many types of health care facilities.

“Over the last 10 to 15 years, what we have seen is providers and patients have become much more aware of what PAs do. They have really emerged into leadership roles, including owning practices, and at the executive level in hospitals as part of the teambased care approach,” said Thadd Gormas, executive director of the Michigan Academy of Physician Assistants.

“Patients really respond well to us, whether it’s because they’re tak-

ing more time to speak with patients, or that a PA is much more willing to consult other folks about the care of a patient,” said Gormas.

Michelle Petropoulos, president of the Michigan Academy of Physician Assistants, said many things have changed in her 24 years as a PA. “We’re a bigger organization than when we started out. While we generally work within a physician group, over the years physicians have sold their practices and we became employed by these larger groups” such as hospitals, Petropoulos said.

Because PAs are trained as generalists, Petropoulos said they are flexible practitioners who can practice in multiple specialties, depending on their interest and job availability.

See ASSISTANTS on Page 12

GETTY IMAGES/ISTOCKPHOTO

PAGE 11

FOCUS | HEALTH CARE

Mental health code changes could ease stressed system Bill adding PAs, NPs to designated practitioners list still faces hurdles in medical community

BY JAY GREENE

Physician assistants and nurse practitioners have asked the Michigan Legislature to fix a glaring hole in the state mental health code: no mention of PAs, NPs and other advanced practice providers in the list of designated mental health practitioners.

Michigan’s mental health code, written in 1974, was developed in the early days of advanced practice providers, when access to care was plentiful, PAs and NPs had more limited licenses and insurance reimbursement was cost-plus to whatever profit was desired.

Senate Bill 191, which redefines mental health professionals to include advanced practice providers, has passed the Michigan Senate and is awaiting hearings and a vote in the state House. It is sponsored by Sen. Curtis VanderWall, R-Ludington, chair of the House health policy committee, and all 15 members.

The bill would authorize several other things, including allowing advanced practice providers to conduct physical examinations, authorize seclusion and restraints and complete first clinical certificates to refer patients to a psychiatrist for further evaluation. Only a psychiatrist is able to make a second certification for involuntary hospital admission. The bill does not change that requirement.

For example, if a patient becomes aggressive toward others or has to be physically stopped from hurting him or herself, nurses can temporarily apply restraints — but a provider order has to be written within 30 minutes and the patient has to be examined in person within an hour, said Dr. Laura Hirshbein, a psychiatrist and medical director in the adult psychiatry unit at Michigan Medicine in Ann Arbor, in a letter of support for the bill.

“If the only provider available (in an inpatient unit) is a PA or an NP, the nurses have to release the patient — even if he takes a swing at other patients,” Hirshbein wrote. She added if the patient were on a medical floor, a PA or NP could legally order restraints because that setting is governed by the public health code that recognizes advanced practice providers.

The Senate Fiscal Agency, which analyzed the bill, concluded it would have no fiscal impact on state government even with a possible increase in mental health services. However, it could result in additional regulatory expenses as advanced practice providers would be monitored as mental health providers.

Thadd Gormas, executive director with the Michigan Academy of Physician Assistants, said SB191 is “pretty basic legislation” because the current code is outdated. More designated mental health providers are needed in the state’s overwhelmed health care system, he said.

“This creates parity in the mental health code. PAs and NPs both practice in every mental health setting in Michigan, but are not listed as mental health providers,” Gormas said. “They deserve to be recognized.”

At a recent Senate hearing, several psychiatrists testified in support of the bill, Gormas said.

However, the Michigan Psychiatric Society, the Michigan State Medical

Gormas

Moote

Society, Disability Rights Michigan, Autism Alliance of Michigan and Arc of Michigan opposed the bill.

Mark Reinstein, a longtime mental health executive who testified for the Michigan Psychiatric Society, said the bill doesn’t significantly expand mental health access. He argued the bill should require advanced practice providers to have post-graduate certification in mental health and minimum hours of mental health training.

“Lastly, instead of curtailing the use of restraint and seclusion, a goal for everyone in the mental health community, SB 191 simply adds a host of new people, some of whom won’t be qualified, to the list of those who can do authorizations, exams and orders,” said Reinstein in a letter to the Senate health policy committee in March.

The Michigan State Medical Society said it supported the bill’s intent to reduce mental health treatment delays.

But it objected to allowing additional health care providers to order the use of restraints and seclusion and provide initial certifications for involuntary holds and admissions.

“This legislation could be a vehicle to require or encourage state-licensed mental health facilities to adopt evidenced-based best policies and training protocols that lessen the need for restraints and seclusion and provide a safer environment for both residents and staff,” MSMS said in a statement to Crain’s.

“Expanding the number of health care professionals who can engage in these processes without altering fundamental practices will not improve the delivery of behavioral health care or clinical outcomes,” MSMS said.

The bill’s more than 18 supporters include the Michigan Osteopathic Association, the Michigan Society of Addiction Medicine, the Michigan Health and Hospital Association, the Michigan Academy of Family Physicians, the Michigan Nurses Association and the Michigan Association of Health Plans.

John McGinnity, director of the PA Medicine Department at Michigan State University, said PA students get the same training in psychiatry as osteopathic students.

“Let PAs use their training. There is a huge shortage of mental health providers. It is a common sense approach,” he said.

McGinnity said he believes some professional physician organizations are simply trying to protect their turf by using the lack of training argument. “I don’t see this as a threat to physicians,” he said.

Marc Moote, chief physician assistant at Michigan Medicine in Ann Arbor, said updating the mental health code is critically important for patients.

“What Michigan residents need is access to mental health care as it is at a crisis level,” Moote said. “Nationally and in Michigan we need more capable, qualified and educated providers

Danek

Patel

for our patients. We hire psychiatrists, but we have seen reimbursement challenges more for PAs and NPs than for physicians in that space.”

Increase reimbursement?

While Gormas said code changes wouldn’t require advanced practice providers to receive additional reimbursement for mental health services they provide, several PAs told Crain’s they believe the code changes could expand what credentialed PAs do because they could be directly reimbursed by payers for those uncovered services.

Samantha Danek, a hospital-based PA who also is chair of MAPA’s legislative committee, said she believes hospitals don’t hire as many advanced practice providers in mental health units because of reimbursement restrictions.

“Right now there is a three-month wait to be seen as a new mental health patient. Hospitals are businesses and they will hire you if you can generate revenue,” Danek said. “Certain services PAs provide in mental health aren’t reimbursed.”

For example, PAs are not reimbursed in some cases for an initial psychiatric evaluation and also for therapy that includes smoking, anxiety, depression and sleep problems.

“While we can’t say for sure that amending the mental health code would alleviate these access issues for patients, it will likely help,” Gormas said.

Sarang Patel, a PA who co-owns two mental health clinics with seven employed PAs, said his clinics face some reimbursement challenges, but the clinics continue to provide whatever service a patient requires.

“Changing the code can increase access at hospitals,” Patel said. “There are certain things related to the mental health code when it comes to billing in outpatient areas that could help us continue to bill properly that would sustain access to care in rural areas.”

Patel said more health insurers recognizing reimbursement for PAs in clinics could help expand the types of services they provide.

“If we run into any billing issues with therapy or medication management, we don’t go back to the patient and not provide the care, we just provide it and bite the bullet,” he said.

Blue Cross Blue Shield of Michigan, which reimburses advanced practice providers for certain mental health services, declined an interview request.

In a statement, Priority Health in Grand Rapids said reimbursing PAs for mental health services is a difficult question to answer because of various complications. “The complexity crosses lines of business, employers’ choices

in plan design, as well as state and federal guidance,” said Priority.

Still, Dr. Jim Forshee, Priority’s chief medical officer, said updating the mental health code is a good thing. He questioned, however, the section of the bill that allowed advanced practice providers to order restraints in psychiatric units.

“We at Priority support these kinds of initiatives and thoughtful legislation because the demand for psychiatric services is so high,” said Forshee, who started out as a PA before going to medical school. “This is something we support, having increased access for patients in the state.”

In a statement, Priority Health said when NPs and PAs are billing in office settings and not credentialed as a network provider, they would bill under the collaborative arrangement of the physician, using the same mental health codes in the payers’ fee schedule.

But if NPs and PAs are billing in an office setting using their own credentials, Priority said they would pay at the advanced practice providers rate.

Forshee the COVID-19 pandemic has brought mental health access to an even higher level of needs. He said advanced practice providers could be used more to provide mental health telemedicine services as part of a mental health care team approach.

“We’ve not seen an expansion of the actual services available in a significant way,” he said. “Making it available digitally, which is something that we’ve done here at Priority Health, will give members online access to resources.”

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AUGUST 16, 2021 | CRAIN’S DETROIT BUSINESS | 11

FOCUS | HEALTH CARE

ASSISTANTS

From Page 10

“What we are trying to do in Michigan is create an environment where we’re independent within the work that we do,” said Petropoulos.

Marc Moote, chief physician assistant with Michigan Medicine in Ann Arbor, said the 2017 law gave PAs greater freedom to practice up to their licenses within the patient-centered, teambased care team.

“The changes in the law in 2017 really didn’t change our independence. It mostly eliminated administrative barriers to team-based practice,” Moote said. “Before, PAs could prescribe controlled substances. The issue was that they had to have a written delegation agreement (with a physician) and didn’t receive a license to prescribe (on their own).”

Moote said PAs will be granted increased responsibilities and autonomy over time.

“PAs are diagnosing, treating, prescribing, and yet, that will vary (between PAs and specialties),” he said. “How much independence will vary based on time and specialty training.”

Because of critical community needs, worsened by the pandemic, Gormas said the fastest growing specialty for PAs is behavioral health.

In June 2019, Canton-born PA Sarang Patel acquired one physician practice in Adrian specializing in mental health services and then in April opened another clinic in Wayne. He employs seven PAs, five NPs, several therapists and support staff.

Patel bought Adrian Counseling from Dr. Theethaye Ittiara when he retired and earlier this year opened Pure Psychiatry of Michigan in Wayne. Under state law, PAs must have collaborative relationships with physicians to operate clinics. Doctors also must own a minimum of 1 percent of clinics.

Patel, a PA since 2016, decided to specialize in psychiatric issues while training at Beaumont Hospital Wayne’s emergency department.

“We wanted to continue servicing the community of Adrian for mental health. Like many rural areas, people drive far for access to care and we wanted to make sure when they come in they feel like they are at home,” Patel said.

Patel said he plans to add other clinics when opportunities arise. “My family is business oriented and I wanted to get into a entrepreneurial role,” he said. “If something comes up in a community, and we can help, I would love to grow.”

Keith Hustak, a PA for 17 years who is vice president of advanced practice provider services and operations with Spectrum Health in Grand Rapids, said PAs historically were designed to take on some of the roles that physicians couldn’t do because of time constraints.

“What’s evolved though over the past 10 years is that PAs have moved from primary care into more specialty care,” said Hustak, who also is vice president of operations for urgent care and occupational health. He oversees the system’s 700 advanced practice providers, including PAs and nurse practitioners.

“We are trying to get increasing access to care and PAs are helping do that,” he said. “In the old days, you might wait two or three weeks to see your physician and then you’d wait two hours in the office. Now it is ‘who can I see the fastest,’ and that’s where PAs are kind of being thrust into the forefront of health care because they have excellent medical training.”

PAs schools increasing Michigan has eight accredited PA programs, including Wayne State University and Grand Valley State University, and three are seeking accreditation at Michigan State University, Oakland University and Lawrence Technological University.

John McGinnity, director of PA Medicine at Michigan State University’s College of Osteopathic Medicine, said there has been rapid growth of PA programs because of the state’s regional health care needs. MSU is seeking provisional accreditation and hopes to start its first class of 38 students in May 2022.

“The biggest issue is clinical rotations. PAs have now twice as many programs as a few years 12 | CRAIN’S DETROIT BUSINESS | AUGUST 16, 2021

“IN THE OLD DAYS, YOU MIGHT WAIT TWO OR THREE WEEKS TO SEE YOUR PHYSICIAN AND THEN YOU’D WAIT TWO HOURS IN THE OFFICE. NOW IT IS ‘WHO CAN I SEE THE FASTEST,’ AND THAT’S WHERE PAS ARE KIND OF BEING THRUST INTO THE FOREFRONT OF HEALTH CARE BECAUSE THEY HAVE EXCELLENT MEDICAL TRAINING.” — Keith Hustak, PA and vice president of advanced practice provider services and operations, Spectrum Health

ago, but it is a challenge to find (training spots) for them” at hospitals, said McGinnity, who taught PA medicine at Wayne State University for 25 years.

“We’re seeing the same growth as medical schools and everyone is looking for training spots for their students,” said McGinnity. “And if you are in a smaller institution, it’s tough. (Hospitals and outpatient providers) want some reimbursement for (training).”

McGinnity said more PAs in Michigan will help address primary care shortages and also lack of providers in rural settings.

Moote with Michigan Medicine oversees more than 350 PAs. More than 70 percent of its PAs specialize, a higher percentage than most community hospitals, he said. Another 400

nurse practitioners are in the university health system, but unlike Spectrum, which operates a blended model, nurse practitioners have separate management.

“The majority of our positions are posted as APPs (advanced practice providers), where either a PA or an NP could apply. Hiring really depends on specialty and department needs. PA and nursing are fully supportive of best qualified applicants. We really want at the end of the day the best practitioners for our patients,” Moote said.

COVID-19 challenges When COVID-19 struck in March 2020, some PAs switched specialties to support other providers in intensive care units and emergency departments.

A small number, estimated at about 12 percent, mostly working at physician offices, were laid off or furloughed when states ordered shutdowns that closed some health facilities, according to a report last summer by the National Commission on Certification of Physician Assistants.

“Patient volume was impacted by the pandemic, with 45 percent of PAs reporting a decrease,” the NCCPA report said. The study included responses of 21,000 certified PAs. In April 2020, Petropoulos began working at home doing telemedicine after Preferred Medical Group in Madison Heights, where she practiced, downsized because of reduced patient visits.

“I wasn’t feeling very useful sitting at home doing a few visits every day,” she said. “I started to submit applications to (hospitals) in Detroit.

They were opening up (COVID emergency centers), but I only got one response.”

Petropoulos decided to go where she was needed and left Michigan to work at Bellevue

Hospital in Manhattan from April to July 2020.

Then she took a job at HBO as a COVID-19 compliance officer. But she went back to Bellevue in February, during another surge, and stayed until last month.

“COVID-19 brought New York City to its knees. I have never seen such devastation,” Petropoulos said. “The unity I witnessed, the cheers of support in the streets when I walked out of that hospital, after seeing what I hope to never see again, brings me to tears to this day.”

Petropoulos, who hopes to return to Detroit, is still working for HBO on multiple shows. She said her safety protocols have resulted in zero outbreaks. At Michigan Medicine, Moote said PAs, NPs and doctors all contributed to a variety of patient care duties during the worst of the pandemic.

“Our PAs viewed COVID, especially the initial surge, as a call to action and volunteered at a tremendous level,” Moote said.

But Moote said COVID-19 has taken a toll on all providers.

“Make no mistake, for those who did not redeploy — PAs, NPs and physicians — they were bearing the brunt of extra workload under austere and extreme circumstances,” Moote said.

“Everyone is back to where we were before. I’m really proud of the work they did.”

Samantha Danek, a neurosurgery PA who worked through the surges at Henry Ford Allegiance Hospital in Jackson, said the COVID-19 crisis challenged everyone differently.

“We had no furloughs at Allegiance. They incorporated staff back into different positions for a time. I went to care for patients in specialized units,” she said. “It’s almost back to normal now.

It’s a relief not having to go back into a unit with all the garb on — the spacesuits.”

Danek said families can now communicate directly with their loved ones.

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FOCUS | HEALTH CARE What are physician assistants?

Physician assistants got their start during the mid-1960s to address a shortage of primary care physicians when the first training program was created at Duke University Medical Center. But PAs’ roots trace back to World War II, when the need for medical doctors created the fast-track training program.

Unlike nurse practitioners, who are trained in the nursing care model, PAs are trained in the medical model with half their 4,000 hours spent in classrooms and half in actual patient care. NPs, who have similar licensing requirements and service limitations as PAs, must complete about 1 1/2 years of post-baccalaureate studies and some 500 hours of clinical training.

With more than 268 PA schools nationally, the PA profession is listed by U.S. News & World Report as No. 1 on its 2021 “Best Healthcare Jobs” list with a projected 31 percent growth rate over the next seven years.

Nationally, there were more than 130,000 practicing PAs with an average annual pay of $115,390, or $55.48 per hour in 2019, according to the U.S. Bureau of Labor Statistics.

In Michigan, 48.2 percent of the 6,759 licensed PAs practice in a physician office or clinic setting, 39.3 percent in hospitals, 7.2 percent in urgent care centers and 4.5 percent in other settings, according to 2019 data, Gormas said.

Overall, 43.6 percent of Michigan PAs are employed by physicians and 56.4 percent by hospitals, a number that has been growing as doctors become hospital employees.

Some 21.5 percent specialize in primary care.

By specialty, 22.1 percent of the state’s PAs specialize in surgery, 17.6 percent in family medicine, 14.5 percent in internal medicine, 8.2 percent emergency medicine, 7 percent urgent care and 3.9 percent in general pediatrics or general internal medicine.

Another 23.4 percent are in other specialties.

Physican assistant Eryn Smith examines patient Brad Cook during an electrophysiology appointment in this photo taken before the COVID-19 pandemic at the University of Michigan Health Frankel Cardiovascular Center. | MICHIGAN MEDICINE

“It’s like a regular day now,” she said. “We’re not seeing those desperate calls for beds, those code reds, 50 patients down in the emergency room waiting. It’s a very welcome change.”

Most people treated at hospitals now are the young unvaccinated. “They don’t get as sick,” Danek said.

In late July, Danek took a job in the mental health unit at Trinity St. Joseph Hospital in Chelsea, where she will be working with a new team of doctors and nurses.

“I decided to switch to psychiatry. I’m trying to line up a little more with my vision,” said Danek, adding that a close friend recently lost her son to suicide at age 16.

“This COVID pandemic gave me a broader outlook of what I want to do with my life” and career, she said.

Like many hospitals that have transitioned to multidisciplinary team-based care, Danek said St. Joe’s Chelsea is just beginning to incorporate advanced practice providers in mental health services.

“They understand what APPs can really bring to their service. They know they can’t maintain this volume without adding APPs,” Danek said.

When Danek first started as a PA in 2009, Allegiance only employed five PAs. Now it has more than 200 PAs and NPs. “It’s been an amazing expansion and worked out very well for Henry Ford,” she said. Over the past 18 months, Allegiance has begun using PAs in its psychiatric units.

When Spectrum integrated its now 700 ad-

vanced practice providers with doctors several years ago in orthopedics and other service lines, Hustak said it was done to improve teambased care, but also to reduce physician burnout.

“We are now working at the top of our competency, helping doctors and other administrators, providing help in a way that is cost effective,” Hustak said.

“We really have a great culture with our PAs and APPs. We don’t have to divide where NPs or midwives and PA do things differently. They work side by side,” Hustak said. “If you stand 10 feet back, they don’t seem much different.”

Moote said the 2017 law also is helping Michigan Medicine and other hospitals with the challenging transition from fee-for-service payments to “value-based reimbursements.”

Fee-for-service payments are based on individual services while value-based payments are based on the services, but also the quality of care provided and patient outcomes.

Within a team-based practice approach, Moote said everyone is striving to find the right balance between quality, price and patient satisfaction, known as the triple aim.

But right now it is difficult to attribute costs and revenue to individual providers because of antiquated reimbursement policies, Moote said.

“If you look at inpatient care, very few inpatient providers, physicians, PAs, NPs, cover their costs exclusively, through direct fee for service reimbursement,” Moote said. “That requires a subsidy by health system to cover a portion of our costs.”

Moote said PAs can provide lower costs and delivery high-value care. Michigan Medicine’s goal is “to figure out what is the optimal number of physicians, PAs and NPs so we can provide lower cost health care at all times,” he said.

Cardiology & Heart Surgery Diabetes & Endocrinology Gastroenterology & GI Surgery Geriatrics Gynecology Orthopedics Pulmonology Urology Cancer Neurology & Neurosurgery Cardiology & Heart Surgery Diabetes & Endocrinology Gastroenterology & GI Surgery Geriatrics Gynecology Orthopedics Pulmonology Urology Cancer Neurology & Neurosurgery Cardiology & Heart Surgery Diabetes & Endocrinology Gastroenterology & GI Surgery Geriatrics Gynecology Orthopedics Pulmonology Urology Cancer Neurology & Neurosurgery Cardiology Beaumont & HeartHospital, Surgery Diabetes & Endocrinology TroyGastroenterology & GI Surgery Geriatrics Gynecology Orthopedics Pulmonology Urology Cancer Neurology & Neurosurgery Cardiology & Heart Surgery Diabetes & Endocrinology Gastroenterology & GI Surgery Geriatrics Gynecology Orthopedics Pulmonology Urology Cancer Neurology & Neurosurgery Cardiology & Heart Surgery Diabetes & Endocrinology Gastroenterology & GI Beaumont SurgeryHospital, Geriatrics Gynecology Beaumont Hospital, Orthopedics Royal Oak Pulmonology Grosse PointeUrology Cancer Neurology & Neurosurgery Cardiology & Heart Surgery Diabetes & Endocrinology Gastroenterology & GI Surgery Geriatrics Gynecology Orthopedics Pulmonology Urology Cancer Neurology & Neurosurgery Cardiology & Heart Surgery Diabetes & Endocrinology Gastroenterology & GI Surgery Geriatrics Gynecology Orthopedics Pulmonology Urology

The Most

NATIONALLY RANKED HOSPITALS in Michigan

AUGUST 16, 2021 | CRAIN’S DETROIT BUSINESS | 13

CRAIN'S LIST | LARGEST MINORITY-OWNED BUSINESSES Ranked by 2020 revenue COMPANY NAME LOCATION PHONE; WEBSITE

MAJORITY OWNER

REVENUE ($000,000) 2020/2019

PERCENT CHANGE

LOCAL EMPLOYEES JAN. 2021/ 2020

MINORITY GROUP OF OWNERSHIP

TYPE OF BUSINESS

1

PISTON GROUP 1 3000 Town Center, Suite 3250, Southfield 48075 (313) 541-8674; pistongroup.com

Vinnie Johnson chairman

$2,876.3

-0%

865 964

Black/African American

Automotive supplier

2

BRIDGEWATER INTERIORS LLC

Epsilon Technologies LLC 2

$1,567.6

-24%

1294 1292

Black/African American

Automotive seating/interiors

3

DETROIT MANUFACTURING SYSTEMS LLC

Bruce Smith CEO

$642.4

-25%

1219 1141

Black/African American

Provides full module assemblies, mechanical and robotic subassemblies, ultrasonic and vibration welding, plastic injection molding and sequencing services to the automotive industry.

4

NYX INC.

Chain Sandhu chairman

$530.0

-5%

NA NA

Asian

Automotive supplier specializing in plastic interiors and subsystem components

5

CAMACO LLC

Arvind Pradhan chairman

$484.6 3

-5%

NA 50

Asian

Automotive seat structure assemblies

6

ACRO SERVICE CORP.

Ron Shanani president and CEO

$446.5

14%

228 2091

Asian

Staff augmentation and workforce technology services

7

ELDER AUTOMOTIVE GROUP

Tony Elder president

$319.2 3

-4%

NA NA

Hispanic/Latino

Automotive dealerships

8

PRESTIGE AUTOMOTIVE

Gregory Jackson chairman and CEO

$308.6

-0%

150 NA

Black/African American

Automobile dealerships, real estate and insurance

9

ROYAL OAK FORD/BRIARWOOD FORD

Eddie Hall Jr. president

$241.9

-11%

253 253

Black/African American

Automobile dealership

10

THE IDEAL GROUP INC.

Frank Venegas Jr. chairman and CEO

$237.5

-12%

364 449

Hispanic/Latino

General contracting, specialized miscellaneous steel manufacturing and distribution of protective barrier products, global supply chain management, other

11

GLOBAL AUTOMOTIVE ALLIANCE LLC

William Pickard executive chairman

$229.1

-21%

171 NA

Black/African American

Warehousing, contract assembly, freight forwarding, contract logistics, procurement, quality control and inventory management

12

DEVON INDUSTRIAL GROUP

David Burnley Sr. president and co-CEO

$168.0

18%

68 75

Black/African American

Construction management, general contracting, program management, design-build, preconstruction, demolition and decommissioning services

12

SYSTEMS TECHNOLOGY GROUP (STG)

Anup Popat chairman and CEO

$168.0

13%

750 700

Asian

Digital transformation, cloud software integration (AWS, Azure, Google), mobility solutions, artificial intelligence, machine learning, big data analytics, internet of things consulting and software integration services

14

CHEMICO LLC

Leon C. Richardson president and CEO

$158.0

-4%

89 NA

Black/African American

Chemical manufacturing, chemical management

15

TECHNOSOFT CORP.

Radhakrishnan Gurusamy president and CEO

$150.7 3

-9%

NA NA

Asian

Information technology and IT-enabled consulting services and business process outsourcing. IT services and technology enabled health care solutions.

16

ALTIMETRIK CORP.

Raj Vattikuti executive chairman

$142.5

27%

128 104

Asian

Technology consulting. Digital business enablement

17

EPITEC INC.

Jerome Sheppard CEO

$131.7

5%

1050 917

Black/African American

IT, engineering and professional staffing

18

JAMES GROUP

John James chairman

$117.0

-4%

174 NA

Black/African American

Supply chain and logistics solutions company specializing in warehousing, transportation and value added services

19

AVIS FORD INC.

Walter Douglas Sr. chairman and CEO

$112.9

-15%

119 NA

Black/African American

Automobile dealership

20

ADVANTAGE LIVING CENTERS

Reginald Hartsfield and Kelsey Hastings owners

$109.1

-6%

815 NA

Black/African American

Skilled-nursing homes, assisted living

21

SCRIPTGUIDERX (SGRX)

Ime Ekpenyong CEO

$104.3

12%

23 NA

Black/African American

Pharmacy benefit management and third party administrator services for employer groups, health plans and government programs

22

MPS GROUP INC.

Charlie Williams chairman

$102.0

-15%

162 168

Black/African American

Waste management, paint shop cleaning and management and industrial cleaning

23

BILL PERKINS AUTOMOTIVE GROUP

Bill Perkins president

$97.7

-18%

69 62

Black/African American

Automobile dealerships

24

MCL JASCO INC.

Louis E. James president and CEO

$90.5

35%

106 NA

Black/African American

Automotive, government and energy industries

25

MICHAEL BATES CHEVROLET

Michael Bates owner

$78.0 3

-10%

NA NA

Black/African American

Automobile dealership

4617 W. Fort St., Detroit 48209 313-842-3300; bridgewater-interiors.com 12701 Southfield Road, Building A, Detroit 48223 313-243-0700; dmsna.com

36111 Schoolcraft Road, Livonia 48150 734-462-2385; nyxinc.com 37000 12 Mile Road, Suite 105, Farmington Hills 48331 248-442-6800; camacollc.com 39209 W. Six Mile Road, Suite 250, Livonia 48152 734-591-1100; acrocorp.com 777 John R Road, Troy 48083 248-585-4000; elderautogroup.com

20200 E. Nine Mile Road, St. Clair Shores 48080 586-773-1550; prestigeautomotive.com 27550 Woodward Ave., Royal Oak 48067 248-548-4100; royaloakford.com 2525 Clark St., Detroit 48209 313-849-0000; weareideal.com 2801 Clark St., Detroit 48210 313-849-3222; gaasolutions.com

535 Griswold St., Suite 2050, Detroit 48226 313-221-1600; devonindustrial.com 3001 W. Big Beaver Road, Suite 500, Troy 48084 248-6439010; stgit.com

25200 Telegraph, Suite 120, Southfield 48033 248-723-3263; thechemicogroup.com One Towne Square, 6th Floor, Southfield 48076 248-603-2600; technosoftcorp.com 1000 Town Center, Suite 700, Southfield 48075 248-281-2500; altimetrik.com 24800 Denso Drive, Suite 150, Southfield 48033 248-353-6800; epitec.com 4335 W. Fort St., Detroit 48209 313-841-0070; jamesgroupintl.com 29200 Telegraph Road, Southfield 48034 248-355-7500; avisford.com 25800 Northwestern Hwy #720, Southfield 48075 248-569-8400; AdvantageLiving.net 15400 E. Jefferson Ave., Grosse Pointe Park 48230 313-821-3200; sgrxhealth.com 38755 Hills Tech Drive, Farmington Hills 48331 313-841-7588; mpsgrp.com 13801 S. Telegraph Road, Taylor 48180 734-287-2600; taylorchevy.com 7140 W. Fort St., Detroit 48209 313-841-5000; www.mcljasco.com 23755 Allen Road, Woodhaven 48183 734-676-9600; michaelbateschevy.com

$2,880.0

$2,051.9

$858.9

$555.0

$508.0 3

$390.6

$331.0 3

$309.4

$270.5

$270.0

$288.7

$142.0 3

$149.0

$164.0

$165.0 3

$112.0

$125.0

$122.0

$132.1

$116.0

$93.4

$120.0

$118.7

$67.0

$87.0 3

Researched by Sonya D. Hill: shill@crain.com | This list of minority-owned businesses is an approximate compilation of the largest such businesses based in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, the companies provided the information. The Diez Group which was No. 3 on last year's list declined to participate this year. Rush Trucking which was No. 23 on last year's list wound down operations and transitioned business to competitors in February. NA = not available. NOTES: 1. Holding company for Piston Automotive, Irvin Automotive, Detroit Thermal Systems and Airea. 2. Epsilon Technologies LLC is the majority owner and is an entity comprised entirely of African American investors (one of which is the Hall family). 3. Crain's estimate.

Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data 14 | CRAIN’S DETROIT BUSINESS | AUGUST 16, 2021

NONPROFITS

Human services agencies JVS and Kadima to merge 2 of 3 agencies that began talks in early 2020 moving forward to reduce costs, expand services

BY SHERRI WELCH

Two Southfield-based human services agencies will merge in January to serve their clients and better position themselves to adapt to the changing mental health funding landscape.

Through the merger, JVS Human Services and Kadima Mental Health Services will create a $24 million nonprofit with roughly 400 employees.

It will bring together JVS’ social services and vocational programs, including services for people with developmental disabilities, with Kadima’s behavioral health services ad supportive housing for adults with mental health issues, providing a broader continuum of care, more robust and higher quality programs, and better outcomes for individuals with disabilities, the agencies said.

JVS President and CEO Paul Blatt will lead the merged organization, which has yet to choose a new name.

Kadima’s Executive Director Eric Adelman will serve as executive vice president and chief advancement officer, and Aubrey Macfarlane, JVS executive vice president and COO, will continue in that role.

No employee layoffs are planned, Blatt said, noting the two organizations lost about 50 employees combined during the pandemic and strategically left those positions open.

The two organizations are looking to hire a combined 30 direct-care professionals and about five social-work positions.

While JVS and Kadima will consolidate their administrative headquarters, no other site closures are planned.

“From the outset, we were eager to see if a combined organization would be better positioned to positively impact the lives of people in our community,” Blatt said.

“Through an in-depth due diligence process, we were able to demonstrate that the new organization will be able to offer a more expansive continuum of services, yielding stronger outcomes for the people we serve. This is an exciting time for JVS, Kadima and our communities.”

Adelman said the merger will strengthen operations, enable the two to provide more impactful services and better position the merged organization to thrive through anticipated cost savings of about $1.2 million over three years.

“As we focus savings on quality and improvement, (that) will position the merged organization to thrive in the future with ... whatever structural changes might come to the community mental health system,” he said.

“This conversation didn’t start because one of us was in trouble. This came from a really strategic and thoughtful place, not a place of crisis.

That allowed us to really think through how we could benefit folks we serve.”

News of the agencies’ plans to merge comes a year and a half after they began talking, with encouragement from the Jewish Federation of Metropolitan Detroit. The leaders said the merged organization will reinvest the money saved into programs that directly benefit and sup-

Blatt

Adelman

port those with development disabilities, autism or mental illness,

with increased investment in clinical services and the shift to the Clubhouse day center model for people impacted by mental illness.

A third agency, Ohren Jewish Family Service of Metropolitan Detroit, was part of those conversations early on

but opted not to move forward.

“For various reasons at some point in the exploration phase, it made sense to each of us that Jewish Family Service wouldn’t continue in the due diligence phase,” said Perry Ohren, CEO of Jewish Family Service, which provides services to help older adults age in place, mental health and wellness and safety net services.

Ohren declined further comment on why the merger wasn’t in the best interest of the organization

and its clients.

“We will continue to be a strong partner with both organizations and the singular organization once they merge,” he said.

All three agencies originally formed to support the Jewish community but evolved to become nonsectarian, offering services to anyone in need.

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

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

AUGUST 24 — THE ARTS A star-studded group of 10 experts will discuss the state of the arts in Detroit, Dlectricity and a new cultural town square

AUGUST 31 — PHILANTHROPY AND WORKFORCE We look at the historic reconnection of Ford family members to the global foundation created with Ford stock, followed by a conversation on whether or not big technology will add Detroit to its job map

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

AUGUST 16, 2021 | CRAIN’S DETROIT BUSINESS | 15

VICARI

From Page 9

You mentioned having to lay off hundreds of people. Are you back to full capacity?

We’re back up to full capacity. Most of our employees came back to us. We’ve opened a couple new restaurants. We opened the Birmingham Pub, and that kept getting pushed back because we couldn’t hire enough people. Finally said, “OK, if we have five people and one bartender, we’re open! I’ll bartend or I’ll serve tables, whatever.” It’s important to open because people won’t apply to a closed restaurant.

We’re dealing with the same thing right now with opening The Bronze Door in Grosse Pointe. We keep putting it back, and I finally said, “We’ve got to open.”

We’re pulling people from each of our stores to come in to help us. We’re not going to really open with five people.

We’re big enough that we can pull a person from each store to come over and work with us. That’s what we’re trying to do.

With all the stimulus checks out there, have you had to do anything differently to hire?

We have a recruiting program that includes scholarships for education based on the number of hours worked.

We have different incentives, but every business is doing that. I just saw a “Labor Needed” sign in the front lawn of a house on my street.

This is a neighborhood, not on a main street. That’s the situation that we’re in right now. The president says it’s not the stimulus money that’s making people stay at home, that Americans want to work. Well, not so much. Not everybody. If they’re making close to $700 just by staying home, and especially in this industry, where you don’t make a ton of money, you’re going to think twice about going back and working hard. I think that a lot of people, because of the closures back and forth, have left the industry and found more permanent jobs, more steady jobs.

We ran an article (recently) asking

“WE’RE ALL KIND OF WAITING FOR SEPTEMBER. THE MANTRA IN THE RESTAURANT BUSINESS IS SEPTEMBER. WE’RE HOPING ONCE THAT (STIMULUS) MONEY GOES AWAY — AND WE’RE REALLY HOPING IT DOESN’T GET PICKED UP AGAIN — THAT PEOPLE WILL FIND THEIR WAY BACK TO WORK.” — Rosalie Vicari

if the business lunch is dead in Detroit. I don’t think it’s dead at all.

It’s just tough finding a place to go for lunch. A lot of restaurants close on Mondays and a lot for lunch because of the lack of staff.

Right. We’re all kind of waiting for September. The mantra in the restaurant business is September.

We’re hoping once that (stimulus) money goes away — and we’re really hoping it doesn’t get picked up again — that people will find their way back to work. I have had servers tell me that they’re not going to come back, because we’re just going to wait until September and wait for the money to finish up. There are some people that desperately need that money, and it’s going to the right things. But when it’s forcing people that could be working to stay home, that’s wrong. That’s the wrong use of money. It’s not just restaurants, every single industry is fighting the same fight.

I looked at the national impact of COVID on the restaurant business.

Sales are off hundreds of billions of dollars, 110,000 restaurants have closed, and 2.5 million jobs were lost. What does this look like moving forward? I’m curious too, because with 110,000 restaurants closing, you bought four more restaurants.

Let’s clarify that, “we” did not, Joe did.

He didn’t necessarily share that with me at the time.

Smart on him for taking advantage of a situation. You have the capital; you have the means, and you know we’re going to be out of this at some point. You said the restaurants are full, but 110,000 people didn’t have that opportunity.

That is what’s so sad. Where will these people go? Some people will find jobs, but it’s a tough market. I think of all the Amazon centers coming in, offering amazing wages and benefits.

Why wouldn’t you do that? It’s a secure future. Our point all along is fighting for the people that weren’t going to come back, the mom-and-pops that failed because they just didn’t have the means to keep it open.

How much bigger do you want to get?

I’m at the point in my life where I would like to slow down a little bit, I’ve just had my ninth grandchild. Joe is not exactly there. What happens is, we open a restaurant, it has our name on it.

So of course, I then jump in because it’s going to open correctly. After 42 years I think he might have that in the back of his head.

We’re doing The Statler, a French American Bistro, with Jonathan Holtzman in Washington Square where the old Statler hotel used to be. I hope maybe, at least just for a while, we take a little bit of a break.

I’ve seen your son working in the restaurant. Does this just keep going?

I don’t know. My son is so intrinsically good at the restaurants, but he has a young family. My husband was gone pretty much all the time when I was raising my children. I think my son looked at that, and said, “I don’t want that for my kids.” I kind of commend him for that. Unfortunately, our business is a nighttime business, a weekend business, a holiday business.

We’ll see how that all shakes out through the years. Maybe when his children get a little bit older, he may step more into a bigger role.

PEOPLE ON THE MOVE

DEALS&DETAILS CONTRACTS

businesses are located in Plymouth.

Website: savantwealth.com

Roncelli, Sterling Heights, a construction management firm, completed the Beaumont Outpatient Campus in Lenox Township. The three-story, 109,630-square-foot campus offers medical services and specialties including an emergency department. Website: roncelli-inc. com

EXPANSIONS Ross Mortgage Corp., Troy, a residential mortgage lender, is expanding into Virginia with an office in Culpeper. Ross Mortgage operates 17 locations in Michigan, Florida, Kentucky, North Carolina and Virginia.

Website: rossmortgage.com Comcast Corp., Plymouth, a media and technology company, opened an Xfinity retail store, at 1367 Eight Mile Road, Detroit. The store is located in the Gateway Marketplace Shopping Center next to the former Michigan State Fairgrounds. The 4,100-squarefoot Xfinity store, which cost $800,000 to build, replaces the now closed Lyndon Street customer service center and is open Monday through Saturday from 10 a.m. to 7 p.m. and Sunday from noon to 5 p.m. Websites: corporate.comcast.com, xfinity.com/ local/mi/detroit Macomb Tire, Roseville, a 15-yearold commercial tire business, was acquired by Shrader Tire & Oil, Toledo, Ohio, a truck tire and lubricant specialist. Shrader Tire & Oil has locations in Michigan, Ohio and Indiana and will be consolidating the Macomb operation into a full-service fleet store in the area. Website: shradertireandoil.com Savant Wealth Management, Rockford, Ill., a wealth management firm, is acquiring AMDG Financial, a fee-only registered investment adviser, and AMDG Business Advisory Services, a tax and accounting firm. Both

The GSH Group, Clawson, real estate investors, acquired The Preserve at Spring Lake, Altamonte Springs, Fla., a 320-unit multifamily community, in June for $62.8 million. It is the group’s first purchase in Florida. Website: gshrealestate.com Alline Salon Group, Bloomfield Hills, franchisee of Regis Corp., with nearly 400 salons throughout the Midwest, acquired four additional Supercuts in Michigan. The salons are located in Livonia, Bloomfield Hills, Rochester Hills and Lake Orion, and will be folded into Alline Salon Group’s existing structure. Website: allinesalongroup.com

MERGERS & ACQUISITIONS RHP Properties, Farmington Hills, owner and operator of manufactured home communities, recently acquired 29 manufactured home communities in Illinois, Indiana and Michigan containing more than 4,200 sites, for a purchase price of $184 million. This brings the company’s total of manufactured home communities to 297 nationwide. Website: rhp.com SyBridge Technologies, Southfield, a designer and maker of tooling and mold products, announced that its subsidiary, Concours Technologies Inc., Windsor, Ontario, Canada, a plastic injection molding services, has acquired the assets of Toolplas Systems Mexico S. de R.L. de C.V., El Marqués, Queretaro, Mexico, an injection molding company.

Websites: sybridgetech.com, concourstechnologies.com Escalent, Livonia, a human behavior and analytics advisory firm, acquired Grail Insights, Oakland, Calif., a consultant, from NewQuest Capital Partners, Hong Kong, a private equity platform. Websites: escalent.co, grailinsights.com

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EDUCATION

FINANCE

TRANSPORTATION

Baker College

Orchards Children’s Services

Wejo

Baker College, one of Michigan’s largest, private non-profit colleges and the top private transfer school in the state, has named Dr. Scott A. Wowra its new Dean of the Colleges of Education, Liberal Arts & Sciences and Social Science.

Dr. Wowra is responsible for providing academic and administrative leadership for several of Baker’s undergraduate and graduate degree programs.

He began his career with Baker College in 2012 as an adjunct faculty member teaching psychology courses.

Troy Kulick joined Orchards Children’s Services in April 2021.

He oversees all aspects of the organization’s finances, including the development and management of strategic investments, preparation of financial statements and reporting to Orchard’s Board of Directors.

Troy brings over 20 years of financial leadership experience, with a focus on developing diverse talent and high performing teams while providing strategic insight and direction.

Benoit Joly has recently joined Wejo, a global leader in connected vehicle data, as executive vice president of the automotive and mobility segments of the business. In his new role, Benoit builds business-generating partnerships with global OEMs, automotive services platforms and equipment vendors. Benoit joins the company from Renault Group, where he served as the head of the services business, helping develop the company strategy and portfolio with the RenaultNissan Alliance.

INDUSTRY ACHIEVERS ADVANCING THEIR CAREERS

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AJAX PAVING INDUSTRIES

ANALYSIS

Workers from Ajax Paving Industries on a road construction project on I-94 in Jackson County .

Why the infrastructure bill isn’t going to be a panacea for roads

T

he bipartisan $1 trillion infras t r u c t u r e spending bill pending in Congress is being billed by the White House and Chad as a LIVENGOOD proponents $7.25 billion shot in the arm for Michigan’s crumbling roads and highways.

It’s actually a $340 million annual shot in the arm for federally funded roadways in the Great Lakes State, according to an analysis of the bill from the Michigan Department of Transportation.

The $7.25 billion the U.S. Senate appropriated for Michigan’s highways in the bill is spread over five years and — here’s the big hidden caveat — it includes the $5.56 billion Michigan already gets from Washington for roads.

In actuality, it’s just $1.7 billion in new money for Michigan roads over the next five years — and there’s no guarantee after 2026 the state will continue to receive that much federal funding for highways in future outlays.

“The guys in Washington make it sound like there’s some new nirvana,” said Jamie Jacobs, owner and CEO of Ajax Paving Industries Inc., one of Michigan’s largest road construction companies. “They’re just kind of doing smoke and mirrors as far as I’m concerned.”

Behind the smoke is a road network that Michigan can no longer afford to maintain based on current tax revenues from state and federal sources — namely vehicle registration fees and per-gallon taxes on gasoline and diesel fuel.

The $340 million in new annual

federal aid is roughly one-sixth of the minimum $1.9 billion more Michigan needs to be investing annually to get the majority of state trunkline roads in good condition.

That nearly $2 billion-a-year underfunding figure is nothing new.

Former Gov. Rick Snyder’s 21st Century Infrastructure Commission said as much in 2016.

But since then, the commission’s report has been paved over with a thick layer of dust on the desks of Michigan legislators.

There’s general agreement among road construction professionals and most political leaders that Democratic Gov. Gretchen Whitmer’s $3.5 billion bonding program to finance highway reconstruction projects is slowing the overall decline of Michigan’s pavement.

“The governor said this is a stopgap,” MDOT Director Paul Ajegba said. “Bonding is not a funding mechanism, it’s just a financing tool to get us to a place where we can all agree, ‘OK, we’ve got a problem, let’s solve it.’”

And while it may check off a box on Whitmer’s re-election talking points with voters next year that she did something to fix the damn roads while the Republican-controlled Legislature sat on its hands, it hasn’t fixed even half of the damnedest bad roads in Michigan.

New money from the federal infrastructure bill is only dedicated to 88,000 lane miles of “federal aid” roads, typically highways and heavily trafficked boulevards.

About 42 percent of those roads were rated in poor condition in 2020 and 36 percent in fair condition, while just 22 percent passed as being in good condition, according to the Michigan Transportation Asset Management Council’s annual report on payment conditions.

In other words, heading into this current orange-barrel season, four of every five miles of freeway and trunkline road with an I, U.S. or M name were in poor or deteriorating condition.

Even with an influx of new state funding from a modest $600 million fuel and vehicle registration tax increase in 2017 and $600 million from existing state tax revenue, the percentage of state roads in poor condition still increased between 2015 and last year — from 40 percent to 42 percent.

Transportation planners say that’s a result of a decade of disinvestment as more and more roads fell into the fair condition category.

And it stands to reason that continued disinvestment in maintenance results in fair roads turning into poor roads.

But anyone who lives in an aging suburb of metro Detroit knows it’s the local streets that feed traffic to arterial roads like Telegraph Road in Wayne County and Metro Parkway in Macomb County that are badly in need of repair.

Fifty percent of local roads are rated in poor condition, while 32 percent are rated in fair condition. Just 18 percent of the 165,000 lane miles of local roads were rated in good condition in 2020, according to the Michigan Transportation Asset Management Council.

At present, the Michigan Legislature has no solution for these roads other than status quo funding or letting counties and cities figure it out on their own within the restraints of property taxes as the only permitted revenue source.

MDOT Director Paul Ajegba said he would welcome the additional $340 million in annual federal road funding if the trillion-dollar infrastructure bill passes.

But he too cautions that it’s not a panacea.

“I don’t want (lawmakers) to think this is the end all, be all solution that’s going to solve all of our problems,” Ajegba said.

Transportation planners worry that when the state’s $3.5 billion in bond proceeds and the new federal funds run out by 2026, the road construction industry as a whole will ramp down operations like it did after the 2009 federal stimulus funding expired following the Great Recession.

That means less investment in heavy equipment and skilled operators, which companies like Troybased Ajax Paving have been making in recent years, Jacob said.

“It’s fits and starts,” said Jacob, who currently has a workforce of 500 employees at Ajax. “Our roads don’t know about fits and starts — and they need to be constantly maintained.”

That’s why this infrastructure bill up for debate in the U.S. House has some folks in the infrastructure business a bit unnerved. They’ve seen this movie before.

“I don’t want the Legislature and others to think all of a sudden that the federal government has come in and saved the day and we can take our foot off the pedal,” Jacob said.

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

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CONDOS

BLUE CROSS

From Page 1

because of the construction cost limitation,” Huez said.

Aamir Farooqi, a Detroit developer who heads up Banyan Investments, which is active in the city’s neighborhoods east of East Grand Boulevard, also said construction costs are a key concern when evaluating the state of the for-sale multifamily market.

As those rise, supply will continue to constrict, fueling increased prices at rates that may drive buyers away.

“Project economics need to make sense for developers and for lenders,” Farooqi said. “While we are expecting construction costs to moderate, there is a lag between those costs coming down and being reflected in new developments getting underway.”

Banyan has completed a twophase redevelopment of the St. Charles School on Townsend Street — where O’Laughlin is finally seeing activity — and is currently finishing a mixed-use building on Kercheval that is expected to come online in the next 60 days.

Market interest has been highest among high-end buyers and for townhomes, where people don’t have to worry about sharing elevators or other public spaces, said Austin Black II, the broker/president of City Living Detroit. While lofts used to sell faster before the pandemic, they’re not as popular now.

Black said empty nesters are driving a lot of luxury condominium purchases, particularly because the market is good for them to sell their houses and downsize. Meanwhile, first-time and young buyers are seeing the high prices of condos and deciding to purchase a single-family home instead — often, for a similar price.

Inventory will continue to fall, Black said. O’Laughlin thought some potential sellers, seeing the inventory surplus, had decided to rent out their units instead. He expects them to put those properties on the market next year, when supply is lower.

“Real demand is going to come back when office occupancy comes up,” O’Laughlin said. “It’s just been hit-or-miss over the past year.”

Still, the report last month from Huez’s company says condo sales recently had their highest 12-month period since the 2018 calendar year.

Between July 1, 2020, and June 30, 2021, a record $106.4 million in condos were sold. In 2018, there was $105.1 million sold. Huez said he anticipates 2021 to be the highest 12-month period by the time it ends Dec. 31.

Increased sales activity and decreased supply has led to sales prices increasing to $212 per square foot, according to Berkshire Hathaway HomeServices The Loft Warehouse.

That’s after a slow year during the first part of the pandemic. In 2020, there were fewer transactions (310, compared to 330 in 2019), lower total sales volume ($84.6 million, compared to $91.5 million in 2019) and a reduced average price per square foot ($203, compared to $214 per square foot in 2019).

Condo developers the last two years have seen setback after setback, most recently with the developer of the Midtown West project making a U-turn on the west side of Midtown and turning a 26-unit Fourth & Selden building into apart-

Brush 8 buyers walk through what will be their unit. | CONTRIBUTED

The recently completed two-phase St. Charles development. | CONTRIBUTED

ments after just three of the units went under contract.

The Fourth & Selden project is hardly the first condo development to shift gears or be scrapped in recent years, following The Mid, Cass and York, The Ashton and others that have been reimagined or sent back to the drawing board due to rising construction costs and other issues.

While an inventory crunch for suburban real estate put upward pressure on prices and created bidding wars that drove some people from those markets, properties like a building in Harbortown reduced prices by $50,000 a unit for lower floors that didn’t have as appealing views — and drummed up three

18 | CRAIN’S DETROIT BUSINESS | AUGUST 16, 2021

new offers, O’Laughlin said.

Where outside of city limits, buyers were competing for a limited supply of available homes, in and around downtown Detroit, an oversupply lured them in.

Take, for instance, a condo in the Willys Overland Lofts in the city’s Midtown neighborhood, which sold in March for $415,000.

“When the buyers submitted the offer, they said I hope you don’t have other offers,” Huez said. “I didn’t tell her that I have been waiting for an offer for three months.”

Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB Contact: arielle.kass@crain.com; (313) 446-6774; @ArielleKassCDB

Walmart Inc. also started pushing at least some employees to a selected group of providers this year, From Page 1 Bloomberg reported.

Locally, Amazon Inc., Rocket There is presurgical work, then surCos. and United Wholesale Mortgery and rehabilitation that typicalgage also operate or contract with ly takes place disconnected from direct primary care practices to one another. Under this model, they control health care costs. have created a clinically integrated More than 31 percent of large model where physical therapists employers — those with 5,000 emand surgeons are all working toployees or more — offered primary gether and collaborating through care directly to employees on site or Triarq. The care plan is connected near site in 2020, up from 20 perthrough a bundled payment arcent in 2019, according to rangement and performs at data from New York asset a lower cost.” management and conThe move is likely a resulting firm Mercer. sponse to competitor and The point, of course, is the country’s largest insurthat how people receive er UnitedHealth Group Inc. health care is changing The company’s Optum diand providers, insurers vision, the source of more and employers are all than half of its revenue, has competing for physicians’ spent years acquiring phyattention. sician and medical practic- Friedkin Mike Sappington, CEO es. of Triarq, said the firm’s For instance, United acattractiveness to physicians is bequired DaVita Medical Group, which operates physician practices cause it provides built-in technical and thousands of dialysis outpacapabilities practices increasingly tient centers across the U.S. and need to be successful.

Michigan, for a sidesplitting $4.3 “Practices need quite a bit of supbillion port today to manage the cost and United employs or manages complexity,” Sappington said. “They nearly 5 percent of the practicing need support in IT technology, comphysician workforce in the country, pliance and a lot more. We help reor about 50,000 doctors, Bloomberg lieve the administrative burden of reported. running the practices.”

United offers its own medical BCBSM plans to boost Triarq’s network as part of a new insurance profile in the specialty space — such plan called Harmony, which has as the fast growing specialty of muspremiums about 20 percent less culoskeletal fields like orthopedists. than its own HMO network. United “We do see Triarq having a strong started selling the Harmony plan to set of capabilities and the opportuemployers in 2019 and then to indinity to expand the set of physician viduals in California last year. practices it works with,” said Todd While HMOs largely fell out of faVan Tol, senior vice president of vor in the 1990s over blowback from health care value of BCBSM. “There patients and payors upset with reis the opportunity to grow inside and stricted care choices, rising health outside the state of Michigan. There care costs are fueling their regrowth. is meaningful opportunity to expand Blue Cross and Aetna are exin the musculoskeletal space and build out what we can do further in panding their own HMO networks the specialist space. We can create as an attempt to better control risnew support models for those proceing health care costs — which are expected to rise 4.4 percent in 2021, dural bundles that produce better according to human resource conoutcomes and more savings.” sulting firm Mercer.

But competition is growing.

Susan Moore, president of OrtonThe private equity sector has ville-based managed care consultused MSOs to invest in large physiing firm Managed Healthcare Recian practices in recent years. While sources Inc., said Michigan private equity activity slowed in employers are leery of insurers di2020 overall, deals in health care inrectly owning physician practices, creased. In fact, equity deal volume like United, and that may be the in the sector rose 21 percent last reason BCBSM is choosing to exyear to a total 380 deals, according pand via an MSO. to Colliers.

“Nationally Blue Cross wants a But BCBSM appears dedicated to low-cost, high performing network winning out. to sell to employer groups,” Moore “We believe our members should said. “This is the first shot across the have choice in where they receive bow at that. Michigan is a different their care and we already have realmarket, maybe because of the large ly strong provider contracting and auto sector employers, but they are just more “NATIONALLY BLUE CROSS WANTS A skeptical about insurance companies con- LOW-COST HIGH PERFORMING trolling practitioners NETWORK TO SELL TO EMPLOYER more. Executives are having to be more cre- GROUPS.” ative about how they sell — Susan Moore, Managed Healthcare Resources insurance and this allows Blue Cross to remain at an networking capabilities, but we do arm’s length while having a major think that its is important for us to impact on costs.” work within that network to imEmployers are also looking to prove and deliver better outcomes control costs and effectively creatfor their patients,” Van Tol said. “We ing their own health care networks. think it’s important to help our CVS Health’s Aetna unit anmembers in where they seek care nounced its Whole Health heath and establish care relationships to plan last year that has a smaller, where they can get appropriate, more limited provider network and high quality, cost effective care. steers employees to its HealthHub That’s raising all boats and we’ll offerings, which include visits with continue to do that.” physician assistants and nurse practitioners for chronic care isContact: dwalsh@crain.com; sues.

(313) 446-6042; @dustinpwalsh

BLUECONDUIT

From Page 3

Still, Robinson notes, many cities still don’t know how many lead service lines they may have or where those pipes are located.

“So those are the kinds of key Robinson questions that (we) help cities answer, so that they can make the most out of this really amazing opportunity that is the infrastructure bill,” he said.

Beyond billions of dollars for the replacement of lead pipes, the bipartisan infrastructure bill now headed to the U.S. House of Representatives contains, in part, $110 billion for U.S. highways, bridges and roads; $39 billion for public transit and $7.5 billion for electric vehicle charging stations.

Michigan could receive $7.3 billion in federal highway aid, $563 million for bridge replacement and repairs, and “could compete with other states for tens of billions more in other economically important bridge or road projects,” according to an analysis released last week by the Detroit Regional Chamber, which supports the legislation.

Flint water crisis help While BlueConduit eyes the present for growth given the political headwinds pushing for a massive investment in the nation’s infrastructure, the roots of BlueConduit stem from the Flint water crisis when city officials needed to answer the above questions posed by Robinson: how many lead pipes are there and where are they located?

In a case study outlining its work in Flint starting in 2016, the company’s founders, Eric Schwartz and Jake Abernethy, found historical records suggesting that between 10 percent and 20 percent of the water pipes in Flint were made from lead, largely in older homes before the use of the dangerous material was outlawed in the 1980s.

The company’s data collection and machine learning technology used in Flint, as well as now in Detroit and many other cities, are generating significant cost-savings for municipal governments as officials no longer have to dig at each house to check if there’s a lead line in place.

Officials with the city of Detroit estimate city government saved $165 million by using the BlueConduit predictive modeling technology in its hunt for lead pipes around Michigan’s largest municipality, according to Bryan Peckinpaugh, public affairs deputy director for the Detroit Water and Sewerage Department.

By 2025, Michigan communities that have lead service lines must provide to the state’s Department of Environment, Great Lakes and Energy a complete inventory of where those lines are located in order to comply with the updated Lead and Copper Rule.

“Technology like BlueConduit allows us to speed up the design process because we have this artificial intelligence and data modeling to design our upgrades,” Peckinpaugh said. “It allows us to speed up our design because it takes about two to three years from identifying where we’re going to replace water mains and lead service lines to actually start digging, based on design and contracting.”

Detroit Water and Sewerage Department crews replace lead water service lines with copper lines. | ERIC VANCE/U.S. ENVIRNMENTAL PROTECTION AGENCY

Two $50,000 grants from the Rockefeller Foundation and Kresge Foundation paid for the city to use the BlueConduit software.

In Toledo, 60 miles south of Detroit, the company’s executives are helping to “engage the community” and explain how AI technology can help with the work of removing the approximate 30,000 lead service lines in the Ohio city, according to Patekka Bannister, commissioner of plant operations for Toledo’s Department of Public Utilities.

A company like BlueConduit, with an understanding of the harm lead service lines can lead to, can help push that message to residents, particularly as there’s likely to be more federal dollars available to remove those lines.

“We’d like to use some of those (federal) dollars to help with our lead service line replacement program,” Bannister said. “They’ve helped us get that out to the community that this is something that is important.”

Schwartz, the Blue Conduit co-founder and an associate professor at the Stephen M. Ross School of Business at the University of Michigan in Ann Arbor, notes that his company was among the first to seek out a technological solution to the issue of identifying lead pipes in the wake of the Flint water crisis that left a city of 100,000 mostly Black residents without drinkable tap water.

“I think just that experience as a first mover and the kind of originators of this idea is the start, but I think that only goes so far,” Schwartz said.

“What we’ve really taken to heart are the values of the way that we’re going to put the social mission first.

That this was started by two professors ... we’re both tenured, and we’re doing this because we believe that we can improve lives.”

year and for that figure to grow by two to three times over the coming year or two. The company has eight full-time employees and seven part-timers.

The company’s current growth has largely been financed by early-stage revenue, but executives at BlueConduit say they are in the process of raising a so-called “friends and family” round of financing, and are seeking out other types of venture capital to continue growth.

As a spin-out of the University of

Michigan, the company licenses its technology from the university, which retains a 1 percent ownership stake in BlueConduit, Schwartz said.

Moreover, the company’s primary location in Ann Arbor — while also having ties to Georgia Tech University where fellow co-founder Abernethy is a professor in the college of computing — helps position BlueConduit to have a readily available pipeline for new tech-savvy workers who are able to generate new ideas, according to Schwartz.

“And when it comes to something that is going to be software-heavy, data science-heavy, recruiting technical talent (and) tech-interested talent, but (also) tech-for-good ... type jobs, I think we’re really well positioned,” he said. “And I think the opportunity to create those positions is something that we just really relish.”

–The Associated Press contributed to this report Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

Primed for growth BlueConduit has eight paying municipal clients: Detroit, Benton Harbor, Toledo and Trenton, N.J., as well four that executives said they can’t name, citing nondisclosure agreements. The company expects to see around $1 million in revenue this AUGUST 16, 2021 | CRAIN’S DETROIT BUSINESS | 19

ARONSON

JA

From Page 3

At Clubhouse Bar-B-Q, the small Ferndale bar and restaurant Aronson owned with his wife and the site he first made his famous fresh salsa, there were 93 items on the menu, including 15 different salsas. “Any kind of food he liked, he put on the menu,” Zilko said.

The tiny front window of the restaurant advertised in neon lights: “ribs, chicken, subs, shrimp, pasta.”

Food for the generous menu came not just from a few vendors but from 47 different companies because each provided the best of whatever Aronson bought from them, he once told Zilko.

“That’s a less-than-ideal business model, (but) he was really good strategically,” Zilko said.

After the restaurant went bankrupt, financial issues and a little serendipity led Aronson to launch Garden Fresh.

It was 1997 when Jim Hiller, then owner of Hiller’s Markets, walked into the Clubhouse Bar-B-Q and asked to taste the salsa he was hearing so much about. After trying it, Hiller asked Aronson to package it for sale in his grocery stores, giving Garden Fresh its start.

Aronson and his wife were a force as they oversaw operations for the company, Zilko said. With batches made a single five-gallon bucket at a time, just as they had been at the couple’s bar and restaurant, the two were getting a million units a week out the door every week and doing it without compromising quality.

It was several years before Garden Fresh could invest the millions of dollars needed to purchase the high-pressure processing equipment that put his company on a path to national distribution of its fresh salsa.

Aronson pioneered the use of HPP, a technology that uses high pressure on sealed packaging instead of heat to kill microbes and extend the refrigeration life of fresh foods, without changing the texture and fresh flavor the way canning in hot water does. He brought HPP to Michigan, installing two lines at Garden Fresh, and later made it accessible to other food startups as well.

Even as he was growing his business, Aronson would make time to meet with entrepreneurs trying to launch companies of their own.

Hardly a day went by that Aronson didn’t bring in a new food entrepreneur to meet Mike Griffin, another of his longtime friends who served as the creative director for Garden Fresh and all of Aronson’s companies.

“He was not shy about asking for a favor if it meant helping somebody else,” Griffin said.

“He said to me one time, ‘Mike, I think I’m spending at least 50 percent of my time these days helping food entrepreneurs, and I love it.’”

In the building that housed the company’s test kitchen, Garden Fresh teamed up with Eastern Market Corp. to launch the nonprofit Startup Engine Entrepreneur Depot. SEED, as it was known, provided manufacturing equipment to enable people trying to launch a food business to see if their product could be turned into a viable company, Aronson said at the time.

The nonprofit worked with local food startups like Scotty O’Hotty hot sauce and Jen’s Gourmet Dressings.

At the same time, Fortune 500 companies were starting to pay attention to Garden Fresh.

With its lines of chips and hummus, and its standing as the No. 1, fresh, refrigerated salsa company in the world, Garden Fresh started getting nibbles from PepsiCo and other food giants.

But Aronson only agreed to sell to

From

Com

Stee

Garden Fresh salsa co-founder Jack Aronson greets children at Beyond Basics. | BEYOND BASICS

Campbell Soup Co. in 2015 when he found a culture that mirrored his company’s at Campbell’s Bolthouse Farms operation in California. Garden Fresh sold for $231 million and a promise to keep the business in Ferndale, retain all employees, make investments and never change a recipe without the couple’s approval.

As Aronson cleaned out the space SEED had occupied before its transfer to Campbell, he came across a stack of old dishwasher racks. He didn’t remember exactly where they had come from but thought someone might be able to use them. A phone call or two later, World Medical Relief was happy to get them to help organize its medical supplies.

SEED morphed into FEAST Detroit and moved to an Inkster property that Aronson donated to Eastern Market following the sale of Garden Fresh, Eastern Market President Dan Carmody said.

“It’s my hope SEED can be to upstart food manufacturers what the back of our restaurant was to me and my wife,” Aronson said in 2015 after the sale to Campbell.

“We are deeply committed to our local food producers and will do all we can to help them realize their dreams.”

Countless food companies in Southeast Michigan owe part of their success to Aronson’s willingness to share his time, expertise, and in some cases, financial resources with them, Carmody said.

“We at Eastern Market are indebted to Jack for showing how early-stage food businesses can benefit from a support system dedicated to their success,” Carmody said.

Sharing the success Many millionaires are philanthropic, but Aronson was also a servant leader focused on the good of his employees and others in the community, colleagues said.

As the Garden Fresh sale neared, he and his wife met with each of the 453 employees at Garden Fresh and offered them a bonus payable upon the closing. They quietly gave their em-

20 | CRAIN’S DETROIT BUSINESS | AUGUST 16, 2021

ployees millions of dollars.

Aronson and his wife also founded the Artichoke Garlic Foundation (named for the first flavor of salsa he made), seeding Zilko it with $10 million.

As of the end of fiscal 2019, the year of its most recent 990 filing with the Internal Revenue Service, the foundation still had $8.9 million in assets.

The couple had already donated $25 million by the end of 2015, Crain’s reported in Aronson’s 2015 newsmaker profile.

Their gifts supported literacy with gifts to Beyond Basics, whose board Aronson chaired, and the Ferndale Literacy Project, a charity the couple started in Garden Fresh’s hometown to ensure students could read and write.

Other nonprofits that drew the couple’s support included: Boys and Girls Club of Ferndale, Life Remodeled, Starfish Family Services, Roeper School in Bloomfield and cancer support organizations Gilda’s Club of Metro Detroit and New Day Foundation.

Zilko said he believes the foundation will endure, with continued involvement from Annette Aronson and the couple’s children.

Aronson “would tell me all the time, ‘I’m honored to be in a position to give to other people,’” his friend said.

“It was a privilege to him. ... He was humbled to be in position to do that.”

A mentor to startups But Aronson drew people to him not because of the millions he’d earned but because he was always looking for ways to give to others and treated everyone with the same kindness and respect, his friends said.

Aronson’s passion for helping other food entrepreneurs continued after he sold Garden Fresh. He purchased another HPP machine and installed it in a Taylor site. He would meet people there who had no experience in food production, donating his time and ex-

Carmody

Spehn

pertise to show them the ins out outs of HPP and to advise them on things like packaging and labeling.

HPP helped extend the shelf life of Drought raw juices from three days to 40 days, positioning the company to gain national distribution.

“Jack treated us as peers from the moment we met him,” said Caitlin James, co-founder and CEO of Berkley-based Drought, in an email.

“He and Annette quite literally opened up their entire business to us free of charge and allowed us to learn how to turn our small juice operation into a renowned manufacturing hub.”

Business meetings with Aronson were casual and goofy, James remembered. They usually started with him “humbly bragging” about his softball stats, raving about his favorite kale chips or showing James and her sisters/business partners pictures of his Tibetan cats. But a solid power hour of business would follow, along with a brimming bag of Garden Fresh chips and dips when they parted.

“We’re going to do our best to carry on his love for fresh food manufacturing and can only hope to be as impactful and respected as Jack,” James said.

The Great Lakes HPP business in Taylor continues to operate, offering fee-based tolling and retail packaging.

Aronson was also a partner in cold storage company Freezer and Dry at the same site, Griffin said.

After Garden Fresh, Aronson founded a couple of more food companies of his own, including stuffed burger/fresh meat business Great Fresh Foods LLC and the Clean Planet Foods line of fresh, cooked meats that were processed with high pressure like his fresh salsas.

Initially, Aronson was working to gain retail distribution for pre-pack-

aged dinners branded as Mindful Meals. He planned to donate the profits, “but at some point, it just became more elegant just to give the food away,” Griffin said.

Aronson’s company was producing the meals in significant quantities last year. He and his family would drive to area hospitals, fire and police departments and hand them out to first responders and also to food-insecure people, Griffin said.

In February, Aronson drove downtown to give out something different.

He’d gone to Burlington Coat Factory and bought a couple of dozen winter coats, hats and gloves to hand out.

He called Gina Kell Spehn, co-founder of the New Day Foundation, whose board he served on, to tell her that he couldn’t find anyone on the streets of Detroit to take the coats. So he dropped the coats off to her so she could get them to cancer patients who needed them.

In between trips to Switzerland, Austria, Hungary and Germany for treatments, Aronson was an active member of New Day Foundation’s board, she said. While back in Michigan at one point he insisted on hosting a board meeting for the nonprofit at Hazel, Ravines, and Downtown Kitchen in Birmingham.

“He was a huge foodie,” Spehn said.

She told him the nonprofit didn’t hold board meetings at restaurants, “but he had a room,” and he was always thinking about how he could share what he had and help others, she said.

New Day Foundation recently awarded Aronson its Legacy Award.

“We sent him the acknowledgment about this award, and he didn’t want it… he didn’t want to be put in the spotlight,” Spehn said.

But he eventually agreed and did a video to thank the nonprofit for the award.

“He sat in his car in his driveway, and you can literally hear the landscaping guys in the background. He was just really humble and sweet,” Spehn said.

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

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here?’” she said. “So in addition to ‘Show me your check stubs,’ ‘What is your history dealing in communities of color?’”

Phyllis Edwards, director of the nonprofit Bridging Communities whose headquarters neighbors the old police station, said there haven’t been any problems with the business next door. She called Steele a “good neighbor.”

“Any additional lighting and security cameras that can ensure additional safety to the neighborhood is welcome,” she said, adding that she’s excited to see a business building up along the corridor.

From Page 3

Complex process “Today the property is not permitted for the use of an Airbnb,” Detroit’s Buildings, Safety, Engineering and Environmental Department said in a Steele s t at e m e nt emailed to Crain’s on Aug. 5. “The owner has been cited for No Certificate of Compliance and Illegal Use.” The saga sheds light on the complex nature of the city’s permitting processes, which are often labeled confusing. Enforcement has been similarly criticized, with those who aren’t following city code known to sometimes slip through the cracks.

However, there’s been no stated opposition to Steele’s project from the city, just an effort to bring it into compliance. Steele must submit plans, pass inspection and get city approval before he can legally do what he’s been doing.

“We’re working with the owner to guide him through the process to become legal,” BSEED said in a statement to Crain’s.

The building department’s deputy director, Raymond Scott, told Crain’s in an interview that he thinks “it’s a good concept if (Steele) can pull it off.”

Steele, who owns Berkley-based RT Software Systems Inc., is emphatic he wants to do good for the neighborhood around his building and will do so as long as he’s given the chance.

“I don’t have any excuses, but I’ve been working through it,” he said last week. “It takes an enormous amount of resources ... I’m the guy with pennies, not millions.”

Steele has invested $360,000 so far in his mission to turn the building into a data center where he would keep clients’ information secure. He’s got a name picked out, Data Behind Bars, but he says it’s not a gimmick.

“There are people who want to invest in Detroit in a meaningful way and I’m going to provide a conduit,” Steele said. “This is not some kind of novelty. They’re going to be able to place commercial, industrial enterprise-level equipment here.”

Steele was also clear he believed in the morality of the decision to list a former police station and jail as a night of fun for tourists. He told Crain’s when the listing was still active that “history is history” and “we, specifically, our group here now wasn’t part of that history.”

Steele has pictures of National Guard soldiers in the police station’s lobby during the 1967 Detroit rebellion that came as the “culmination of decades of institutional racism and entrenched segregation,” as the Detroit Historical Society puts it.

He said he’s been working hard over the years, including replacing expensive stolen infrastructure and hauling out dozens of dumpsters of trash, to turn something negative from the past into something positive. He aims to include meeting space for community nonprofits and Wi-Fi that the neighborhood can use. Steele also said he’s been hiring people who are nearby and/ or at risk of homelessness for construction work.

What’s next

An Airbnb listing surfaced in late July advertising a former Detroit police station at 6840 McGraw Ave. as an overnight experience where guests could explore jail cells, a drunk tank and other rooms. It turns out this was not legal, and Ed Steele, who has been working toward renovating the building for eight years, was ordered to shut it down. | COURTESY OF ED STEELE

Historically significant properties

National Guardsmen at the former 6th Precinct police station on McGraw Avenue in Detroit are “pinned down by gunfire” during the 1967 uprising, according to Walter P. Reuther Library records. | WALTER P. REUTHER LIBRARY, ARCHIVES OF LABOR AND URBAN AFFAIRS, WAYNE STATE UNIVERSITY

The former 6th Precinct police station on McGraw Avenue in Detroit. |

Community developer and equity consultant Lauren Hood said making the right relationships needed to understand what’s allowed, and what’s not, is part of what it means to come to a city and participate respectfully in its development.

She also said a project like this — in an old law enforcement facility, tied to racial uprisings and being used for tourism — would need “critical race consciousness” and focus on promoting racial understanding that’s so badly needed in Detroit.

“I think there should be a broader discussion around selling cityowned properties that have historical significance to private (ownership),” she said.

This building sold just less than a decade ago and it’s long been private property. But Hood says Detroit has now come to a place where it can be “more discerning” about to whom it sells historically significant properties. She says those discussions need to happen.

“We have to broaden the conversation (from financial viability) to: ‘What is the impact on the people

Detroit’s building department became aware of the project when Crain’s requested comment from the city Aug. 4 after interviewing Steele about the Airbnb listing and his plans for the building. Steele told Crain’s that he hadn’t received any interest nor accepted any overnight customers yet and planned to contact a city inspector before doing so.

“He’s trying to drum up business, I get it, but you’ve just got to do it correctly, that’s all,” Scott said.

City building, mechanical, electrical and other inspectors looked over Steele’s building Aug. 6. They ordered Steele to stop his construction work on the property because he did not have the permitting to do so. He received two blight tickets and a $1,000 fine for not having a certificate of compliance, a document that shows a property is safe enough to be occupied, and for using the facility in ways not allowed by city law.

He declined to say how much he has earned from tours of the building.

The property is up to date on its taxes, according to the Wayne County Treasurer’s office.

Steele now needs to submit a site plan for BSEED to review so he can pull all the proper permits for the extent of his work on the building, Scott said.

“We have no indication that he is not willing to comply,” Scott said.

“He was more appreciative than anything.”

Steele would also need to change the allowed use for the building, which currently allows office use, if he wants to make it a short-term rental property, Scott added. If Steele did want to use it as an Airbnb rental while continuing renovations, structural engineers would need to decide if those uses are compatible.

Steele said he’s not yet sure how the process with the city will proceed, but if it’s allowable he does still want to offer his building as a place where people can bring a sleeping bag and say they slept in a jail.

There could be more hurdles. The rules surrounding short-term rentals in Detroit have drawn controversy and confusion in recent years.

The city has a ban since November 2017 on short-term rentals in properties that are zoned R1 and R2, but it hasn’t often been enforced.

Steele’s building is zoned M2, for restricted industrial use, according to city records.

Detroit City Council member Janeé Ayers led an effort in 2019 to enshrine rules that crack down on short-term rentals on sites like Airbnb in Detroit. But there hasn’t been any new discussion on it since early 2020, before the pandemic.

Contact: afrank@crain.com; (313) 446-0416; @annalise_frank

AUGUST 16, 2021 | CRAIN’S DETROIT BUSINESS | 21

THE CONVERSATION

DT Midstream’s David Slater on innovating in the energy space DT Midstream Inc.: In July, DTE Energy Co. got out of the natural gas pipeline and storage business, shedding a multibillion-dollar division as well as 2,400 miles of pipeline in the Midwest, Northeast and Louisiana and 91 billion cubic feet of regulated underground natural gas storage in Michigan. Those assets were spun off into a new company: DT Midstream Inc., Detroit’s newest publicly traded company (NYSE: DTM). DT Midstream, or DTM for short, and its 80 corporate employees are preparing to leave DTE’s 1 Energy Plaza this fall and move across downtown into the 29th floor of the Ally Detroit Center. David Slater, who has been president and COO of DTE’s gas pipeline and storage division since 2014, is now president and CEO of the new company. He spoke to Crain’s about the transition, justification for the spinoff and his career trajectory. This interview has been condensed and lightly edited for clarity. | BY CHAD LIVENGOOD Tell me a little about DT Midstream’s new home base.

We’re really excited to move into the Ally building. Just a wonderful building, great location, right in the heart of Detroit and what I’ll call the renaissance that’s happening in the city, especially along Woodward. So we really appreciate our partnership with Bedrock.

Tell me about the reason for the spin off (from DTE Energy), the justification for standing up the company.

We embarked upon this, thinking about how to maximize the value to DTE shareholders over a year ago after sensing a desire by a shareholder base for more pure-play investment vehicles.

So we really wanted to take DTE and separate these two operating divisions so you have a pure-play utility ... and a pure-play pipeline company, which is what DTM is. We really felt that would suit the needs of the investors better and unlock some trapped value that we thought was inside the DTE share. ... I think you’re seeing a lot of that value creation being released here over the last month, month-and-a-half if you look at DTE shares (DTE stock closed at $121.18 per share Aug. 11, up nearly 10 percent from June 30 before the spinoff).

Is this a trend in the energy sector to decouple these big “all things to all people” energy companies and split them off into pure-play sectors?

Yes, there have been a number of other transactions that have had the same strategic intent. And really, you want to have each respective management team very focused on its lane, so to speak, its area of focus. And I believe there will be higher value creation as a result of that, where you don’t have that diversified company, where you have investors who need to understand three

or four industries to really understand the investment thesis for that company.

So it has been a trend.

With the new downtown headquarters, your management staff is all based here. Do you see the company’s headquarter footprint in Detroit growing? What’s it going to look like three to five years from now.

The company is growing. So I would expect we’ll grow our staff over time. ...

All of the operating teams are primarily in the field locations — I use that term loosely — but they tend to be close to the assets on the ground and operate those assets in the regions they exist in.

What are some challenges you foresee in the pipeline business in general, regulatory and political?

I think challenges tend to create opportunities and the way I look at it is the energy space has been constantly changing. I’ve been in the business 30-plus years and there’s been considerable change over those 30 years. As I look forward, I think one of the opportunities is how do we continue to decarbonize the energy complex. That was a big focus at DTE and is going to be a focus at DTM. We’ve already publicly announced our net zero (greenhouse emissions) goal by 2050. We’re working on ways to decarbonize our assets. ... Some people would call that a headwind or a challenge, but I like to look at it through the positive lens of opportunity. Detroit has a great heritage of being innovators in the energy space all the way back to the beginning with (Thomas) Edison.

the north shore of Lake Erie. ... I went to school at the University of Windsor and graduated with honors and then started in the industry working for a utility in Ontario, Union Gas, and spent the first part of my career. And then I was transferred over to an unregulated division inside the corporate structure that was involved in merchants energy marketing and proceeded to spend a fair amount of my career in the merchant energy space working for various companies through M&A transactions. ... I ultimately ended up working for a Canadian (natural gas) producer who ultimately was bought by CNOOC (China National Offshore Oil Corp.) and ... did all of the natural gas marketing for them in the U.S. and eastern Canada — and then grew that company into a top 10 energy provider in North America. That was a very interesting fun part of my career. We ended up selling that company to Goldman Sachs. I took that over to Goldman and spent about a year working for

Goldman Sachs. That’s when I pivoted back to the asset-based company to DTE a decade ago and kind of went full circle — started in the utility, went to the merchants realm working for both a producer and large bank and came back to the assets at DTE 10 years ago.

You were at Goldman Sachs 20102011. Post-Great Recession, the congressional scrutiny was coming down on the big banks. It must have been an interesting time working for one.

It really was. It was incredibly educational. It’s been a really interesting and rewarding career having the opportunity to spend time with different companies that have a different lens on the energy space. ... But like I said, change typically brings all kinds of interesting opportunities.

David Slater, president and CEO, DT Midstream Inc.

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Detroit native Stacy Brown-Philpot joins StockX board

22 | CRAIN’S DETROIT BUSINESS | AUGUST 16, 2021

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Yes, I am. Born and raised in Leamington, Ontario, which is about 45 minutes due south of Detroit on

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VETERAN TECHNOLOGY EXECUTIVE AND DETROIT NATIVE Stacy Brown-Philpot has joined the board of StockX LLC, one of the fastest growing tech companies in her hometown.

Brown-Philpot, who last year stepped down from running San Francisco gig economy company TaskRabbit Inc., becomes the first female board member of StockX, an e-commerce reseller of sneakers, luxury goods and other lifestyle items. The company has been raking in venture capital largesse and is seen as a likely candidate to go public in the coming months.

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Detroit’s west side and is a Cass Tech alumna, also serves on the boards of Nordstrom, Noom and HP and is a founding member of Japanese investment firm SoftBank’s Opportunity Fund, as well as a board member for Black Girls CODE. “It is no coincidence that in only five years, StockX has established itself as a leading global marketplace of its kind. The company’s incredible growth is a testament to its disruptive model, exemplary leadership, and the team that serves as its foundation,” Brown-Philpot said in a news release.

Other StockX board members include Jake Cohen, a partner with Detroit Venture Partners, and Jay Farner, the CEO of Rocket Companies Inc. (NYSE: RKT), the parent company of Rocket Mortgage and several other financial companies controlled by billionaire Dan Gilbert.

“Stacy’s proven leadership and experience in both technology and consumer marketplaces will bring a new voice and powerful perspective to our board of directors,” StockX CEO Scott Cutler said the release.

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