Crain's Detroit Business, Aug. 29, 2022, issue

Long-running Black-owned businesses on how they lasted

| BLOOMBERG NEWSPAPER VOL. 38, NO. 33 l COPYRIGHT 2022 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

Cannabis testing lab aims to please all palates

BY MINNAH ARSHAD Fourth-generation funeral home director Antonio Green still remembers watching his grandfather craft caskets by hand. ese days, caskets coming into the James H. Cole Home for Funerals are prefabricated and can be customized to satisfy any customer. Since its founding more than a century ago, Detroit’s oldest Blackowned funeral home has witnessed leaps in technology, yet the core of the business has remained the same: being there to honor the dead and provide loved ones with peace in a time of grief.

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“You just don’t know day to day or even year to year exactly what’s going to happen,” said Green, whose great-grandfather James H. Cole started the business in 1919. “Everybody’s set the stage well, so it’s just a matter of carrying the torch.”

In the nation’s largest Black-majority city, entrepreneurs of color share a unique perspective on progress over the last century.

Rising interest rates and a cooling housing market are squeezing the mortgage business

e Southeast Michigan mortgage industry veteran spent nearly a decade working at Detroit-based Rocket Mortgage, then known as Quicken Loans, before venturing into the world of becoming a wholesale broker at Motto Mortgage, a franchise brokerage. But Dicker decided that amid the challenges in the industry, it was time to set up shop on his own, something he did in early August, launching Troy-based Your Mortgage Guy LLC. “I focus mostly on (home) purchase, and through networking with Realtors, it seems Mortgage brokers feeling the squeeze, but making it work

DON’TBANKRUPTCIES?PANIC Flurry of filings may just be return to normal. FARNER’S STOCK BUY STREAK Rocket CEO makes big string of share purchases.

BY NICK MANES

And as August’s Black Business Month closes, See MINORITY on Page 19 Green

BOUTIQUE

More survivingsimplythan

I BY DUSTIN WALSH

CRAINSDETROIT.COM I AUGUST 29, 2022

PAGE 3 Small shops get creative to deal with rate increases NEW PRIORITIES Nonpro ts look beyond fundraising skills when seeking CEOs. PAGE 8 THE CONVERSATION : Spectacle Society CEO on putting passions to work. PAGE 22

Today’s legal marijuana industry is about science and speci city — plant species, cannabinoids, concentration, genetic strains, terpenes — all things an average user would have never even considered before the legal recreational market hit Michigan in late 2019. But the commercialization of cannabis in Michigan has created elbow room for companies to market products under the more speci c chemical components of the plant. Warren-based Reassure, a state-licensed marijuana compliance testing lab, is gambling on the marijuana industry following a similar trajectory as craft brewing and wine, where consumers develop a sophisticated palate, understand hop strains or oral notes and look for more than just a buzz. “WE’VE STUDIED A LOT OF THINGS EXHAUSTIVELY IN NATURE, BUT WE HAVEN’T WITH CANNABIS.”

—Ankur Rungta, CEO of C3 Industries 20 Anthony Long of Allen Park uses a pipette in the microbial clean room at Reassure Labs in Warren.

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It’s not all doom and gloom in the world of independent mortgage brokers. e rapid rise in interest rates has had myriad e ects on the entire residential real estate ecosystem, with independent mortgage brokers certainly feeling the squeeze. e rapid rise in interest rates this year has substantially cut into the pro t margins of the lenders that brokers work with every day, and led to an ice-cold re nance market and a world in which those who are buying homes are paying hundreds of dollars more in a monthly payment compared with last year. Still, wholesale brokers in metro Detroit say they’re nding ways to make it work in a challenging market. Take Christian Dicker, for instance.

See BROKERS on Page 21 See MARIJUANA on Page

BUSINESSDETROITANTAYA/CRAIN’SNIC

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WHY IT MATTERS: e gift from Scott will enable the local chapter to sus tain and accelerate its presence in Detroit, expanding the number of youth and families it serves by bring ing on additional mentors, enabling it to provide more resources to fami lies and caregivers to overcome bar riers and to expand access to behav ioral and mental health resources.

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THE NEWS: A jury convicted two men of conspiring to kidnap Michigan Gov. Gretchen Whitmer in 2020, de livering swift verdicts in a plot that was broken up by the FBI and de scribed as a rallying cry for a U.S. civil war by anti-government extremists.

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Kellogg names Gary Pilnick CEO of cereal spino Kellogg Co., known for its Frosted Flakes and other announcedcereals,inJune it would split its food businesses into three separate companies.

WHY IT MATTERS: e Board of State Canvassers, a panel of two Demo crats and two Republicans, will meet next week to consider the recom mendation to place the proposal on the November ballot.

FRIENDS OF THE CHILDRENDETROIT TO GET $1 MILLION

| LUKE BLOOMBERGSHARRETT/ PRESENTING SPONSOR2022 SOLUTIONS AND STRATEGIES FOR: • Rising costs • Policy Issues • Labor force challenges REGISTER CRAINSDETROIT.COM/HCLS22TODAY: BREAKOUT SESSION SPONSOR Pilnick

WHY IT MATTERS: e company, ranked as the best-selling cannabis vape brand in the country and best-selling cannabis brand in California, has picked Michigan for its rst non-Golden State location.

WHY IT MATTERS: e location in Lan sing was the rst among the chain’s roughly 3,000 U.S. locations to hold such a vote. In July, Chipotle shut down a Maine site whose workers had petitioned a few weeks earlier for an election of their own.

ELECTIONS BUREAU: CERTIFY ABORTION-RIGHTS INITIATIVE

Kellogg Co. tapped its chief legal o cer to lead a spino of its less-pro table cereal division. e Battle Creek-based company announced Wednesday it appointed Gary Pilnick, currently vice chair of corporate development and chief le gal o cer, as CEO designate of the new North America Cereal Co. following the company’s split into three separate entities in June. It also appointed Dave McKinstray as CFO, Sherry Brice-Williamson as chief supply chain o cer, Doug VanDeVelde as chief growth o cer, Bruce Brown as chief customer o cer and Shannon Bible as chief transformation o cer, all of whom are current executive committee members at Kellogg. North America Cereal Co. will remain headquartered in Battle Creek. All the leaders will assume their new roles upon the separation of the business, which Kellogg said is on track to wrap by the end of 2023. Kellogg said in June that one reason for separating the businesses — temporarily dubbed Global Snacking Co., North America Cereal Co. and Plant Co. — was revenue imbalances among its three divisions, which were competing for resources under one corporate umbrella. e snacking sector brought in over 80 percent of Kellogg’s $14.14 billion in net sales last year while the cereal division, meanwhile, brought in $2.4 billion, or just under 17 percent.

2 CRAIN’S DETROIT BUSINESS | AUG UST 29, 2022 ` 2 MEN GUILTY OF CONSPIRING TO KIDNAP WHITMER

WHY IT MATTERS: e result was a big vic tory for the U.S. Justice Department. A di erent jury just four months ago couldn’t reach unanimous decisions on Adam Fox or Barry Croft Jr. but ac quitted two other men, a stunning con clusion that led to a second trial.

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LANSING CHIPOTLE WORKERS FIRST TO VOTE FOR UNION

STIIIZY CANNABIS COMPANY OPENS FIRST MICHIGAN STORE

THE NEWS: Friends of the Chil dren-Detroit, a mentoring a liate launched in the city in 2020, has re ceived $1.1 million as part of a $44 million gift made to the national or ganization by MacKenzie Scott. Elev en other a liates around the country are sharing in the rest of the gift, which will support new Friends of the Children locations and expan sion among the 26 sites it has estab lished over the last eight years, the organization said in a release.

THE NEWS: Chipotle Mexican Grill Inc. workers at a Lansing store voted to join the Teamsters union, the latest in a series of landmark U.S. organiz ing victories. e vote was 11-to-3 with 2 other challenged ballots, ac cording to the National Labor Rela tions Board. Roughly 21 employees are in the new bargaining unit.

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT NEED TO KNOW PEOPLE NEWS

THE NEWS: Stiiizy, headquartered in Los Angeles, opened its newest location, in Ferndale. Stiiizy, owned by L.A.-based cannabis holding company e Shryne Group, will have a 10,000-square-foot dispensary that in cludes indoor-grown ower, along with concentrates, pods, infused blunts and pre-rolls. e store will also sell edibles, vapes and topical creams.

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THE NEWS: State election o cials rec ommended certi cation of a proposed constitutional amendment to lock abortion rights into the Michigan Con stitution, sidestepping an anti-abor tion group’s challenge that alleges the measure cannot go to the ballot be cause of a lack of spaces between words. e elections bureau estimated that a sample taken from roughly 752,000 signatures — a record — shows that about 596,000 are valid, approxi mately 146,000 more than is needed.

Koehler wrote that construction costs to renovate the church, which dates back 150 years, have soared and are now prohibitive. “What a lot of you don’t know is that we’ve been operating out of a temporary o ce space for three years now after starting our rst ‘for mal’ (not DIY) renovation work at the church,” Koehler, a 2015 Crain’s 20 in eir 20s honoree, wrote. “We paused that work to redo our designs after nishing interior demo lition before COVID, and then like all other construction projects, we com pletely halted when COVID hit. We’ve emerged from the last 2.5 years as a company with di erent needs in a physical space, facing a di erent construction environment with in sanely higher costs on all fronts. In short, renovating the church has be come nancially impossible for us. We would risk the whole music com pany if we took on the amount of debt it would now take to renovate the buildings the way we need to (and the way such an iconic campus deserves). It would dramatically

How is Rocket CEO’s vow to buy up to $36 million in stock going? Farner stake grows to over $34.5 million NICK MANES

LEGAL FIGHT

—Peter Forhan, founder and CEO, JustLight

Mortgage executive Jay Farner ap pears to be sending an “expensive signal” to the marketplace: While the stock for Detroit-based Rocket Com panies Inc. may be in decline at the moment, he thinks it’s going to go Farner,up. CEO and vice chair man of the parent company of Rocket Mortgage and other con sumer nance brands, has amassed a posi tion over the last six months in the company that totals more than $34.5 million, a period during which the company’s stock (NYSE: RKT) has plummeted more than 15 percent. In late March, Farner announced his intention to personally acquire “up to” $36 million of Rocket stock, a signal to the market that he viewed shares as being undervalued. “I’m excited to share that I have a plan in place to personally purchase up to $36 million of @RocketCompa nies stock throughout 2022,” Farner wrote in a March tweet, announcing the plan to acquire shares through a broker. “Our platform and team members are second-to-none. e $RKT ecosystem continues to grow and I am con dent in our continued success.”ACrain’s analysis of securities l ings through midday Aug. 23 related to Farner’s stock purchases since late March shows that Farner has: ` Made 99 stock purchases.

REAL ESTATE

e second bankruptcy petition also follows a lawsuit led by Just Light founder and CEO Peter Forhan against Eypex in May, alleging that the supplier withheld product, de sign les and software that prevent ed the startup from doing business. “While Mr. Forhan could be a vi sionary, that ‘vision’ does not seem to include running his business in a way reasonably calculated to pay its undisputed obligations,” according to the bankruptcy petition, led by Matt Wilkins, attorney at Brooks Wilkins Sharkey & Turco PLLC. “ e noteholders’ notes are past due and the company, despite many promises, has o ered no credible path forward as to when that could possibly happen.”

JustLight said it is shifting its business model to market its Sun ower therapy lamp as a medical device. ESTATE

Assemble Sound has put its prop erty in the shadow of Michigan Cen tral Station in Detroit’s Corktown neighborhood up for sale for an un listedGarretprice.Koehler, one of the found ers of the Detroit-based record label and management company, in an email called the decision to put its three buildings on 17th Street at Rose Street on the market both “f---ing bit tersweet” and “f---ing necessary.”

Forhan argued the contrary. “I do not think that’s true,” For han told Crain’s during an inter view. “I think the viability of a pho tobiomodulation device is an incredible path forward.”

e founder of an embattled Ann Arbor-based maker of infrared light therapy devices says its credi tors are trying to force it to liquidate due to soured relationships and a battle over intellectual property.

KURT NAGL AND PINHO

` Acquired nearly 2.2 million shares in the company, totaling $19.3 mil lion.

Creditors aim to force Ann Arbor startup JustLight into bankruptcy

FINANCEENTREPRENEURSHIP

Corktown church plans coda for Assemble Sound, which lists property for sale LIGHTS UP

NICK MANES Farner KIRK

“I THINK THE VIABILITY OF A PHOTOBIOMODULATION DEVICE IS AN INCREDIBLE PATH FORWARD.”

| JUSTLIGHT VIA FACEBOOK REAL

Wilkins declined to comment on the case.ecompany says its technology focuses on delivering infrared light “at the correct frequency and loca tion for an optimal duration of time,” improving cellular function, a process “crucial for the health and wellness of the human body.”

Assemble Sound has put its property in the shadow of Michigan Central Station in Detroit’s Corktown neighborhood up for sale for an unlisted price. COURTESY OF O’CONNOR

AUGUST 29, 2022 | CRAIN’ S DE T ROI T B USINESS 3

e creditors say they just want out after sinking more than $1 mil lion into a startup vision that has not panned out. An involuntary Chapter 7 bank ruptcy petition was led earlier this month against Archimedes Innova tions PBC — doing business as Jus tLight — in U.S. Bankruptcy Court of the Eastern District of Michigan in ItDetroit.isthe second time since late April that a forced liquidation has been attempted by a group of inves tors tied to an ex-CEO of JustLight and to Auburn Hills-based auto motive supplier Eypex, which had been contracted to manufacture the therapy devices.

See JUSTLIGHT on Page 18 See FARNER on Page 18 See ASSEMBLE on Page 20

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

Property in De troit connected to a now-jailed Hong Kong media mogul ownedAvenuewhyrazed.activistpro-democracyandhasbeenIt’snotknownaWoodwardbuildingbyJimmy Lai, who accumulated a few dozen properties at a Wayne County tax-foreclosure auction in 2013, met the wrecking ball. e building, located in Detroit’s Gateway Community neighborhood just south of Highland Park, is owned by Woodward Heights Limited Part nership, according to documents led with the Michigan Department of Environmental Quality and the Michigan Department of Licensing and Regulatory A airs toward the end of July. e contact listed on the docu ments, known as a noti cation of in tent to renovate/demolish, for Wood ward Heights LP is Debbie Mallais, who is described as commissioner for Lais Hotel Properties Ltd., which is parent company of the Vintage Ho tel chain owned by Lai. e noti cation also includes an address for Woodward Heights LP and Mallais of “526 Regent St.” in De troit; there is no such address known in Detroit. However, Vintage Hotels lists its address as a PO Box at 526 Re gent St. in Niagara-on-the-Lake in Ontario.

REAL ESTATE INSIDER

Fencing surrounds the site of a demolished Woodward Avenue building just south of Highland Park owned by Jimmy Lai.. MANES/CRAIN’S DETROIT BUSINESS

Kirk PINHO ere’s no second- oor bathroom although the oor, lighting, electrical and plumbing are new throughout. e roof appears to be in good shape. It’s two doors down from a mainstay downtown Pontiac water ing hole and, sandwiched in between the two, you have an option to pur chase another building for expan sion, if you want. None of that, however, is truly driving the $3.75 million asking price for 81 N. Saginaw St. Clocking in at $1,563 per square foot, it’s among the highest known per-square-foot sale prices currently on the market for property of any type in metro Detroit, according to a review of listings on CoStar Group Inc., a Washington, D.C-based real estate information service — and there’s a reason why. e building just north of Huron Street in the heart of downtown is al lowed to have one of the ve medical cannabis licenses issued in the Oak land County seat’s central business district. e other four locations with downtown licenses are Common Cit izen (17 S. Saginaw St.); Zenith Ven tures LLC (22 N. Saginaw St.); and RTMC Enterprises Inc. (123 N. Sagi naw St. and 10-12 W. Pike St.). So while the two-story building, which is just 2,400 square feet, is just a shade over the median size of a new single-family home, you have to go beyond just its bricks and mortar to grasp its true value, said Harry Greenspan, one of the build ing’s owners and the licensee for The Flower Chop medical cannabis business.“There was not an exact science to it,” Greenspan said of determin ing the asking price. “But I can tell you it was predicated on location, and that we would be first to open by at least three months, but proba bly closer to six.”

Lai started the pro-democracy Ap ple Daily tabloid in 1995, which fold ed under government pressure fol lowing the enactment of a new law that e Guardian said has “been used against multiple news outlets” and “had a chilling e ect on press freedom in Hong Kong.”

“It collapsed last year after its funds were frozen under the new se curity law and many of its senior sta , including Lai, were charged with ‘collusion with foreign forces,’ one of the new national security crimes,” AFP wrote.

Detroit property owned by jailed Hong Kong mogul razed

4 CRAIN’S DETROIT BUSINESS | AUG UST 29, 2022

‘Green zone’ properties priced higher despite glut of cannabis

REAL

KIRK PINHO

| NICK

Filings for Woodward Heights LP also list Carlo Robazza as secretary for 1898312 Ontario Inc., which bought the properties in 2013 from the tax-foreclosure auction and then transferred them through a quitclaim deed to various other Lai-con nected entities, land records show. Robazza is CFO for Lais Hotel Prop erties.Detroit-based Adamo Group is the demolition contractor, the state DEQ/LARA ling says. Demolition permits were issued Aug. 1, accord ing to Detroit permitting records. A message was left with Adamo, as well as Vintage Hotels, seeking com ment on the property’s demolition. A message was also left for Mallais. Lai, through the 1898312 Ontario a liate, bought the Detroit proper ties, primarily in Detroit’s North Corktown neighborhood, for $643,000 for what I described in 2015 as “a grab bag of single-family homes and vacant lots as well as industrial and retail space.”

e BBC reported in December that Lai was sentenced to prison “for participating in a vigil marking the 1989 Tiananmen Square massacre in Beijing.”Earlier this week, AFP reported that Lai — who the publication described as being “openly loathed by Beijing” — is also facing a no-jury trial in Chi na’s capital either later this year or early next year on sedition charges.

See ‘GREEN ZONE’ on Page 5

e Committee to Protect Journal ists, which awarded Lai with the Gwen I ll Press Freedom Award last year, has condemned Lai’s arrest and imprisonment.“eHongKong authorities’ allout assault on independent media, including new charges against for mer Apple Daily executives and edi tors and the arrests at and closure of Stand News, mark a sad day for the people of Hong Kong,” Steven Butler, the Committee to Protect Journalists’ Asia program coordinator, in Wash ington, D.C., said in a press release. “Hong Kong’s once-vibrant media scene is being crushed as China ex erts greater control over the former colony, and the people of Hong Kong are deprived essential critical voices.”

But Pontiac is well behind the times.Ittook years of political in ghting, lawsuits and other battles just to get rules on the books and licenses is sued for medical marijuana — nearly a decade and a half after Michigan voters green-lit its use and sale in the state in the rst place. And now, Greenspan says, it’s tak ing too long for Pontiac o cials to draw up rules on recreational dis pensaries, meaning that the city is still years behind other communities — and e Flower Chop is, for all in tents and purposes, functionally ob solete when users can drive not too far away and secure recreational marijuana elsewhere.

“ e problem now is that the med ical model, since 2019, is a broken business model,” Greenspan said. Now at his wit’s end, Greenspan said he is fed up and is willing to cash out at the right price. “I’m not pulling any punches any more. I’m not being nice anymore,” heAsaid.message was left seeking an in terview with Pontiac’s mayor or dep utyWithmayor.recreational licenses seem ingly on the way — the timeframe, however, is anyone’s guess — Green span hopes that a smooth process for getting the business approved as rec reational when the time comes is enough to draw some bites at the lure.South eld-based brokerage rm Signature Associates Inc. has the list ing on the building, which includes the license for 3 Green LLC. O ers to purchase are due by Sept. 2. Real estate investors have said in recent months that at one point, speculators had optioned as many as two dozen downtown buildings, cre ating a logjam in the market. In the green zone It’s not just in Pontiac where prices for properties zoned for cannabis use — those in so-called “green zones — have been eye-popping. ESTATE

The downtown Pontiac building at 81 N. Saginaw St. has hit the market for $3.75 million, one of the largest per-square-foot prices in the region. | COSTAR GROUP INC.

Detroit, which has also struggled to adopt its own rules on recreational cannabis, is another key example. (Among other things, the big real estate costs raise concerns about e ectively pricing out people without as much capital, making it a business only those with deep pockets can enter.)Marc Nassif, senior managing director in the Detroit o ce of appraisal company BBG, based in Dallas, said his rm has appraised 29 cannabis-related facilities in the region in the last year and a half. BBG analyzed same-asset sales before and after approval of marijuana-related uses and those prices have gone up by multiples between 3 and 9, with industrial and growing facilities commanding higher multiples. For example, one building sold for $8.75 per square foot in 2017 and $78.75 per square foot in 2021, with “the only material di erence” being that local regulations allowed grow use there, Nassif said. In another example, a building that sold for $65 per square foot in 2017 fetched $210 per square foot 15 months later as an approved provisioning center. “Pricing is heavily dependent upon local laws, the cannabis uses allowed and the number of locations allowed in that municipality,” Nassif said. Real estate costs aside, the industry is also facing growing pains. Crain’s reported earlier this month that, amid a glut of supply, prices for an ounce of recreational marijuana ower have plunged nearly three-quarters since just before the COVID-19 pandemic to $121.58, causing constricting pro t margins.

Hammoud wrote that there have been “several failed attempts to rehabilitate the property and address the notices of violation.” “ is blighted property has negatively impacted the surrounding neighborhoods and our downtown for too many years,” Hammoud said. e Detroit Free Press reported in February 2018 that the building, which is about 285,500 square feet, was ordered evacuated. Di erent parties involved at the time o ered di erent reasons for the evacuation, ranging from asbestos to a temporary suspension of HVAC services so a pipe could be xed. An email sent Friday morning to a general email address for Madison Heights-based Namou Hotel Group, the property’s owner through an afliate called Dearborn Hotel Group LLC, was returned as undelivered. Voicemails were left Friday morning with a representative for Hammoud; a representative from Namou Hotel Group; and a broker with Farmington Hills-based omas A. Duke Co. who has the listing on the building. Dearborn Hotel Group paid an estimated $4.18 million for the property in October 2018 after it had been evacuated, and it fell behind on its property taxes in 2020, records show.

As some are trying to nd new life for large vacant suburban buildings, Dearborn says one of its tallest needs to come down immediately.

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

Mayor Abdullah Hammoud said ursday in a Facebook post that the 12-story Village Plaza o ce tower along Michigan Avenue is to be demolished due to dangerous conditions.

AUGUST 29, 2022 | CRAIN’S DETROIT BUSINESS 5 Listing opportunities: Debora Stein at dstein@crain.com RECOGNIZE INDUSTRY ACHIEVERS IN CRAIN’S Building an Interconnected Grid REGISTER:Expertswww.crainsdetroit.com/greenenergymidiscusshowaninterconnected energy grid is vital to achieve Michigan’s renewable energy goals. sponsored by: FREE WEBCAST SEPTEMBER 15 | 1 P.M. Submit questiona for the panel when you register:Aubrey Johnson Vice President of System Planning and TransmissionCompetitive Midcontinent Independent System Operator (MISO) Charles Marshall Vice President of TransmissionPlanning ITC Michigan Sara Patrick President and Chief Executive Of cer Midwest OrganizationReliability(MRO) Dan Scripps Chairman PublicMichiganServiceCommission MICHIGAN’S GREEN ENERGY MICHIGAN’SFUTURE:GREENENERGYFUTURE: FOR POSSIBILITIES THAT ONCE SEEMED UNREACHABLE. CANCER IS A BEGINNING. As the only National Cancer Institute (NCI)-designated comprehensive cancer center in metro Detroit, we give you access to more than 250 promising new treatments found only at Karmanos. We give you your best chance forward.

REAL ESTATE

Dearborn orders ‘dangerous’ o ce tower demolished

The 12-story Village Plaza building in Dearborn has been ordered demolished for dangerous conditions. | COSTAR GROUP INC.

David Nykanen, president of Troybased Midwest Title LLC, whose company has insured more than $100 million in cannabis properties, said the Pontiac property fetching the asking price is likely far fetched. “It’s pretty well established that the recreational cannabis market is going through an adjustment period, where the supply vastly exceeds the demand, at least at the price that it was originally priced in,” Nykanen said. “So that’s what makes that ($3.75 million) number seem more aspirational to me. I have not seen the volume of transactions in 2022 that we saw in Jason2021.”Kelmigian, a cannabis real estate specialist and commercial real estate broker from Signature Associates who has the listing, said the building’s turn-key condition and other factors played into the asking price.“Another thing to consider is the owners of the property are licensed and are considering opening the store themselves,” Kelmigian said. “If they’re successful and if conservative projections for Pontiac are met, the store could be worth well over our current asking price, which if you were an operator, you may end up kicking yourself if you passed on it now.”Nassif said, however, that price dips seen in the end-product — the marijuana — have not similarly been felt in real estate, at least not yet. “ ough end-product price points have decreased over the summer, this trend has not material shown in real estate sale prices yet.”

‘GREEN ZONE’

From Page 4

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

IMAGESGETTY

WILLIAM HALLAN ANALYSIS Dustin WALSH IMAGES/ISTOCKPHOTOGETTY

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

6 CRAIN’S DETROIT BUSINESS | AUG UST 29, 2022 Sound o : 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. 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.

‘Zombie companies’ bankruptcies a sign of normalcy

Shift in purchasing can pay big dividends for Michigan

William Hallan is president and CEO of AssociationRetailersMichiganthe and InsuranceandRetailersMichiganServicesRetailersCo.

COMMENTARY

Todd Sable, partner and of the leader of commercial transactions practice group at Detroit-based law rm Honigman LLP, called the rise of bankruptcies, particularly auto supplier bankruptcies, a return to normal. “Whether all this means there is going to be a huge uptick in bankruptcies remains to be seen,” Sable said. “Yes, we are seeing a rise in bankruptcy activity we haven’t seen in the last few years, but I think there should be expect ed some normal rate of suppliers having nancial trouble under the extraordinary cir cumstances we’ve seen in the past year coupled with the pandemic. Clearly there is stress in the system that needs to be dealt with, but it could be called a return to stress.”

So while the Eastern District court has seen 17 cases this year and likely will land many more bankruptcy lings between now and the end of the year, it’s hardly a doomsday scenario.

Reading the business headlines these days, you might come to the conclusion that companies are failing en masse as economic decline and rising costs sink opera tions. Crain’s has reported on several com mercial bankruptcies — the Chapter 11 of auto supplier Gissing North America and T.H. Marsh Construction Co. for example — this month alone. But the creditor purge is much less a har binger of impending economic collapse than a simple return to normal. Bankruptcies are on the rise, but experts say the vast majority of those companies ling are holdovers that were su ering prior to the pandemic and were able to limp along thanks to copious government stimulus. “Most are zombie companies that had been propped up by stimulus spending,” said Alex Calderone, president of turnaround advisory rm Calderone Advisory Group. “Under nor mal circumstances, they would have failed much sooner.” e data bears this out. In 2020, the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit saw only a trickle of bank ruptcy lings. ere were only six commercial bankruptcies in all of 2020 to be exact, and most were small businesses with little means to access capital during the early days of the pandemic.rough July 31 of this year, the court has elded at least 17 corporate bankruptcy l ings, and some of notable size. Gissing, for instance, sought protection for up to $100 million in liabilities and owes $13.3 million in product to Tesla Inc. It’s unclear how distressed Gissing was during the pandemic days of 2020, but the supplier did seek and receive a $4.65 million loan from the $953 billion Payment Protec tion Program established through the Coro navirus Aid, Relief and Economic Security Act (CARES Act) to maintain employment during mandated business shutdowns in an attempt to control the virus. at loan was later forgiv en for Gissing and most others. Business investment plummeted in the U.S. to almost zero in the second quarter of 2020 as everyone hunkered down, but immediately shot back up in the third quarter of that year and climbed to a record high by the rst quar ter of this year thanks to stimulus. And thanks to boosted unemployment bene ts, stimulus checks and more govern ment spending, consumer spending in Mich igan recovered by June 2020 and remains higher than pre-pandemic spending by 21 percent, largely led by entertainment, recre ation and retail, according to data from Op portunity Insights Economic Tracker. One only has to look to before the pandem ic to realize how well the stimulus worked. ere were 124 commercial bankruptcies led in the Eastern District in Detroit in 2019, when the economy was booming with an un employment rate of 3.7 percent and gross do mestic product growth for the year at 2.3 per cent. at’s a more than 95 percent decline in cases from 2019 to 2020. But that’s not to say there aren’t economic headwinds now and in the near future, as the nancial advisers say. While easing, in ation over the past 12 months remains a problem and so does the ever-present bullwhip that continues to reverberate through supply chains.Laura Marcero, managing director of turn around rm Huron Consulting Group, said all roads lead back to federal stimulus money ending.“ere was the COVID relief money and lots of liquidity for re nancing; that was all part of the solution to get through the pan demic,” Marcero said. “But COVID relief ex pired and now the interest rates are driving up and the water is dropping on liquidity. So some of the problems that have been there for years are starting to surface again.”

What would hap pen if every Michigan resi dent shifted one out of ev ery 10 retail purchases to a Michigan-based compa ny?Combined, Michigan residents spend $30 bil lion on retail purchases, if 10 percent of those dollars stayed in Michigan, it would add an estimated $3 billion into our econo my.Michigan Retailers As sociation partnered with Public Sector Consultants for our annual Buy Nearby analysis to quantify what a simple change in spend ing could do for our state. We know that each dollar invested in local Michigan retailers is an investment in Michigan. But we wanted to dig deeper to understand both the direct and indi rect impact it would have on our state. Individually, this shift looks like shopping at a few stores in your downtown, rather than or dering everything from an out-of-state retailer. However, $3 billion in additional revenue would trigger staggering results. By the numbers: ` 16,000 new jobs in Michigan, boosting labor income (salary and bene ts) by about $660 million. ` $1.2 billion in value added to the state’s economy. ` $2.2 billion in gross economic output. In short: Jobs and opportunity to keep Michigan moving forward. PSC found the largest employment gains would accrue in retail industries — with the greatest bene ts occurring in the non-store, general merchandise, clothing, and electronic retailEveryonesectors.had a rst job, a place that helped develop work ethic and an understanding of how the world works. Many of these 16,000 new jobs are potential rst jobs, ideal for gain ing experience and developing the next gener ation of business and community leaders. Beyond the immediate economic impact to retail business, the real estate, owner-occu pied dwellings, warehousing and storage, management of companies and enterprises, and hospital sectors would also experience an increase in prosperity. As Michigan’s small businesses recover from the pandemic, face in ation head on, and continue to evolve their businesses, the least any of us can do is buy local. In June, 50 percent of Michigan Retailers As sociation members reported through our monthly Retail Index that their sales were down month-over-month. e impact of spending, just a little more on in-state goods each year, is signi cant for retailers and our state’s future prosperity. ese are the hard numbers that show what buying local would do for our economy. e ripples into the economy of these numbers are signi cant, and we can grow them into waves if we chose to Buy Nearby.

@RachelWatson86 Grand Rapids native says Paul Schrader plagiarized his lm idea COURTS Paul Schrader speaks at the Zurich Film Festival in October 2021. |FRANCOIS GLORIES/ ABACA/SIPA USA

Fueling the Tech-Enabled Broker

Lawsuit claims writer-director used his concept in making of September 2021 lm ‘The Card Counter’

GRAND RAPIDS — A federal civil suit alleges Hollywood writer-director Paul Schrader stole ideas for his 2021 lm “ e Card Counter” from a Grand Rapids native. In the lawsuit led Tuesday with the U.S. District Court’s Western Dis trict of Michigan, Mark Vanden Berge, who now lives in Tennessee, claims that Schrader took ideas from a movie concept he shared with the Os car-nominated lmmaker known for “Taxi Driver,” “Raging Bull,” and “ e Last Temptation of Christ.” Schrader said he does not recall ever interacting with the plainti , and his attorney called the claims “base less.”Perrin Rynders, a partner at Grand Rapids-based Varnum law rm, is representing Vanden Berge. e suit seeks a jury trial and dam ages of at least $75,000 — the mini mum required for the case to be heard in federal court — stemming from in teractions Vanden Berge alleges he had with Schrader about his lm idea, “Blown Odds.” e lawsuit claims Schrader plagiarized major plot points of “Blown Odds” in “ e Card Counter.”Rynders said he believes the plain ti ’s case is “100 percent” winnable. “I think we all know that juries are really good at hearing all of the facts,” he“Blownsaid. Odds,” according to court documents, was to be about a brain-injured poker savant with a dis turbed past who encounters a soonto-be mass murderer at a high-stakes Las Vegas poker table. Appended to the court documents are a copy of Vanden Berge’s lm con cept dated January 2018 and an email to Schrader about the project dated Sept. 7, 2018, about a year before Schrader announced he was making “ e Card Counter.” e lawsuit alleges Vanden Berge met Schrader at a 2018 premiere of “First Reformed” at Calvin University, their shared alma mater. Schrader has appeared at Calvin throughout his ca reer to give talks on his lms, which often feature dark religious themes from his Calvinist upbringing in Grand Rapids’ Christian Reformed Church.Inthe suit, Vanden Berge says he asked Schrader following a Q&A ses sion after the screening if he would hear his pitch for “Blown Odds.” Vanden Berge alleges they met the following day, when he asked Schrad er to review a written draft of the con cept, with the understanding that Schrader would not use it without consent.esuit says Vanden Berge contin ued to re ne his lm concept in the following months before emailing it to Schrader’s agency. Vanden Berge claims to have had at least two phone conversations with Schrader’s then-manager, Johnnie Planco, who assured him that Schrader had re ceived the draft. When “ e Card Counter” came out in September 2021, Vanden Berge said in the court ling, it was so simi lar to his pitch for “Blown Odds” that he experienced “emotional distress.” In separate phone calls Tuesday, both Schrader and his attorney, Philip Kessler, said they had not been served with a court summons.

AUGUST 29, 2022 | CRAIN’ S DE T ROI T B USINESS 7

Contact: rachel.watson@crain.com (989)

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RACHEL WATSON Schrader vehemently denied Van den Berge’s allegations. He said he does not recall ever meeting Vanden Berge, though he couldn’t swear to it, since the Dutch last name is so common in Grand Rapids that he may have grown up with 10 Vanden Berges, he said. “ ere’s something shy going on here,” Schrader said. “Nothing about it rings a Kesslerbell.”also called the accusations baseless, and said if Schrader receives a summons they would defend the claim vigorously. “ ere’s no merit to the allegations that Paul Schrader engaged in plagia rism, nor would he ever do so — nor would he ever need to do so,” Kessler said. “ is is one of the most talented directors in the United States.” Side by side, Vanden Berge’s lm concept di ers signi cantly from “ e Card Counter” in its character names, details and plots points, although they are both about gamblers and set in ca sinos.Schrader said he did receive two let ters over a year ago from Vanden Berge’s attorney regarding the plagia rism claim, but said when Kessler re sponded on his behalf, he never heard back.“It was an insult to even suggest such a thing to a director with one of the most towering reputations in Hol lywood, which Mr. Schrader has well earned over many decades of hard work,” Kessler said. e suit is seeking judgment against Schrader for three civil counts: breach of con dence, breach of implied con tract and breach of duciary duty. 533-9685;

experience. PAGE 10

Kenneth Estelle is the top executive at Feeding America West Michigan, a food bank serving about half of Michigan’s counties, with territory spanning the state’s west side and stretching across the Upper Peninsula.

Nearly eight out of 10 (79%) nonpro ts identi ed salary competition as a factor preventing them from lling job openings.

COMPENSATION TRENDS SOFT SKILLS Nonpro ts prioritizing leadership over

Like every industry, nonpro t health and human services organizations are facing signi cant talent shortages.

To ensure food gets to those in need, Estelle, a retired Rockwell executive who got a Class A commercial driver license after joining the nonpro t in 2011, jumps in the cab.

Talent shortages in the nonpro t sector

` Roughly a quarter (24.2 percent) were seeing vacancies in less than 9 percent of the jobs at their organization.

FEEDING AMERICA WEST MICHIGAN

` Just over a third (33.5 percent) said 10-19 percent of jobs in their organization were vacant.

As a result of job shortages: ` 26 percent of nonpro t reported having a waiting list that is more than a month long. ` 21 percent don’t have a waiting list because they can’t accept new clients Factors afecting a nonpro t’sability to recruit and retain sta :

BY` SHERRI WELCH

THE DRIVE FOR STAFF

8 CRAIN’S DETROIT BUSINESS | AUGUST 29, 2022

He is also a truck driver for the nonpro t. e food bank has increased driver pay 25 to 30 percent to $27 per hour since the pandemic began, but it’s still short of drivers.

` Nearly a quarter (23%) of respondents said the inability to nd child care was a ecting recruitment and retention. ` COVID vaccination policies a ected nearly one in ve (19.2%) of responding nonpro ts.

` Three out of four nonpro ts (76 percent) of nonpro ts, reported job vacancies of greater than 10 percent.

“I never want to cancel a food distribution, so I will get in a truck and drive it,” Estelle said.

`

An online survey of more than 1,000 nonpro ts in the health and human services to arts, culture, and education arenas across all 50 states in fall 2021 found:

Kenneth Estelle, president and CEO, Feeding America West Michigan.

Human services agencies taking on talent shortages with limited resources

NONPROFIT fundraising

*SOURCE: NATIONAL COUNCIL OF NONPROFITS, “THE SCOPE AND IMPACT OF NONPROFIT WORKFORCE SHORTAGES,” DECEMBER 2021

` More than a quarter (26.2 percent) said 20-29 percent of jobs in their organization were vacant. ` 16.1 percent reported that nearly a third or 30 percent of employee positions at their organization were un lled.

“When you have McDonald’s and others that haven’t tradition ally paid $15 per hour for front-line sta ... that puts pressure on hu man service orga nizations and others who are now competing for that same person,” Johnson said. At the management level, COTS di rectors are being recruited by national child care groups that are o ering more money and remote work. at has Johnson considering o ering signing and retention bonuses for se lect“Wepositions.havenot made a decision to do that, but we are talking about it,” she said. “We have gotten to the point where maybe we have to do some thing di erent.”

`

e Wilson foundation in 2019 put $15 million behind a three-year pilot program aimed at better supporting and retaining entry-level caregivers at health systems in Southeast Michi gan, western New York and Cleve land.“Without continuing to work on this very complicated and challenging issue... people are going to go without the care that they need, and workers in these positions can’t nd ways to get o this challenging treadmill of understa ng,” Slichta said.

Even when funding can be found to maintain operations, it can lead to more problems down the line.

See TALENT on Page 12

`

Like other nonpro ts, e Chil dren’s Center has no choice but to meet the market rate, working in con sultation with compensation rm J.H. Donahue and Associates, Matthews said. In January it gave its clinicians another $3,000 in annual pay and its child welfare specialists another $5,000 annually, on average, thanks to an increase in the per diem from the Michigan Department of Health and HumanRecently,Services.therm found that 55 em ployees are still paid below the mini mum for their positions, so the center is getting ready to do another round of pay increases, Matthews said. Johnson

To the extent that it has drivers, the Comstock-based food bank has launched mobile distribution, pass ing out food in some communities from the back of the semi truck to help meet rising need. Still, “there are some communities we literally can’t reach because of driver shortages,” Estelle said. e labor shortages happening in the nonpro t sector are not parallel to other sectors, said David ompson, vice president of public policy for the National Council of Nonpro ts. “We’re serving people,” ompson said. “If we don’t have sta , we don’t have services.”

Keeping up with market Nonpro ts say they have no choice but to increase sta pay, to the degree they“Wecan.need to show up for children and families,” said Ann Kalass, presi dent and CEO of Inkster-based Star sh Family Services, which provides early learning education and behavioral health services for young children. “We don’t think that we can cut our way .. out of the situation. We need to value our workforce.”

J. VALENTINE VISUALS

PAGE 8 `

`

Focus: HOPE is trying to ll nine early education center aid positions or 14 percent of its 62 early education jobs.

Human services agencies taking on talent shortages with limited resources. Nonpro ts o ering new bene ts to attract, retain sta at all levels during talent shortage list of top-paid nonpro t executives category. ey’re working to be as competi tive on pay as possible and o ering new signing bonuses and an array of new bene ts like paid parental leave, student loan assistance and caregiver subsidies for children and elderly family members to attract and retain employees.Unlikeother employers, they can’t raise prices to o set the increased sta ng costs, and that takes a toll on current employees, the nonpro t’s bottom line and ultimately those who are in need of services. Many of the community pantries, soup kitchens and churches that gave out emergency food before COVID have not reopened or restarted food distribution, Estelle said. “But people still need the help.”

Also in this report

|

Snapshot of job vacancies at human services agencies:

In Southeast Michigan, many hu man service agencies report job va cancies of roughly 15 percent. ose with signi cant government contracts funding the services they provide, like Wayne Metropolitan Community Action Agency and Star sh Family Services, are faring a little better but still facing shortages, the im perative to compete for all levels of tal ent and the need to nd more funding. For some, it’s a matter of survival: e Children’s Center, a behavioral health, foster care and adoption ser vices provider for children, has one of the most signi cant shortages, leaving more than a third of its 85 clinical posi tions — including some supervisory roles — vacant, President and CEO Debora Matthews said. Nonpro ts providing programs for students be fore and after school have required stu dent to sta ratios, said Helene Weir, CEO of YMCA of Metropolitan Detroit. “If we don’t have the appropriate amount of sta at a (site) we can’t ac cept more youth into the program,” she said. “We have wait lists at almost Salvador Tabarez/Home Assessment Specialist/with Wayne Metro’s Water Conservation (Green and Health Homes) team – at community resource event in Detroit.

` Inkster-based Star sh Family Services has 40 of 450 positions or 9 percent un lled, down from 80 in the spring. all of our sites.”

After hazard pay ended, COTS, which is operating on an $8 million budget, made the decision to increase its full-time minimum wage by 25 per cent to $15 per hour from $12, John sonDespitesaid. that, it has lost employees to other jobs and been ghosted by candidates who expressed interest in positions, she said. Ten of COTS’ 62 jobs are vacant right now.

Short on talent In a fall 2021 survey conducted by the National Council of Nonpro ts, 76 percent of 1,000 nonpro ts surveyed from around the U.S. reported job va cancies of greater than 10 percent. Six teen percent reported that nearly a third of their jobs were vacant. Human services agencies in Michi gan are seeing the same, struggling to ll jobs from entry-level positions in Head Start classrooms to warehouse jobs at food banks, from front-line sta at homeless shelters to in-home and in-hospital caregivers.

`

About half of the positions in the direct care workforce in health care are going un lled, said Amber Slichta, vice president of programs and learn ing for the Ralph C. Wilson Jr. Founda tion, which is focused on grants in the caregiver space among its target ar eas. at includes nurses aides in hos pitals, nursing homes and home health care agencies, which have seen longer waiting lists for people dis charged from the hospital, people who are homebound and for those whose existing caregivers need a break.ere was a caregiver shortage be fore the pandemic, and COVID has only made it worse as people decide they are no longer comfortable work ing in health care, Slichta said. e shortages can lead to deferred surger ies, mistakes and burnout.

by

Wayne Metropolitan Community Action Agency, which is o ering rich bene ts, has 53 vacant positions or 6 percent of its 850 funded positions.

“When hazard pay is gone, you can’t go back to lower (pay). You have to maintain it just to compete,” she said, something that has permanently increased salary rates for those posi tions. “We can’t change our opera tions or our impact on families. at’s crucial to them; that’s life to them.”

AUGUST 29, 2022 | CRAIN’ S DE T ROI T B USINESS 9 `

PAGE 12

At Star sh Family Services, sta ng shortages peaked in the spring, with about 80 of 450 jobs open between early childhood education and be havioral health services. It’s been able to ll about half of those positions over the past six weeks by putting more urgency on recruitment inter nally and being more aggressive in its compensation based on market data, Kalass said. It has spent another $2 million this year to increase wages and add new sta bene ts. e agency has been able to cover increased costs in part from responsive donors and founda tions and exibility from public funders in early childhood and be havioral health that allowed it to de liver services virtually. Increased Medicaid reimbursement rates for behavioral health services have also helped, Kalass said. Like other human services agen cies, Star sh has also had to tighten its belt to get more money to front-line service professionals, she said. It closed an Inkster clinic in 2020 and a behavioral health program site in Dearborn this spring.

Cheryl Johnson, CEO of the Coali tion on Temporary Shelter, relied on COVID relief funding to help make up gaps in sta ng during the pandemic, but now that has created a new chal lenge for her. When sta shortages and retention issues rst started in 2021, COTS was able to remain competitive, thanks to a $195,000 hazard pay grant from the city of Detroit for employees who couldn’t work remotely, including di rect-care sta and child care develop ment teachers working with those in the Detroit shelter. About 25 shelter employees received an additional $300 per pay period, she said. But the funding soon ran out.

At The Coalition on Temporary Shelter in Detroit, 10 of 62 or 16 percent of jobs are un lled.

Troubling turnover e Children’s Center thought it was gaining ground in lling open po sitions for social workers, counselors and psychologists. But over the past three months, turnover has picked up, Matthews said. “We’ll hire maybe three (people) and then two more resign.” Private-pay behavioral health pro viders are often more attractive to sta than nonpro ts not only for the com pensation they o er but also because they don’t have Medicaid paperwork to deal with, she said. e sta shortages are preventing the center from taking in new clients and hitting its revenue. Matthews is projecting it will see about 700 clients by the end of its scal year in Septem ber, and revenue — which is reliant on a fee-for-service model — will drop by 25 percent to a projected $18.5 mil lion, putting the agency in the red again this year. “If we don’t have clinicians to see clients ...we have to stop the intake process,” Matthews said. “ is is a huge issue for any chil dren-serving agency handling behav ioral health,” she said. “We all hear that the need has gotten greater during COVID. If they have to wait months to get care because we don’t have clinicians, they’re falling farther and farther behind.”

PAGE 12 ` Crain’s

At The Children’s Center, more than a third (35 percent) or 30 of 85 clinical positions are vacant right now, including some supervisor positions.

SOURCE: CRAIN’S DETROIT BUSINESS, NON-PROFIT PERSONNEL NETWORK

“People have been so impacted by the pandemic in personal and pro fessional lives, they are seeking that warmth from a leader.” ey are also looking for a creative leader who understands how to manage the hybrid work situation and can attract, retain and develop talent, Miller said. “When we are interviewing, boards want to hear how (candidates) have been innovative and creative in growing and retaining their teams,” sheManysaid. boards and search rms are

The shift to virtual programs and telehealth and renewed or new focus on racial justice, social justice and economic security has also led many nonpro t leaders to retire early so a new generation can come in, she said.

In a sign of the times, leadership traits like empathy, compassion and the ability to inspire employee loyalty are trumping the need for a full slate of functional skills in nonpro t CEO searches.ough candidates must still bring some degree of nonpro t manage ment savvy, the soft skills are at the top of the list, nonpro ts and execu tive search rm experts said, given everything people have come through during the pandemic — and the tight talent landscape. ose who bring traits like empa thy, warmth and passion for the mis sion are even, in some cases, gaining an edge over more experienced can didates.Covenant House Michigan’s new CEO Meagan Dunn oversaw a 62-bed shelter for victims of domestic vio lence and human tra cking and a $12 million budget in her prior role as vice president of programs for YWCA Kalamazoo. She also took night shifts at the shelter to see the issues clients and sta faced rsthand.“We were really drawn to her expe rience in running a program that was similar to ours and her willingness to dig in and see what the people in the shelter and the sta were going through,” said Covenant House Chair Kellie Ray, partner in Plante Moran PLLC’s not-for-pro t practice. at really demonstrated a leader ship quality and a servant leader per spective, and Dunn’s programmatic experience lent itself to Covenant House’s desire to expand programs youth outreach. e board hired Dunn, 41, even though she didn’t have as much fundraising experience as some of the other candidates for the role. It’s supporting her with executive and fundraising coaching and bringing in new development sta to support her, Ray said. It’s been a traumatic couple of years for all social services agencies and that made Dunn even more at tractive, she said. “We wanted an inspirational lead er. We put more emphasis on Mea ghan’s ability to connect with the mission...the youth we serve and program sta ,” Ray said. “ at was more important to us at this point.”

Nonpro t CEO turnover in Southeast Michigan over the past year

And her leadership style is collab orative rather than authoritarian, Christ said. “We felt that she had the leader ship and interpersonal skills that will help her and the organization succeed.”Kinal, who lacks nonpro t ac counting expertise, had already hired a nancial coach to learn about nonpro t accounting before she was o ered the job, Christ said. And the board is ensuring she’ll get any additional support needed to gain the functional skills she needs as “CEO.e other technical stu can be learned, but certain personal skills you can’t just teach,” Christ said. e willingness to train was rare in the past, though it did happen from time to time, Miller said. For the most part, though, in the past nonpro t boards didn’t want that risk of someone who was unproven.

GETTY IMAGES/ISTOCKPHOTO Dembs Miller Ray Trulik

Nonpro ts prioritizing leadership over fundraising skills

10 | CRAIN’S DETROIT BUSINESS | AUG UST 29, 2022 FOCUS | NONPROFIT COMPENSATION TRENDS

Southeast Michigan nonpro ts that have seen or signaled turnover in the top executive role over the past year include: Arts and culture: Center for Arab American Philanthropy, Cranbrook Academy of Art, Detroit Symphony Orchestra, Detroit Zoological Society, Heidelberg Project, Museum of Contemporary Art Detroit Civic groups: Clinton River Watershed Council, Joe Louis Greenway Project , New Detroit Parks Coalition Foundations: Children’s Foundation, Community Foundation for Southeast Michigan, New Economy Initiative of the Community Foundation for Southeast Michigan Health care: Henry Ford Health System, Beaumont Health Higher education: University of Michigan, Wayne State University Human services: 826 Michigan , Accounting Aid Society Detroit , Covenant House Haven , Detroit Children’s Fund, Detroit College Access Network, Detroit Police Athletic League, Fair Food Network, Forgotten Harvest, Make-A-Wish Michigan, Mercy Education Project, Ruth Ellis Center, Spaulding for Children, Society of St. Vincent De Paul Detroit, Star sh Family Services Other: NSF International

Other executives have moved on to new roles and at least two new CEO spots have opened at newly formed nonpro ts.

on Page 14

Haven’s new CEO , Christine Kinal, was an external candidate who brought a non-traditional back ground to the domestic violence shelter’s top executive job. A former intelligence analyst in the U.S. Ma rine Corps, she had served for 20 years on the South eld Police De partment before launching proto type manufacturer CK Industries. But Kinal brought a passion for the mission. She had volunteered as a crisis counselor for ve and half years at Common Ground, a 24hour crisis services agency in Ponti ac for runaways, victims of crime, people with mental illness and oth ers.Her background was admittedly non-traditional for a nonpro t CEO, Common Ground’s chair Kristi Christ, vice president and trust o cer for JP Morgan Private Bank, ac knowledged.ButKinalhas worked with victims and survivors as a police o cer and a crisis counselor, Christ said. “She’s very warm and engaging... (and) was looking for a way to be of service,” Christ said. “Her passion for our mission really came through during the interview, which is what really resonated with all of us on the search committee.”

Filling experience gaps Empathy and genuine openness to inspiring people are really important traits in leaders right now, said Blaire Miller, managing partner and owner of e Hunter Group, an executive search rm that led the search for Covenant House’s new CEO.

“There’s a sea change in turnover,” said Julie Rosen, principle and leader of the not-for-pro t practice at Oak Brook, Ill.-based LongtimeWitt-Kiefer.nonprotleaders, many who started as social workers and rose through the ranks over the years are resigning and retiring, she said. Many leaders stayed through COVID and helped through that transition but were burned out, with “nothing left in the tank,” Rosen said.

also using assessments to identify and measure leadership traits, Miller said. at doesn’t mean nonpro t boards are eschewing functional skills as they look for CEOs. ey are still seeking leaders with a demon strated history of growing revenue through grants, fundraising and the ability to identify organizational e ciencies, Miller said. “(But) it’s rarely the technical skills that make or break a leader’s suc cess,” she said. “It’s these leadership traits and how they are applied with in each speci c culture that really builds that high-performing, collab orativeExecutivechain,”recruiters likened non pro t CEO searches to house hunts. Organizations go in with a wish list of quali cations, but most eventually need to give on some of the things on that list. “Just like you don’t nd the perfect house, each candidate has di erent strengths,” Miller said. “Sometimes they’re just so en thralled with what (an up and com ing candidate) could o er that they’re willing to help coach them and support them through the rst couple years of building their leader shipSubsequently,skills.”

boards are identify ing key traits in areas like diversity, equity and inclusion and cul ture-building and then acknowledg ing they can teach other needed skills, said Paul Trulik, founder and CEO of Apparatus Solutions in De troit, now part of Georgia-based Quatrro Business Services. Spaulding for Children’s new CEO, Melissa Jenovai, was an inter nal candidate. She started at the child welfare agency as an intern in 2005 and rose through the ranks to be named vice president of child and family services in 2017. She did not bring a deep fundrais ing background but got the job any way, said Gary Dembs, president of the South eld-based Non-Pro t Personnel Network, which led the search for Spaulding. Like other nonpro ts, Spaulding’s board was willing to supplement some missing skills for the new lead er, heesaid.outside candidate that was a nalist had functional experience in nance, fundraising, management and human resources. But the board went with Jenovai because she See SOFT SKILLS brought continuity of culture and es tablished chemistry with sta and existing relationships with funders and external child welfare advocacy relationships, Dembs said. “ e board was willing to invest in continuing education and/or prop ping up their leadership skills through Leadership Detroit” or other organizations, Dembs said. A broader pool e push for more diverse and in clusive leadership is a ecting the functional experience levels many candidates bring, he said. “If boards are open to a more di verse candidate pool for the CEO position, there are (often) going to be skill sets missing” for less experi enced candidates, Dembs said. “ at’s a good thing. It shows more of an openness to (diverse) candidates... (who) may not have had the opportunity to gain experi ence in the past.”

SHERRI WELCH Candidates with empathy, warmth, passion for mission getting chance at leadership roles

The pace of nonpro t CEO turnover has picked up over the past year, in part due to deferred retirements for longtime leaders kicking in after they stayed during the pandemic, executive recruiting experts said.

FELDMAN AUTOMOTIVE CHILDREN’S MIRACLE CELEBRITY INVITATIONAL RAISES MORE THAN $1 MILLION TO BENEFIT CHILDREN THANK YOU TO OUR GENEROUS SPONSORS BENEFITING

Nearly 100 generous donors and 50 national and local celebrities helped to raise more than $1 million to support life-saving health care services and enrichment programs for our youth. Visit beaumont.org/MillionThanks to see event highlights and the many community supporters.

The Beaumont Health Foundation partnered with the Mark Wahlberg Youth Foundation to host the Feldman Automotive Children’s Miracle Celebrity Invitational on August 29 at the Detroit Golf Club.

—Debora Matthews, president and CEO, The Children’s Center Hope pack food boxes for those in need. HOPE

Volunteers at Focus:

foundations

The Henry Ford (The Edison Institute Inc.)

See BENEFITS on Page 14

Inkster-based Star sh Family Services has added retention bo nuses, select signing bonuses, in creased retirement matches and paid parental leave.

Larry Alexander, president and CEO1 Metropolitan Detroit Convention and Visitors Bureau

FOCUS | NONPROFIT COMPENSATION TRENDS

Daniel Loepp, president and CEO Blue Cross Blue Shield of Michigan/Blue Care Network Philip Incarnati, president and CEO McLaren Health Care John Fox, president and CEO1 Beaumont Health Wright Lassiter III, president and CEO1 Henry Ford Health

|

2020 top executive Nonpro t organization

foundations

Arts and culture

Patricia Mooradian, president and CEO

Eric Larson , president and CEO Downtown Detroit Partnership Steve Grigorian, president and CEO Detroit Economic Club Terry Barclay, president and CEO Inforum

Christopher Palazzolo, president and CEO Ascension Providence Rochester Foundation Robert Hoban, former president and CEO Ascension St. John Foundation Margaret Casey, president Beaumont Health Foundation William Shepard, VP for advancement and executive director Eastern Michigan University Foundation Paul Miller, president Presbyterian Villages of Michigan Foundation

Anthony Michaels, president and CEO Michigan Thanksgiving Parade Foundation/The Parade Co.

Ranked by 2020 total compensation by category.

SME (formerly Society of Manufacturing Engineers) Sandy Baruah, president and secretary Detroit Regional Chamber

At the moment, it’s crucial for Fo cus: Hope is to nd entry-level center aides to help in the classroom, Hayes said.Focus: Hope reduced spending for things like training and supplies to in crease the hourly rate for teacher aides to $15 and fund other attraction and retention e orts, he said. Fewer teachers, assistant teachers and aides working with the kids nega tively impacts development and so cial skills for those in the program, “which is going to a ect our future,” Hayes said. Policy changes ahead Policy changes and government support to help with the shortages are slowly materializing. e state budget for the 2023 scal year, which starts Oct. 1, includes a

“We’re hearing from fresh-out-ofschool folks that want $45,000$50,000, with no experience other than their internships,” up from the $40,000 annual salary typical for the position, she said. “ at’s really hurting us. If you al low them to make that kind of money, you’ve got to increase people who’ve been there for three, four years and already have their licenses.” e Children’s Center will have spent an additional, unbudgeted $700,000 this year to give employees pay increases by the time it completes the second round, Matthews said. But the turnover rate from month to month is still 28 to 30 percent. Like behavioral health industries, early education programs are seeing an increased number of behavioral health issues in children, something that’s deterring many from coming in or staying in their jobs, said Waymond Hayes, director of Early Learning and Youth Development for Focus: Hope “ e pay that’s being o ered to in dividuals with the high standard of degree requirements doesn’t align.”

Sandra Bouckley, CEO and executive director

TALENT From Page 8

Nonpro ts o ering new bene ts, programs

CRAIN’S LIST TOP-PAID NONPROFIT EXECUTIVES

Fringe bene ts have typically been something o ered only to the highest levels of leadership, if at all, in the nonpro t sector. But tax-exempt organizations are of fering those and other soft bene ts at every sta level, now, in a bid to attract and retain sta . Organizations responding to a National Council of Nonpro ts na tional survey last fall on talent shortages reported that, following compensation, the second greatest challenge to employee recruit ment and retention is the inability of prospective and current em ployees to nd a ordable child care.“As a nonpro t employer … you can’t compete with the private sec tor on salaries. But what you can do is become very creative with your fringe bene ts that you o er,” while also reinforcing the organi zation’s mission and the fact that job seekers would be giving back to their community by joining the agency, said Louis Piszker, CEO of Wayne Metropolitan Community Action Agency. e bene ts are also an import ant retention tool, he said, given the increased workload for re maining employees and the burn out they Duringface.the pandemic, Wayne Metro added about 250 employees to its base of 600 to administer the Coronavirus Emergency Rental Assistance Program. at and oth er COVID response programs have increased its budget from $55 mil lion in 2019 to $350 million this year, spread across more than 100 programs aimed at helping people move out of poverty. With only 53 of its jobs currently vacant, the organization is faring better than other human services agencies. To ll a range of posi tions from entry level service pro viders through accounting, data analysis, IT professionals, grant writing and teaching positions, Wayne Metro is o ering rich bene ts, including: $5,000 in annual tu ition reimbursement, low-cost health care, 401(k) bene ts, six weeks of paid parental leave, $100 per month in student loan subsi dies and a $2,500 dependent care bene t for parents or caregivers of older adults, up from $1,500 before COVID.Even with those bene ts, how ever, there is a lot of competition for early childhood teachers and after-school program jobs, Piszker said“People will jump for 50 cents more or $1 more an hour.”

Social services Robert Cahill, president and CEO Hospice of Michigan Steve Fetyko, president and CEO United Methodist Retirement Communities Shawn H. Wilson, president and CEO Boys & Girls Clubs of Southeast Michigan Roger Myers, president and CEO, PVM Presbyterian Villages of Michigan Darienne Driver Hudson, CEO United Way for Southeastern Michigan

Other Kevan Lawlor, president and CEO1 NSF International Lincoln Smith, former president, CEO and trustee1 Altarum Institute W. Clark Durant, president and treasurer The New Common School Foundation Kristen Holt, president and CEO GreenPath Financial Wellness

Health care

12 | CRAIN’S DETROIT BUSINESS | AUG UST 29, 2022

Grantmaking

Richard (Rip) Rapson, president and CEO

Increases in fringe bene ts aim to attract, sta at all levels during talent shortage

Dominic DiMarco, president1 Cranbrook Educational Community Salvador Salort-Pons, director, president and CEO Detroit Institute of Arts Afa Dworkin, president and artistic director Sphinx Organization

SHERRI WELCH

The Kresge Foundation Audrey Harvey, executive director and CEO Blue Cross Blue Shield of Michigan Foundation Mariam Noland, president1 Community Foundation for Southeast Michigan Darin McKeever, president and CEO William Davidson Foundation David Egner, president and CEO Ralph C. Wilson Jr. Foundation

retain

Once you give those bene ts to employees, it would be hard to take them away, he said. “ ey are going to be part of our retention program. We are going to work hard to keep them,” even af ter Wayne Metro’s annual budget drops back down, Piszker said. Other nonpro ts are o ering one or more of those bene ts.

Fundraising

| FOCUS:

YMCA of Metropolitan Detroit provided employees with reten tion bonuses and household memberships to its tness facili ties and programs. It has also created a new human resource specialist position dedi cated to recruiting exclusively for its youth development programs, CEO Helene Weir said. “We’re hoping that a dedicated role will help us attract more quali ed can didates and hire and on-board faster and more e ciently.”

Mchael Slubowski, president and CEO, Trinity Health Corp. Trinity Health

“PEOPLE SAY (THEY) DIDN’T GO TO SCHOOL TO DO ALL THIS PAPERWORK ... THEY ARE REALLY FRUSTRATED THEY HAVE TO SPEND THAT TIME ON PAPERWORK INSTEAD OF TALKING WITH PEOPLE.”

Business organizations

404,937.00 346,421.00374,968.00467,480.00-7.6% South

AUGUST 29, 2022 | CRAIN’ S DE T ROI T B USINESS | 13 2020 top compensationexecutive 2020 compensationbase 2019 compensationbase 2019 top compensatonexecutive Base pay 2020/2019Citychange Footnotes 600,523.001 375,923.00344,258.00668,858.009.2% Detroit 1. Michaels’ consulting rm Michaels Group also has a management contract with Woodward Dream Cruise Inc. and received $48,000 in 2019, the latest year available. 540,725.00 444,770.00474,524.00654,704.00-6.3% Dearborn 483,824.00 410,551.00441,238.00611,025.00-7.0% Bloom eld Hills1. DiMarco retired in June 2021. 467,226.00 434,718.00446,921.00477,584.00-2.7% Detroit 461,176.00 298,051.00286,589.00444,696.004.0% Detroit 654,789.00 556,422.00520,787.00611,958.006.8% Dearborn 499,290.00 380,508.00394,022.00640,503.00-3.4% Detroit 459,297.00 312,934.00299,904.00425,819.004.3% Detroit 330,630.00 262,301.00292,201.00329,667.00-10.2% Detroit 322,815.00 304,403.00292,183.00345,539.004.2% Detroit 1,184,379.001 577,103.001,148,037.00543,975.006.1% Rochester 1. Compensation from the organization and related organizations. 778,455.00 274,736.00495,265.00833,258.00-44.5% Detroit 768,477.00 393,698.00398,954.00657,954.00-1.3% South eld 335,671.00 239,765.00250,319.00350,447.00-4.2% Ypsilanti 133,734.00 133,734.00138,539.00144,550.00-3.5% South eld 976,115.00 850,557.00809,343.00930,865.005.1% Troy 923,354.00 318,747.00297,989.00955,060.007.0% Detroit 693,368.00 596,983.00572,944.00657,431.004.2% Detroit 1. Noland retired in March 2022. 656,473.00 581,852.00500,000.00562,878.0016.4% Birmingham 649,346.00 577,451.00533,361.00635,699.008.3% Grosse Pointe Farms 11,540,334.00 1,645,962.001,537,661.0012,104,983.007.0% Detroit 8,756,201.00 8,616,308.007,968,695.008,155,554.008.1% Grand Blanc 5,828,955.00 1,564,725.001,888,740.005,109,948.00-17.2%

2,394,122.00

679,847.00

FOCUS | NONPROFIT COMPENSATION TRENDS $25

Ann

Salary database available

767,059.00 528,538.00507,971.00719,887.004.0% Ann

374,201.00 329,337.00350,000.00393,863.00-5.9%

South eld 1. Left the organization on Feb. 4. 3,913,770.00 1,754,642.001,621,355.003,690,408.008.2% Detroit 1. Left role as CEO in late July. Wright Lassiter served as CEO of Henry Ford Health System and president of Henry Ford Health System Foundation. 1,748,691.001,665,425.002,965,730.005.0% 713,317.00701,660.002,748,748.001.7% 1. Lawlor retired February 2022. 499,044.00409,122.00822,206.0022.0% Arbor Smith retired in June 2021. Hills 1. Alexander retired at the end of 2020. Arbor Hills eld Detroit million allocation to help cover costs for after-school providers. To help with behavioral health cli nician shortages, the state earlier this year also changed the rules to allow clinicians with only a bachelor’s de gree to provide higher level services than they previously could, Mat thews said. ose employees can now provide more behavioral health therapy under the supervision of a master’s degree-level therapist and do case management work to help families secure basic needs assis tance, something that’s enabling be havioral health agencies to hire more employees with just bachelor’s de grees.e state this year provided a $2 per hour increase for front-line workers in residential child caring institutions, said Bob Wheaton, public informa tion o cer for the Michigan Depart ment of Health & Human Services. One of the next big things behavior al health providers are advocating for is a reduction in Medicaid paperwork. e Michigan Behavioral Health and Wellness Collaborative, a mem bership advocacy group that includes 17 Wayne County agencies, is pushing for changes in the procedural admin istrative requirements of the Detroit Wayne Integrated Health Network, the county’s mental health authority, Matthews“Peoplesaid.say (they) didn’t go to school to do all this paperwork...they are really frustrated they have to spend that time on paperwork instead of talking with people.”

610,891.00 398,077.00575,000.00752,142.00-30.8% Detroit 523,004.00 380,733.00346,776.00382,574.009.8% Farmington

An expanded version of this list with salary information for more than 140 executives from Southeast and outstate Michigan is available in Excel format with a Crain’s All Access + Data subscription at crainsdetroit.com/data.

Livonia 2,203,116.00

513,703.00 468,521.00359,920.00481,305.0030.2% Chelsea 494,400.00 300,000.00275,000.00320,585.009.1% Farmington

Also on the advocacy front: e Wilson Foundation has awarded grants to Caring Across Generations, a national advocacy organization that is working with Impact Alliance Michi gan to lift up direct care workers and look at everything from career paths to better training and more pay, SlichtaGovernmentsaid. and philanthropy should play roles in helping nonprof its respond to the talent crisis, the Na tional Council of Nonpro ts’ omp sonFoundationssaid. can expand grants for workforce training programs for en try-level positions and also help smaller nonpro ts get into the gov ernment grants and contracting are na, ompson said, something that provides stable funding. Local gov ernments can use American Rescue Plan dollars to expand child care facil ities. States can adjust licensing re quirements, provide more funding and x government grants and con tracting reimbursement rates to cover the current costs of providing services, he said, noting some states haven’t updated nonpro t reimbursement rates in more than 20 years. “As a result nonpro ts have to fund raise to subsidize government,” ompson said.

501,112.00 478,851.00433,408.00454,297.0010.5% Detroit

Ann Arbor

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

Published here are a selection of the top-paid nonpro t executives in Southeast Michigan, broken out by the type of nonpro t. This year’s review focused on compensation data for calendar year 2020, which is the most recent available based on nonpro t form 990 tax lings. It includes large nonpro ts and smaller organizations that in our judgment merited inclusion, such as civic and business organizations and smaller nonpro ts whose CEOs earned compensation comparable with their peers at larger nonpro ts.The total compensation for some executives, where noted, is net of deferred compensation reported on a prior-year 990 to give a more accurate picture of that executive’s actual compensation and a truer ranking. In the interests of transparency, some nonpro ts still completing 990s provided compensation data for their top executives upon request.

1.

Tania Hernandez, community resource coordinator for Wayne Metro, at a family literacy event at Ann Visger Elementary in Detroit. |WAYNE METRO

Marsh Construction les for Chapter 7 liquidation

T.H. Marsh’s website says the company started in 1954 by father and son Alfred Marsh and Ted H. Marsh, first by building gas sta tions along the expanding high way system fueled by the Feder al-Aid Highway Act of 1956. Since then, it has built projects in health care, nonprofits, multifamily, re tail and education, the website says.e company reported $90 mil lion in revenue in 2020, placing it at No. 142 on the Crain’s Private 200 list; that gure was down from $92 million in 2019. It’s not known how many people T.H. Marsh employs. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB T.H.

— Blaire Miller, managing partner and owner, The Hunter Group

Ryan Marsh, president of T.H. Marsh, and Ernest Hassan III, T.H. Marsh’s bankruptcy attorney with the South eld o ce of Stevenson & Bullock PLC, did not immediately respond to a request for comment. e case has been assigned to Judge Maria Oxholm of the U.S. Bank ruptcy Court for the Eastern District of Michigan Southern Division.

Former Wayne County o cial Rahal to join DTE; 2 promoted at county MINNAH ARSHAD

From Page 10 YMCA of Metropolitan Detroit is using part of MacKenzie Scott’s $10 million gift to upgrade spaces and facilities to better cater to the community. | YMCA

Nonpro ts are also looking to soft bene ts and workforce development programs to help retain and attract staFocus:. Hope hosts virtual early ed ucation programs on Fridays so em ployees can work from home, said Waymond Hayes, director of Early Learning and Youth Development for Focus: Hope. It’s also providing a path to jobs for several parents with a child in the program. It provides parent volun teers with a monthly stipend to at tend a six-month program to earn their child development associate certi cate. en Focus: Hope hires them as assistant teachers. About a third of the nonpro t’s 60 employees in that position have come through the program, Hayes said. Wayne Metro also has an internal workforce development program or apprenticeship that provides partici pants with a monthly stipend of $960, one-on-one coaching, computer lit eracy classes and other needed skills training. At the end of the program, it hires them into one of its many pro gram areas, Piszker said. “We are at a point where like some others, maybe we pay a signing bo nus and a retention bonus,” said Cheryl Johnson, CEO of the Coalition on Temporary Shelter in Detroit. “We have not made a decision to do that, but we are talking about it.” It did, however, give front-line sta , who are working longer hours to make up for sta ng shortages, a break from all internal and external meetings in July, to reduce some of the strain on them. “We have to take care of (sta ) in order to take care of our families,” Johnson said.

14 | CRAIN’S DETROIT BUSINESS | AUG UST 29, 2022

“SMART PEOPLE CAN LEARN ANYTHING. IT’S HARDER TO LEARN (TO BE) EMPATHETIC, VISIONARY AND HARDWIRING.”THAT’SCHARISMATIC...IFNOTTHEIR

HEALTH CARE

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

DUSTIN WALSH

Boards expect a certain amount of skills and experience, but at the end of the day, they are really look ing for a cultural t, Rosen said. ey want somebody to be authen tic, humble, a good listener. “ ere is no room for arrogance. Con dence yes, arrogance, no,” she said. “People work for other people At the end of the day, top executives and even rank and le (employees) won’t work for somebody they don’t like. ey have too many choices.”

TurfeSusick Jackson

Beaumont Health on Wednesday promoted veteran health care execu tive Nancy Susick to COO of the orga nization.erole for the health system had been left open since the departure of Carolyn Wilson, who departed Beau mont in September after it an nounced it would merge with Grand Rapids’ Spectrum Health. In the in terim, Susick split those duties with David Claeys as co-COOs. She also recently served as the in terim president of Beaumont after CEO John Fox departed the organiza tion early this year. Claeys is now the president of Beaumont’s Dearborn and Farming ton Hills hospitals. Debbie Guido-Al len replaces Susick as president of the Royal Oak hospital, on an interim etyservingupworkedinpitalBeaumontSusickbasis.joinedHosinRoyalOak1986andherwaytheladder,inavariofleadership positions — from assistant nurse manager to director to president of Beaumont Hospital in Troy. Concurrently, Susick also served in the U.S. Navy Reserve. She retired as a captain in 2012 after 24 years of service.Sheearned a bachelor’s in nursing from University of Detroit Mercy and a master’s in nursing from Oakland University.

BENEFITS From Page 12

Contact: minnah.arshad@crain.com (313) 446-0416; @minnaharshad

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

SOFT SKILLS

REALKIRKESTATEPINHO Bloom eld Hills-based

Beaumont, which is now a subsid iary of the merged BHSH System, has spent the last few months lling cor ner o ces. In July, BHSH hired Benjamin Schwartz to run the Beaumont sub sidiary as its president. Schwartz joined Beaumont from New York’s largest health system Northwell Health, where he most recently served as its senior vice president and regional physician executive. Beaumont and Spectrum merged in February to create the state’s larg est health system, temporarily named BHSH Health, with $12 bil lion in revenue and operating 22 hospitals and 305 outpatient loca tions.

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

Veteran leader Nancy Susick to ll COO role at Beaumont Health

PEOPLE As Wayne County’s chief adminis trative o cer leaves for a new role at DTE Energy Co, two others have been promoted to leadership roles in the county o ce. Former Chief Administrative O cer Khalil Rahal left Wayne County earlier this month and is joining DTE as director of economic development, the company announced on Tuesday. Wayne County chief of sta Assad Turfe, 40, is being promoted to deputy executive, and interim communica tions director Ti ani Jackson, 35, now holds her role permanently. Rahal, 41, is the rst at DTE to hold this position, which was created to help the company “work with busi nesses of all sizes to make Michigan their best choice for growing or relocat ing their operations,” a spokesperson told Crain’s. His start date is Aug. 29. Newly named deputy executive Turfe will begin his new role upon the approval of the Wayne County Com mission, a county spokesperson said. Turfe has been serving the county for nearly 20 years, beginning as a dep uty police o cer and rising through the ranks to sergeant and executive lieutenant. In 2017, he joined Wayne County Executive Warren Evans’ team as chief assistant and was promoted to chief of sta the following year. Turfe received his bachelor’s degree in crim inal justice and public policy at Con cordia University Ann Arbor. Before joining Wayne County’s communications team last year, Jack son worked in administrative roles at the Wayne County Circuit Court, the U.S. Census Bureau and Strategic Sta ng Solutions, a Detroit-based sta ng company. She received her bachelor’s degree in corporate com munication and public relations and her Master of Public Administration from the University of Michigan. Rahal had been serving Wayne County in a variety of roles since 2015.

“Now there’s more risk appetite from the boards to help build up their skills,” she said. “Smart people can learn any thing. It’s harder to learn (to be) empathetic, visionary and charis matic...if that’s not their hardwir ing.” e trends are also happening nationally, said Julie Rosen, princi ple and leader, not-for-pro t prac tice at Oak Brook, Ill.-based search rmNonproWitt-Kiefer.tboards are looking for candidates with high emotional in telligence and a passion for the mission, along with great business skills and a strong ability to connect with individual and corporate do nors to help bring in new revenue. If the person doesn’t have a fundraising background, they’ll say have you done political work, been able to develop successful partner ships or built strong connections with internal and external constitu encies?

T.H. Marsh Construction Co. has its o ce in this building at 100 W. Long Lake Road in Bloom eld Hills. | COSTAR GROUP INC. T.H. Marsh Construction Co. has led for Chapter 7 liquidation. e Bloom eld Hills-based gen eral contractor said in its bankrupt cy ling dated Monday afternoon that it had $50,001 to $100,000 in assets and $1,000,001 to $10 million in liabilities. It also listed between 100 and 199 creditors.

Stanton: Kids Count measures ve core areas: economic security, education, health, safety, family and community through 90-plus indicators. We do this for the state, for individual counties and for the cities of Detroit, Flint, and Grand Rapids. Mi igan was ranked 32nd in the nation for overall ild well-being.

Stanton: e COVID-19 pandemic shed a light on core issues that families and ildren have been struggling with for many years — and the number one is ildcare. High quality, accessible ildcare is costly to the family while the people that are providing this important work are paid poorly. We also saw signi cant issues with education as kids tried to learn from home. Finally, mental health, both for adults and ildren, continues to be a concern. Based on our Kids Count data, we found that there are 22,000 more kids in Mi igan struggling with anxiety and depression. We need to do more as a state to make sure that we’re rea ing out to both kids and families to make sure they’re getting prevention services and supportive services.

Burns: Another part of the pandemic is that patients had to go alone.

Advocating for the overall health and wellbeing of children across the state

Haddad: It’s been great to see the improved level of awareness around this issue. It’s a critical issue, speci cally for our youth in the community. It’s something we’re excited to work with you on.

LARRY BURNS: Let’s talk a little bit about your role with the Detroit Pistons.

Kell Spehn: We are looking for partners in the community. It’s not just about throwing money at our cause — it’s about nding new solutions with the utility companies, the mortgage companies and the banking industry. We know that there’s more to cancer than just medicine. We’re going to o er services so that you can stay whole as a person and as a family. Find more information at FoundationForFamilies.org.

Haddad: ere’s a shared vision between the Detroit Pistons organization and e Children’s Foundation to bring people together to improve the lives of ildren in the community and to create positive ange. Working together for First Tee - Greater Detroit is a great example of that.

Burns: How can people help you?

SPONSORED CONTENT

A big part of how the League works with kids is a two-generational approa . We want to make sure that in order to help kids, we’re helping that whole family unit. For example, regarding the earned income tax credit, we make sure that money gets into the hands of working families.

Kell Spehn: Imagine hearing the words, “you have cancer.” When you hear those words, so many things run through your mind. Primarily, “how am I going to beat this?” O en, people immediately jump to, “how am I going to a ord this?” Forty percent of people we help are single parents and simply cannot a ord this disease. We help pay bills. If you need somebody to talk to, we can provide that. If you need somebody to get to the store for you, we have somebody who can help. We have 150 volunteers across the state.

Burns: What obstacles did your foundation experience with COVID-19?

When kids have access to health insurance, they’re more likely to be up to date with their vaccinations and have a primary care doctor. ose are so important. All this data is available to the public on the Mi igan League for Public Policy website at mlpp.org

Burns: Let’s talk about our partnership.

Burns: Any advice on how The Children’s Foundation can Stanton:help?

On this monthly radio program, The Children’s Foundation President & CEO Larry Burns talks to the community, government and business leaders about issues related to children’s health and wellness. This hour-long show typically airs at 7 p.m. the fourth Tuesday of each month on WJR 760AM. Here’s a summary of the show that aired Aug. 23; listen to the entire episode, and archived episodes, at

Kell Spehn: We saw a few things during the pandemic, su as delayed cancer screenings and surgeries. Treatments were being delayed, and we were seeing families sitting idle while cancer was growing. Today, we’re seeing a huge in ux of cancer patients, and those with later stage diagnoses.

Kell Spehn: e emotional impact of the pandemic compounded by cancer has been staggering. It’s hard to witness and it’s hard to ignore. While the nancial assistance we provide can help with the mental stress of bills, there is mu more going on.

Burns: Tell us more about the data you’re referring to.

LARRY BURNS: Tell us about your journey. GINA KELL SPEHN: My husband, Mi ael, and I ea lost our rst spouses to cancer. We both felt strongly that there was a gap in this space. We started New Day Foundation for Families with the goal to improve treatment outcomes for families, improve their quality of life and provide things that medical doctors don’t. We provide nancial assistance and emotional resources.

In addition, we have a live entertainment business, 313 Presents, whi puts on 300-plus events a year. We have the Motor City Cruise, whi is our new NBA G League team. We made the playo s in our rst year. We have an eSports team in Pistons GT. With the Pistons Performance Center, as part of our partnership with Henry Ford Health, we have a real estate business as well, and we function as a real estate developer. My role is to help operate and oversee that, to shape the strategy of the business and to drive the business forward, whether it’s on the sales and marketing front, operational front or the facilities front. My job is to make sure that they’re all working together, to make sure that everybody’s aligned, and to make sure that we’re all pushing the business forward in every way that we can.

Kell Spehn: We’re in the middle of a strategic planning process. It’s grueling and it’s invigorating because it requires you to dig deep and think about where you want to be in those next few years ahead. We want to do radical good for the cancer community.

Burns: Can you give us a broader sense of how New Day provides support?

LARRY BURNS: Tell us about the Michigan League for Public Policy. MONIQUE STANTON: e Mi igan League for Public Policy has been around since 1912. Our mission addresses economic, racial, health, and wellness disparities among Mi igan’s ildren, individuals and families. We’re dedicated to helping make Mi igan a better place for all people within our state, especially vulnerable populations. One example of what we do is Kids Count, a national e ort to help measure the health and well-being of ildren across the state.

Burns: That’s not where we want to be. Stanton: It’s not where we want to be. We ranked 29th in economic well-being in family and community context. e state’s lowest national rank was in education — we were 40th. e place that we excelled at was health. We do an excellent job in Mi igan of ensuring that ildren are covered by health insurance.

Burns: Tell us more about that facility.

ABOUT THIS REPORT:

Monique Stanton President & CEO of Michigan League for Public Policy

Haddad: We are too — we can’t wait.

Kell Spehn: Isolation is one of the worst things — truly, we need ea other. During the pandemic, we started an emotional support program, speci cally to get counselors and therapists on board with us, to help cancer patients immediately.

Burns: What was the mental wellness impact of that?

Richard Haddad Chief Operating Of cer & Chief Legal Of cer at Pistons Sports & Entertainment; Trustee, The Children’s Foundation

GinaYourChildrensFoundation.org/caring-for-kidsKellSpehn Co-founder & President of New Day Foundation for Families

Burns: Where do you see New Day Foundation for Families going forward?

e Children’s Foundation is a leader in behavioral healthcare and mental healthcare, so building on those e orts is vital. It’s important that we continue to reduce the stigma associated with accessing mental health, substance use disorder and other behavioral healthcare services for kids and families. Looking at public policy, how can we create systemic ange so we’re not facing the same issues year a er year?

RICH HADDAD: e basketball team is the core of everything we do. We’re optimistic about the upcoming season. We’ve built this core group of young and talented players that we’re excited to wat develop and grow together, and ultimately bring Detroit its next ampionship.

Burns: The Children’s Foundation is joining the path to talk about mental health, particularly with youngsters and young adults, and utilize the Pistons, the brand and the in-game experience to do that.

Haddad: ere are so many NBA teams engaged in an arms race to build the biggest and the best practice facility. But most teams end up building a fortress that’s great for the players and the coa es, but you don’t really see anyone come in or out of it — there really isn’t any accessibility. We tried to do it the other way around. Our facility is state-of-the-art and rst class in every way, but it’s open to the community. We host 300-plus events there every year. e goal is for it to be a hub for everything that’s going on in the New Center neighborhood and more broadly in Detroit. We also brought two other partnerships to the table, Plum Market and Planet Fitness. ey’re two examples of the way that we are committed to use the Pistons Performance Center to provide bene ts to our community.

CARING FOR KIDS

Burns: There’s another element of this partnership that includes the facility. We struck gold, as it’s mental health, nutrition and eSports in one partnership. We’re really excited.

Burns: What are some of the biggest challenges with COVID?

The o ces in this mixed-use building at 38 Commerce Ave. SW in downtown Grand Rapids were fully leased as of the second quarter of this year.

“It will be an interesting dynamic to monitor as we see some companies grow here locally,” he said. “Will they back ll space that is being vacated by right-sizing larger, corporate-type end users? Let’s face it, Grand Rapids is a tertiary market, so this is a space that they may or may not need to be in.”

West Michigan commercial real estate packed tight

O ce space right-sizing after pandemic work-from-home hasn’t hit as hard as in other cities

“Inventory seems to be at a low point, and certainly well below the current demand we are seeing from buyers in the market,” she wrote in the report. “ is problem is a result of so many properties having been sold over the past few years, combined with the lack of new construction due to the pandemic and high construction costs.”

O ce Je Karger, senior vice president of brokerage for JLL Grand Rapids, handles acquisition, sales and leasing of commercial real estate in West Michigan.Hesaid JLL’s reports are based on quarterly leasing activity and corporate owner-occupied property data. According to JLL’s calculations, Grand Rapids’ overall o ce vacancy rate in Q2 was 11.8 percent, down from 12.8 percent in Q1. at compares to 18.7 percent vacancy in Detroit, 19.9 percent in Indianapolis, 22.1 percent in Chicago and 18.9 percent on average in the U.S. in the second quarter. Total vacancy rates were 14.5 percent for downtown Grand Rapids o ce real estate versus 9.4 percent in the Year-to-datesuburbs. net absorption in the JLL report — the amount of space occupied — was 265,166 square feet, with 10,781 square feet available in sublease vacancy and 51,000 square feet under construction (none of it downtown). e average direct asking rent was calculated at $21.74 per square foot downtown versus $17.63 per square foot in the suburbs. Karger thinks Grand Rapids is insulated from higher vacancy because local companies have been slower to reevaluate their space usage in the era of remote and hybrid work, while larger companies have already begun reducing their footprint to match the number of daily in-person workers. But slowly, it’s beginning: Morgan Stanley this year consolidated a downtown o ce and a suburban ofce to a location in southeast Grand Rapids, and Wells Fargo consolidated its downtown location into a suburban location on the northeast side.Karger said it’s possible Grand Rapids vacancy rates will increase in the next 18-24 months as local right-sizing catches up to national trends, but it’s also possible other growing companies will take over the empty o ce space.

GRAND RAPIDS — e pandemic’s impact on o ce and industrial real estate markets is spilling into 2022, according to a pair of West Michigan reports. e takeaways? Corporate growth and a lack of new construction are putting both segments in a tight spot. at’s according to Q2 o ce and industrial market reports from NAI Wisinski of West Michigan published this month and o ce and industrial market trend reports published by JLL Grand Rapids in July.

BY RACHEL WATSON

16 | CRAIN’S DETROIT BUSINESS | AUGUST 29, 2022

Overall trends In the West Michigan o ce segment, vacancy rates, particularly in downtown Grand Rapids, are higher than industrial vacancy rates (but not as severely as in other large cities).It’s a bit of a shu ing game, with new supply hitting the market just as some companies are right-sizing their o ce footprint and others are expanding. Meanwhile, the availability of suburban o ce space is shrinking: If proximity to downtown restaurants and entertainment isn’t as important in the work-fromhome era, why not move to the suburbs, where rents are lower, and parking is Meanwhile,free?demand for industrial space far outpaced supply in Q2, making for one of the tightest markets local brokers have seen in their lifetimes. With o -market deals becoming more common, less well-connected businesses are nding it tough to grow their footprint. Brokers are hopeful more supply will come online in Q3, but much depends on whether supply chain problemsAlthoughabate.each rm’s Q2 reports focus on di erent factors a ecting the market right now, what they have in common is the pandemic’s lingering impacts on commercial real estate.

MICHIGANWESTOFWISINSKINAI Horn Kapanowski Karger Woznick

REAL ESTATE

Hillary Taatjes Woznick, a partner for o ce and retail at NAI Wisinski, said there’s a misconception that West Michigan has a higher o ce real estate supply than larger markets.“ e mentality is that there’s just tons of o ce space, and everybody’s working from home, and people are giving it away,” she said. “ at’s really not true. … We have the biggest inventory crisis that we’ve ever had in West WoznickMichigan.”saidin the introduction to her Q2 report for NAI that COVID-19 caused downtown o ce leasing to stall for a full year from March 2020 to March 2021, but then it picked right back up. She said the biggest challenge now is the lack of o ce buildings available to buy in West Michigan.

When a property goes on the market for leasing, Woznick said she gets calls asking if her client would be willing to sell the property instead of leasing it, leading to o -market deals and lower inventory. NAI West Michigan had its best year ever in terms of o ce building sales, Woznick said. e NAI Q2 report showed an overall o ce vacancy rate of 6.6 percent with 8.1 percent vacancy downtown.Woznick is currently “out of inventory,” she said — especially in the suburbs. Downtown office real estate is going for $20.21 per square foot, on average, according to NAI’s calculations. Woznick said according to her most recent estimate, parking costs add another $10 PSF for downtown tenants, and it gets more competitive all the time due to lack of supply. With lower rents and free parking, the flight to the suburbs is understandable, she said.

See SPACE on Page 17

DexKo Global Inc., Novi, manu facturer of trailer running gear, chassis assemblies, related compo nents and hydraulic brake applica tions, has signed an agreement to acquire Fluid-Press Group, Al binea, Reggio Emilia, Italy, devel oper and manufacturer of hydraulic valves and manifold blocks for agri cultural machinery, industrial equipment, cranes, aerial plat forms, and earth-moving machines. Website: dexko.com

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Strata Oncology Inc., Ann Arbor, a precision oncology company, has expanded its clinical trial sites to Lehigh Valley Topper Cancer Insti tute, Allentown, Pa., and the Uni versity of Michigan Health Rogel Cancer Center, Ann Arbor, for the Strata Sentinel, a study of the Strat aMRDTM minimal residual disease test, bringing the use of biomark er-matched precision therapies to earlier stages of cancer treatment. Website: strataoncology.com

NAI WISINSKI OF WEST MICHIGAN

PITCH COMPETITIONS

RHP Properties, Farmington Hills, private owner and operator of man ufactured home communities, ac quired three manufactured home communities in Cedar Rapids, Des Moines and Pella, Iowa, totaling 723 home sites. This expands the company’s portfolio to four com munities in the state and brings the company’s total of manufactured home communities to 315 nation wide. Website: rhp.com

J.D. Power, Troy, a data analytics firm, acquired the finance and in surance menu and reporting soft ware business of Tail Light, Plano, Texas, an automotive software company. Websites: JDPower.com, taillight.com

JOB FRONT

Underground Printing, Ypsilanti, a custom printed apparel provider, moved to a 172,000-square-foot headquarters facility at 1476 Seaver Way, Ypsilanti, from a 55,000-squarefoot space in Ann Arbor. Website: un dergroundshirts.com

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SPACE From & DETAILS EXPANSIONS

Crain Communications seeks an experienced Assistant Controller to join its Financial Services team. This position is responsible for providing assistance to the VP of Finance in managing the global controllership operations of the organization including general ledger and xed asset accounting, vendor payables, and accounts receivables & collections. Visit crain.com/careers/ for more information and available positions.

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White Cap Supply Holdings LLC, Atlanta, provider of concrete acces sories and chemicals, tools and equipment, building materials and fasteners, erosion and waterproof ing and safety products to profes sional contractors, acquired CSI Geoturf, Highland Township, a wholesale distributor of civil site construction geosynthetic and landscape supplies. Websites: whitecap.com, geoturf.com

GLOBAL POSITION

AUGUST 29, 2022 | CRAIN’ S DE T ROI T B USINESS | 17 To place your listing, contact Suzanne Janik at313-446-0455 CLASSIFIEDS Advertising Section REAL ESTATE FOR SALE Manager, Major League Advance Scouting sought by Detroit Tigers Inc. located in Detroit, MI, to seek & assess players, prep game plans, & travel extensively to Japan, Korea, Taiwan, & in US. Req. Fluent Japanese. Email David.Allende@tigers.comresume: POSITION AVAILABLE JOB FRONT

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JLL cited a few major owner-occu pied expansion projects in the West Michigan industrial space in Q2, in cluding LG’s $1.7 billion expansion of its facility in Holland to quintuple its capacity to produce EV battery com ponents, P zer putting $120 million into its Kalamazoo facility to expand production of the COVID-19 vaccine, Grand River Aseptic Manufacturing investing $160 million in its facility in Grand Rapids, Coastal Container spending $25 million to expand and JR Automation putting $10 million into its facility. e DeltaPlex arena, the former home of the Grand Rapids Gold bas ketball team and concerts and events, sold to Visser Brothers Devel opment for $5.5 million at the end of 2021, and the company said in Q2 it intends to repurpose the 6,000-per son capacity venue into warehouse space for an industrial tenant that has not been “Developersselected.arejust trying to get their hands on properties or facilities that they can renovate and re-occu py,” Horn said.

` Affordable Dentures & Implants, Kinston, N.C., a network of dental practices focused on tooth replace ment, opened locations at 23111 Allen Road, Woodhaven, and 8327 Twelve Mile Road, Warren. Web site: warrenabledentures.com/locations/mi/tions/mi/woodhaven,affordabledentures.com/locaafford

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Lear Corp., Southfield, automo tive seating and electrical systems manufacturer, acquired Thagora Technology SRL, Iasi, Romania, a company specializing in material utilization hardware and software technologies. Website: lear.com

` BasBlue’s Founders + Fund(Her)s Pitch Day, sponsored by JPMorgan Chase, awarded $14,500 in seed

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Industrial O ce supply might be low, but in dustrial real estate supply is histori cally scarce in West Michigan. at’s according to Bob Horn, ex ecutive vice president at JLL Grand Rapids, and Andrew Kapanowski, commercial real estate specialist for NAI Wisinski of West Michigan. “ is is one of the hottest industri al markets that (we’ve) seen in de cades,” Kapanowski said. JLL’s Q2 industrial report said the total vacancy rate in West Michigan is at 3 percent while average rent is at $4.26per square foot. And while it didn’t list the number of available square feet, the report said about 2,512,750 square feet of space is un derAccordingconstruction.to NAI’s Q2 report, which uses CoStar data, the overall industrial vacancy rate in West Mich igan is at 2.2 percent, the average price per square foot is $5.25, and less than 4 million square feet of space is vacant and available. Kapanowski said demand for in dustrial space is high not only be cause of the e-commerce boom but because local companies are per formingMeanwhile,well. new builds have been slow to come online due to supply chain delays and high materials costs. “I’ve run into situations where ordering a garage door takes four, ve, six months sometimes,” he said. Kapanowski is hoping the market will soften in Q3. “Honestly, (we’re) almost an un healthy level of lack of supply, be cause it’s so hard to nd stu for peo ple,” he said. “It would almost, in a way, be healthy to have a little bit of market contraction — not really a full contraction, but just to soften it up a littleKapanowskibit.” and Horn both said o -market industrial deals are com mon right now, and buildings that are still under construction are leased before they’re even complet ed. Businesses are also signing lon ger-term leases, Horn said — 10 to 15 years versus the ve-year leases that used to be common — and leasing more space than they need to allow room to grow. at’s hurting smaller companies that need less space, since investors and developers aren’t churning out as many small buildings, and the larger projects they’re developing are being leased o -market by compa nies with deeper pockets.

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The former DeltaPlex arena at 2500 Turner Ave. NW was the home of the Grand Rapids Gold basketball team and hosted many concerts and events. It sold to Visser Brothers Development for $5.5 million at the end of 2021 and is being repurposed into warehouse space for an industrial tenant.

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funding to five Detroit area female business owners. Jordan Yagiela of Team Yagiela, a residential devel opment company doing rehabs of blighted single family homes in De troit, was awarded $5,000 from the BasBlue Foundation. Panelists Su zanne Shank and Jake Cohen pro vided additional funding and offers of support to the remaining four fi nalists, Hannah Awada of Hummus Goodness, Claire Smith of Teffola, Deirdre Roberson and Alecia M. Gabriel of The Lab Drawer and Ta mika Mayes of Reyz. Website: bas blueus.com

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Page 16 DEALS

Centroid Systems LLC, Troy, a software company, acquired Guardian Eagle, St. Petersburg, Fla., a data security consultant. Websites: centroid.com, theguardi aneagle.com

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SERVICES

Great Lakes GrowthWorks, Ann Arbor, a business management consultant, has changed its name to Upland. Website: go-upland.com

Assistant Controller AVAILABLE

Utility Energy Services, Troy, de veloper and manager of energy-re lated businesses and services, was selected for the second class of Ap ple’s Impact Accelerator. e Impact Accelerator launched last year with the goal of ensuring Apple’s strategic work and investments to protect the environment also help expand ac cess to opportunity for communities of color. It is a three-month program in which Black-, Hispanic/Latinx-, and Indigenous-owned businesses working on environmental services and solutions receive training and mentorship. Website: utility-energy services.com

The Christmas Tree Promotion Board, Howell, a promotion and re search organization funded by North American Christmas tree growers, has re-branded itself the Real Christmas Tree Board. Char tered in 2015, the organization is a resource for insights about farmgrown Christmas trees. Website: re alchristmastreeboard.com

Contact: rachel.watson@crain.com (989) 533-9685; @RachelWatson8

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MERGERS & ACQUISITIONS

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NSG Industries, Detroit, an in vestment firm, acquired Stoney Creek Logistics Inc., Rochester, a shipping firm. Website: stoney creekfreight.com

` Infusion Associates, Grand Rap ids, provider of medically pre scribed outpatient infusion and in jection therapies, opened an infusion center at 363 West Big Bea ver Road, Troy. Two additional lo cations will open in Novi and Ma comb later this summer. cations/troy-miinfusionassociates.com/office-loWebsite: ` Fanuc, Rochester Hills, a robotics company, opened a new robotics and automation headquarters in Aguascalientes, Mexico. The 109,000-square-foot facility will provide sales, demonstrations, training, engineering and customer service. Website: fanucamerica. com

18 | CRAIN’S DETROIT BUSINESS | AUG UST 29, 2022 e idea, Forhan told Crain’s, is that light helps the body produce energy, though he acknowledged that belief might go against broader scienti c consensus. e “vast majority” of Americans receive “too little sunlight every day,” Forhan told Crain’s. “Getting more sunlight, especially in the morning or evening, “will directly increase the energy level of your body,” according to the founder. “You will improve every health metric,” said Forhan. “And it will contribute to preventing degenera tive brain disease, including Alzhei mer’s, (and) many other degenera tiveBeforediseases.”thelegal actions ew and relationships went bad, the startup and supplier of automotive lighting united to try to deliver on a UV light-inspired idea to change the game of pain relief. Forhan, who earned a bachelor’s degree in materials science from University of Michigan in 2018, founded JustLight in 2020 after a few other startup ventures including a UV hand-and-phone sanitation de vice during the COVID-19 pandem ic.JustLight’s agship product is the Sun ower, a lamp-like device emit ting infrared light intended to ease joint and muscle pain, according to the company. JustLight’s website lists them for sale at $1,100 apiece. After developing the technology, Forhan worked to scale up to mass production by raising around $3 million, primarily through convert ible equity notes with a 20 percent discount and no value cap. Such method of raising funds is standard for an early-stage startup with no determined market value, said Chris Rizik, CEO of Ann Ar bor-based Renaissance Venture Capital, which is not an investor in JustLight.“Soitis pretty typical for compa nies to initially use loans from inves tors as a way to raise quickly, with out haggling over price,” Rizik said in aneemail.goal, according to Rizik, then becomes for those loans to be con verted into stock once the company reaches a point of maturity and can raise a priced equity round. In exchange for the risk being tak en by early-stage investors, they will then convert their debt into stock at discount of 20-to-30 percent, said Rizik.JustLight’s largest investor, which is not among those trying to drive it into bankruptcy, is Asahi Kasei, a Japanese chemical supplier with a base in Novi. e startup won fund ing last year through the conglomer ate’s UV Accelerator, intended to boost products for the public good, and an additional undisclosed in vestment by the company.

` Farner’s stake in Rocket Compa nies, as of Aug. 19, was more than $34.5 million, up from about $16.8 million on March 30. Financial experts and observers of the company say the stock-buying spree by Farner is rare for a chief ex ecutive.“ere are CEOs who don’t have 2 percent of their net worth in their own company stock, and who talk a glorious game in earnings calls,” said Erik Gordon, a professor of nance at the University of Michigan. “And then there are CEOs who buy (millions) worth of their company’s stock. Who are you going to be lieve?”Farner, through a Rocket Compa nies spokesperson, declined to com ment for this report. In 2020, Farner reported earning $52 million in total compensation, $29 million of which came from a one-time payment of $29 million to cover taxes due on shares of the com pany he was awarded. A spokesperson for the company noted that the CEO’s stock buying amounts to something of a reinvest ment in the company following that payment.Tobesure, it’s hardly unheard of for top executives at public compa nies to have stock in their company. Indeed, it’s a common part of execu tive compensation plans. But few other CEOs at large-cap companies — those with market cap italizations of $10 billion or higher — are buying stock in such quantities. Going back to May, MarketBeat — which tracks CEO stock buys — has tracked fewer than two dozen chief executive stock purchases that weren’t made by Farner. ‘Might be foolish’

From Page 3

“WHILE MR. FORHAN COULD BE A VISIONARY, THAT ‘VISION’ DOES NOT SEEM TO INCLUDE RUNNING HIS BUSINESS IN A WAY REASONABLY CALCULATED TO PAY ITS UNDISPUTED OBLIGATIONS.”

Farner’s stock buying over the past several months comes amid a period when Rocket Mortgage and its a li ates — as well as the broader mort gage sector — are going through a downAmidcycle.surging interest rates, in a tion and lackluster consumer con dence, Rocket Companies earlier this month reported second-quarter net income — bottom-line pro t — of $60 million, a decline of more than 94 percent from the second quarter of last year — when pandemic-era,

fund is still in process of learning about the bankruptcy petition and declined to comment on any next steps. Manufacturing mess

rock-bottom interest rates were fuel ing a mortgage boom — and report ed total revenue of $1.4 billion in this year’s second quarter, compared with $2.7 billion during the same pe riod last year. Total mortgage originations for the company fell by more than half to $34.5 billion, compared with $88.5 billion in the second quarter of last year. e outlook for the third quarter shows continued decline, with closed loan volume forecast to be between $23 billion and $28 bil lion.Given the challenges in the indus try, Farner has said the company’s leadership is working nonstop to di versify away from being overly de pendent on the notably cyclical mortgage business.

|ROCKET COMPANIES JustLight claims the infrared light emitted from its Sun ower eases muscle and joint pain. | JUSTLIGHT VIA FACEBOOK

“We have some conversations that have been progressing well,” Forhan said about potential inves tors, declining to elaborate.

` As of Aug 19, the CEO holds about 3.7 million shares of the company’s common stock.

Discussions began in late April between JustLight and Eypex about the supplier producing the Sun ow er lamps, according to the lawsuit againstShortlyEypex.after production began, the relationship started to break down, court documents show. e proximity sensors on the lamps were defective, according to JustLight, which alleges that Eypex told the startup it had to eat the costs. On the other hand, Eypex said JustLight failed to pay for orders as inventory stocked up and its own suppliers began demanding to be paid for materials. “ e Noteholders are, under standably, greatly concerned about their Notes — they are justi ably concerned that they will never be re paid,” the bankruptcy petition said. One of the creditors is George Ad ams, who Forhan hired to be CEO in 2020 before he separated from the company after less than two years. It’s not clear whether he quit or was red.

“Asahi Kasei is not a shareholder in JustLight — we invested through a debt instrument,” a company spokesman told Crain’s in an email last week. “Asahi Kasei has no inten tion of making further investments in AlsoJustLight.”investing in the company around the same time was Michigan Rise, a pre-seed venture fund backed by the Michigan Economic Develop ment Corp. and the Michigan State University Foundation. e fund invested $75,000 in early 2021, using a convertible note mechanism. Prem Bodagala, a di rector at Michigan Rise, said that JustLight “checked all the boxes” at the time, given its status as an ear ly-stage company with potentially promisingBodagalatechnology.toldCrain’s that the

—Erik Gordon, professor of nance, University of Michigan

“We are at fuller intensity than I’ve ever seen in the 27 years I’ve been at the thatwe’re“thisalystsFarnerganization,”ortoldanearliermonth.eworkthatdoing—nooneelse is doing — that will really di erentiate the company moving forward to be far broader than just a mortgage lender.” Given that work, analysts say they’re “on the sidelines” at present when it comes to Rocket and its stock price going forward. “2022 is playing out worse than ex pected and the 2nd half of the year will be clearly tougher than the rst for mortgage companies,” analyst Jay McCanless with Wedbush Securities wrote in a note to investors earlier this month. “We are looking past this year and towards what this company is going to do with its 4 million+ ac tive customers over time.” Given that work, Gordon, the UM professor, said it remains to be seen whether Farner’s stock buying will pan out over time, or whether he might lose millions of dollars. “It might be a foolish thing,” Gor don said of the stock buys. “But it’s a signal coming from somebody who knows more about the company than anybody else. He could be wrong. He could be overly optimistic, but he knows more about Rocket than any body else.”

Rizik, the startup funding expert, said it is unusual for early-stage in vestors to take strong action against startups.“Investors who invest in a startup company will typically come in un derstanding the high risk involved, especially at the earliest stages,” he said. “So it is rare that investors later take action against the company un less either the investors weren’t pre pared for the risk or something ex tremely unexpected happened after theForhaninvestment.”saidhis second genera tion, FDA-approved Sun ower will be produced by new manufacturers — Chinese supplier Kaiyan Medical and Light Tree Ventures, based in Amsterdam. He said the focus will be on developing enterprise cus tomers and raising capital to com plete an Alzheimer’s treatment clin ical trial, which costs about $4.5 million.Forhan said the company sold only about 160 of the rst-genera tion Sun owers. He declined to say how long the company and its seven employees could sustain without more capital. “I wouldn’t be devoting my whole like to a photobiomodulation device if I didn’t think the market opportu nity for this incredible therapy was viable,” he said.

— Bankruptcy petition, led by Matt Wilkins, attorney at Brooks Wilkins Sharkey & Turco PLLC

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

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

FARNER From Page 3

“IT MIGHT BE A FOOLISH THING. BUT IT’S A SIGNAL COMING FROM SOMEBODY WHO KNOWS MORE ABOUT THE COMPANY THAN ANYBODY ELSE. ”

JUSTLIGHT

Forhan said the creditors’ petition is largely the result of JustLight changing its business model to an FDA-approved device and pursuing new contracts with manufacturers that are ap proved to make medical devic es.“… Eypex has led a petition for toperatefaithLightagainstbankruptcyinvoluntaryJustinbadinadesattemptobtainJustLight’s assets in liqui dation and oust JustLight’s founder from his role as CEO,” the lawsuit against Eypex said. After the rst petition for involun tary bankruptcy, the two sides en tered a standstill agreement through July 27, during which JustLight was to raise capital. It failed to do so, ac cording to the creditors’ attorney.

Rocket CEO Jay Farner has bought more than $19 million worth of shares since March.

The state’s first African Ameri can-owned certified public ac counting firm, George Johnson and Co., was founded in 1941 at the height of the Black Bottom neigh borhood and nearby Paradise Val ley business district. It was a time of flourishing entrepreneurship for the community — until the govern ment authorized the building of a part of Interstate-75 right in 1959. Many Black-owned Detroit busi nesses were leveled and lost, never to be Today,recovered.datashow that entrepre neurs of color still make up a shock ingly low portion of the overall number of businesses in Detroit. A 2021 report from the Federal Reserve Bank of Chicago says 10 percent of Detroit businesses were Black-owned in 2020, while the Census Bureau found 77.1 percent of Detroit’s population was Black or AfricanAnthonyAmerican.McCree, CEO and man aging partner at George Johnson and Co., said one of the require ments to become an accountant in the mid-1900s was to work for a CPA for a couple of years. But Rich ard Austin, GJC’s founder, was shut out from fulfilling that require ment; nobody would hire him be cause he was Black. Eventually, a professor allowed Austin to work for him at night, McCree said, pro viding him a pathway to certifica tion.Opening GJC in 1941 was a revo lutionary moment for the Black community. It was the first African American-owned CPA firm in Michigan, originating in a Detroit apartment building at the height of Paradise Valley’s existence, McCree said.Today, it employs about 30 peo ple across three offices in Detroit, Chicago and Cincinnati. McCree said this was likely the firm’s best year.Austin’s clientèle included small, Black-owned businesses in Black Bottom that were turned down from CPA services by most other firms. GJC provided a service to the entrepreneurs of the city at a time when no one else would, McCree said.“Times are different now where the obvious challenges aren’t there that he dealt with, but some of them are,” he Whilesaid.many of the challenges mi nority accountants faced in the past were by way of explicit discrimina tion, McCree hinted toward implic it biases that continue today, such as the different level of confidence a client may have in a Black-owned firm.The Chicago Fed also noted that Black entrepreneurs faced unique challenges when trying to scale up. The report said that 30 percent of small, Black-owned businesses na tionwide were concerned about credit availability during the COVID-19 pandemic, compared to 12 percent of small, white-owned firms that expressed concern. Bar riers to capital were also concerns for Black entrepreneurs before the pandemic, like limited credit histo ry, lack of financial records and tra ditional banking relationships, the Chicago Fed Michigan’sstated.only Black-owned bank, First Independence Bank, was founded in 1970, motivated by the unrest that swept the city in 1967, CEO Kenneth Kelly said. About 22 members of the Black community came together and de cided to start a bank to support its community after seeing the finan cial challenges of business owners without access to banks. The founding members labored for about two and a half years to go through the regulatory process and raise funds, and in May 1970, the bank opened its doors. Currently, Kelly said, First Inde pendence employs about 70 people and its has about $400 million in assets.“Ithink it was the vision of those individuals looking to see that they could make a change in the com munity by starting and controlling a bank that would be interested in the community they were trying to grow,” Kelly said. At that time, African Americans struggled to get loans from existing banks, limiting them from becom ing homeowners and advancing their businesses. First Indepen dence enabled many people of col or to grow financially. At the same time, Kelly said the opening of First Independence pushed other longstanding banks to hire employees of color in pro fessional“Largerjobs.banks noticed they had to begin to be a little bit more inclu sive to the African American com munity if they were going to be suc cessful long term,” Kelly said. One hurdle the institution con tinues to face is reaching a custom er base beyond communities of col or.“While our banks are Blackowned, they’re not Black only,” Kel ly said, emphasizing the impor tance of a wide customer base for the bank’s long-term success.

Prioritizing digitization in work flow at George Johnson, especially during the pandemic, has been cru cial to the success of the CPA firm, McCreeTechnologysaid. like cloud-based platforms, updated phone systems, online secure file portals and soft ware updates have enabled the company to keep up with larger es tablished firms, McCree said, and ensured a seamless transition to re mote working in the last couple of years.“When the world shut down, we were able to pick up our computers, go home and start working just as if we were in the office,” McCree said. “Our client service didn’t miss a beat.”

AUGUST 29, 2022 | CRAIN’ S DE T ROI T B USINESS | 19

Unique challenges

MDBBA currently offers capital and technical assistance programs to businesses in Wayne, Oakland and Macomb counties. It launched last spring with $1 million from TCF Bank and was founded by Charity Dean, who previously led the city’s Civil Rights, Inclusion and Oppor tunity“TheDepartment.futurehas the potential to be extremely bright for Black entre preneurs — with intentionality and focus on undoing 400 years of sys temic barriers that have hampered our community,” said Bowman. “I’m optimistic that with the help of our organization and other part ners, that we can continue to am plify the plight of Black businesses and amplify the resources that are available.”

MINORITY From Page 1

The Federal Deposit Insurance Corp. reported a total of 19 Blackowned depository institutions na tionwide in the first quarter report of 2022 out of 4,796 total depository institutions. Changing with the times

Contact: minnah.arshad@crain.com (313) 446-0416; @minnaharshad Karla Cole with her sons, Brice and Antonio Green, standing outside the West Grand Boulevard location of James H. Cole Home for Funerals Inc. in 2019. | COURTESY OF JAMES H. COLE HOME FOR FUNERALS INC.

—Anthony McCree, CEO and managing partner at George Johnson and Co. McCree Kelly

entrepreneurs of color in Detroit have been reflecting on a rich histo ry that mirrors America’s tumultu ousness relationship with race. Minority-owned businesses, born in many cases out of necessi ty, have endured unique challenges for decades. When Black communi ties were turned away from ser vices, they filled voids by building their own institutions, from bars to banks.And, of course, funeral homes. “Blacks have always had to bury their own, pretty much,” third-gen eration President Karla Cole said. “White people would not bury Blacks, so Black funeral homes had to come into existence for that rea son.”

The funeral home declined to disclose revenue in formation but said it serves about 2,000 families annually.

Shrinking the racial wealth gap Kai Bowman, chief operating of ficer of the Metro Detroit Black Business Alliance, said supporting Black-owned businesses is a crucial step in shrinking the racial wealth gap.A 2018 study by the W.K. Kellogg Foundation stated that Michigan stood to gain $92 billion in eco nomic output by 2050 if racial dis parities in health, education, incar ceration and employment were eliminated.Thestudy said that by the middle of the century, 40 percent of Michi gan workers will be people of color.

The National Funer al Directors Associa tion said NF DA-member funeral homes serve 113 families per year on average. These numbers were significantly higher during the height of the COVID-19 pandemic, but Cole said the funeral home was relieved to see those numbers drop back. At First Independence, Kelly said he has prioritized keeping the bank’s technology updated to en sure it remains competitive with other banks across the country.

Richard Austin founded George Johnson and Company in 1941. COURTESY OF ANTHONY MCCREE “TIMES ARE DIFFERENT NOW WHERE THE OBVIOUS CHALLENGES AREN’T THERE ... BUT SOME OF THEM ARE.”

“To be candid, it’s an investment, which means you really have to make the decision to spend the dol lars up front with the intent of knowing it’s going to have a lon ger-term impact on your business and your customer relationships,” Kelly said.

“The racial wealth gap is perhaps one of the biggest economic issues in this country,” Bowman said, ac celerated by a centuries-long “headstart” when people of color were barred from property owner ship and other economic freedoms. Even now, entrepreneurs face unique barriers to resources. At the beginning of the pandemic, the Small Business Administration be gan the Paycheck Protection Pro gram, established by the CARES Act, which provided businesses with funds to sustain payroll and other costs. However, Bowman said early rounds of the program had one caveat: businesses had to demonstrate a banking relation ship.Due to historic racial barriers to financial institutions, Bowman said this was a “nonstarter for a lot of Black-owned businesses.”

Even a business that will always be needed has to change with the times.“Because the funeral business, the industry, is so slow, we’ve actu ally had the opportunity to stay ahead of the game and even (be) trendsetters in some ways,” Green from James H. Cole said. At its newest location on Schae fer Highway, which opened about 12 years ago, the company installed screens in all its visitation rooms so loved ones could play memorial videos, a screen at the front door to see the deceased person’s photo and service information and a digi tal board in the lobby to showcase visitations in progress. At the height of the pandemic, livestreaming ser vices also gained popularity. Due to changing industry regula tions and expectations, the compa ny saw peak revenue in the late 1960s and early ’70s. In the early 1980s, profit margins for funeral homes were much higher, at around 15 percent, Green said. By the early 2000s, it had dropped to less than 10“Whenpercent.times were a lot simpler, you had the ability to profit more than you do even nowadays,” Green said.However, technological advance ments mean the business has more access to a variety of manufactur ers, so they’re no longer tied down to one manufacturer and price.

MARIJUANA From Page 1

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

“WE WOULD RISK THE WHOLE MUSIC COMPANY IF WE TOOK ON THE AMOUNT OF DEBT IT WOULD NOW TAKE TO RENOVATE THE BUILDINGS THE WAY WE NEED TO (AND THE WAY SUCH AN ICONIC CAMPUS DESERVES)...”

—Garret Koehler, one of the founders, Assemble Sound

Blake Sutherland of Clarkston prepares a hemp sample for testing at Reassure Labs.

Anthony Long of Allen Park uses a pipet in the microbial clean room at Reassure Labs in Warren.

PHOTOS FOR NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

20 | CRAIN’S DETROIT BUSINESS | AUG UST 29, 2022

change what we do, the spirit of how we do it, and the impact we have. at’s not something we’re willing to do.”

Assemble Sound paid $260,000 for the church property and two other buildings in 2017 and 2018 pur chased through an a liate called Not Community Fellowship LLC regis tered to Koehler, land records say. ere’s the church property at 2300 17th St., with 6,100 square feet; a 4,100-square-foot former school building at 2310 17th St.; and a 3,300-square-foot vacant house at 2324 17th St., according to marketing materials by Detroit-based O’Connor Real Estate, which has the listing that went live on Tuesday morning. A message seeking additional in formation was left with Koehler. At varying points in time, the church operated as La Iglesia de Je sus Christo and Grace-to-Grace Lu theran Church but had been vacant for several years when Assemble Sound purchased it. Late last year, Assemble Sound and Atlantic Records announced a new artist development initiative and joint venture giving the major record label the ability to hone and recruit local musical talent early in their ca reers, a December press release said. Crain’s reported in December that Assemble Sound has a sta of 11 and was founded by Koehler, Seth Ander son, Nicole Churchill and Nicole Shackelford.elisting comes as Ford Motor Co. is slated to wrap up its redevelop ment of Michigan Central Station, long a dilapidated eyesore in the neighborhood, into the anchor of an autonomous and electric vehicle campus currently pegged at about $950 million. For years, the expected in ux of workers has caused con cerns about its ripple e ects in the broader Southwest Detroit area, not justEarlierCorktown.thissummer just a couple blocks away, an entity tied to New York City-based City Winery — which said in January it is opening a Detroit location — paid $2.343 million for nearly an entire block of property south of Michigan Central Station.

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

ASSEMBLE From Page 3

CEO Michael Polselli told Crain’s the lab plans to renovate 4,000 square feet attached to its existing 6,000-square-foot lab to perform ge netic testing on marijuana strains in an attempt to codify each strain’s psychoactive e ects. By performing DNA sequencing, Polselli said the lab can detect the “traits” a speci c plant will exhibit and allow cultivators to selectively breed and manipulate genes to in crease the yields of “medically bene cial components” of a plant. In oth er words, the lab will provide growers with the ability to hone in on speci c e ects of the marijuana, such as making a strain that provides a more reliable reduction of anxiety than current strains. e result should allow growers to produce a product with a direct and speci c claim on how the user should feel after consumption, reducing the need for consumers to experiment to nd a desired e ect while also allow ing cultivators and retailers to more accurately market the product. “ ere are di erent areas in the ge nome and we can say this strain re lieves anxiety and know it,” Polselli said. “Everything we do is consumer education. Consumers will become more sophisticated and I think these boutique strains will be popular.” Ankur Rungta, CEO of C3 Indus tries, a vertically integrated marijua na rm that also retails its Cloud Cov er brand and operates dispensaries under the High Pro le name, said the science of marijuana has been gross ly understudied due to its illegality for more than a century. “ ere are 120 cannabinoids and tons of terpenes and we only know a lot about three of them (CBD, THC, CBN),” Rungta said. “Had we studied these for 120 years, we’d know every thing. But we have this crazy void in our understanding of these natural compounds in this plant. We’ve stud ied a lot of things exhaustively in na ture but we haven’t with cannabis. So it’s really exciting that there is going to be more and more science sub stantiated with data over time.” However, Rungta does worry the industry may be slow to move to a more scienti c approach. “From a consumer recreational standpoint, there are sophisticated R&D growers out there, but much of it is pop a bunch of seeds, run them through production, share the prod uct with your friends and pick which one you like. I think there’s probably science and R&D that can be brought in, but it will take time.” Polselli said eventually the lab should be able to categorize strains to have quality mutations, such as being more resistant to mold and other contaminants. He called performing genetic test ing on marijuana “returning to his roots.” He’s a biochemist that spent more than six years at Genesis Ge netics in various management posi tions overseeing genetics testing of patients undergoing in-vitro fertiliza tion.Reassure Labs opened earlier this year, a relatively new entrant into the marijuana testing business. Roughly 21 active licenses for marijuana test ing labs exist in the state. Polselli coowns the company with investors Stan and William Dickson of De troit-based nancial advisory rm Dickson & Associates PC. e product is now well-regulated and for good reason. Mold and yeast are the most common problems for growers. Marijuana users are 3.5 times more likely to develop a fungal infection than nonusers due to vari ous molds that can grow on the plant, according to an analysis of 20 million insurance claims published in Emerging Infectious Diseases in 2020.e Cannabis Regulatory Agency requires marijuana growers to test 0.5 percent of a harvested batch of marijuana before it can be sold for consumer use. Batch sizes max out at 50 pounds under the regulations. In July, labs tested more than 2,700 pounds of marijuana ower and shake with a consumer sales value of $106.6 million, based on CRA data. e regulatory agency also re quires testing on two to 12 infused products, such as gummies, per batch which can range from 100 to more than 10,000. In total, the Michigan marijuana industry sold more than $188.8 mil lion worth of product including last month. Testing the product Just before lunch on weekdays, Re assure’s drivers return with pounds of marijuana. e lab currently tests approximately 30 samples per day with a capacity for about 80 per day, PolselliSomesaid.growers need testing daily, others less so. Compliance testing costs about $400 to $500 per sample, PolselliReassuresaid.turns results around in three days or less. e lab employs about 15 employ ees, mostly younger college gradu ates with chemistry degrees. e state regulates contaminant testing for microbials, mycotoxins, moisture content, foreign materials, pesticides, residual solvents and heavy metals. Testing also measures potency levels of tetrahydrocannabi nol (THC) and cannabidiol (CBD). Reassure’s sta breaks up the mar ijuana nugs and visually inspects the samples to look for mold or rat excre ment, then grinds the product up for further scienti c exploration. e product is then stored in a freezer at negative 80 degrees Celsius. e test ing includes blasting apart ions with a plasma laser or melting the product in acid, all to determine whether the product is safe for consumption.

Polselli calls the process similar to the environmental testing done on soil.If a sample fails testing for mold or other minor issues, the cultivator or processor must remediate the prod uct and get it retested and then it can be put on store shelves. at process involves exposing the product to ozone or an X-ray machine or air dry ing the product for a few weeks. Re mediated product then requires two additional microbe tests, Polselli said.Many large grow operations put all of their product through remediation prior to testing to sidestep any poten tial failures that can be expensive. Reassure also includes terpenes testing in its results, in the hopes of cultivators making use of the infor mation.Terpenes are the naturally occur ring chemical compounds in mari juana responsible for the strain’s aro ma, taste and some health bene ts. ey are also found in herbs like thyme and sage as well as in citrus fruits. e terpene humulene, for in stance, produces an earthy aroma and is found in hops as well as can nabis. It’s generally recognized as be ing an appetite suppressant as well as an anti-in ammatory component.

Funeral services are pending, ac cording to a company spokesper son. Christian is survived by his wife, Judy, his daughter Dana Ray mant and his son Eric Christian. Christian became vice president and general manager of local De troit station WNIC 100.3 FM in 1974 before starting Saga. e company sold its only Michigan assets — Lansing-based Michigan Radio Network and Michigan Farm Radio Network — to Missouri-based Lear eld Communications in 2015. In 2018, the company exited the TV station business with a $66.6 million“Quitesale.frankly, for us to negotiate with a company like Comcast or Dish Network, we just didn’t have the clout,” a Saga spokesman told Crain’s at the time. “So, we needed to get bigger in TV or we needed to exit the business and put the mon ey toward radio.” e company’s market capital ization stands at $172.5 million, and its stock price of $28.50 per share was up more than 18 percent year-to-date as of early last week.

Likewise, executives at Home Point Capital, an Ann Arbor-based whole sale lender, say they’re working close ly with brokers in their network and attempting to educate consumers on the bene ts of working with indepen dent mortgage brokers as opposed to direct-to-consumer retail lenders.

Dicker Rosa

Ed Christian Private equity rm Huron Capi tal Partners LLC has added to its string of investment exits. e Detroit-based rm on Wednesday announced the sale of Phoenix-based Pueblo Mechanical and Controls to OMERS Private Eq uity, a Toronto and New York in vestment fund with nearly $20 bil lion in assets under management, according to its website. Terms of the sale were not dis closed, but the exit marked Huron’s fourth exit over the past 12 months, according to a news release.

For some who have been around the mortgage industry for a while, the change of pace brought about by ris ing rates and a generally challenging real estate market in which home prices remain high is actually wel come news. “ ere’s de nitely a normalization in the market,” said Dante Rosa, the senior loan o cer and owner of Dan te Rosa Home Loans LLC in Macomb Township.e“abnormal” markets years of 2020 and 2021, and even 2019, ac cording to Rosa, were welcome news for consumers and mortgage lend ers, but were not sustainable, the broker told Crain’s. “I’ve been doing this for 29 years,” Rosa said of his career in the mort gage sector. “And this is a normal market.”Despite that normalization, Rosa said that the lack of re nancing activ ity means his business is likely to be down between 30 percent and 40 percent year-over-year. e broker said his ve-person company, in which he is the only loan originator, did total loan volume last year of $21 million over 100 loans.

Growing the pie e volatility being felt in the mar ketplace — and described by brokers like Dicker and Rosa — could play in their favor, according to Mat Ishbia, CEO of Pontiac-based United Whole sale Mortgage, the nation’s largest wholesale mortgage lender. Speaking on an earnings call with analysts last week, Ishbia said that because of the rapid uctuation in mortgage rates, consumers are “shopping” more, and coming to the conclusion that it’s “cheaper” to go with a UWM,broker.Ishbia said, is working to educate the brokers within its net work on the ongoing changes in the marketplace so they can relay that information to their clients — the consumers who are nancing homes. “ at’s part of the partnership with UWM,” Ishbia said. “You have access to leverage our information, our training, our knowl edge, (for brokers) to communicate in a positive way in their markets throughout America. And it’s helping brokers win. And we feel really great about it right now and we’ll continue to use that edge to help our brokers continue to win.”

“Saga expresses its heartfelt condo lences to the Christian family and Ed’s friends and colleagues. Ed will be missed but not forgotten. He is and was a true radio broadcaster that never lost sight of his ‘true north’ in an industry he loved.”

UWM VIA TWITTER

NICK MANES

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

“Our costs to originate (loans) — because of our technology — is lower than everybody else in the wholesale channel, and retail channel, to be clear,” Ishbia told analysts. “And so it kind of puts (other lenders) on their heels a little bit. And so they all lower their rates, which helps all brokers ... but none of them can get to the level that we’re at ... because their cost to originate is too high.”

Wholesale lending on the rise UWM, in particular, has been rolling out initiatives to try to either help its brokers bring more business or bring more brokers under its umbrella. is week, the company rolled out what it’s calling temporary rate buy downs, which will lower borrowers’ interest rates by up to 2 percent for the rst two years of their mortgage, according to a news release. e pro gram aims to serve as “an ideal op tion for borrowers who expect an in crease in their income in the next few years or who have seller concessions to use and want to take advantage of a low rate up front,” according to the release.Additionally, the company has been focusing on its “aggressive” pricing strategy, called “Game On,” in which the company is dropping its rates across the board by 50-100 basis points.

While likely a positive for consum ers facing rising mortgage payments as interest rates increase from record lows, Ishbia stressed that the initia tive also helps facilitate the compa ny’s goal of growing the wholesale channel of the mortgage market, in which UWM is the dominant lender. e Game On initiative, Ishbia said, will bring more brokers and loan o cers to the channel. Other lenders, he said, are unable to compete with the pricing being of fered by his company, which he ex pects to translate to increased market share for UWM.

AUGUST 29, 2022 | CRAIN’ S DE T ROI T B USINESS | 21

UWM is by far the dominant player in the wholesale space, holding more than 32 percent of the market share at the end of last year, according to data from Inside Mortgage Finance. at’s roughly double the share of the next largest lender, Detroit-based Rocket Mortgage, the nation’s overall largest lender and UWM’s main rival. Rocket Mortgage’s parent compa ny, Rocket Companies Inc., saw its pro ts decline by 94 percent yearover-year in the second quarter, and executives at the company say they’re working overtime to push the nan cial behemoth beyond the volatile mortgage sector. As that happens, Ishbia and other boosters of the wholesale sector of the business tout that the rising rate environment going on now will only help grow that sector.

PRIVATE EQUITY

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

Huron Capital sells major western investment

Home Point CEO Willie Newman told analysts earlier this month that the company has been analyzing data from the federal Home Mort gage Disclosure Act, and found that in 2021, brokers working with Home Point and other wholesale lenders saved consumers an average of $9,400 over the life of a loan, general ly through lower up-front costs and lower interest rates.

BROKERS From Page 1

“ is advantage is fueled by one primary driver: choice. Mortgage brokers have choices, and retail o cers do not,” Newman said. “ is creates alignment between the broker and the consumer, and the competition forces Home Point and other lenders to put their best foot forward (in terms of) price, product, and service delivery. e re sult is that consumers win.” In its earnings report earlier this month, Home Point reported having 8,744 broker partners as of June 30, up about 2,000 from the previous year.By comparison, UWM has 11,00012,000 brokers within its network, according to a company spokesper son.Rosa and Dicker said that the Ponti ac-based lender stands as their prima ry lender for their clients, but they also do business with lenders including Home Point and Caliber Home Loans, a Texas-based mortgage lender.

A 20-year-old company, Pueblo was acquired by Huron Capital in 2017.“We have a clear focus to become one of the largest independent tech nical services operators in the U.S. by leveraging a scalable platform with an experienced and aligned management team,” stated Dan Bueschel, Pueblo CEO. “Due in large part to the investments we made in the systems and team, in addition to leveraging Huron’s demonstrated M&A playbook, we executed and in tegrated numerous acquisitions in cluding six in 2022 alone.” Moelis & Co. served as nancial adviser for the deal, and Perkins Coie LLP served as legal adviser to Huron and Pueblo. Huron Capital, which has man aged as much as $1.8 billion since its founding in 1999, lists three core areas of focus on its website: com mercial and industrial services, professional services and consum er services, primarily focused around residential services. A news release from Huron Capi tal late last year said the PE rm completed eight exits in 2021, which included the majority sale of San Francisco-based Sciens Build ing Solutions to funds managed by global investment rm Carlyle.

“We acquired Pueblo because we believed demand for HVAC repair and installation services would in crease and the sector was ripe for consolidation,” Scott Hauncher, a Huron Capital partner, said in a news release. “Since then, regional population growth, aging infra structure, energy e ciency and sustainability have driven demand for Pueblo’s services.”

UWM Chairman and CEO Mat Ishbia speaks at a company rally in Pontiac on May 6. |

Grosse Pointe Farms radio mogul Ed Christian dies at 78 NICK MANES Ed Christian, the founder, chair man, president and CEO of Grosse Pointe Farms media company Saga Communications Inc. (NASDAQ: SGA), has died, according to a news release from the company. Christian, 78, died Aug. 19 follow ing a “short illness.” A more speci c cause of death was not disclosed. e executive formed Saga Com munications in 1986 and the com pany went public in 1992. e com pany currently owns or operates broadcast properties in 27 markets around the country, including 79 FM and 35 AM radio stations. “ e broadcast industry has lost a pioneer and giant,” the company said Monday in the statement.

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

like a good opportunity to build my own book with the higher rates right now,” Dicker said. “And if there is a slowdown, capture more revenue for myself.”e30-year xed rate mortgage hit a near record low of well below 3 per cent in the tail end of 2020 when the country was in the throes of the COVID-19 pandemic. Data from Freddie Mac shows that rate didn’t tick back up above 4 percent until late March, which made for a home-buy ing and re nancing boom for all of 2021. Rates are now over 5 percent, clocking in an average of 5.13 percent average for a 30-year loan, Freddie Mac reported ursday.

Dicker, the broker who recently started his own brokerage business, noted that his time working on the retail side of the business at Quicken Loans only prepared him for a small part of the sector, and going to the wholesale world led to new opportu nities, including going into business for“Nowhimself.that I’ve had the experience and understand how the business works, between the margin compres sion and the higher rates and the ability to capture my own book, it seemed like the perfect time to make that jump,” said Dicker, who shared that he’s seen lots of executives from retail lenders making the jump that he did. “ e broker world is growing very fast, while the retail world is shrinking.”

OBITUARY

` Opening during the pandemic, was it tough getting clients at rst? I’m not gonna lie, it was slow going at rst. As a business opening right in the middle of a global pandemic when people were still isolating, it was a challenge to get people in the door. There were very few in-person events happening, and less people out and about at the time. Not ideal for a new business, but I wasn’t about to let that deter me.

Dustin Walsh, senior reporter, health care. (313) 446-6042 or dwalsh@crain.com

Third Man Records presses album with real marijuana leaves

or Jason.davis@crain.com David Eggert senior reporter

Rachel Watson, West Michigan, (989) 533-9685 or rachel.watson@crain.com

or david.eggert@crain.com Arielle Kass, residential real estate.

Spectacle Society founder Tina Arroyo came to opticianry by an interesting path. The 45-year-old Corktown resident established her premium eyewear boutique in December 2020, during the height of the coronavirus pandemic. Arroyo, born in Queens, N.Y., and raised on Long Island, found her way to the eld by way of photography. Arroyo, who has a bachelor of ne arts degree in photography and is a certi ed optician, worked to open her eye care business for more than a decade. She began working in the eld in 2007, and made stops in Denver and Portland before opening her business at 1512 Bagley St. in Detroit. Arroyo talked to Crain’s about her winding career road and the future of her business.

` How did Spectacle Society come to be? This was over a decade in the making. Have you ever worked for a job and thought, “If I had my own place, I’d do it like this?” Well, I spent years working as a tech, a certi ed optician, an optical trainer and a manager helping other opticals grow and thrive. Over the years, I started compiling a list of things I would do when I owned my own store. I’d dream about it at night and think about it every day. Spectacle Society is the realization of that dream. The space was intentionally designed to be accessible for everyone regardless of age, size, ability, skin color and gender representation. From the store layout, to the frames selected, to our branding, I designed Spectacle Society for the diverse community that Detroit is. ` Why Corktown for your business? I was drawn to Corktown because of the strong community vibe it has. It’s a part of the city, just a few blocks away from skyscrapers, but it feels

arielle.kass@crain.com Nick Manes nance and technology.

nmanes@crain.com Kurt

SINCERUMBLINGSTHEFIRSTSTATE, COLORADO, legalized recreational marijuana, celebrities and musicians have used their image to market marijuana products.Now Jack White’s ird Man Records is using marijuana to market an artist’s product. Last Friday, the boutique record label and shop planned to release the seminal record “Dopesmoker” from San Jose stoner metal band Sleep with marijuana leaves pressed into the limited-run vinyl record sourced by cultivator Doghouse Farms in Detroit. Due to federal and state regulations, the “Weedian High-Fi” version of the record will be available exclusively at ird Man’s Detroit storefront on Can eld Avenue, along with preorders for the standard black vinyl recording, the label announced on its social media earlier this week. It’s federally illegal to ship any marijuana products using the mail system or across state“Dopesmoker”lines. will also return to streaming platforms on that day after being removed in February. e album was recorded in 1996 and later released in 1999 after the band’s breakup. ey’ve since reformed and released a comeback album, e Sciences, in 2018 on ird Man Records. ird Man Records declined to discuss how many pressings it will release but the album will retail for $150.

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22 | CRAIN’S DETROIT BUSINESS | AUGUST 29, 2022 THE CONVERSATION

Spectacle Society’s Tina Arroyo on seeing her passions go into a business like a neighborhood. There are lots of small businesses, community events and people waving to each other as they go down the street. These days so many opticals are impersonal. I wanted Spectacle Society to be rooted in a neighborhood where the focus could be on connecting with our clients and getting to know them, so they can have personal opticians. It’s an oldschool concept I really love. To have a professional available to you who uses their expertise and knowledge of your history to guide you year after year is transformative. Corktown felt like the perfect place to bring this to life.

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`

` Is most of your clientele from Corktown and Southwest Detroit? Actually, our clients are from all over metro Detroit. We have people who travel in from the suburbs and neighboring states, too. We have a virtual tting option designed for people who nd it challenging to see us in person, but it gives us access to clients all over the country.

` Your degree is in ne arts photography. Tell me how, and why, you came to become an optician. Photography was my joy, my creative outlet, and it’s what introduced me to optics. I was captivated by how the camera was designed to mimic the human eye and intrigued by the science behind sight. The more I learned, the more excited I became. I ended up as an ophthalmic technician, working closely with eye doctors on the medical side of things. When I discovered opticianry,it was a real lightbulb moment. It brought together my love of optics, my appreciation for fashion and design, and my favorite part of being a photographer: helping people see the beauty in their uniqueness. My path forward was clear and I never looked back.

` How do you weave your passion for art, fashion and photography into an optician business? As a creative individual I have always seen the world a little di erently — noticing the beauty in uniqueness. I love to people watch and admire how others express themselves through their clothes, accessories and hairstyles. Early in my life as an optician something clicked: Eyewear is a form of self-expression and frames are wearable pieces of art. So I approach the selection of eyewear from more than just a medical perspective. I get to know my clients. What is their authentic style? How do they want to be perceived? What aspects of their personality do they want to project to the world? From there I custom curate a selection that takes into consideration

CLASSIC

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How big of a con dence booster can the right pair of glasses be? Wearing expressive eyewear can be transformative. Most importantly, you should love the way you look, see and feel in your glasses. When you choose eyewear that expresses your individuality, you feel your best. Putting on your glasses, looking in the mirror and thinking, “Yes! I look good,” gives you a boost of con dence to start your day. When you feel good, it shows on your face and how you carry yourself,

Sponsored

erry Norcia, CEO of DTE Energy, Dan Loepp of Blue Cross Blue Shield of Michigan, Steve Steinour of Huntington Bank, Vinnie Johnson of the Piston Group, and Dan Gilbert are some of the the big names lending their support to the Yeshiva Beth Yehudah Annual Dinner on October 30th.

YEHUDAHBETHYESHIVALAUNNADINN EVENT SPONSOR

JAMES GROSFELD LEADERSHIPOUTSTANDINGAWARDEE

FOR MORE INFORMATION PLEASE VISIT WWW.YBYDINNER.ORG CALL 248.663.8299 EMAIL DINNER@YBY.ORG UNITY NORCIAJERRY EVENT CHAIR GROSFELDNANCY HONORARY CHAIR BLUMENSTEINPENNY HONOREE TRIBUTE CHAIR PAPPASNORMAN CHALLENGESCHOLARSHIPCHAIR WEISSARTHUR CAMPAIGN CHAIR GILBERTDAN HONORARY CHAIR STEINOURSTEVE COMMITTEECORPORATE CHAIR

This Evening of Unity will bring together some of Michigan’s top political figures, corporate executives and community leaders to celebrate one of the largest, most longstanding events in the local Jewish community, in support of education at the Yeshiva Beth Yehudah.

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heart for many years, because of the school’s focus on using education to shape bright young minds into exceptional, compassionate leaders,” said Grosfeld. He attends the school’s dinner every year and in 2019 dedicated the new campus of the Yeshiva’s Beth Jacob Girls School in honor of his wife, Nancy. “Few things are as important to me than help ing build a strong future for Detroit’s Jewish community and it’s been an honor to work with Yeshiva Beth Yehudah to make this a reality.”

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“In a world where things often feel fractured, thousands of people join ing together in support of a single cause—in this case, education—is powerful,” said Yeshiva Beth Yehudah President Gary Torgow. “Yeshiva Beth Yehudah is proud to unite supporters from our community and be yond behind such a worthy goal.”

IN SUPPORT OF EDUCA TION Content

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Michigan’s first and largest Jewish day school, with campuses in Southfield and Oak Park, the Yeshiva Beth Yehudah has demonstrated commitment to educating the next generation of Jewish leaders, including over 6,000 graduates. More than 1,300 stu dents attend the school, which is dedicated to providing a quality education to every child, regardless of his or her ability to pay tuition. The Yeshiva distributes more than $7 million in scholarships annually and en sures that every student receives a nutritious breakfast and lunch each day. Their Special Services Division provides educational, so cial, and therapeutic support for 300-plus children with learning differences and spe cial needs, and has become a model for schools around the country. This division alone, with over 70 full time staff, runs at an annual cost of nearly $3 million.

Leaders of these corporations will attend the event alongside Gov. Gretchen Whitmer, Michigan’s senators and representatives, local law enforcement officials, and top figures in higher education, healthcare, and more. Nearly 3,000 guests from across the region attend this incredible event annually.

“Yeshiva Beth Yehudah has been an organization that has been close to my

JOHNSONVINNIE CHAIR GENERAL CHAIR GENERAL CHAIR

In a world where things often feel fractured, thousands of people joining together in support of a single cause — in this case, education—is powerful.

The 2022 dinner will honor James Grosfeld with the Outstanding Leadership Award. The former CEO of the Pulte Group and a dedicated philanthropist, Grosfeld is a longtime supporter of the Yeshiva. He’s one of many: This year’s event sponsor, DTE Energy, will be joined by corporate sponsors including Huntington Bank, Blue Cross Blue Shield of Michigan, and Piston Group.

GARY TORGOW, PRESIDENT YESHIVA BETH YEHUDAH””

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