Crain's Detroit Business, Oct. 4, 2021 by Crain's Detroit Business

THE CONVERSATION: Conservancy’s Michele Hodges on Belle Isle future. PAGE 70

GRAND PRIX

What a move off Belle Isle would mean downtown. PAGE 3

CRAINSDETROIT.COM I OCTOBER 4, 2021

Shovelready state? Push on for site-prep money after Ford plants head south BY CHAD LIVENGOOD

See DOWNTOWN on Page 67

See FORD on Page 69

BACK HOME EXPATS RETURN LIVE AND IN PERSON FOR DETROIT HOMECOMING

 Ford looks beyond station walls in Corktown. PAGE 14

 Photos: A look inside Detroit Homecoming. PAGE 54

 Kramer: A different Detroit greets expats. PAGE 14

 MORE STARTING ON PAGE 14

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according to the DDP. Yet four hours away in Cincinnati, a city with less than half of Detroit’s population, there are close to 18,000 residential units downtown, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. Detroit’s population is three-quarters of Columbus, Ohio’s but Columbus’ downtown has nearly

Gov. Gretchen Whitmer’s administration, economic developers and industry groups are pushing for the creation of a $100 million fund for industrial development on large tracts of land after Tennessee and Kentucky landed $11.4 billion in investments from Ford Motor Co. and a battery maker. The $100 million would give the Michigan Economic Development Corp. a pot of money to assemble land and pay Energy firms say for planning, price critique not engineering, so simple. PAGE 69 traffic studies as well as infrastructure and utility improvements to make so-called megasites shovel-ready. Executives at DTE Energy Co. (NYSE: DTE) and Consumers Energy Co. (NYSE: CMS) told Crain’s that both utility companies are in talks with MEDC officials about how to better coordinate direct marketing of large-scale industrial sites, particularly for future battery plant projects that require a high volume of electricity. “There are discussions at the state level of making funding available for preparing sites for the future and, at DTE, we support that 100 percent,” DTE Energy CEO Jerry Norcia said in a phone interview. “If the governor and the Legislature want to create funding streams to make sites available, I think that would be a huge opportunity.” The proposed fund was already

Does downtown need residential pivot? Push on to facilitate office conversions BY KIRK PINHO

With a global pandemic upending office markets around the country, Congress is mulling whether to offer developers a sweetener to turn old office buildings into residential, institutional, hotel or mixed-use space. The proposal has generated some buzz locally, with Detroit Mayor

Mike Duggan coming out in support of it, along with the Downtown Detroit Partnership and the Detroit Regional Chamber plus mayors of other cities around the state. Precisely how much impact the Revitalizing Downtowns Act would have on Detroit is up in the air. For example, the city’s largest and most active developer says that, although it supports the pro-

posal for a 20 percent tax credit for such conversions, it does not have any active plans to utilize it should it come into law. Other developers either said they were unfamiliar with the proposal or otherwise declined to comment. This much is clear. Downtown Detroit’s apartment inventory tends to lag behind the central business districts of other large metros. For example, there are about 4,500 units in the downtown core,

NEWSPAPER

NOTABLES 2021 RISING STARS IN HEALTH CARE. PAGE 56

NEED TO KNOW

REAL ESTATE

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ROCKET MORTGAGE CLASSIC EXTENDED THROUGH 2027 THE NEWS: The first PGA Tour event in Detroit will continue through 2027 following a contract extension between the tour, Detroit Golf Club and tournament title sponsor Rocket Mortgage. Rocket Companies Inc. CEO Jay Farner made the announcement Monday at Detroit Golf Club alongside PGA Tour commissioner Jay Monahan and Rocket Mortgage-sponsored pro golfers Rickie Fowler, Lexi Thompson and Bryson DeChambeau, who helped the U.S. to a Ryder Cup win the previous weekend. WHY IT MATTERS: The Rocket Mortgage Classic launched in 2019 and quickly became a popular tour stop for players and fans that highlights golf that brings thousands of spectators to Detroit. Cam Davis won the tournament in July after a dramatic playoff.

MEDC TURNS TO NEW AGENCIES FOR PURE MICHIGAN THE NEWS: The Michigan Economic Development Corp. is shaking up its outside marketing and advertising vendors after the five-year life of its existing contracts expired. The Michigan Strategic Fund’s board voted to award a $7.1 million annual business attraction, marketing and advertising contract to a joint venture between Grand Rapids-based public relations firm

lican lawmakers involved in negotiations, came in conjunction with her signing off on $55 billion in spending two days before the start of the new fiscal year.

Lambert and Houston-based advertising agency 9th Wonder. Separately, the MEDC is tapping Kansas City-based tourism advertising agency MMGY Global to run its Pure Michigan tourism-attraction campaign after five years of being managed by McCann, the global advertising agency with an office in Birmingham. WHY IT MATTERS: The switch takes the management of the long-running tourism campaign out of the hands of McCann, the agency that created the “Pure Michigan” slogan in 2006 and has been involved in it ever since.

BUDGET SIGNING LEADS TO MASK CONTROVERSY THE NEWS: Gov. Gretchen Whitmer on Wednesday deemed some Republican-backed budget provisions to be unconstitutional attempts to restrict COVID-19 public health measures but allowed language limiting possible government vaccination requirements. The Democratic governor’s moves, which did not surprise Repub-

WHY IT MATTERS: Some county health departments rescinded mask orders following the budget signing, saying it was unclear whether Whitmer’s declaration would survive a court challenge.

GERMAN LIFE SCIENCES FIRM HEADED TO ANN ARBOR THE NEWS: A German life sciences company has selected Ann Arbor for a new 130,000-square-foot plant. Sartorius BioAnalytical Instruments Inc. plans to invest $57 million in the new facility, creating between 67 and 160 new jobs, and will receive a $1.2 million “performance-based” grant from the state to do so, according to a briefing memo from the Michigan Economic Development Corp. The jobs at the new facility will include product development, operations and other support functions, according to a news release from Sartorius. The company’s German parent firm is a public company that last year reported about $2.7 billion in revenue and has about 11,000 employees worldwide.

Westin Book Cadillac expected to be sold  The historic Westin Book Cadillac hotel in downtown Detroit is expected to be sold to a Chicago-based hotel developer that’s been active in the city in recent years. A document posted on the city’s website says an affiliate of Oxford Capital Group LLC is assuming $77 million in commercial mortgage-backed securities debt owed by current owner, Cleveland-based Ferchill Group, and will spend $16.5 million to renovate the 1924 building at 1114 Washington Blvd. Book Cadillac Detroit Propco LLC is seeking a 12-year property tax exemption valued at $10 million from the city and $26.4 million from all taxing entities for the project, which involves exterior and interior improvements. In March, John Ferchill, head of Ferchill Group, said in an email to Crain’s that the hotel that he redeveloped in 2008 for $180 million with 453 rooms and condominiums was heading into foreclosure after falling behind on a pair of CMBS loans. The building opened in 1924 as the Book-Cadillac Hotel and had been vacant and in disrepair for more than two decades before the redevelopment, one of several high-profile projects that helped kick off a building rehab wave in the downtown core. The Westin Book Cadillac | CONTRIBUTED PHOTO

WHY IT MATTERS: The site selection strengthens the Ann Arbor region’s firepower in the bioscience business.

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2 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

ELECTION 2021

SPORTS BUSINESS

Proposal S on Detroit ballot as backstop on reparations BY ANNALISE FRANK

See GREAT LAKES on Page 68

See PROPOSAL S on Page 66

DETROIT GRAND PRIX

The Community Foundation has tapped John Hartig, who worked with the late U.S. Rep. John Dingell to establish the Detroit International Wildlife Refuge downriver, to help lead the effort and is working to raise $2 million to fund outreach and engagement through 2023.

A November ballot proposal staunchly opposed by Mayor Mike Duggan’s administration seeks to lock in Detroit residents’ ability to push forward with reparations in the event City Council falls short. Detroiters will vote Nov. 2 on Proposal S, which, if passed, would mark a significant pivot in the city toward direct democracy. The initiative backed by social welfare or- Perkins ganization The People’s Voice would enable residents to enact initiatives by public vote that appropriate city money for the purposes they choose. Proposal S has had an arduous Mallett and litigation-lined journey to the ballot, and it is still being questioned on its legality, consequences and lack of clarity. It’s part of a push toward giving Detroit residents who feel shut out of government a say — specifically, a say in instituting government programs that give reparations for historic injustices against Black residents. Detroiters will be simultaneously voting on Proposal R, an initiative led by City Council President Pro Tem Mary Sheffield that asks whether the city should create a committee to explore reparations. The People’s Voice, founded by attorney Todd Perkins, is pushing for Detroiters to vote “yes” on proposals S and R as a pair. The former was created as a fail-safe move if elected officials aren’t as “aggressive” as they need to be when it’s time to act on reparations, said Perkins, principal of Detroit-based Perkins Law Group PLLC. In that case, voters could go back to the ballot and do something “revolutionary,” like get reparations approved themselves. Perkins said it’s time to build a new avenue toward reparations that empowers Black residents, after “you’ve felt nothing but frustration and consternation” trying to get there. However, the effort has drawn a fervent rebuke from city government leaders. While Duggan is in favor of reparations and supports Proposal R, according to Deputy Mayor Conrad Mallett, Mallett called Proposal S “very, very bad public policy.” “(Proposal) S, to me, is a confused attempt to take away decision-making authority not from the mayor of the city of Detroit but from Detroit City Council,” Mallett, who is also a former Michigan Supreme Court justice, told Crain’s at the recent Mackinac Policy Conference.

A rendering for the proposal to bring the Detroit Grand Prix back to downtown Detroit after years of holding the race on Belle Isle.

Detroit Grand Prix organizers see race’s future downtown Visitors would benefit, but loss of race could be blow to Belle Isle budget BY KURT NAGL

After years of trying to convince the community that hosting an IndyCar race on Belle Isle is a good idea, organizers of the Detroit Grand Prix are changing their tune. Bud Denker, race chairman and president of Bloomfield Hillsbased Penske Corp., is now set on selling his plan to bring the race back downtown, where it started 40 years ago. It may be the path of least resistance for organizers determined to keep the race alive in the city.

Moving the event off the public island park and onto a circuit near the Detroit riverfront and Renaissance Center, starting in 2023, would benefit businesses and the community, Denker said. It would also pacify critics who for years have condemned holding the event on Belle Isle for its damage to the environment and disruption of park access. “The magic of our route is that everything north of Jefferson is unimpeded, unencumbered,” Denker told Crain’s after formally presenting his plan to Detroit City Council last week. “... Everything around the

circuit will be visible to the public, free of charge, and that is inclusive, that is bringing down people of all walks of life, and that’s why it’s important to bring it downtown.” He is asking City Council to approve a three-year deal to hold the race downtown on the first weekend of June from 2023 through 2025. The race is scheduled to take place on Belle Isle next year, with an option to extend through 2024 should City Council put the brakes on the downtown proposal. See GRAND PRIX on Page 65

“THERE ARE 260 BUSINESSES WITHIN A 15-MINUTE WALK FROM THE REN CEN.” — Bud Denker, race chairman

INFRASTRUCTURE

Connecting the dots of blue water and greenways Great Lakes Way effort seeks increased access, federal designation, economic development BY SHERRI WELCH

Michigan’s vast freshwater lakes are known near and far, but not everyone knows you can put in a kayak near the southern shores of Lake Huron and paddle 156 miles of waterways to western Lake Erie. Blueways, or water paths, that flow between Port Huron and Toledo are already in place. On land, a significant percentage of 160 miles of greenways that connect to those blueways are completed or underway. But there are still waterfront

areas and land along the stretch dubbed the Great Lakes Way that the public can’t access. The Community Foundation for Southeast Michigan is Hartig leading an effort to improve access to the blue and green trails, while raising the visibility of that stretch by engaging with public, private and nonprofit orga-

nizations in the 44 communities along it. In the near-term, it’s working to promote what’s already there, including blueways, greenways, cultural attractions and historic sites. It’s also seeking a federal designation for the Great Lakes Way, something that could bring new resources for its development and maintenance, national acclaim and increased tourism to the state. In the future, the initiative will focus on expanding public access to the waterfront and helping to ensure

greenway links are developed where there are gaps along the trail.

National designation

OCTOBER 4, 2021 | CRAIN’S DETROIT BUSINESS | 3

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Well-known office properties in metro Detroit up for grabs Blink and you miss it. In the past week, nearly 800,000 square feet of office space across four wellknown properties in Troy and PontiKirk ac became availPINHO able if you have the scratch. Toss in the Fisher Building and the former UAW-GM Center for Human Resources in Detroit for good measure, and you have six buildings over 100,000 square feet — some vacant, some well leased — totaling 1.8 million square feet in the market for fresh ownership in metro Detroit the last 30 days or so, according to a survey of listings on CoStar Group Inc., a Washington, D.C.-based real estate information service. That’s a lot of large buildings to go up for new ownership in a short period of time. The listings aren’t necessarily related or driven by a single cause, but whether they sell and to whom has implications for an office market, like others, that has been turned upside down by the COVID-19 global pandemic. “I think we are heading for some Armageddon moments on the office side with more vacancy to contend with,” said AJ Weiner, managing director in the Royal Oak office of Chicago-based brokerage house JLL. “Suburban Detroit has yet to feel the full weight of the contraction that’s going to occur as a result of COVID. Heading into COVID as a regional office market, we were already overbuilt, that was already a challenge. We have an overbuilt market, and we have to find a way to collectively right-size it.” According to a second-quarter report from the local office of New York City-based Newmark Knight Frank, the vacancy rate in metro Detroit’s office market increased to 16.8 percent from 16.5 percent in the first quarter as some 181,000 square feet became available. It’s also nearly 2 percentage points higher than it was a year ago, at 14.9 percent vacant. The office market has about 78.6 million square feet leasing for an average rate of $20.34 per square foot per year. “There is a significant (a never-before-seen occurrence) amount of sub-

The owners of the Big Rock Chophouse on Eton Street in Birmingham are closing the restaurant by the end of the year and the building owner is seeking a new tenant. | COSTAR GROUP INC.

lease space on the market that, with most burning off within three to five years, when landlords will need to look to fill this vacant space,” said Steve Morris, managing principal of Farmington Hills-based Axis Advisors LLC. The four buildings that hit the market in the last week are as follows: One of the Ottawa Towers buildings, which is 200,000 square feet and vacant. It is on the market for $5.9 million, or just shy of $30 per square foot. It is owned by an affiliate of Bob Waun’s Pontiac-based Dirt Realty, which acquired them earlier this year for $7.4 million. Waun told me he thinks its a good contender for a corporate headquarters. “I hate seeing that building empty, and if I can’t fill it, I want somebody else to do it,” Waun said. Three of the buildings in the North Troy Corporate Park marketed by Farmington Hills-based Friedman Real Estate. The buildings at 700 Tower Drive and 800 Tower Drive, plus 5555 New King Drive, total 569,000 square feet of the 1.2 million-square-foot, eight-building complex around I-75 and Crooks Road. Their occupancy rates are not known. A message was left with one of the brokers on the listing seeking comment. A group of investors led by Miami-based Rialto Capital Management LLC paid $15.5 million for the entire office park in 2012 when it was just 23 percent occupied. Morris noted that the North Troy Corporate Park was purchased on the cheap, leased up well and now ownership is in a good position to sell. “In excess of 50 percent of all suburban office buildings were sold for cents on the dollar from 2011-2016 as a result of the CMBS mortgage foreclo-

sures,” Morris said. “Landlords who purchased office buildings during the aforementioned time now have high occupancy. Thus, a building that was purchased below replacement costs, i.e. $15 to $40 per square foot (which cost $200 per square foot to build) are now on the market for sale in the range of $100 to $150 per square foot. It’s a win-win. The seller will make a very large profit and the purchasers obtain a highly occupied building with the positive outlook that rental rates will again increase a few years out.” In Detroit, the 635,000-square-foot Fisher Building hit the market last month and the 420,000-square-foot building now known as The Icon, formerly the UAW-GM Center for Human Resources, hit the market shortly thereafter.

Cushman & Wakefield gets Big Rock listing The Southfield office of brokerage firm Cushman & Wakefield has been hired to market the Big Rock Chophouse space at 245 S. Eton St. in the Birmingham Train Station for lease. A news release says it is being marketed for potential office, retail, restaurant, hospitality or health care use. Big Rock, which is expected to close at the end of the year, is owned by Norman and Bonnie LePage. The restaurant opened in 1997 as a rebrand of another LePage property, Norman’s Eton Street Station, which opened in 1984. The LePages also own Griffin Claw Brewing Co. in Birmingham and Lumen Detroit. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

SPONSORED CONTENT

CARING FOR KIDS

Host Larry Burns, President and CEO, The Children’s Foundation

Advocating for the quality of life for Michigan children and their families

Advocating for the health & wellness of children and families

About this report: On this monthly radio program, The Children’s Foundation President and CEO Larry Burns talks to 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 Sept. 28; listen to the entire episode, and archived episodes, at yourchildrensfoundation.org/caring-for-kids.

Kuhu Saha, Co-Founder, Executive Director, Give Merit

Matt Pepper, President & CEO, Michigan Humane

Ernestine Sanders, Founder & CEO, The Saturday Scholar

David Merritt, Co-Founder & Board Chair, Give Merit

Larry Burns: Tell us about your journey and the role you have now.

Larry Burns: Tell us about your journey.

Larry Burns: What made you decide to start Give Merit? Kuhu Saha: Dave and I met at orientation for the University of Michigan. We were friends through college. David Merritt: Our backgrounds are different but the thing that connects us most is a heart to serve and make sure young people in the city of Detroit have the adequate resources and opportunities to be successful. Saha: We’re celebrating our 10th year at Give Merit. Around that same time, we started the FATE Program in collaboration with our school partner, the Jalen Rose Leadership Academy. It started with a cohort of 25 ninth graders and helping them find their passions. We do that through the fashion brand and donate a portion of our proceeds. In addition to that, the fashion brand serves as a backdrop to the programming that we do. When students enter in the ninth grade, they’re with us for all four years of high school doing a weekly after-school program. Each year is tied to a capstone project that has to do with the brand. Burns: What happens next? Merritt: We’re promising $8,000 in college scholarships to all qualifying FATE students that graduate and are accepted to any post-secondary education. We’re currently supporting about 150 Detroit youth through the program. Now we have a four-year college program, which continues that personal and professional development for them, and helps set them up for internships and job placements to ultimately prepare them for their careers. Burns: Tell us about your big capital project. Merritt: We’ve been working to build a park with a holistic life skills and fitness center to get young people active through innovative sport/play programming. Burns: What are some other components? Saha: At one end of the park there will be a shipping container yard that will include food, beverage and retail. One will be a teaching container to learn about healthy eating. Merritt: It will also have a miniature turf field for activities like lacrosse and five-on-five soccer and football. There’ll be an obstacle course, rock-climbing wall and a gym. Burns: Will there be a place for a classroom?

Matt Pepper: I originally started in advertising and public relations, but I realized that’s not my thing. My dad taught me to do something you’re passionate about, so I changed to wildlife biology. From there I started my chapters, upward and onward. I started in Kent County as a cruelty investigator, then an animal control supervisor. I went on to Shreveport, Louisiana, Memphis, Tennessee and Albuquerque, New Mexico. I had this vision in my head of what animal welfare is and what it can mean to a community. When Michigan Humane called me, I realized that there’s something special about this community — a passion and pride. Michigan Humane has a long history of success and this was the place where I could take that vision and make it a reality. Burns: Tell us about the name change to Michigan Humane. Pepper: The primary driver was an evolution in this community, the industry and our organization. It had us really taking a hard look at who we want to be. We consider ourselves a human-centered organization that works through the animals. Burns: Talk about pets and the pandemic. Pepper: People need pets in their lives because lives are better with pets. Think about the emotional and psychological support that pets provide us, including the opportunities for exercise. We’re still seeing adoption numbers that are just off the charts. People are welcoming pets into their families to help get them through these times. Burns: What’s on the horizon for Michigan Humane? Pepper: There’s research that shows if you have a pet, you’re 31 percent less likely to die of heart disease or stroke, you’re 35 percent more likely to be more active, and active communities are safer communities. For this new generation in the workforce, having an animalfriendly employer and animal-safe spaces to take your pets is a deciding factor in life choices. My vision over the next several years is to help make Detroit the most humane community in the country. What I love about our work is how it relates to the quality of life for everyone, whether you’re a person or a pet. I feel like metro Detroit can do something that’s special and we’re going to elevate our role to be a bigger part of the solution. Burns: What are some of the other services you offer?

Burns: Last thoughts?

Pepper: We can address dog bite situations by giving people access to services and care. We participate in health and human services events. For example, people come in for free care for their pets and Delta Dental may be there to provide human dental needs, or the City of Detroit could be there giving out COVID vaccines.

Merritt: We’re always looking for mentors for our students and our programming. If you want to be a positive role Lorem ipsumplease let us know. model for youth in Detroit,

We work with Gleaners and Forgotten Harvest to hand out human food. If you can’t afford to feed your dog, we want to help you.

Saha: We plan on all the spaces being transformable. For example, the basketball court will be covered and that’s an opportunity to transform that into a classroom.

Ernestine Sanders: I started out as a public school teacher in St. Clair Shores and then went into the private schools. I was with Friends School then The Roeper School. I’ve had a long association with Cornerstone Schools and now with The Saturday Scholar. It’s been an exciting journey and one that continues because I believe that we should be lifelong learners and put to work what you know. Burns: How is The Saturday Scholar making a difference? Sanders: We have many young people who aspire to go on to college and to do that they have to score well on their ACT or the SAT. I have found that more work is needed in terms of reading math and writing. At The Saturday Scholar, our students come in from October until May and work all morning with our teachers. We have another dimension to it as well, to provide services for parents and families. For example, programs on how to apply to college. We found that many of our scholars are the first generation going into university or college. We provide as much as we can so that our students are well-informed. We’re just providing more opportunities for them to be successful. Another issue we try to address is students who go away to school but by December they are returning. One reason is lack of funds. Educating our scholars on the grants and scholarships that they can apply for is really important. The second reason is that they’re not prepared academically — their study skills and their academic resilience aren’t strong enough once they’re in. We are doing pre, mid and post assessments throughout The Saturday Scholar. That data is very important to help them to see what they may have not known and dig deeper. We’re really proud of it because we can individualize our program so that our students can achieve more than they thought they could. Burns: The Children’s Foundation recently made a grant to The Saturday Scholar. Sanders: That grant allows us to bring in staff to pay them so that they can be there every Saturday. It allows us to bring resources to our students, including technology like Chromebooks. The Children’s Foundation grant is a staple for us. Burns: Where does The Saturday Scholar take place? Sanders: It’s at University of Detroit Mercy which is exciting for the parents and inspiring for our scholars to have a pre-college experience. October 9 will be our first day this school year. Burns: How can those interested help? Sanders: It’s $600 for the full-year experience, but we know that many of the students we serve cannot afford that, so we scholarship our students. If anyone would like to make a donation to support a Saturday Scholar, they can go to our website at www.thesaturdayscholar.org and get all of the information. We also have a social media presence on Facebook and Instagram so that we can reach out to the young people who might want to be with us.

OCTOBER 4, 2021 | CRAIN’S DETROIT BUSINESS | 5

CANNABIS

Cannabis investor and NBA Hall-of-Famer Chris Webber plans a cannabis-focused development in southwest Detroit at Michigan Avenue and 22nd Street. | PLAYERS ONLY HOLDINGS

Chris Webber to build up to $175M cannabis compound

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BY ANNALISE FRANK

Chris Webber, an NBA Hall-of-Famer, former University of Michigan basketball star and Detroit native, broke ground Tuesdsay on the first phase of an estimated $175 million cannabis-focused development in southwest Detroit. Webber, a 48-year-old cannabis investor, plans to run industry job training through his partnership with West Coast lifestyle brand Cookies, as well as grow cannabis at the 180,000-square-foot development campus dubbed Players Only Holdings, he told Crain’s ahead of the morning groundbreaking event. Players Only, co-founded with entrepreneur Lavetta Willis, expects the initial development to cost $50 million and finish in March, according to Webber and a news release. The cultivation space is planned to start at 60,000 square feet and range up to 130,000 square feet after three years. There are also plans for a consumption lounge and an 8,000-square-foot dispensary, though as of now it could only sell medical cannabis. Detroit’s recreational industry is still tied up in litigation. Webber, a 2021 Hall of Fame inductee and a member of UM’s Fab Five in the 1990s, said his goal with the new project is to help those unfairly targeted by the war on drugs, people of color and others in underrepresented communities enter the cannabis industry. Webber declined to estimate how many people would be trained by the facility, saying it’s too early to predict. He also said the project would create hundreds of jobs, including construction, but could not give a specific number. “Being from Detroit, I want to make sure we have a positive impact not just with the taxes we pay or the profits or anything like that, but a community impact,” said Webber, who played for the Detroit Pistons, Philadelphia 76ers, Sacramento

Kings and others over a 15year NBA career. The facility at 2599 22nd St. just off Michigan Avenue will offer job training and placement in the industry as well as programs for getting criminal records expunged and earning a GED. The cannabis education will range from Webber bud tending to cultivation, extraction, marketing and other job areas. As planned, the cannabis-focused development campus would extend to cover several properties on 9 acres. Business partner and developer Christos Moisides owns the main building but is expected to transfer it to Players Only Holdings. Players Only has also agreed to an exclusive distribution deal for its branded marijuana products with Gage Growth Corp., one of Michigan’s biggest cannabis operators and soon to be acquired by TerrAscend Corp. Webber, who owns a cannabis and CBD health company called Webber Wellness, in February launched a $100 million cannabis private e quity fund for businesses owned by people of color with Jason Wild, a health care investor and president of New York-based JW Asset Management LLC. The Webber Wild Impact Fund is investing with the goal of addressing equity barriers: White people have gotten the vast majority of cannabis dollars in the relatively new industry across the country — including in Michigan, where the state recently reported that just 3.8 percent of people with ownership interest in recreational businesses in Michigan were Black and 1.5 percent Hispanic or Latino. Contact: afrank@crain.com; (313) 446-0416; @annalise_frank

REAL ESTATE

Expect the Unexpected. A sign in front of the Packard Plant in Detroit in a Feburary 2021 file photo.| KIRK PINHO/ CRAIN’S DETROIT BUSINESS

When disaster strikes at work or home, it is crucial you know which restoration company to call.

Detroit looks to pull public funding from Packard Plant Little progress made since 2017 announcement

S c an f or Z ol man R e s t or a t ion ’ s C on t ac t Inf or ma t ion

BY KIRK PINHO

way for new construction. A previous Bohemian vision of apartments, With little progress made on the shopping, light industrial, art gallery redevelopment of the Packard Plant and restaurant space never got off on Detroit’s east side, the city is look- the ground. He paid $405,000 for the entire ing to terminate its public financing plant — some 3.2 million square feet of the project’s first phase. The Detroit City Council is consid- across 40 acres along East Grand ering whether to scrap the brownfield Boulevard around I-94 — in 2013 at a reimbursement and the 12-year Ob- Wayne County property tax foreclosolete Property Rehabilitation Act sure auction. “The tax abatement that was awardproperty tax freeze Fernando Palazuelo’s Arte Express Detroit LLC received ed to support the project envisioned for a planned $23 million rehab of the for this property is without a project,” historic plant’s 121,000-square-foot Luke Polcyn, deputy group executive for Jobs & Economic Growth in Mayor administration building. The Planning and Economic De- Mike Duggan’s administration, told velopment standing committee on the standing committee last week. Thursday moved those items to the “The property is for sale. We are keenfull council for its consideration, ly focused on this property. It is an enormously significant asset and, in which could come next week. Although there was a ground- some ways, a liability. We are watchbreaking ceremony in 2017 and some ing the situation closely.” Palazuelo has said the COVID-19 cleanup of the property has taken pandemic has place since, from greatly constrictthe outside it re“THE ECONOMIC ed his cash flow mains much as it and hampered did more than HARDSHIPS RESULTING the project. four years ago “The economwhen Palazuelo FROM THE ONGOING ic hardships rekicked off what GLOBAL PANDEMIC HAVE sulting from the was supposed to ongoing global be an 18- to CREATED SIGNIFICANT pandemic have 24-month con- CHALLENGES FOR OUR created signifistruction period cant challenges that would result COMPANIES AND MADE IT for our compain office and VERY DIFFICULT TO nies and made it event space. very difficult to An email was EFFECTIVELY MANAGE effectively mansent to Palazuelo CASH FLOWS.” age cash flows,” and a representahe wrote in a tive seeking com- — Fernando Palazuelo, in a February email ment Thursday February email to Crain’s to Crain’s. morning. “As you are well aware, our efforts Palazuelo’s tenure as steward of the behemoth Albert Kahn-designed at the Packard Plant are funded enplant has been marked by everything tirely from our operations in Lima from nearly losing the property to and other areas of the world where foreclosure earlier this year for un- the commercial operations of the paid taxes to the collapse of the icon- tenants in our buildings have been ic bridge spanning Grand Boulevard, on government-imposed shutdown from a photo shoot with wild animals for the past year.” The Detroit Free Press reported at that drew international attention to a lawsuit over $6,000 in unpaid office the time that the brownfield reimbursement amounted to $5.4 million. rent. The OPRA property tax freeze is Most recently, Palazuelo, a native of Spain who now lives in Peru, has valued at $3 million. put the property up for sale with the expectation that sizable swaths of it, Contact: kpinho@crain.com; if not all of it, will be razed to make (313) 446-0412; @kirkpinhoCDB

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OCTOBER 4, 2021 | CRAIN’S DETROIT BUSINESS | 7

LETTERS TO THE EDITOR

MSU sponsorships to only male athletes are blatant gender bias TO THE EDITOR:

COMMENTARY

Adding up the reasons for the pervasive worker shortage

Detroit bus drivers’ voices need to be heard TO THE EDITOR:

Dustin

WALSH

there are many theories — from blaming the gratuitous unemployment benefits and stimulus to child care conundrums to those who left to avoid COVID exposure — and many of them are only part of the equation. “I have to confess that we are also a bit puzzled,” said Gabe Ehrlich, economist and director of University of Michigan’s Research Seminar in Quantitative Economics, which forecasts the economy and the labor market. So what do we know? Labor force participation remains well below pre-pandemic levels in Michigan. In August, only 59.1 percent of prime working-age Michiganders were working or actively seeking work. That’s down from 61.6 percent in February 2020. About 223,000 in the state remained on unemployment in August, according to U.S. Federal Reserve data. But by Sept. 4, the unemployment figure in the state plummeted to 88,932 after enhanced pandemic benefits expired on Sept. 1. So there may be a lag in labor force participation as those booted from benefits may seek work in the coming weeks or months. But there still isn’t enough labor to fill demand. There were more than 112,000 job advertisements in August in the metro Detroit area alone — nearly 5,200 of those openings were at HFHS, Ascension Health and Beaumont Health — up 2.5 percent from July, according to the Michigan Bureau of Labor Market Information and Strategic Initiatives.

I am a city of Detroit bus driver. I found the article you wrote on the Detroit bus system (“‘I wanted to cry’: Detroiters at their wits’ end with ‘cantankerous’ DDOT bus service hobbled by chronic driver shortages,” Sept. 20) highly offensive. The fact that no one ever comes and talks to the drivers who are out risking their lives is disappointing and disgraceful, but this is nothing new. Hopefully with this letter, you consider all parties involved, because speaking honestly, the entire system would run better if our voices were heard and taken seriously.

See SHORTAGE on Page 67

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com. Please include your complete name, city from which you are writing and a phone number for fact-checking purposes. 8 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

First and foremost, the Detroit Department of Transportation is listed under the city of Detroit’s general fund, so this means that whatever the government does send to us in funding, the mayor decides how it is used. With so much federal money headed to Detroit, they could have easily raised our pay to $30 an hour, with the top pay for senior drivers $40 an hour. SMART is still paying their drivers hazard pay, which started last year. We haven’t received a dime of hazard pay since last year. Fact of the matter is: Nobody respects bus drivers. Reginald Glasgow II Detroit

DANIEL SAAD FOR CRAIN’S DETROIT BUSINESS

f you’re in business or read the pages of Crain’s in recent months, you’re likely asking, “Where have all the good workers gone?” About 74 percent of businesses surveyed in September by the National Federation of Independent Businesses said they are experiencing a mild to significant staffing shortage. And 82 percent of those surveyed said they are losing sales opportunities due to their inability to fill vacant positions. The shortage is pervasive. Henry Ford Health and other health systems are temporarily shuttering beds due to inadequate staffing — HFHS is even importing 500 nurses from the Philippines to fill the gaps. Last week, Michigan State University anLABOR FORCE nounced it is tempoPARTICIPATION rarily closing its resiREMAINS WELL dential dining halls, which feeds thouBELOW PREsands weekly, due to the labor shortage. PANDEMIC Low-income workLEVELS IN ers are on the move, leading the charge in MICHIGAN. “The Great Resignation.” According to the August job seeker report by Bankrate, 72 percent of respondents earning less than $30,000 per year are looking for a new job, compared to just 44 percent of those making $80,000 or more. Of those surveyed, 55 percent said they plan to have a new job in the next year. That spells pain for many employers and it’s clear the state of Michigan, and much of the U.S., is in the middle of one of the starkest labor crises on record. More than 50 percent of small businesses have at least one job vacancy, which is, in fact, a record in the 48 years the NFIB has measured vacancies. But less clear is the answer to the question of where the workers have gone. The truth is

Thank you for shining an important spotlight on the recent stunning and blatant gender bias at Michigan State (Kelley Root, “As MSU-UWM deal changes college sports landscape, where are the women?”). As you indicated in your excellent commentary, the university can’t completely control how a billionaire donor wants his money spent. But in light of the horrifying sexual abuse of female gymnasts by Dr. Larry Nassar that MSU allowed to occur, as well as the lawsuits claiming MSU discouraged the reporting of rape allegations against athletes, it is shocking that MSU’s leadership would allow the gift of $6,000 sponsorships to go only to male athletes. I wonder if MSU would have allowed a donor to designate that his sponsorships would go ONLY TO WHITE ATHLETES. I’m certain that would have been a bridge too far. As a former journalist and a 2007 inductee into the Michigan Journalism Hall of Fame

for my pioneering role as one of the first female women TV sports broadcasters in the U.S. (WJBK-TV2/CBS in Detroit, 1978-1984), I am particularly interested in sports and have followed the development of women’s sports closely. I covered the 1978 lawsuit by the Lady Spartans basketball team against their own university for blatant Title IX violations and was in the courtroom when they won the preliminary injunction that forced the university to begrudgingly begin addressing deeply ingrained discrimination. The fact that blatant discrimination against an entire gender is still acceptable to MSU in 2021 and justified with the pathetic explanation that “we are going to walk before we run with this” is all the reminder Michiganders need to understand that women remain second-class citizens at Michigan State University. I am sickened. Anne Doyle Podcast host Power Up Women and Game Changers Auburn Hills

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

OTHER VOICES

Congressional drug price bill not a risk worth taking BY DAVID BREEN

ichigan businesses and workers have experienced a profound sense of pride during the past year. When the eyes of the world were David Breen is upon us last Device president, cember, as trucks Kalamazoo left Pfizer’s Kaoperations/site lamazoo manuleader for Pfizer facturing site and Inc. set off on their mission to deliver the first COVID-19 vaccine to the world, we knew we had achieved something big. We delivered an innovative vaccine and with it, we also delivered hope. The businesses that took part in that historic moment are part of the backbone of much of the economic recovery we are on the brink of achieving. We need policymakers to protect that ecosystem. The health care policies under debate in Congress right now put economic opportunity, jobs, and innovative research in jeopardy. At Kalamazoo, we continue to refine our production capabilities to ensure that we are able to make as many vaccine doses as possible, as quickly and as

safely as possible, to address the needs of as many people as possible. While the vaccine work is ongoing, Pfizer and the industry as a whole continue to explore new treatments for cancer as well as rare and chronic diseases to bring hope and new treatments to the many patients waiting for cures. That is why it is so frustrating to see Congress considering a bill, known as H.R.3, that could actually work against our industry’s ability to discover and deliver new breakthroughs to patients. The bill purports to use Medicare price negotiation as a way to lower drug prices, but that price-fixing will also stifle innovation and the devel-

opment and availability of new treatments. We’ve seen the ideas of H.R.3 modeled in European countries, where they have failed. While nearly 90 percent of new medicines launched globally in the past decade are currently available in the United States, only about half are available in some European countries. Additionally, it can take months for patients to have access to the newest treatments available that they desperately need. Many treatments are never available in those countries. Even the Congressional Budget Office, a nonpartisan entity which assesses the impact of legislative pro-

KEYNOTE SPEAKER ELIZABETH HERTEL

Director Michigan Dept. of Health and Human Services

PINO COLONE, M.D.

President Michigan State Medical Society

CRAIN’S EVENT

Health care summit to focus on what’s next Crain’s Health Care Leadership Summit will examine factors shaping the future of health care, including access, health policy and workforce issues. The event will start Oct. 12 with a virtual keynote by Elizabeth Hertel, director of the Michigan Department of Health and HuHertel man Services. The second day of breakout sessions on Oct. 13 in person at The Henry in Dearborn will include:  Pino Colone, M.D., president, Michigan State Medical Society  Bret Jackson, president, Economic Alliance for Michigan  Carmen McIntyre Leon, M.D., associate chair, Wayne State Department of Psychiatry  Philip Levy, M.D., professor of emergency medicine, Wayne State University  Tina Wheeler, vice chair-health care sector leader, Deloitte Dominick Pallone, executive director, Michigan Association of Health Plans The virtual program is $50. Both days are $125. For more information or to register, go to crainsdetroit.com/ health-summit. In-person events will require attendees to be vaccinated for COVID-19 and masked while indoors.

Just as Michigan’s elected officials have supported Pfizer’s investment, expansion, and job creation efforts here at our Kalamazoo site, we need them now to also support the policies that will allow us to continue to carry out Pfizer’s purpose of delivering breakthroughs that change patients’ lives. H.R.3 is not a risk worth taking. The world cheered us on and put its faith in us when innovation was one of our greatest hopes out of this pandemic. Now, we put our trust in our congressional leaders to make the right decision for patients’ well-being during and after this pandemic.

posals, conservatively concluded that the government restrictions suggested in H.R.3 could result in 59 fewer new drugs over the next three decades and “would have a negligible effect on federal spending.” Simply put, we could sacrifice future potential treatments, and have almost zero positive impact on our country’s financial health. Ensuring that patients across the country have access to affordable medicines and treatments should be a shared goal of the private and public sectors. My colleagues and I want to see our pipeline of crucial vaccines and treatments continue to reach patients who are depending on them.

Join health care industry executives to exchange ideas at this year’s summit, themed Looking Ahead: Shaping Health Care’s Future. Discussions will address access to care, policy priorities, closing the talent gap and other future challenges and opportunities facing health care.

OCT. 12 | NOON

Senior Vice President - Associate Chief Clinical Officer and Chief Quality Officer Henry Ford Health System

CHRISTOPHER FRIESE

Elizabeth Tone Hosmer Professor University of Michigan School of Nursing

BRET JACKSON

President Economic Alliance for Michigan

PHILLIP LEVY, M.D.

(VIRTUAL KEYNOTE)

Professor of Emergency Medicine Wayne State University School of Medicine

OCT. 13 | 8:30 – 11 A.M. The Henry, Dearborn

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(IN-PERSON BREAKOUT SESSIONS)

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TINA WHEELER

NOTE: Full vaccination against COVID-19 (or negative test result) and compliance with masking protocols will be required of all attendees.

Vice Chair - Health Care Sector Leader Deloitte

For more information and to register, visit crainsdetroit.com/health-summit. OCTOBER 4, 2021 | CRAIN’S DETROIT BUSINESS | 9

SPONSORED CONTENT

EQUITY

PATHWAYS

nvesting in diversity, equity and inclusion is not just the right thing to do, it’s right for business: There are severe economic costs associated with not addressing systemic and seemingly intractable inequities. For example, the United States would have experienced a cumulative economic impact of $70 trillion by 2019 if businesses and communities had begun harnessing the power of DE&I in 1990, according to findings published in the Bank of America Global Research report Everybody Counts! Diversity & Inclusion Primer. The country also would have generated $2.6 trillion more in economic output in 2019 alone if gender and race gaps had been closed. Businesses that create and implement robust, deliberate DE&I strategies cultivate a competitive edge because they not only attract customers and investors focused on ESG, but they also boost talent pools, innovation, productivity, scalability and profitability. “There are still trillions of dollars of potential unlocked value to be created by minimizing disparities between groups of people around the world,” said Matt Elliott, Midwest Region Executive for Business Banking and President of Bank of America Michigan. “Bank of America understands the value of investing in responsible growth, which means

10 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

The business case for investing in diversity and inclusion: ‘Trillions of dollars of potential unlocked value’ By Leslie D. Green for Crain’s Content Studio

DIVERSITY, EQUITY & INCLUSION EXPLAINED

DIVERSITY is the representation of various identities and differences

EQUITY focuses on fair treatment, equal opportunity and equal access to resources

INCLUSION is the active engagement of the contribution, and participation of all people

DIVERSITY ASKS WHO IS IN THE ROOM

EQUITY ASKS WHO IS TRYING TO GET IN THE ROOM BUT CAN’T

INCLUSION ASKS HAVE EVERYONE’S IDEAS BEEN HEARD

growing in a sustainable way. Part of that sustainability is having a diverse and inclusive workforce and sharing your success with your communities.”

an absolute business imperative. They also discussed the barriers and complexities to addressing equity and the opportunities the work presents.

Elliott recently moderated a virtual roundtable with metro Detroit business, academic and community leaders who delved into why equity is not only the right and good thing to do, but

Knowing the ‘why’ to determine the ‘how’ Earnings and employment inequities aren’t

just Detroit problems, said Elliott, who sits on the board of directors of Business Leaders for Michigan, a nonprofit working to make Michigan a Top 10 state in terms of jobs, wages and overall economy. Elliott indicated that the median income for Black households is about 60% of the income in white households. “We can’t get to the Top 10 if we can’t narrow that gap,” he said. The average annual wage for someone working but not living in Detroit is about $71,000. However, the average wage for a Detroit resident is less than half that, at $33,970, which isn’t enough to thrive, feed a family or prosper at any level, said Anika Goss-Foster, CEO of the nonprofit, social impact organization Detroit Future City. Goss-Foster said such inequities have little to do with what residents do to improve their conditions but are the result of broken systems. “The jobs that are available, the value of the jobs and the differences between what those living in Detroit and not living in Detroit earn is unconscionable. Even if you matriculate through school, there may not be a job waiting for you,” Goss-Foster said. Unemployment is 1.5 times higher for African Americans in the city compared to white people,

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SPONSORED CONTENT

ROUNDTABLE PARTICIPANTS

MODERATOR: MATT ELLIOTT Midwest Region Executive for Business Banking and President of Bank of America Michigan

ANIKA GOSS-FOSTER CEO, Detroit Future City

according to Detroit Future City’s recent State of Economic Equity in Detroit report. Left unaddressed, racial disparities could cost the U.S. economy another $1 trillion to $1.5 trillion in lost investment and consumption of goods and services over the next 10 years, Bank of America’s Diversity & Inclusion Primer reports. Conversely, closing the country’s racial employment gap would inject another $150 billion in yearly labor compensation. This is seen in S&P 500 companies with more than 33 percent people of color on staff, which experience more than 1 percentage point higher ROE than their peers.

diversity movement that in 1998 led to the founding of minority-owned automotive interior systems manufacturer Bridgewater Interiors and other minority-owned suppliers.

JACK ELSEY CEO and Partner, Detroit Children’s Fund

PAMELA GOOD Co-founder and CEO, Beyond Basics

PIERRE BATTON Executive Vice President, Small Business Services, Detroit Economic Growth Corp.

PORTIA ROBERSON CEO, Focus: HOPE

RONALD E. HALL President & CEO, Bridgewater Interiors

Today, Bridgewater is a $2 billion company with 2,400 employees. President and CEO Ron Hall said Bridgewater, which spends more than $250 million annually with minority-owned companies, stays true to its equity and inclusion beginnings by “toning from the top.” Social impact organizations: Meeting people where they are

Community leaders agree: nonprofits also need to intentionally “The small business community isn’t looking pursue equity internally and with the clients they serve. for donations. Detroit’s entrepreneurs are Detroit Children’s Fund, asking for an opportunity to gain access to which raises money to invest the markets and compete.” in the improvement of Pierre Batton Detroit schools, previously had a 100 percent white team serving the majority Black city, said CEO and About 50 years ago, OEM procurement Partner Jack Elsey. executives found that after decades of trying to grow businesses they had a large number “We needed to do the hard work,” he said, of “very entrepreneurial companies” of less adding the organization will soon have a staff than $5 million in annual revenue — a small comprised of 62 percent people of color. figure in the automotive world. That narrative changed with the supplier

ENRIQUE NEBLETT Professor of Health Behavior and Health Education, University of Michigan School of Public Health; Associate Director, Detroit Community Academic Research Center

WRIGHT LASSITER III President and CEO, Henry Ford Health System

Focus: HOPE CEO Portia Roberson said ABOUT THIS PROJECT: Bank of America partnered with Crain’s Content Studio, the marketing storytelling division of Crain’s Detroit Business, to convene a virtual roundtable of business and community leaders to talk about the pathway to equity in Detroit. OCTOBER 4, 2021 | CRAIN’S DETROIT BUSINESS | 11

SPONSORED CONTENT

EQUITY PATHWAYS (CONTINUED FROM PREVIOUS PAGE) people think diversity and inclusion “automatically” happens because many nonprofits are social impact organizations and they help people. “[The community thinks] we have this diverse team of people, and it’s equitable for everybody who works for us.” In addition to addressing internal DE&I issues, she said these organizations need to look at how they are attending to the needs of the people they serve. Focus: HOPE sought to fulfill both expected and unexpected client needs when the pandemic began. One such need was ensuring seniors, some of whom already received supplemental food boxes, received more food because access to family members and stores became onerous or impossible. The organization also provided digital devices so seniors could gain access to necessary resources and workers could do their jobs remotely. With its increased efforts, Roberson said, Focus: HOPE realized providing transportation, internet service, a virtual workforce program and childcare, for example, will continue to be necessities post-pandemic. “It’s made us a more equitable group, because we can serve more people and we can meet them where they are,” she said. Equity in Detroit’s small business community While diversity is indicative of who is represented at the table, Elliott said, equity refers to who has access to the table, and inclusion happens when everyone at the table is heard. However, attaining representation, access and a voice is especially difficult for small businesses with few resources. When Bank of America committed $1.25 billion over five years to knocking down systemic barriers to equity in communities of color, Elliott said it also designated $300 million to invest in, largely, venture funds run by people of color who invest in minority-owned companies. “We’ve already seen some really impactful investments,” he said.

YAWNING DISPARITY: AVERAGE WEALTH OF AN AMERICAN FAMILY Black families

White families

$1 million $980,500

800,000

600,000

400,000

200,000 $154,200

$142,300

$28,900 0

1967

2019

MORE ETHNIC & RACIAL WORKFORCE DIVERSITY = HIGHER ROE Median forward 1-year ROE based on the percent of people of color in the workforce for S&P 500 companies (2008-20) 20%

Above median diversity

Below median diversity

Sources: Revelio Labs, BofA U.S. Equity & Quant Strategy Note: People of color is defined as Black, Hispanic and Asian.

COVID in the same way that racial injustices aftTHE er withCOST this,” Batton “‘A rising tide already grappled to compete found OFsaid. ILLITERACY existed before George Floyd,” said Wright raises all ships.’ themselves struggling to survive. As a Lassiter III, president CEO of Henry Ford result, DEGC, Bank of America, the people City Nearly 800 million lack basic reading and writing skills.1 The cost of illiteracy doesn’t justand impact Health System. “Th ese aren’t new challenges. “If we target the most hard-hit demographics, of Detroit and more than 57these otherindividuals—it public also impacts their families and the societies in which they live. What we’ve had in the last 18 months or so is which tend to be Black business owners, we’re and private partners launched Detroit amplification of what was already there.” doing a better job of assisting everybody in the Means Business, a coalition endeavoring “There are tens of millions of jobs to be market. Then, there’s also great opportunity in to keep Detroit’s small businesses going created. GDP can be grown. And folks can To address issues, HFHS is trying to “find the terms of jobs creation.” during the ebbs and flows of the economy. make great money when they tap into these sweet spot” between where the data shows there small businesses, give them a chance and make are more intense issues and the health system’s The keys, Batton said, are determining what “We asked, ‘What does (COVID) mean for the investments,” he said. understanding of the holes that already existed real access would look like in Detroit’s small home-based service provider who doesn’t have in the fabric of the community, he said. business community, figuring out how to access to commercial “Why do Detroit high schools tend to focus on continue or increase support and mobilizing space? What does it mean “The essence of equity is ensuring you have efforts that guide partners who can help. leading students to blue collar jobs rather than for a hair salon or interventions that are appropriate to the needs to college? These are really hard questions that barbershop? How can we of the problems you’re trying to address in the Addressing health disparities support you? How can we require not only a lot of interrogation but also communities you’re dealing with,” Lassiter said. help you?” Batton said. require the undoing of ‘tried-and-true’ systems While people relatively high on the economic that have been in place for a long time.” The approach to providing care in an equitable stratum or at the top rung of the business To help close equity gaps, Jack Elsey manner is not one size fits all even when ladder may have surface knowledge of the organization has been dealing with the disparities in COVID-related inequities in the U.S. in general and Michigan discussing investing $250 “The small business community isn’t looking deaths in African American communities, or specifically, most don’t have to contend million of affordable and flexible capital into for donations. Detroit’s entrepreneurs are challenges with prenatal care, infant mortality with problems getting access to quality Detroit businesses run by people of color. asking for an opportunity to gain access to the and maternal mortality in Southeastern transportation, technology, health care or markets and compete.” Michigan, or issues with diabetes among education, Elliott said. And they’ve had fewer “I think that the phrasing is really important Hispanics in Southwest Detroit, he said. problems than many during the pandemic. for us and also for the community in terms of When COVID-19 and the resulting tracking that goal and letting them know that quarantines took hold, businesses that While addressing certain health-specific issues “Health disparities and inequities existed before we are being intentional in who we’re going Pierre Batton, executive vice president of Small Business Services at Detroit Economic Growth Corp., agreed the ROE of closing equity gaps in small business are massive.

12 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

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SPONSORED CONTENT

THE COST OF ILLITERACY Nearly 800 million people lack basic reading and writing skills.1 The cost of illiteracy doesn’t just impact these individuals, it also impacts their families and the societies in which they live.

GLOBAL COST OF ILLITERACY: $1.19 TRILLION Social and economic terms: health, crime, welfare, lost earnings, lost business productivity and other societal problems.2 U.S.

$300.8 BILLION

CHINA

$135.6 BILLION

INDIA

$53.6 BILLION

BRAZIL

$27.4 BILLION

AUSTRALIA

$18.4 BILLION

PERSONAL COST OF ILLITERACY: People with poor literacy skills are more than 2 Illiterate workers earn 30-42%

TIMES as likely to be unemployed.3

LESS than their literate counterparts.2

43% of Americans with low literacy skills live in poverty.4 LOWER PROFICIENCY IN LITERACY are more likely than those with better literacy skills to report POOR HEALTH.3

Individuals with

60-80% of prisoners in various nations read and write below basic levels.2 1. uis.unesco.org/literacy/Pages/literacy-data-release-2014.aspx. 2.worldliteracyfoundation.org/wp-content/uploads/2015/05/The-EconomicSocial-Cost-of-Illiteracy.pdf. 3.oecd.org/site/piaac/SkillsOutlook_2013_3book.pdf. 4. literacypartners.org/literacy-in-america/literacy-facts.

is critical, Lassiter said, more critical is alleviating the issues that don’t fall under the traditional auspices of the health industry. “How do we connect people to food, so we reduce food insecurities? How do we support housing? How do we support getting kids the education that can provide the chances and support they need?” he asked. “If we’re not leaning into organizations that are closer to the community than a big organization like Henry Ford is, then we are not going to be successful.”

“Rather than just addressing the symptoms of poverty, we should be implementing cures. Literacy is one of those cures,” she said. “We are graduating kids who can’t read. “Literacy changes everything,” Good said. “It allows people to compete for jobs and enables equity.”

The ROI of addressing early literacy, education

Nationwide, more than half of adults — 130 million people from 16 to 74 years old — “lack literacy proficiency,” according to information published in the September 2020 Gallup report Assessing the Economic Gains of Eradicating Illiteracy.

Lessening inequities in all manner of work and life starts with closing equity gaps in education, said Pamela Good, co-founder and CEO of Beyond Basics, which pairs children with tutors to get them reading at grade-level.

“Literacy is linked to a variety of positive outcomes, such as higher education, income, health and civil engagement. Likewise, macroeconomic research has long-shown that higher levels of human capital — measured by

educational attainment, cognitive ability and literacy — are associated with higher economic growth at the national level,” the report states. The mean annual income of adults with Level 2 literacy proficiency is $47,596 compared with $62,997 for adults with Level 3 proficiency — the minimum needed to contend with the difficulties of life, work and an increasingly innovative society. By boosting adult literacy to Level 3, the Gallup report states, the U.S. would increase annual income for the country by $2.2 trillion, or 10 percent of the gross domestic product. In 2019, according to results of state testing, 17 percent of Detroit third graders were proficient or advanced in language arts; by comparison, 45 percent of third graders statewide were proficient or advanced. To end disparities, Elsey of Detroit Children’s Fund said educators need to start asking themselves: “Why am I suspending this child? Why are my suspension numbers for Black boys twice as high as any other part of the population? Why do we expect less of our English learners? Why do Detroit high schools tend to focus on leading students to blue-collar jobs rather than to college? “These are really hard questions that require not only a lot of interrogation but also require the undoing of ‘tried-and-true’ systems that have been in place for a long time.” Many think the cost to fix education is expensive, he said. “It is. It’s like deferred maintenance on your house. If you don’t fix the couple of shingles that are broken now, a few years later you’re going to have to replace your whole roof. That’s where we are now.” He said high-performing schools in New York City and Washington, D.C., have two adults in every classroom because they receive $18,000 to $21,000 per student in state funding. Michigan, on the other hand, provides less than $9,000 per student in most school districts, including Detroit.

“Let’s fund it,” said Good of Beyond Basics. “Let’s come together as a business community and flatten the curve for educators. If we get literacy as a foundation piece, then everything else we’re talking about will follow.” Detroit Future City’s Goss-Foster agreed. She said ending disparities and closing educational gaps in literacy and other areas would make it easier for Detroit residents to obtain job training, education supplements and to prosper. Key takeaways in addressing racial inequities Statistics regarding disparities in employment, wages, housing, health and education are bountiful. However, “data is only useful, if partners help us understand what the data means to their communities,” said Enrique Neblett, professor of Health Behavior and Health Education at the University of Michigan School of Public Health and associate director of the Detroit Community Academic Research Center. “We don’t have a structure in place that allows us to think about what the data means to the community,” he said. The consensus is that creating equity will require sustained, long-term, dedicated investment, input and collaboration from business leaders, nonprofits, governments, academics and communities alike. “There’s not one entity that can solve this problem on its own,” agreed Henry Ford Health System’s Lassiter. “The solution is not just going to be fixing education. It’s not just going to be taking care of food insecurity issues. It’s not just going to be workforce training. The health industry is not going to solve health disparity problems. Health disparity problems will be resolved very broadly by the collaboration of all of us. “It’s going to be all of us figuring out the areas in which we can do the work the best and letting each of us do that work together.”

BUSINESSES CAN HELP LESSEN INEQUITIES BY: Getting out of their silos and learning what the community needs Understanding the problems and the complexities to solving the problems Giving people a seat and a voice at the table Not just checking for blind spots but looking for opportunities to increase equity Meeting people where they are Investing in small businesses, especially those run by people of color Letting leaders of social impact organizations weigh in on your diversity, equity and inclusion plans Remembering that attaining equity won’t happen in a quarter but will take years

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OCTOBER 4, 2021 | CRAIN’S DETROIT BUSINESS | 13

Live — and alive

TAKING SHAPE

Detroit Homecoming attendees visit the Michigan Central Station during Detroit Homecoming on Sept. 25..

Ford’s vision for Corktown extends beyond train station walls IN THIS SPECIAL REPORT

BY KURT NAGL

Ford Motor Co.’s vision for Michigan Central Station extends far beyond the walls of the historic building in Corktown and goes further than tackling just mobility issues. Since the Dearborn-based automaker announced three years ago its renovation of the train station, expected to total $740 million, the project has taken many different turns. Details are beginning to take shape as the company prepares to welcome employees to the new campus by the end of next year, CEO Jim Farley said during a Detroit Homecoming discussion with event director Mary Kramer. “We really want companies like Google and other software mobility companies to come down there,” Farley said. “We don’t want this to be a Ford facility. In fact, I’d be really happy if only 10 percent of the people there worked at Ford, but I want my good Ford software people down there with those kinds of companies. And we’ll learn a lot from them, and they’ll learn a lot from us. And geez, I can’t think of a place in the country where that’s happening.” Farley, who took the reins at Ford

14 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

 Is a residential pivot the future for downtown Detroit? PAGE 1

 White House COVID rescue czar: Previous crises informed the response this time around. PAGE 20

 WorkingNation CEO: Address worker issues on changing job front. PAGE 24  Co-founder of WealthX picks Detroit for growing new startup. PAGE 49

Ford Motor Co. President and CEO Jim Farley speaks at the Mike Ilitch School of Business at Wayne State University during Detroit Homecoming on Sept. 25. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

in October 2020, is racing other automakers to an electric future that promises to upend the global automotive industry in the coming years. Ford recently committed $30 billion of investment into electrification by 2025. In Detroit, the train station is both symbolic of that future and of a new beginning for Detroit after years of economic hardship.

Farley said Ford’s renovation of Michigan Central is being driven by “Bill Ford’s personal vision.” The impetus for purchasing the station was being “fed up” with the “deterioration porn” of Detroit in the media, he said. “Someone had to step up.” See CORKTOWN on Page 18

 Serial CEO Meg Whitman on re-engaging students after COVID disruption. PAGE 52  PHOTOS: Scenes from the eighth edition of Detroit Homecoming. PAGES 55-56

WATCH HOMECOMING VIDEOS ONLINE  To see a selection of speakers and sessions from Detroit Homecoming, go to detroithomecoming.com.

NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

Comeback’s pulse keeps quickening How many in-person events have you attended this year? We rolled out the red carpet for more than 110 Mary former DetroiKRAMER ters and recent “boomerang” alumni who have returned “home” at the 8th annual Detroit Homecoming late last month. Another 130 attended livestreams of the on-stage programming. Despite requiring proof of vaccinations and face masks indoors, COVID definitely affected the turnout; we had nearly 250 “expats” attend in 2019. But less than 24 hours after our final session, our in-boxes started to fill up with emails from our outof-town guests extolling the intimacy of the gathering and the quality of on-stage programming and off-stage experiences — from riding in the new Mach-E Mustang to Dlectricity in Midtown to the Michigan Opera Theater’s remarkable “BLISS” in the old Michigan Theater. Many told us this was their best experience yet. Oh, and a few mentioned ways they planned to engage, including due diligence on potential investments. “Coming from San Francisco, my wife, Michelle, and I were pleasantly surprised at how far Detroit has come in the five short years since we’ve moved — especially considering how much the pandemic has slowed growth in California,” said David Anderson, a Crain’s 20 in their 20s honoree in 2015 as the founder of co-working space Bamboo in Detroit. “In Detroit, business is booming, construction is everywhere, and the strengthening sense of community is palpable.” Anderson is a founding partner of a Bay-area VC fund and has personally invested in an electric vehicle marketplace called Drive in Detroit. The startup handles financing, delivery, federal rebates, at-home charging, warranty and service and insurance for owners of EVs. Meanwhile, Anderson and his wife are looking for other opportunities to invest personally in small businesses, real estate and high-growth startups. “I’m excited and inspired by all of the expats I met at Homecoming, and I’m already looking forward to next year,” he told me. Detroit’s narrative has certainly changed since Homecoming began See KRAMER on Page 16

Building a Better World, Starting with Detroit Revolutionizing mobilit y isn’t just changing how we get from A to B, it’s also changing A and B for the better. For us, building a better world star ts at home, where it all began. We’re on the ground, creating the future of mobilit y by restoring an icon from its past, the 108-year-old Michigan Central Station as the centerpiece of a new mobilit y innovation district in Corktown. Michigan Central will be a unique ecosystem welcoming a wide variet y of players from communit y groups to cutting-edge star tups to solve mobilit y challenges in a way that benefits ever yone. From here, Detroit’s oldest neighborhood will have a bright new chapter as a state-of-the-ar t mobilit y testing environment, complete with open spaces, retail and public ar t, and that prioritizes accessibilit y, sustainabilit y and walkabilit y—transforming the future of neighborhoods in Michigan and even worldwide. But our groundbreaking work hasn’t stopped there. This initiative comes on the heels of our mission to electrif y icons like the Mustang and F-150 as par t of our commitment to a more eco-friendly future. The success of the award-winning 2021 Mustang Mach-E and 2022 F-150 Lightning (available Spring 2022) are proof that the technological revolution is under way—and so are we. Whether electrif ying icons or restoring them, we are committed to creating a better world where ever yone is free to move and pursue their dreams. Built For America.

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See how we're reshaping the future of global mobility

9/7/21 11:55 AM

KRAMER

From Page 14

in 2014. At that time, the city was in bankruptcy. We asked successful people who hailed from the area to return to re-engage to help the city climb out of its economic distress. This year, the excitement of what’s happening in Detroit — Ford’s investment in Corktown, GM’s investment in Factory Zero, the burgeoning arts scene, more venture capital-backed companies — was indeed palpable. But the sessions on diversity and equity also sparked lively conversation. Ford Motor Co. CEO Jim Farley’s Saturday morning fireside chat definitely impressed many. It had the highest livestream views, too. Farley spoke as passionately about Detroit and the investment in Corktown as he did about the company’s EV future. It was clear he had a competitor in mind, and it wasn’t GM. It is Tesla. Farley said he spent eight months personally courting Doug Field, who was leading Apple’s car project and was also a senior engineer at Tesla. Farley said he is learning that some Silicon Valley talent is rooting for Ford to succeed. I think there were scores of people listening who are rooting, too. In fact, one expat told me he planned to order a Mach-E that following Monday after taking a drive in Corktown as part of the Homecoming activities.

Ford Motor Co. President and CEO Jim Farley (left) talks with Mary Kramer, director of Detroit Homecoming and director of special projects for Crain Communications Inc., at Detroit Homecoming at the Mike Ilitch School of Business. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

Of course, none of Homecoming's experiences would be possible without support of our nonprofit fiduciary, the Downtown Detroit Partnership and grants and support from leading foundations and companies, including DTE Energy Foundation, the Ford Foundation, Ford Motor Co., General Motors Co., Kresge Foundation, Rocket Companies, the W.K. Kellogg Foundation and William Davidson Foundation. Putting the right people in the room with the right mix of speakers and experiences has been key to Homecoming’s success. It was a catalyst for music industry executive Mike Jbara to make four local investments in hospitality and en-

tertainment companies. Jbara, CEO of the United Kingdom-based music technology company, MQA, has attended all previous Homecomings and he was determined to make the eighth. He planned to arrive for the start on Thursday, Sept. 23, but a change in COVID protocols in Europe, a cancellation of a flight to JFK and another flight cancellation of a connecting flight from Atlanta derailed those plans. He got to New York eventually, but was having trouble connecting to Detroit. Finally, he called Amex Travel for help, and an agent found a seat that had materialized because of another traveler’s cancellation. But he had to get from JFK to LaGuardia in 45 minutes. “I might have broken a few traffic laws to

WELCOME HOME Since 2001, the Detroit Sports Commission has attracted hundreds of events to metro Detroit generating millions in economic activity while improving the quality of life for its residents. The DSC is proud to support the 2021 Detroit Homecoming and its celebration of the city. VISIT DETROITSPORTS.ORG

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

get that LGA flight,” he said dryly. Jules Pieri has also attended all eight Homecomings. (2020 was virtual.) Pieri was a co-founder of The Grommet web site that launched thousands of consumer products, including SodaStream, Bombas and FitBit before selling to Ace Hardware and exiting the company. Today, Boston-based Pieri is a lead investing partner of XFactor Ventures, which invests in companies with female founders and mixed-gender teams that have billion-dollar market opportunities. “Once again, Detroit Homecoming overdelivered,” she wrote us on Sunday. “I can’t imagine planning it in the face of a pandemic. The generosity of spirit and the power of the content/ experiences is truly unique in my ‘event’ attendance history. And the part you cannot manufacture is the local friendly welcome, curiosity, humility and capability. The visionary leaders in this town are to be so highly commended — from corporate to nonprofit to community organizers to government. I wish Boston could show 10 percent of what Detroit has in terms of drive and pride.” But she also was scouting for investment prospects and found a couple of promising leads. “That alone was worth the plane flight; I really want to drive our capital to Detroit and having eyes and feet on the ground is essential.” Not all Homecoming “outcomes”

are big investments. Some expats — like Jonathan and Kelly Opdyke — found a nonprofit cause to invest in. In their case, it’s a give to the School at Marygrove for a dental clinic in honor of Jonathan’s parents, who worked together in a dental practice serving east-side Detroiters and the Grosse Pointes. And every Homecoming alum becomes a brand ambassador for Detroit, a role expat Ed Hogikyan takes seriously. “I thought the variety in the talks was great,” the New York-based Hogikyan wrote me. “So many fascinating stories to be shared. The tours I attended were so informative that I wished I was able to attend more of them at the same time. MOT’s production of ‘BLISS’ was absolutely awe-inspiring. I was so incredibly moved by the music, voice, staging, and that magnificent setting. I literally had chills while watching it. How lucky were we to be able to experience such inspired creativity. A true testament to the great work and thinking coming out of ‘the D.’ I leave each Homecoming I’ve been fortunate enough to attend feeling even more proud of my roots. I am a constant ambassador for all things Detroit, and the visit has given me even more to talk about.” Mary Kramer is director of Detroit Homecoming and director of special projects for Crain Communications Inc.

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General Motors proudly supports the tenacity of Detroit. From our history of innovation to the promise of our future, Detroiters know there’s nothing we can’t do, so long as we do it together.

everybody in.

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Together we thrive.

CORKTOWN

“We can’t just walk away from that,” he said. The global microchip shortage, now projected to cost the industry $210 billion in losses, laid bare the industry’s reliance on imported parts. Farley said the problem is only going to get worse with the ramp up of EVs, whose primary components are batteries and silicon. The solution, he said, is government-backed investment in microchip plants in the U.S. and domestic sourcing of lithium and cobalt for batteries — the heart of the next generation vehicle. “So, are we going to import the lithium and cobalt from, you know, nation states that have child labor and all sort of corruption, or are we going to start to get serious about mining in North America,” Farley said. “We have to solve these things, and we don’t have much time.” All the issues tie back to the future of electric vehicles and when they will take over the industry. For most consumers, EVs are too expensive, and that will continue to slow the transformation of the industry, Farley said. “I am deeply worried about the affordability of this move,” he said. “That’s the one that keeps me up at night.”

From Page 14

In addition to previously announced plans to improve green space around the train station, including making Roosevelt Park safer and more accessible, Farley said the project aims to connect the campus to the Detroit riverfront with a green belt and “huge park.” “We’re going to work with the team to connect it to the river,” he said. “We quickly realized, holy cow, the real opportunities are actually the whole space around (the station).” Another key Corktown project for Farley is the $22 million homeless shelter in the works with the Pope Francis Center. Farley said a site has been selected and that the project is “almost funded.” Farley, who regularly volunteers at the Pope Francis Center, said he thinks the model for the new shelter could help solve the issue of homelessness in Detroit. “I think (it) will be America’s most innovative transition center for homeless people,” he said. On the mobility side, plans unveiled in 2020 involving a “connected corridor” on Michigan Avenue between Corktown and Ann Arbor are still very much part of the vision. Farley said the automaker is raising money with “a couple of technology companies” to push the project forward.

Ford purchased the Michigan Central train station in Detroit three years ago. |LARRY PEPLIN FOR CRAIN’S DETROIT BUSINESS

Ford also parted with some of its Corktown land as part of another enormous nearby development: the city of Detroit’s $200 million-plus, 841-unit housing development, Crain’s reported last year. That project won a $30 million federal Choice Neighborhoods grant in May. That plan would include housing for a mix of income levels in Corktown and North Corktown, as well as street and park improvements and a

community empowerment center.

New challenges The connected corridor is symbolic of the major challenges posed by the electrification of the industry, according to the CEO. “Autonomy is taking longer than we thought, but we still have to solve these second order problems, like do we have dedicated infra-

structure for autonomous vehicles, you know, et cetera, et cetera,” Farley said. “I don’t think we should wait for regulators to make up their minds. We have to solve this as companies.” Among those second order problems is the impact of electrification on labor and supply. An EV requires between 20 percent and 30 percent less labor than a traditional ICE-powered vehicle, Farley said.

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

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Sperling: COVID rescue plan shows lessons learned in other crises Gene Sperling has had a front-row seat to the decline of the U.S. automotive industry and more than one economic meltdown. He’s also played instrumental roles in the needed repairs. The Ann Arbor native has held economic advisory roles in the Clinton, Obama and now Biden administrations. He’s been charged on more than one occasion with the federal response to crises that roiled his home state: the 2009 automotive bailout and the 2013 city of Detroit bankruptcy. Now, the economist is serving as a special adviser overseeing the implementation of the $1.9 trillion American Rescue Plan relief package, signed by President Joe Biden in March. Sperling, who was a speaker at this year’s Detroit Homecoming, spoke with Crain’s on his role in the 2008 automotive industry bailout, and what it means in today’s climate. | BY NICK MANES  As a key player in developing the recovery package from the Great Recession, what are the lessons learned there? I will always be proud to have been part of the team for President (Barack) Obama that pushed very hard for saving the automobile industry, and particularly Chrysler. While of course that was the right thing to do for Detroit, more importantly, it was the right thing to do for the future of American manufacturing. The lesson that taught is that when you allow a failure like that, it’s not just about temporary job loss. You kill the supply

chain, the skill set that you need to be competitive in the future, in that area. I think when people look at American manufacturing, they’ll look at consumer electronics, when people sat by and let the industry collapse. And then later, when the smartphone revolution happened, we had no supply chain or capacity to compete with China, and we lost hundreds of thousands, maybe millions of jobs. The counter is, we didn’t let the American automobile industry go under.

20 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

See SPERLING on Page 22

American Rescue Plan special adviser Gene Sperling at Detroit Homecoming at Mike Ilitch School of Business in Detroit . |NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

Explore stories of eight Kresge partners in Detroit and around the country as they work to dismantle structural racism in all its facets through organizing, advocacy, power building and more.

our COMMON PURPOSE 2020 ANNUAL REPORT • RacialJustice.Kresge.org

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SPERLING

THE SPERLING FILE

From Page 20

Name: Gene Sperling

And now, every day, you’re watching an advertisement of a newer, cooler electric car being led by the American automobile industry. The lesson has to be not just that it saved Detroit or saved some jobs, but it laid a foundation for us to be now competitive in what is probably the greatest manufacturing ... opportunity for the future.  How does that lesson parlay into some of what you hope to accomplish with the American Rescue Plan? If you’re thoughtful, you’re always looking back on what went well and what you could have done better. The commitment to the American automobile industry and what that means for the future of jobs (and) competitiveness is an extremely positive lesson. In the Obama recovery plan, the lesson was that it was very effective in getting us out of recession. But it was not big enough or long enough or durable enough to ensure that you could firepower through obstacles to have a stronger recovery for two or three years. So I think the key thing with the American Rescue Plan is that it is designed to be both a crisis response and to also be funding for a more

Born: Dec. 24, 1958, in Ann Arbor Education: B.A., University of Minnesota; J.D., Yale University; Wharton Business School, University of Pennsylvania Current role: Coordinator, American Rescue Plan for the White House

Rip Rapson, president and CEO of the Kresge Foundation, chats with Gene Sperling at Detroit Homecoming. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS

durable, equitable recovery. We’ve already seen the delta variant (of the coronavirus), and there’ll be other things that will come up. I think in the Obama years there was a view that you did what you needed to do for this year, and if you needed more you came back. And (the American Rescue Plan) was ‘Do what you need for a strong two-to-three year recovery and have enough (left) to deal with unforeseen problems.’ So I think the American Rescue Plan does represent some lessons learned.

22 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

 One of the things that we hear is hampering manufacturers today is rising steel prices, in part tied to tariffs that are carried over from the previous administration. Is that something that you think needs to be looked at? What I would say is that there is a lot of consciousness in the White House on the supply chains, and particularly transitory obstacles ... Understanding that some inflation we’re seeing is just transitory and the impact of closing down and restarting the economy.

On some of the trade issues, as the (Biden) administration works through this initial crisis, I think you’ll see more comprehensive strategies ... but also taking very seriously where there are issues with China that have to be worked through and taken very seriously.  From your perspective as an economist, any educated estimates as to when we’ll see some cooling on inflation? We obviously saw progress in the last month. I think the key thing is that we

Previous roles: Served as national economic adviser under Presidents Bill Clinton and Barack Obama, the only person to serve in that role in two administrations. Sperling also founded the Center for Universal Education at the Brookings Institution think tank. He authored the book “What Works in Girls’ Education: Evidence and Policies from the Developing World.”

still believe that what we’re seeing are still transitory things, and that if you take out the things that are due to just kind of the restarting of an economy ... I think a lot of economists, and I think the Federal Reserve, (do) not see longterm issues. It is still our view that the evidence shows that the inflation we are seeing is overwhelmingly due to transitory issues and not long-term trends. Contact: nmanes@crain.com (313) 446-1626; @nickrmanes

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WorkingNation CEO: Address worker issues on changing job front BY SHERRI WELCH

Addressing workforce issues coming as a result of new technologies starts with a larger conversation about the changing job front. That’s according to Art Bilger, founder and CEO of California-based WorkingNation, who spoke at Detroit Homecoming last month. His group is a nonprofit media organization working to educate people about the impact technology is having on unemployment structures and the changing job outlook. Employers can play a role in addressing education gaps by communicating with educational institutions about new technologies that will influence the workforce to ensure needed educational opportunities are put in place, Bilger said during a conversation with Kylee Mitchell Wells, executive director for Southeast Michigan of Ballmer Group, the philanthropic venture of former Microsoft CEO and metro Detroit native Stev en Ballmer. Broad communication to job-seekers and stakeholders including employers, educational institutions, local government and philanthropy about the impact of new and increasing use of technologies is needed to understand opportunities in the job market, Bilger said.

Kylee Mitchell Wells, executive director, Southeast Michigan, Ballmer Group, speaks with WorkingNation Founder and CEO Art Bilger during a Detroit Homecoming session Sept. 25.

from MIT. There are some community colleges trying to scale up certificate programs in those areas, but more are needed, he said. Local employers can help address education gaps by both communicating the emerging needs to educational institutions and through the creation of internships and apprenticeships, not just for younger employees but also for older workers who are looking to shift to new employment, Bilger said.

And educational institutions must then step up with educational options that prepare students for those jobs. “An example I always use is data and analytics...my belief is over the next 10, 15 years, there won’t be an aspect of business, government or not-for-profits that won’t be driven by data and analytics,” Bilger said. Yet, there are not a lot of educational programs focused on that, he said. Those jobs don’t require a doctorate

The motivation behind the innovation. Behind every innovation has been technology. And, behind every advancement in technology has been an engineer who knows they can find a better way. Detroit has always been the home of daring visions, breakthroughs, and seismic shifts that have been felt around the globe. At Urban Science, we’ll never stop championing those efforts and leading the way toward education and opportunities for those who care enough to keep on finding ways to improve our city and our world.

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24 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

Bilger pointed to Ford CEO Jim Farley’s recognition of the impact electrification will have on labor and supply and the need for employers to help solve the workforce challenges associated with it during another Detroit Homecoming conversation. As the former industrial capital of the world and a place of emerging technologies today, Detroit “has the mindset to ... throw themselves into this whole idea” Bilger said.

“The key is the idea … getting that idea spread among those who are the creators of jobs.” As part of its approach, WorkingNation hosts town halls in cities around the country to discuss a dozen or more workforce-related issues, Bilger said. It’s looking at Detroit as a potential site for one of the town halls and looking to engage with Ballmer Group and others on workforce development locally. Ballmer Group has invested in an initiative called Detroit Drives Degrees to help foster conversation and collaboration between community colleges and business to figure out exactly what the needs of employers are, Wells said. It has also made investments in other workforce efforts like Gov. Gretchen Whitmer’s “60 by 30” initiative to increase the number of working-age adults with a skill certificate or college degree in Michigan from 49 percent to 60 percent by 2030. Wells said there are conversations starting about bringing WorkingNation to Detroit and to engage other foundations as they look at hosting a town hall here and other efforts. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch  Detroit Homecoming coverage continues on Page 49.

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The 2021 Michigan CIO of the Year® ORBIE® Awards program honors chief information officers who have demonstrated excellence in technology leadership. Winners in the Global, Large Enterprise, Enterprise, Large Corporate, Corporate, and Healthcare categories will be announced on October 8 at the virtual MichiganCIO ORBIE Awards.

FROM OUR CHAIR

KEYNOTE SPEAKER

LEADERSHIP AWARD

How the global pandemic elevated the CIO’s strategic role. Page S3

Target’s Mike McNamara put a focus on teambuilding in his role as CIO. Page S4

Marcy Klevorn of Ford on giving back and leaving a legacy for the technology community in Michigan. Page S6 SPONSORED CONTENT BY MICHIGAN CIO | S1

CONGRATULATIONS 2021 MICHIGANCIO AWARDS NOMINEES SHOHREH ABEDI

ALAN DOUVILLE

Auto Club Group (AAA)

Stryker

Cooper Standard Automotive

AMJED AL-ZOUBI

TAMARA FABER-DOTY

HANS KEIL

Amerisure Mutual Insurance

MARK BAUGHMAN

Delta Dental of Michigan

CMS Energy and Consumers Energy

BILL FANDRICH

Blue Cross Blue Shield of Michigan

DAVID BEHEN La-Z-Boy

RICH FUSINSKI

H.W. Kaufman Group

SCOTT BENNETT Lear Corporation

SUSAN KAMPE

Beaumont Health

Michigan Medicine

LESLEY SALMON Kellogg Company

MICHAEL KENNEDY

MARCUS SHIPLEY

Gordon Food Service

Trinity Health

ELIZABETH KLEE

University of Michigan Dearborn

CARRIE SHUMAKER

Urban Science

DEE SLATER

DEV GANGULY Jackson National

ANITA KLOPFENSTEIN Little Caesars Enterprises - Ilitch Holdings

JOHN BENNETT Meritor

ANDREW ROSENBERG

Wolverine Worldwide

RYAN SPENCER Yazaki

KELLY GARCIA Domino’s

DOUG BENSINGER

NOAH KOTCH

Credit Acceptance Corporation

BROM STIBITZ

State of Michigan

Viking Group

ASH GOEL

Bronson Healthcare

TYLER BEST

TERRY LEDBETTER Meijer

RON STRACHAN

McLaren Healthcare

Adient

MARVIN GRITTERS

Universal Forest Products

JERRY BETTENS

Michigan First Credit Union

Gentherm

MARK GUTHRIE AM General

LESLEY MA

NSF International

TOM BRES

Sparrow Health System

MATT LOGAR

SHERYL HAISLET Vertiv

SAM MAHALINGHAM Altair

JASON BRESSLER

MICHAEL HICKS

ANNETTE MARCATH

ITC Holdings Corp

RAMAN MEHTA

Visteon Corporation

Ally Financial Services

RICHARD HOOK

Trion Solutions

Penske Corporation

RANDALL MOTT

GREG HOUCK

Howard & Howard

WILLIAM ISAACS

University of Michigan College of Literature, Science and the Arts

Detroit Medical Center

ARIF DAR

ROGER JOHNSON Dart Container

TONY DEAN

JASON JOSEPH

Auto Owners Insurance

Spectrum Health

MELISSA WOO

Michigan State University

BRIAN WOODRING

BETH NIBLOCK

DONALD WRIGHT

CHRIS PODGES

STEVE ZERBY

BILL REX

VIJAY SANKARAN

Munson Healthcare

SpartanNash

DEREK WHITE

General Motors

City of Detroit, MI

CATHLEEN CURLEY

Rock Central

SmithGroup

PATHIK MODY

SPENCER CREMERS

MILOS TOPIC

Grand Valley State University

DANIEL WALTZ

Samaritas

Great Expressions Dental Centers

Epitec

MidMichigan Health

RON HINSLEY

STEVE COLLINS

DARLENE TAYLOR

Health Alliance Plan

Emergent Holdings

Henry Ford Health System

CHARLES CAINE

BorgWarner

DAN WALEKE

United Wholesale Mortgage

PAUL BROWNE

RYAN TALBOTT

Kellogg Company

MIKE ROGERS

Nexteer Automotive

Quicken Loans

American Axle & Manufacturing

Owens Corning

Johnson Controls

MATT SCULLY

AAA Life Insurance

Pandemic Elevates CIO’s Strategic Role in 2021 access to entertainment, food, and products delivered to our homes; and connected us with colleagues, friends and loved ones. Technology has helped us adapt, adjust and survive our new abnormal. Without the leadership, planning and foresight of CIOs, conducting business would be impossible under these circumstances.

2021 CIO CHAIR MAMATHA CHAMARTHI Head of Software Business & Product Management – Global, Americas and Asia, Stellantis

Since last March, Chief Information Officers everywhere have supported the largest work-from-home experiment in the history of the world. Thanks to these innovative technology leaders, most organizations have managed to continue operating through this pandemic disruption. Technology has enabled our new virtual lives; provided

MichiganCIO brings together leading CIOs of Michigan’s largest organizations to help CIOs maximize their leadership effectiveness, create value, reduce risk and share success. Through member-led, noncommercial programs, CIOs build meaningful professional relationships with colleagues facing similar challenges, solving problems and avoiding pitfalls. Throughout this crisis, MichiganCIO members have collaborated locally and nationally with CIOs from across industries. In any gathering of CIOs, the answer is in the room. The challenge one CIO is facing has likely been solved

by another CIO. What was their experience? What did they learn? What would they do differently? How could other CIOs benefit from sharing their experiences?

led programs and interaction. The power of CIOs working together – across public and private business, government, education, healthcare and nonprofit organizations – creates enormous value for everyone.

There is no textbook for how to be a great CIO. The best way to sharpen your leadership acumen is to join a peer leadership network with other leaders working on solving similar challenges. The industries and size may be different, but winning approaches to effective leadership and problem solving are transferrable. Every leader’s perspective is valuable and contributes to the conversation and everyone wins when leaders engage, share ideas, experiences and best practices.

Together, we are transforming our organizations with technology and enriching our region and our world. On behalf of MichiganCIO, congratulations to the nominees and finalists on their accomplishments and thank you to the sponsors, underwriters and staff who make the ORBIE Awards possible.

For over twenty years, InspireCIO has been inspiring CIO success through the annual CIO of the Year ORBIE Awards – but this is just the tip of the iceberg. By joining MichiganCIO, technology executives take their leadership to the next level through year-round, member-

Sincerely, Mamatha Chamarthi 2021 Chair, MichiganCIO Head of Software Business & Product Management – Global, Americas and Asia, Stellantis

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GATHERING LEADERS Leaders of state government, business, nonprofit and other community organizations gathered during the Mackinac Policy Conference last month for a dinner hosted by KC Crain, president and CEO of Crain Communications, David Parent, Michigan Managing Principal, Deloitte, and Sandy Baruah, President and CEO, Detroit Regional Chamber. The dinner featured a one-on-one conversation between Crain and Wright Lassiter III, CEO of Henry Ford Health System; that conversation was part of a series of interviews with metro Detroit business leaders about resiliency and leading through change. Watch the conversation, and others in the series, at crainsdetroit. com/voices-kc-crain. SPONSORED BY

P063_CD_20211004.indd 63

9/28/21 1:19 PM

CRAIN'S LIST | HEALTH INSURERS/MANAGED CARE PLANS Ranked by 2020 Michigan revenue MICHIGAN REVENUE ($000,000) 2020/ 2019

MICH. PERCENT CHANGE

SE MICH. REVENUE ($000,000) 2020/ 2019

MICH. ENROLLED MEMBERS 2020/ 2019

SE MICH. ENROLLED MEMBERS 2020/ 2019

MICH. ENROLLED MEMBERS IN HMO/ DHMO, PLAN

MICH. ENROLLED MEMBERS IN PPO PLAN

MICH. ENROLLED MEMBERS IN POS PLAN

MICH. OTHER MEMBERS

COMPANY ADDRESS PHONE; WEBSITE

TOP LOCAL EXECUTIVE(S)

BLUE CROSS BLUE SHIELD OF MICHIGAN/ BLUE CARE NETWORK

Daniel Loepp president and CEO

$30,100.0

-0.4%

$30,100.0 $30,220.0

4,686,762 4,702,961

1,148,855

3,346,628

191,279

PPO, HMO, HSA-eligible products, Medigap, Medicare Advantage, Medicare Part D, commercial prescription drug plans, dental and vision benefits, Medicaid HMO

PRIORITY HEALTH 1

Michael Jasperson senior vice president, Provider Network Diane Wolfenden vice president, East region

$5,138.8

24.2%

$731.7 $606.5

1,200,000 940,000

300,000 203,000

600,000

HMO/PSO, Medigap, PHIC, Medicare Advantage, Medicare PDP, Medicaid, self-funded

MERIDIAN HEALTH PLAN OF MICHIGAN INC.

Sean Kendall plan president and CEO

$2,248.8

11.0%

NA NA

588,093 519,533

588,093

Medicaid, Medicare, Marketplace

HEALTH ALLIANCE PLAN OF MICHIGAN

Michael Genord 2 president and CEO

$2,072.3

2.8%

NA $1,510.7

402,787 402,324

244,193 232,667

220,507

87,623

11,637

83,020

HMO, PPO, EPO, Medicare, Medicaid, DSNP, MedicareMedicaid dual eligible (MMP), ASO/self-funded, network lease

DELTA DENTAL OF MICHIGAN

Goran Jurkovic president and CEO

$1,708.5

-13.1%

$839.7 $947.6

5,675,924 5,617,595

2,583,776 2,621,574

4,702,367

964,616

Delta Dental Premier, Delta Dental PPO, Delta Dental EPO

MOLINA HEALTHCARE OF MICHIGAN INC.

Christine Surdock president

$1,685.0 3

-0.4%

NA NA

399,622 3 362,421 3

Medicaid, Medicare

MCLAREN HEALTH PLAN INC.

Nancy Jenkins president and CEO

$863.8

1.9%

$863.8 NA

279,997 253,074

52,500 0

18,347

Small Group; Rewards: Platinum, Gold, Silver; Standard: Platinum, Gold, Silver, Bronze; HSA: Bronze ; HRA: Gold - Large Group; POS; HMO; HSA; HDHP ASO; ASO Captive Arrangement

UNITEDHEALTHCARE

Dustin Hinton CEO, UnitedHealthcare Michigan and Wisconsin

$428.5 4

4.4%

NA NA

0 0

UnitedHealthcareChoice, UnitedHealthcareChoice Plus, UnitedHealthcare Options PPO, HRA, HSA, Dental PPO, Dental INO, Dental Select Managed Care, Dental Indemnity, vision, Medicare, Medicaid

AETNA BETTER HEALTH

Beverly Ann Allen president Randy Hyun CEO

$382.5 3

20.3%

NA NA

59,489 3 47,678 3

Aetna Better Health of Michigan and Aetna Better Health Premier Plan

UPPER PENINSULA HEALTH PLAN LLC

Melissa Holmquist CEO

$304.3 3

6.3%

NA NA

53,839 3 48,957 3

Medicaid, Medicare

HUMANA INC.

Ryan Zikeli market VP, employer group sales Kathie Mancini president, East Central Medicare region

$295.5 3

93.2%

NA NA

22,934 3 14,595 3

Medicare, Medicaid

PHYSICIAN HEALTH PLAN

Dennis Reese president

$161.0 3

-9.9%

NA NA

30,508 3 32,987 3

TOTAL HEALTH CARE USA INC. 1 3011 W. Grand Blvd., Suite 1600, Detroit 48202 313-871-2000; thcmi.com

Michael Jasperson SVP, Provider Networks Praveen Thadani president Shannon Wilson VP, state markets

$160.9

-18.4%

NA $197.2

34,784 3 38,942

34,784 38,942

32,687

1,733

364

HMO, POS, HDHP

MICHIGAN COMPLETE HEALTH INC.

Sean Kendall plan president and CEO

$86.7 3

29.4%

NA NA

2,958 3 2,604

NA 2,604

Medicare, Medicaid, HMO

PARAMOUNT CARE OF MICHIGAN

Lori Johnston president

$28.6 3

17.5%

NA NA

2,845 3 2,123 3

Medicare, Medicaid, commercial

600 E. Lafayette Blvd., Detroit 48226 313-225-9000; bcbsm.com

27777 Franklin Road, Suite 1300, Southfield 48034 800-942-0954; priorityhealth.com

1 Campus Martius, Suite 700, Detroit 48226 888-773-2647; mhplan.com

2850 W. Grand Blvd., Detroit 48202 313-872-8100; hap.org

4100 Okemos Road, Okemos 48864 deltadentalmi.com

100 W. Big Beaver Road, Suite 600, Troy 48084 248-925-1700; molinahealthcare.com

G-3245 Beecher Road, Flint 48532 888-327-0671; mclarenhealthplan.org

26957 Northwestern Highway, Suite 400, Southfield 48034 800-842-3585; uhc.com

1333 Gratiot, Suite 400, Detroit 48207 313-465-1519; aetnabetterhealth.com/michigan

853 West Washington St., Marquette 49855 906-225-7500; uphp.com

26600 Telegraph Road, Suite 220, Southfield 48033 800-486-2620; humana.com

1400 E. Michigan Ave., Lansing 48912 517-364-8400; phpmichigan.com

800 Tower Drive, Suite 200, Troy 48098 844-239-7387; michigancompletehealth.com

106 Park Place, Dundee 48131 734-529-7800; paramounthealthcare.com

$30,220.0

$4,137.2

$2,026.0

$2,016.1

$1,966.0

$1,692.5 3

$848.1

$410.4

$318.0 3

$286.3 3

$153.0 3

$178.7 3

$197.2

$67.0

$24.3 3

TYPES OF HEALTH PLANS

Researched by Sonya D. Hill: shill@crain.com | This list of leading Michigan insurers/managed care plans encompasses medical, dental, optical and other health care organizations. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies or the Michigan Department of Insurance and Financial Services. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. NA = not available. Health care plan types include: Exclusive Provider Organization (EPO) - Members must use the EPO provider network exclusively and medical services received outside of the EPO network are not covered except for emergencies. Exclusive Provider Arrangement (EPA) - Similar to an HMO. Members must choose a physician who authorizes referrals and arranges hospital admissions. Point of Service Plan (POS) - Members designate a primary care physician but can go outside the network for services. Administrative Services Only (ASO) - Offered by insurers to self-insured employers. NOTES: 1. Priority Health merger with Total HealthCare completed on Jan. 6, 2020. 2. Succeeded Theresa Kline who retired June 30, 2019. 3. From Department of Insurance and Financial Services. 4. Crain's estimate.

Want the full Excel version of this list — and every list? Become a Data Member: CrainsDetroit.com/data 64 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

GRAND PRIX

From Page 3

City officials supportive The plan appears promising for organizers, though. Denker said he has met with every member of City Council and he is “confident” but “not presumptuous” about getting their approval. Mayor Mike Duggan and City Council President Brenda Jones have voiced support. “I worked downtown when the Grand Prix was in the streets of the city in the 1980s and it was exciting,” Duggan said Wednesday when asked about the race after a news conference. “You had office buildings filled up with people watching those cars, it showed off the city of Detroit in a way that I never felt like the Belle Isle shots did. So I’m encouraged by it and for those who would like to be able to go to Belle Isle earlier in the season and have more space. It also eliminates the problem having to set up and take down the Grand Prix. So I think it’s a very positive idea, and I want to see all the details, but I’m strongly supportive of the direction.” Jones also said in an interview with Crain’s that she’s in favor of the change and would likely vote “yes” when it comes before the lawmaking body for approval. “The community has asked for it to come to the streets” and leave Belle Isle, she said. Jones said she believes the proposal would still allow vehicle and pedestrian flow downtown during race time. The riverfront would be open and a crosswalk would allow people to walk over Jefferson Avenue from the downtown core to Hart Plaza. The Lodge Freeway to Jefferson exit would be closed over the race weekend but other downtown exits would remain open. “I don’t see where it would cause any backup traffic or any problems in downtown Detroit. As a matter of fact, I think it will be helpful to the businesses in downtown Detroit,” she said.

Back to race roots Denker said his blueprint for a downtown race drew inspiration from the inaugural Big Machine Music City Grand Prix held in August in Nashville. The three-day IndyCar race was marketed as a festival tying into Nashville’s food and music scene. It attracted more than 100,000 spectators and generated upward of $20 million for the local economy, according to the Nashville Convention and Visitors Corp. Why not transport that model to the Motor City, Denker said. “There are 260 businesses within a 15-minute walk from the Ren Cen,” he said. “We don’t touch those down on Belle Isle.” The proposed new track is also inspired by the race’s roots. The Grand Prix started on the streets of downtown Detroit, where it took place from 1982 to 1991 before moving to Belle Isle. The race was discontinued in 2001 but revived in 2007 by Roger Penske, the founder and chairman of Penske Corp., which owns IndyCar. The Grand Prix was mothballed again 2009-11 around the Great Recession but brought back as an annual event in 2012. Organizers have said the event is a money-losing labor of love. The purpose is to shine a spotlight on Detroit and the Penske brand, Denker said. “It’s not profitable now,” he said. “I’d like it to be closer to it. That’s not our goal.” Ticket sales make up just 15 percent-20 percent of event revenue. The rest comes from sponsors, mainly title

REDEFINING

The Detroit Grand Prix on Belle Isle. | DETROIT GRAND PRIX

sponsor Chevrolet and presenting sponsor Lear Corp.

Downtown plan Denker hopes his pitch for a downtown event is received warmly. He said the environmental impact would be minimal, as racecar drivers would be using E85 ethanol fuel and emitting less CO2 than regular vehicles. Set-up and tear-down time would be similar to the Belle Isle race, which is around two months. Denker said crews would be working to set up concrete barriers and fencing 8 p.m.-5 a.m. to minimize impact on traffic. Hosting the race downtown in 2023 would give organizers time to make necessary road repairs to the envisioned 1.7-mile track (Belle Isle’s track is 2.3 miles). Denker said the scope of repairs is unclear, but they would not be as extensive as one might imagine. A major plus is that the city of Detroit recently repaved a part of Jefferson. “Further on Jefferson Avenue, it’ll require some patching and paving here and there, but it’s actually not bad, believe it or not,” he said. More than 50 percent of the racing circuit would be visible to the public along the Detroit riverfront and Jefferson, Denker said. The only area requiring a ticket purchase would be the pit lane on Atwater, where grandstands and chalets would be erected on GM parking lots by the Renaissance Center. The new downtown plan also has Roger Penske’s blessing. “We are excited about the potential opportunity to bring the Grand Prix back to its roots in downtown Detroit. We have seen the excitement, the energy and the positive impact that downtown street races make in a city,” Penske said in an emailed statement.

‘Double-edge thing’ Ron Olson, chief of parks and recreation for the state Department of Natural Resources, which manages the Belle Isle Park, said that the race leaving the island would be a benefit to parkgoers but potentially a blow to the park without funds raised from the event. He said he’s in talks with organizers to potentially continue philanthropic support for the park even if the race leaves. “It’s a double-edge thing,” Olson said. “Part of it is there are people that would prefer the Grand Prix not be there because it does have an impact. From our end of it, they’ve been good partners and they’ve helped Belle Isle.” Race organizers’ agreement with the DNR to host the race on the island ran through 2021, with an option to extend through 2023. Because the race was canceled in 2020 due to the COVID-19 pandemic, it was entitled to one additional year on top of that, Olson said. In 2018, the annual event fee was increased from $200,000 to $325,000, and the Grand Prix was required to make an additional $125,000 annual investment in the park. Additionally, it was re-

quired to reduce the set-up and teardown time by 25 days to 59 days. Organizers have long argued that the race is more of a boon for Belle Isle than a hindrance, pointing to the $13.5 million organizers have invested there since 2007 and the $5 million it has raised for charity. Michele Hodges, president and CEO of the nonprofit Belle Isle Conservancy, said Grand Prix officials “have been great stewards of Belle Isle, and I don’t expect that to stop.” The Grand Prix has been an important funder of the Belle Isle Conservancy’s work in recent years, contributing $400,000 to $1.1 million per year, beyond fees paid to the DNR, she said. Still, the conservancy, which is operating on a $2 million budget this year, expected the Grand Prix wouldn’t be on the island forever, “and therefore, we committed to a development plan that would allow us to wean ourselves from that funding,” Hodges said. — Crain’s Detroit Business reporters Sherri Welch and Annalise Frank contributed to this report.

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COLLEGE OF BUSINESS OCTOBER 4, 2021 | CRAIN’S DETROIT BUSINESS | 65

PEOPLE ON THE MOVE

Advertising Section

To place your listing, visit www.crainsdetroit.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com ENGINEERING / DESIGN

ENGINEERING / DESIGN

REAL ESTATE

Spalding DeDecker

Colliers International

Spalding DeDecker (SD), a leading civil engineering, planning, and surveying firm, hires John Fortunato as Sr. Project Manager to help geographically expand SD’s Construction Engineering service area and add bridge inspection services. John has more than 23 years of experience in the construction of local, state, and federally funded projects. Mr. Fortunato will lead our west and mid-Michigan construction engineering efforts and will assist in pursuing additional MDOT work.

Spalding DeDecker (SD), a leading civil engineering, planning, and surveying firm, hires Keith Simons, PE, PTOE as Senior Project Manager. Keith is a licensed Professional Engineer and a certified Professional Traffic Operations Engineer. With more than 20 years of experience, Keith will help expand SD’s transportation department, serve as a Senior Project Manager focused on Michigan Department of Transportation (MDOT) business, and lead SD’s Lansing Regional Office.

Colliers International is pleased to welcome industry veteran, John Salsberry, as an Executive Vice President. John has been advising occupiers of real estate since 1992 and has to date, completed over $1 billion of transactions in 46 States and over 40 countries. John is an active member of SIOR (Society of Industrial and Office Realtors) and was named to Midwest Real Estate News’ Hall of Fame in 2019.

ENGINEERING / DESIGN

Spalding DeDecker Spalding DeDecker (SD), a leading civil engineering, planning, and surveying firm, hires Daniel Jackson, PS as Senior Project Manager. Dan is a licensed surveyor in Michigan, Ohio, and Louisiana and has more than 30 years of experience. He has a wealth of experience in construction staking, boundary, topographic, and ALTA/NSPS surveys, and oil and gas pipeline surveys. Dan’s primary focus will be client development in the construction industry. Daniel will help expand SD’s survey market reach.

ENGINEERING / DESIGN

Spalding DeDecker Spalding DeDecker, a leading civil engineering, planning, and surveying firm, hires Cassi Meitl, AICP, PMP as Sr. Planner to help expand their Urban Planning services. With her experience working for the City of Detroit, she will help guide developers, community development groups, and nonprofits in navigating a project through Detroit with assistance in zoning and policy, master planning, site selection and planning due diligence, entitlements and approvals, and community engagement.

SHARE YOUR COMPANY’S JOURNEY Feature your latest milestones, launches, partnerships, awards and more in Crain’s

FINANCIAL SERVICES

Hilco Global Jesse Glossinger joins Hilco Performance Solutions (an operating unit of Hilco Global) as Director on its advisory team in the rapidly expanding offices in Metropolitan Detroit. A 15-year veteran of The Ford Motor Company, Mr. Glossinger will leverage his considerable experience in corporate finance, strategy, and finance within the automotive and commercial industrial sector to help expand Hilco’s current performance solutions strategic advisory practice within this critical midwestern market.

66 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

INSURANCE & BROKERAGE

Mapes Insurance Agency Mapes Insurance, a full-service insurance agency with expertise in surety bonds, announced today the hire of Dan Cusenza as Surety Practice Leader. In this newly developed role, Dan will coordinate the bond service team at Mapes Insurance, providing primary support for Mape’s bond clients. Dan brings over 10 years of experience overseeing the bond department for one of the largest bond agencies in Michigan.

PROPOSAL S

From Page 3

Mallett argues the initiative would make City Council “irrelevant,” giving residents the power over the city’s spending. “I think we are going to have a discussion with Detroit voters about (Proposal) S. We don’t want people to be uninformed about something that is as consequential as removing from the budgetary process the Legislature, who, that is their job, right?” he said. “The way I read it is, yeah, we’re going to make spending decisions based on initiative, that is, by the popular will, as opposed to the legislative responsibility to study the issue, weight the consequences, do a cost-benefits analysis and make a public decision.” Perkins said this is yet another an example of Duggan’s administration creating confusion, misinformation and a “boogeyman” to fight when it disagrees with a proposal. He referenced this summer’s push by the Detroit Charter Revision Commission to get sweeping changes made to the city’s governing document. Duggan’s administration also opposed that effort that would have cost the city money. Duggan supporters launched a campaign against it, and Proposal P was defeated at the ballot in August. “We should be treading very lightly in trying to stop something like this in a city that is so overwhelmingly African American,” Perkins said, arguing that if the mayor can ask for more money for his agenda through referendum — like when Duggan’s $250 million blight removal initiative Proposal N appeared on the ballot — residents should be able to do it, too. Peter Ruddell, a longtime policy and elections adviser, told Crain’s that he has never seen a local effort on a city ballot to try to let residents make monetary appropriations themselves through ballot initiatives. It’s a move toward more direct democracy, he said. There are also questions as to whether Proposal S violates state law, said Ruddell, a partner at Detroit-based Honigman LLP. The ballot initiative would allow Detroiters to vote in ordinances that appropriate funds City Council must spend, but they wouldn’t be able to change the city’s budget itself. Perkins has said that distinction is there to make sure Proposal S complies with state rules. But Ruddell said the implementation of the initiative would still be murky. He questions whether the mayor would still retain line-item veto power for all monetary appropriations, as is required under Michigan’s Home Rule City Act. Normally, the mayor cannot take action against a voter-initiated ordinance, so what would happen here, and what would City Council’s role be?, he asked. Detroit also can’t run a deficit, so if a future proposal put Detroit’s spending over its annual revenue, that’s a problem that would need solving.

Legal battle

For more information, contact Debora Stein at dstein@crain.com or submit directly to CRAINSDETROIT.COM/COTM

Proposal S almost didn’t get on the ballot in the first place: It’s there by a judge’s order. The Detroit Election Commission on Aug. 18 ruled the People’s Voice’s referendum petition legally deficient and took six days to notify Perkins, despite the fact that his group had properly submitted signatures, according to Perkins and documents he sent to Crain’s. So he sued the commission and City Clerk Janice Winfrey on Aug. 27, seeking reinstatement on the ballot. The commission argued that Proposal S’s

Ruddell

McCampbell

language would be unclear to voters and that the People’s Voice didn’t have all its documentation in order, according to the lawsuit and the defense’s response. The two sides also differed on whether it was too late to change the ballot. Perkins argues the Detroit Election Commission wrongly denied the ballot initiative, delayed the process and lied about the validity of petition documents in court in order to keep it off the ballot. “They don’t want people to vote on certain things. They want to determine what you have a right to vote on,” he said. On Sept. 10, Wayne County Circuit Court Chief Judge Timothy Kenny ruled in favor of Perkins and the People’s Voice, restoring Proposal S to the ballot. But the legal battle isn’t over — Perkins plans to file a motion for sanctions over the denial and delays. Calls to Detroit’s elections department media line were not answered.

Reparations considered At the center of Proposal S and Proposal R is whether Detroit will act on the long-standing question of reparations — or government restitution for historic injustices against African Americans. Evanston, Ill., is the first city in the United States so far to fund reparations, and plans to give up to $25,000 toward housing for eligible residents, according to ABC News. It is in an attempt to acknowledge harm “caused to African-American/Black Evanston residents due to discriminatory housing policies and practices and inaction on the part of the City from 1919-1969,” the city of Evanston says on its website. In Detroit, reparations are under discussion. However, they’re still far from being implemented. Sheffield’s reparations proposal would, as worded on the ballot, “establish a Reparations Task Force to make recommendations for housing and economic development programs that address historical discrimination against the Black community in Detroit.” Sheffield did not respond to a request for comment on her stance on Proposal S. “... On Proposal S in relation to reparations, I think, we have a democracy and at this point voters should have the ability to vote on appropriating funds,” said Denzel McCampbell, a candidate for Detroit City Clerk and former Detroit Charter Revision commissioner. “I think that is something that is key, on various issues, not just reparations. If you think about affordable housing, transportation.” The clerk candidate also drew a connection to Proposal P. “When I think about why (Proposal S) came about, and (Proposal P), I think it shows there’s a gap in what voters want in the city and what they’re seeing from their elected officials,” McCampbell said. “As I talk to people, time and time again, they’re frustrated in the lack of progress they’re seeing and this could be a way, they’re saying, ‘We need a route where our voices will be heard.’” Contact: afrank@crain.com; (313) 446-0416; @annalise_frank

DOWNTOWN

From Page 1

11,000 units. Cleveland has 300,000 fewer residents than Detroit within its limits but about 12,400 units in its downtown — nearly three times as many as Detroit, with another 1,000 or so in the hopper. Baltimore has 100,000 fewer residents but more than 15,000 units in its central business district. “Our downtown doesn’t have a whole lot,” said Kevin Dillon, a multifamily market expert who is senior managing director on the Great Lakes Investment Sales Team for Berkadia. He also noted that Detroit is geographically larger than those other cities in terms of size, which the exception of Columbus, so its apartment market is more spread out. “Corktown doesn’t have a whole lot. Midtown has some. Go to the waterfront and the Villages and there’s plenty.” The proposal would be eligible for turning an office building that is at least 25 years old into residential, institutional, hotel or mixed-use space. If it’s a residential redevelopment, it would require that 20 percent of the units be for affordable housing, a fraught subject in Detroit. Housing designated “affordable” is measured based on Area Median Income, a federally designated metric that factors in the household incomes in Detroit’s suburbs, which skew that figure higher for Detroit than it would be if the figure included only the city. The AMI for the region (and Detroit) is $64,000 for a two-person household and $80,000 for a four-person household. The legislation, S. 2511, was referred to the Senate Finance Com-

Downtown Detroit’s commercial properties are estimated to have a value of $4.4 billion. | BLOOMBERG

“I think what Debbie Stabenow is doing, really initiated by the Gilbert group, as far as national legisla-tion to provide tax incentives to convert office space to residential is getting momentum from cities across the country.” The local office of New York Citybased brokerage house Newmark Knight Frank says that there is 14.9 “I THINK WE ARE HEADING FOR SOME million square feet ARMAGEDDON MOMENTS ON THE of office space downtown, and 14.7 OFFICE SIDE WITH MORE VACANCY TO percent of that is vaCONTEND WITH,.” cant. Tenants have vacated some 61,000 — AJ Weiner, managing director in square feet during the Royal Oak office ,JLL the second quarter mittee after being introduced in July and nearly 120,000 square feet has by U.S. Sens. Debbie Stabenow and been abandoned this year so far. The legislation also has the supGary Peters, both Democrats. “The office space issue is going to be port of Dan Gilbert’s team. a national question, because I think we “Bedrock is in strong support of can all speculate on what the future is the proposed Revitalizing Downgoing to be, but I would not be at all towns Act,” Kofi Bonner, CEO of Gilsurprised if across the country, people bert’s Bedrock LLC real estate comaren’t using two-thirds or three quar- pany, said in a statement. “Shifting ters of the office space they used be- work patterns are a reality and we fore. …” Duggan said in an interview believe it’s incredibly important to provide downtown property owners with Crain’s last month.

SHORTAGE

From Page 8

Even if all 134,068 on unemployment last month rejoined the labor force, and assuming their skills matched the needs of employers, they couldn’t even fill all the jobs available in metro Detroit and metro Grand Rapids, according to the state data. But Matthew Piszczek, a professor of management at Wayne State University, warns that many of those that left the labor force may not return even without benefits. “Due to care demands, whether that’s the elderly or children, created by COVID a lot of people have stepped out of the labor force and we just don’t know whether they will return even if COVID winds down,” Piszczek said. “If their job was low paying and not all that satisfying, they may have found a way to live without returning. COVID really

shook up people’s priorities and we can’t discount that impact on the labor force.” But even if those who dropped out return, they are unlikely to make a dent in jobs demand. “Labor supply is down, labor demand is up ...,” Ehrlich said. U.S. job postings were up 43.6 percent on Sept. 24 compared to before the pandemic on Feb. 1, 2020, during an economic boon for the country, according to jobs board Indeed. On July 31, there were 10.9 million job openings in the U.S., a record high, according to the U.S. Bureau of Labor Economics. Meanwhile, there were only 8.7 million unemployed. We simply have more jobs than people in the U.S. and Michigan. The result is an empowered labor force — one that seeks all the accoutrements of a quality job like work-life balance, flexibility, higher pay and a positive culture.

across the U.S. the flexibility to adapt to the marketplace as the future of work unfolds. Over Bedrock’s 10-year history, we have invested extensively in studying and executing proven strategies for the growth of our cities, and we believe the proposed legislation would be a vital tool for continuing that momentum.” However, when asked if Bedrock would take advantage of the legislation if it is enacted, a spokesperson said the company currently has no plans to make office-to-residential conversions. According to the DDP’s annual report from last year, there are roughly 4,500 residential units in the downtown core, with a 16.1 percent vacancy rate and monthly asking rent of $1,531. Its population continues to grow, rising from just over 5,000 in 2011 to 7,150 in 2019, an increase of about 43 percent. Downtown’s commercial properties are estimated to have a value of $4.4 billion. Whether it’s economically viable to turn an office building into residential depends on the circumstancEmployers are working on higher pay. According to the NFIB survey, 77 percent of respondents have increased wages in recent months. But money can’t solve all problems. “People want out of relationships they don’t value,” Piszczek said. “Workers have all the power and are leaving jobs that have poor working conditions, unpredictable schedules and inconsistent hours. A complete redesign of work is happening whether employers like it or not.” So executives must do a little soul-searching as the labor shortage continues to squeeze profits. They must reevaluate working conditions and benefits. Determine what is possible within the confines of their budgets to maintain a workforce. After all, the good workers are out there, if you can catch them. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

es, Dillon said, estimating that those conversions can cost $150 to the “high $100s” per square foot. “It’s not necessarily cost effective to renovate an office building in an adaptive reuse manner bringing it to multifamily, especially if you have a vibrant office market,” Dillon said. “But if you have a high vacancy market, it may be cost effective to do that in an effort to regenerate the market.” And some argue that reducing regulatory and bureaucratic hurdles to development is far more effective than tax incentives. “No developer’s sitting there thinking, ‘Man, I’d really love to do an adaptive reuse on that empty office building downtown but what’s standing in my way is that my federal taxes are 20 percent too high,’” said John Mozena, a critic of public subsidies for development who is president of the Center for Economic Accountability. “Sure, more free money from the government might kick a few projects loose, but what’s actually stopping developers from repurposing existing properties like this are all the barriers thrown up by the gauntlet of government agencies and

boards that make these projects so expensive, risky and complicated. Anyone who’s ever been involved in trying to build anything new, different or unusual in a city knows firsthand how many barriers there are in place that can kill even the best ideas.” Bedrock and others have pulled off office-to-residential conversions in recent years. For example, the former Detroit Free Press building on Lafayette was turned into apartments and retail and the David Stott Building in the Capitol Park neighborhood was converted into apartments. Developer Mike Ferlito likewise turned the former Lawyers Building on Cadillac Square into apartments, as well, and Detroit-based developer The Roxbury Group converted the building formerly called the Hammer and Nail into apartments in what is now called The Plaza in Midtown. It’s not just residential uses that have taken the place of office in recent years. The Roxbury Group also turned the former Metropolitan Building into a new hotel in addition to the David Whitney Building on Grand Circus Park, which is now a hotel and apartments. Bedrock is also in the process of turning the Book Tower and Book Building into apartments and a hotel/apartment concept, plus retail and other uses. The former Detroit Police Department headquarters on Beaubien has been envisioned as hotel space. Also of note is that the legislation isn’t specifically limited to downtown redevelopments but could also be used to convert old office properties in the suburban locations into new uses. “That’s the kind of thing that would be an important game changer for us because we have to start whittling away the size of the office market,” said AJ Weiner, managing director in the Royal Oak office of Chicago-based brokerage firm JLL. “I think we are heading for some Armageddon moments on the office side with more vacancy to contend with,” Weiner said. “Suburban Detroit has yet to feel the full weight of the contraction that’s going to occur as a result of COVID. Heading into COVID as a regional office market, we were already overbuilt, that was already a challenge. We have an overbuilt market, and we have to find a way to collectively right-size it.” Crain’s reporter Annalise Frank contributed to this story. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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Lake Huron

The Great Lakes Way A 160-mile water and land trail system stretching from Port Huron to Toledo is envisioned to expand public access to the waterfront and highlight historical and cultural attractions along the route, a handful of which are highlighted here. Greenway route Blueway route

HURON-CLINTON METROPARKS

Greenway connection Blueway connection

St. Clair Flats

Lake St. Clair Belle Isle Historic Fort Wayne

DETROIT RECREATION DEPARTMENT

MICHIGAN DEPT. OF NATURAL RESOURCES

Lake St. Clair Metropark

Lake Erie SOURCE: COMMUNITY FOUNDATION FOR SOUTHEAST MICHIGAN

GREAT LAKES

“IT’S ALMOST LIKE WE SHOULD HAVE THOUGHT OF THIS BEFORE. THE BLUEWAYS ARE ALREADY THERE, AND SOME OF THE GREENWAYS ARE. BUT WHAT WE’RE DOING IS BRINGING MICHIGANDERS TO THE WATER.”

From Page 3

“It’s almost like we should have thought of this before,” Community Foundation President Mariam Noland said. “The blueways are already there, and some of the greenways are. But what we’re doing is bringing Michiganders to the water.” Gaining a national designation can be a very powerful economic driver, Noland said. With technical assistance from the Rivers, Trails and Conservation Assistance Program of the National Park Service, “we’re ready to really move aggressively on this,” she said. The Eastern Seaboard of the country has the Appalachian Trail, the Western Seaboard the Pacific Crest Trail and the Rocky Mountains the Continental Divide Trail. But the long stretch of freshwater blueways and greenways along Michigan’s eastern shores is very unique, Noland said. “You can’t get this anywhere else in the world, and it’s worthy of national designation,” she said. The Great Lakes Way builds on the Community Foundation’s work over the past 20 years to create a connected, regional network of greenway trails. Its investment of $33 million in foundation and private contributions has leveraged $125 million in public funding to establish more than 100 miles of greenways connecting more than 80 communities across Southeast Michigan. Its focus on the water came after it funded two books in 2019. One, “The Heart of the Lakes” written by Dave Dempsey, looked at the history and future role of fresh water in Southeast Michigan. The other, “Waterfront Porch: Reclaiming Detroit’s Industrial Waterfront as a Gathering Place For

— Mariam Noland, president, Community Foundation

All” by Hartig, examines the history of reclaiming and redeveloping the riverfront in Detroit. Both books called for the creation of a Great Lakes Way, Noland said. Last year, CFSEM convened an advisory committee of leaders from public, private and nonprofit organizations with an interest in the water. After a preliminary look at the assets along the area it’s calling the Great Lakes Way and existing blueway and greenway connections, it affirmed that recommendation, she said. Hartig, a visiting scholar at the Great Lakes Institute for Environmental Research at the University of Windsor and the longtime head of the Detroit International Wildlife Refuge, chairs the advisory group and is leading the Great Lakes Way initiative with Tom Woiwode, director of the Greenways Initiative at CFSEM, and newly hired project director Dana Hart. Hartig, a river navigator for the American Heritage River Initiative in the late 1990s and early 2000s, has worked on many Great Lakes projects between the U.S. and Canada over the past 40 years focused on the Detroit River, Rouge River, Cuyahoga River in Cleveland, Hamilton Harbor in Ontario and the Niagara River that runs between Ontario and New York.

Riverfront as a model Most people in the region are still disconnected from the water resourc-

68 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

es right in their backyard, Hartig said, pointing to the industrial and brownfield properties along the waterfront in the downriver area. “We want to have places (people) can come interact with these water resources,” he said. Detroit’s riverfront is a model for the Great Lakes Way, said Hartig, who serves on the board of the Detroit Riverfront Conservancy, which has spent nearly 20 years developing the riverwalk and ancillary properties along a 5.5-mile stretch of the Detroit River, from Gabriel Richard Park near Belle Isle to Riverside Park, west of the Ambassador Bridge. The Detroit Riverfront Conservancy leveraged more than $1 billion in additional economic investment from its own investment of $140 million during the first 10 years of development of the riverfront, Hartig said. Its efforts are attracting millions of people to the waterfront. “If you could expand that to the north to Port Huron and to the south to Toledo, that’s what we’re looking for,” he said. The Community Foundation recently obtained trademark protection for the Great Lakes Way and has begun work to brand the name and a website. It’s also beginning outreach to communities along the route to share what already exists and what they can do to help get people engaged and raise visibility, Noland said. “We’re not asking them to give

money ... it’s really trying to help them understand the power of what they’ve got and the power of 160 miles and what it means to individuals and their communities,” she said. At the same time, the foundation is reaching out to interested groups including the Detroit Riverfront Conservancy, Southeast Michigan Council of Governments and a long list of others to engage them in the work. It’s also developing plans for town hall conversations in communities, starting in St. Clair County, possibly as soon as this fall, Hartig said. Through it all, the initiative will work to build a case for why the Great Lakes Way is so important to Michigan and the country and to figure out how to connect people, communities and assets along its path, Noland said.

Spurring development The Great Lakes Way includes one of the largest freshwater deltas in the world, the St. Clair Flats; important bird habitats as designated by the National Audubon Society; the only international heritage river system in the world (the Detroit River); and North America’s only international wildlife refuge and an internationally renowned sport fishery that attracts tournaments offering $500,000-$1.5 million in prize money. Other historic and cultural attractions along the way include the Underground Railroad, Historic Fort Wayne, River Raisin National Battlefield Park and MotorCities National Heritage Area sites. There is significant potential for spurring economic development with increased public access to all of those things, Hartig said. In Trenton, within a couple years of the wildlife refuge visitor center opening, a tavern, Wild Birds Unlimited store, coffee shop and restaurant

U.S. FISH AND WILDLIFE SERVICE

Detroit River International Wildlife Refuge

MICHIGAN DEPARTMENT OF NATURAL RESOURCES

Windsor

opened in the surrounding area, Hartig said. The Great Lakes Way could attract new bed and breakfasts, coffee shops, restaurants, retail and kayak liveries. It will increase tourism and connect the next generation, many living in urban areas, to the water and land, he said. “If you reconnect people to water and give them a compelling experience, a sense of place, that can lead to a stewardship ethic,” Hartig said. “We need the next generation to have a stewardship ethic for water and land. If they don’t, they’re going to make the same mistakes we made in our generation.” As it works to engage the communities along the Great Lakes Way, the Community Foundation is working with the University of Michigan’s Detroit River Story Lab to develop and share historical, cultural and ecological stories from the area as well as with UM’s Taubman College of Architecture and Urban Planning and its look at sustainable redevelopment of a 10-12-mile stretch of the Detroit River and how people can better connect to it as part of a semester-long team project. As part of its early efforts, the initiative will also begin promoting the 156 miles of marked water trails, telling visitors where they can put in and take out their kayaks to provide safe passage, Noland said. Going forward, it will work with rural and underserved communities to pursue funding for projects needed to improve or expand access and fill gaps in the Great Lakes Way, Hartig said. “We want to be welcoming to all, and we want benefits to all,” he said. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch

Michigan energy officials dispute rates uncompetitive BY CHAD LIVENGOOD

An insinuation by Ford Motor Co. CEO Jim Farley that Michigan’s industrial electric utility rates are uncompetitive with other states sparked some pushback from the state’s energy sector last week. Ford’s rollout of its plans to build a new electric pickup truck assembly plant and a new battery plant in western Tennessee along with two new EV battery plants in central Kentucky came with a list of reasons why one of Michigan’s nameplate automakers is headed south. Chief among them were electricity rates, setting off cursory comparisons of the average price of electricity for industrial users in Michigan (8 cents per kilowatt hour) compared to the 5.85 cents average that Tennessee manufacturers pay and the 6.06 cents per kilowatt-hour that it costs to run a factory in Kentucky, U.S. Energy Information Administration said. “It was a very thorough, arduous process with things that we never considered before like energy costs,” Farley told The Detroit News. The thoroughness of Ford’s site search, however, didn’t include its home state. A Ford company spokesman acknowledged last week that the Dearborn-based automaker didn’t even consider Michigan due to the lack of a shovel-ready megasite to accommodate the massive factories Ford intends to build south of the Ohio River. “If Ford had picked a site in Michigan, we would have certainly deliv-

FORD

From Page 1

part of Whitmer’s broad MI New Economy initiative before Ford shocked the governor’s office, lawmakers and suppliers like DTE in deciding to build two gigantic electric vehicle and battery plant campuses on large sites already groomed for speedy development in western Tennessee and central Kentucky. Both southern states have reportedly spent millions of dollars prepping a 3,600-acre tract of land one hour northeast of Memphis and a 1,500-acre site south of Louisville, Ky., for fast construction of large industrial facilities. Michigan economic planners acknowledged last week that Ford’s home state has almost no similar shovel-ready sites to market to automakers looking to make a big bet on electrification of vehicles. “We don’t have 2,000-acre sites sitting around,” said Maureen Donohue Krauss, CEO of the Detroit Regional Partnership, the 11-county economic development organization. Despite having vast tracts of farmland along interstate highways that connect to international crossings in Port Huron and Detroit, the state has lacked a policy initiative for buying the development rights of contiguous tracts of land that can be marketed for new vehicle or battery assembly plants, said John Walsh, CEO of the Michigan Manufacturers Association. “We have not focused a lot on that,” said Walsh, a former GOP state

Industrial electricity prices Michigan’s statewide average price of electricity for industrial users in July was eight cents per kilowatt hour, only slightly lower than Wisconsin (8.29 cents) and Minnesota (8.77 cents) in the Great Lakes region. Ohio (6.63 cents), Kentucky (6.06 cents) and Tennessee (5.85 cents) have lower average rates for industrial users. Michigan energy industry officials note utility companies can offer rates below the statewide average for large-volume industrial users with lower fixed cost of service. 5.9 or less 6.0 to 6.9 7.0 to 7.9 8.0 to 8.9 9.0 or higher

SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION JULY 2021 REPORT

ered a very competitive proposal,” DTE Energy Co. CEO Jerry Norcia told Crain’s. “We have the ability to do that with projects like this that are very large energy users. We can get extremely competitive with our rates. ... But we never got to the table to have the detailed discussion because they weren’t set on a site in Michigan.” Michigan utility regulators, analysts and executives contend the average industrial rates for electricity

legislator and budget director under former Gov. Rick Snyder. “There are regional efforts, there are local efforts, but not even on a scale half of what they’ve done in Kentucky and Tennessee.” While acknowledging Ford’s decision to pass up its home state may have been “site specific,” Whitmer said Ford didn’t give Michigan a “real opportunity” to make a bid for one or both of the projects. Ford spokesman Martin Günsberg said the Dearborn-based automaker’s site selection factors included the amount of land needed in proximity to highways and railways that was “shovel ready.” “Michigan did not have the type of sites needed for this project, so they were not part of the formal bid process,” Günsberg told Crain’s. Whitmer’s new MEDC chief, Quentin Messer Jr., tried to downplay Michigan’s inability to compete for the 11,000 new jobs Ford and SK Innovation intend to create between the two southern states. “Sure, we would love to have all of Ford’s investments in Michigan, but this is only one announcement,” Messer told reporters. “Ford remains a vital part of the Michigan business community.”

‘Not ready for business’ Krauss said the Detroit Regional Partnership is working on creating its own catalogue of 200 build-ready sites for industrial use of 5 acres or more within its region, which extends north to Shiawassee, Genesee, Lapeer and St. Clair counties and south to Lenawee and Monroe

by state don’t tell the whole story. “Those are kind of meaningless (numbers) when you’re comparing across states because it doesn’t tell you what an individual customer type is paying,” said Julie Metty Bennett, CEO of Public Sector Consultants, a Lansing-based consulting firm whose clients DTE Energy and Consumers Energy Co. “We really need to get more granular about benchmarking more customer types to really have an intelligent conversa-

tion about whether or not our rates are competitive because the average is just an average.” Ford said last week that the two new manufacturing complexes in Kentucky and Tennessee would use a combined 86 gigawatt hours annually in electricity — roughly the electricity used to power 17 million homes. DTE and other utilities can charge a lower rate for a high-volume industrial users such as a battery plant because the cost of service is lower due to the large volume of electricity, Norcia said. “So you’re going to be way below that 8-cent (per kilowatt hour) number on a deal like this,” he said. “And that’s what we would have put on the table.” Following a change in state energy law seven years ago, Michigan’s electricity rates are based on cost of service for each class of users — residential, commercial and industrial. That law change sought to end a long-standing practice of offering socalled “economic development” rates to lure new companies to Michigan with lower electricity prices than their competitors might be paying. But as a result of the law change, the Michigan Public Service Commission is limited to authorizing special contracts for big industrial users who could show that their departure from a utility’s customer base would be harmful for the rest of the customers, MPSC Chairman Dan Scripps said. “It really restrained our ability to give special economic development

The Marshall Area Economic Development Alliance has a 1,600-acre tract of farm land near the I-69 and I-94 interchange in Calhoun County that has been marketing for a decade for a new large-scale industrial development. | MICHIGAN ECONOMIC DEVELOPMENT CORP

counties along the Ohio border. The sites will be classified as Verified Industrial Properties or VIP, Krauss said. But Krauss cautioned that such a list of properties can’t be assembled overnight. Piecing together a 1,000-plus acre site often takes years to secure options to purchase multiple parcels of land, Krauss said. “No one wants to have to come in and negotiate with 40 property owners,” Krauss said. “Our goal would be to have three to five of those (megasites) in the Detroit region in the next few years.” Jackson-based Consumers Energy maintains a catalogue of “ener-

gy-ready” properties in its electric service area outside of DTE’s Southeast Michigan service area. That catalogue for site selectors includes 354 acres on General Motors Co.’s former Buick City complex in Flint, a 400-acre build-ready site in Delhi Township south of Lansing and a 1,600-acre piece of mostly farm ground near Marshall at the I-69 and I-94 interchange. “The availability of sites is really a proxy for the speed of which a customer can get up and running,” said Brian Rich, senior vice president and chief customer officer for Consumers Energy. “Having an energy-ready site is crucial when we’re attracting some of these larger busi-

rates to try and lure a company,” Scripps told Crain’s. In December, the commission approved a rate case for Consumers Energy to sell Hemlock Semiconductor Corp. in Saginaw County electricity nearly at cost to supply its 400 megawatt manufacturing plant after Hemlock threatened to build its own power plant. Hemlock produces polycrystalline silicon, a substance used in solar cells and semiconductor devices. Hemlock’s special rate came as a result of a 2019 change in the state’s energy law that the company lobbied for. Electricity makes up 40 percent of Hemlock Semiconductor’s costs, according to a House Fiscal Agency analysis of the change in law. “It’s a good example of when a customer raises their hand and wants to work constructively with the Legislature, the Public Service Commission and the utility that we can bring really, really attractive rates to bear,” said Brian Rich, senior vice president and chief customer officer for Consumers Energy. Special contracts are limited to Consumers or DTE’s existing customers and not available to a new customer looking to relocate to Michigan, which limits backlash the utility companies could get for cutting special deals on rates for new business. “I think their reluctance is they have a large number of industrial customers and they’d have some explaining do,” Scripps said. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

nesses that we can actually point to a facility that exists, have them see it and know that if they were to commit to Michigan they would be up and running (quickly).” While the Marshall megasite may have been large enough to suit Ford’s needs for a pair of battery plants it plans to build in Kentucky, there’s been no pre-development work done to date on ground that remains mostly active farm fields, said James Durian, CEO of Marshall Area Economic Development Alliance. “It’s a great location and has a lot of potential,” Durian told Crain’s. The Marshall economic development organization, which has been marketing the megasite for a decade, is working with the MEDC to secure funding to pay for the development of an industrial master plan and traffic impact studies that site selectors need to evaluate a property for their client, Durian said. “That will inform us of what next steps we need to take to make the site more competitive,” he said. Walsh, head of the manufacturer’s association, said the lack of pre-assembled tracts of land that are ready for immediate construction of a large industrial complex leaves Michigan less competitive for big deals — even before tax incentives, energy prices and the availability and cost of labor come into play. “We’re not always ready for business,” he said. “We’re not very aggressive here.” Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood OCTOBER 4, 2021 | CRAIN’S DETROIT BUSINESS | 69

THE CONVERSATION

Michele Hodges on what's new on Belle Isle and stirring up mischief BELLE ISLE CONSERVANCY: Michele Hodges has led the Belle Isle Conservancy since 2013 as its first president. She merged disparate, special-interest groups into one nonprofit that’s helping to reestablish the island as a mecca for people near and far. Hodges — also a member of the Grosse Pointe Park City Council for the past two years and a current candidate for mayor — is fostering public-private partnerships to help restore Belle Isle and its historic structures. When she isn’t in meetings or creating memorable annual fundraisers — like a garden party that drew 600 people to the island in September to support the Anna Scripps Whitcomb Conservatory — Hodges is looking for mischief and people to help her find it. This Q&A has been lightly edited for brevity . | BY SHERRI WELCH What is happening on the island right now? Visitors to the island will see some dramatic changes if they haven’t been there recently. There’s the installation of the Iron Belle Trail and an 8-ton sculpture of glass and steel, 23 feet high. It’s the skylines of the two cities (on either end of the statewide trail), Ironwood and Detroit, in abstract form. The Oudolf Garden was unveiled a few weeks ago, a beautiful, four-season garden designed by Piet Oudolf. It’s an almost $5 million project. He has a world following, so it really elevates Belle Isle in the eyes of the world and horticultural community. The Belle Isle Aquarium is also something we’re very excited about. We had $1.2 million in renovations during COVID to upgrade systems as well as to redo exhibits and the entry foyer. We now have garden eels, lion fish and axolotls, which are akin to a mud puppy or salamander. They are certainly favorites of the community because of their charm, particularly in Mexico. They’re near extinction. They can regenerate their eyes, gills, limbs and brains, so they are important to our educational curriculum. The aquarium is the eyes into the lakes and water of the world, Africa in particular, to show how alike we are. ... We have multiple species from African lakes. Do you think the zoo on the island will ever reopen? I think something will happen on that site. The DNR, with the conservancy as a partner, is working with Michigan State University to discuss a future vision for redevelopment of the old Belle Isle Zoo. It’s still in the very early stages. The Grand Prix is returning to the island next year, right? Yes, they will be on the island June 3-5, 2022, again. We see it as one of those public-private partnerships that is important toward operation of the island. One of the benefits of the Grand Prix is it portrays the island in such a beautiful light to the world. (On Tuesday, after this interview, race organizers proposed

moving the race back to downtown Detroit in 2023.) How is the conservancy doing revenue-wise, given the pandemic? The conservancy has emerged strong from the pandemic with a 9.7 month runway, in part due to the support of the community and strong financial management. In light of COVID, we’ve been looking for alternative revenue opportunities that are in alignment with our mission to continue to diversify. One of those options is a winter lights program on the island. It would follow a path throughout a portion of the island, a driving route, that would delight and amaze those who come to enjoy it. We’re in the exploratory stages of that, possibly for winter 2022. What else are you working on? Belle Isle has $300 million in deferred maintenance and capital needs. With our DNR partners and the stamina they bring to the table, we see a bright future. We’re looking to restore the dome on the Anna Scripps Whitcomb Conservatory, continue improving the aquarium, restore the James Scott Fountain. In addition, we’ve been working on a splash park. We will be working in partnership with the DNR to conduct a mobility and circulation master plan that will help inform the best place for the splash park.

straight from the prohibition era. We’ve activated the space for fundraising purposes and hope to build it out in away that allows us to open it to the general public in the future. And then, of course, there’s the space beneath the Scott Fountain. It’s not open to the public, but is an engineering feat. To see how that mechanism operates — the pipes, the pumps, the switches — and what it takes to keep that fountain running, including duct tape, is fascinating. The DNR has made track chairs available to the mobility challenged so they can navigate the island. And the fairies land on Belle Isle every fall. We’ve been welcoming them through fairy doors. This year the fairy doors are going to celebrate family traditions, one of which is family reunions. They are on the aquarium and conservatory grounds. Last year, you could find them in all sorts of hidden spaces: in trees, at the base of trees, in brick walls, little hidden caverns. This year they go live Oct. 8.

I hear you made an interesting resolution this year. I had to make my New Year’s resolution to misbehave. I decided I was too boring in 2020, so I had to make 2021 the year of misbehaving. But I’m failing miserably. I need help. I’m recruiting people to help make sure I meet this resolution. I’m looking for just that little bit of naughty to make you laugh and giggle. It could mean maybe too many ice cream sandwiches from the MSU Dairy or ringing a doorbell and running. Pranks, in general, would be very welcomed. If you are laughing and smiling, something is right. Take a shot of Reddi-wip right out of the can. It’s time to catch up. I enjoy embarrassing my family by dancing in a window for people or by leaving lipstick lip prints on the windows and doors of people I care about. Haven’t done either in awhile. Both are a little annoying and therefore naughty, but they let people know I care about them.

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Do you have a campaign underway to help fund those projects? The pandemic certainly slowed our plans. We are waiting for outcomes of the master plan in development with the DNR and where the stimulus money might be allocated. In the interim, we continue to increase our readiness as an organization so we’ll have the capacity to do a campaign. What are some of the island’s wellkept secrets? Certainly spaces that punctuate the island’s story would include the speakeasy on the lower level of the aquarium. It is

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RUMBLINGS

Former real estate exec sentenced to 53 months in lottery scheme A FORMER METRO DETROIT commercial real estate executive who swindled investors in sham deals to fuel a yearslong lottery addiction will spend 53 months in federal prison. Viktor Gjonaj, 44, who founded the now-defunct Imperium Group LLC real estate company, said he didn’t have anything to say when Judge Linda Parker asked him if wanted to address the court about the scheme that investigators believe resulted in millions of dollars lost by investors who thought they were investing in real estate with him. Instead, Gjonaj poured their in-

vestments into his gambling binge, which at times reached $1 million a week in Daily 3 and Daily 4 Michigan Lottery play. “This is a lot of Gjonaj money and a lot of harm to many victims,” Karen Reynolds, the federal prosecutor on the case, said in court Wednesday afternoon. “I cannot argue with the fact that Mr. Gjonaj was within the

70 | CRAIN’S DETROIT BUSINESS | OCTOBER 4, 2021

throes of a serious gambling addiction but it does not obfuscate from the fact that … this defendant completed a fairly sophisticated fraud.” His defense attorney, Steve Fishman, said in court that Gjonaj has taken responsibility for his crime and noted Gjonaj’s gambling problem. “Those casinos don’t care. The lottery commission doesn’t care. If you want to gamble away every penny you have and that you can steal, you can do it,” Fishman said in court. A recommendation will be made that he serve his sentence in Morgantown, W. Va. It’s not yet known

when he will report to prison. After Gjonaj completes his sentence, he’ll be required to enter drug, alcohol and mental health programs. The saga, details of which started to trickle out two years ago, involved the implosion of his company, a wild incident in an Ann Arbor hotel, lottery terminals rumored to be dedicated to feeding his near-constant play, addiction and long-rampant speculation of Gjonaj’s whereabouts as lawsuits mounted seeking millions in lost investor money and he was nowhere to be found.

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Crain's Detroit Business, Oct. 4, 2021

Articles inside

 Land trust pairs with developers on a ordable housing

 How Peter Allen steers deals — and student careers

 Michigan Medicine’s new hospital tower muscles on