Crain's Detroit Business, Oct. 10, 2022, issue

AIMS TO PROTECT

$1 BILLION

BET

BY KURT NAGL, DAVID EGGERT AND RACHEL WATSON

Michigan o cials are hailing plans for a pair of EV battery factories and combined $4 billion investment as a major economic victory, but they are also hedging their taxpayer-funded bets in case the projects fail to deliver.

Over the next decade, Gotion Inc.’s $2.4 billion plant near Big Rapids and Our Next Energy Inc.’s $1.6 billion plant in Van Buren Township are expected to create a total of 4,462 jobs, according to ocials, who have approved around $952 million of incentives — $213,357 per job — for the projects.

Industry experts and observers are split on whether it’s worth it.

Anderson Economic Group CEO Patrick Anderson said the taxpayer risk is too high.

“We’re ballyhooing a billion-dollar investment, and we’ve made commitments of $175 million in grants without seeing a business plan or a building schedule, and that is concerning,” Anderson said of the Gotion project. “I don’t like to see our taxpayers taken for a ride, and this thing has a bad smell about it.”

Glenn Stevens, executive director of MICHauto, sees it a di erent way.

Metro Detroit hotel rates hit record high

Major events, tourism bring big boost

BY MINNAH ARSHAD

Metro Detroit’s hotel prices have hit a record high this year, even as occupancy rates lag behind.

Hotels that were hammered during rst couple of years of the COVID-19 pandemic are getting a big boost from new tourist interest in Detroit and a return of major events like the North American International Auto Show.

According to data from STR Inc., a hospitality data and analytics rm and CoStar Group subsidiary, the region’s average daily rate, or ADR, is the highest it’s been since the rm began tracking Detroit data in 1987. e fourweek ADR in October 2019 for metro Detroit was $109.27; three years later, that gure is $123.62, STR reported.

However, the region’s hotel occupancy rates aren’t expected to recover to 2019 levels until 2025, according to STR. e four-week

Casinos, theaters got COVID grants

But two-thirds of applicants denied

BY DAVID EGGERT

LANSING — Almost two-thirds of business applicants to a state pandemic relief program were denied for various reasons, leading business advocates to push the Legislature to ensure that nearly $300 million in unallocated aid is reallotted for businesses by year’s end.

A September report, which the

state Department of Treasury sent to lawmakers and was reviewed by Crain’s, lists 2,981 businesses that got a combined $117 million in state assistance this year and details why 5,333 did not.

e awards ranged from just $2 to as much as $5 million, the maximum allowable amount under a law that was enacted by the Republican-led Legislature and Democratic Gov. Gretchen Whitmer last December.

CONVERSATION

REAL ESTATE Chunk of former Michigan state fairgrounds property for sale.

Emily Laidlaw on tackling Michigan’s child care issues.

“I DON’T LIKE TO SEE OUR TAXPAYERS TAKEN FOR A RIDE, AND THIS THING HAS A BAD SMELL ABOUT IT.”

—Patrick Anderson, CEO, Anderson Economic Group

THE WEEK IN REVIEW,

animation company with o ces near Grand River and Warren avenues in Detroit. A spokesperson declined to disclose nancial terms of the deal.

 AMAZON AIMS TO HIRE 3,500 IN MICHIGAN FOR HOLIDAYS

THE NEWS: E-commerce giant Ama zon.com Inc. plans to hire 2,600 sea sonal employees to meet increased demand in metro Detroit in the com ing weeks and months, and 3,500 around the state, within a variety of roles, a spokesperson said. Amazon’s seasonal employees start at more than $15 per hour.

WHY IT MATTERS: e hiring spree in Michigan is part of a larger push by the Seattle- and northern Virgin ia-based Amazon (NASDAQ: AMZN) to ramp up hiring for the holidays. Nationally, the company plans to hire about 150,000 seasonal workers, on par with last year.

 DUOLINGO ACQUIRES DETROIT ANIMATION STUDIO GUNNER

THE NEWS: Pittsburgh-based language learning company Duolingo (NAS DAQ: DUOL) announced it has ac quired Gunner, an illustration and

WHY IT MATTERS: It cements an existing relationship where the 15 employees of Gunner, which has worked with Duolingo since 2020 on its mobile app, become full-time employees of Duolingo.

 ANN ARBOR SEEKS TO ENDOW MUSIC DIRECTOR POSITION

THE NEWS: e Ann Arbor Symphony Orchestra has taken a $3 million campaign public after raising more than half of its goal. e campaign, which has raised $1.7 million to date, will permanently endow the orches tra’s music director position.

WHY IT MATTERS: e orchestra named Earl Lee, the former assistant con ductor of the Boston Symphony, as its new music director in June, fol lowing a three-year, international search that drew over 225 candidates. In April, Lee was named the recipient of the 2022 Sir Georg Solti Conduct ing Award, an accolade that honors a single, promising conductor each year age 38 or under.

 BIG CHANGE FOR DETROIT BEER EXCHANGE

THE NEWS: e Detroit Beer Exchange

is suspending day-to-day restaurant operations and instead will operate as an event space. e business on the ground oor of the Stevens Build ing at 1260 Washington Blvd. in downtown Detroit opened in sum mer 2021 as an o shoot of the popu lar stock market-based bar in Kalam azoo.

WHY IT MATTERS: It’s a format change for the beer bar that focuses on using dynamic pricing as an interactive happy hour attraction. e prices are based on the principles of supply and demand allowing guests to game the prices like the stock market.

 JPMORGAN CHASE PILOTS 'VIRTUAL CALL CENTER'

THE NEWS: JPMorgan Chase & Co. is piloting a unique remote work pro gram in Detroit this month. e NewYork based company is starting a vir tual call center with about 50 people from the city currently in training. ey are slated to graduate on Oct. 20. e starting wage for the new fulltime role is $22.50 an hour plus bene ts, according to a Chase spokesper son.

Longtime TV journalist Christy McDonald to join WDIV-TV



Longtime Detroit journalist Christy McDonald will join television news station WDIV-TV (Channel 4) this week.

McDonald will serve as a special correspon dent and ll-in anchor for the network e ective Oct. 10, the station announced.

She departed her previous role as anchor and managing director of One Detroit, the news pro gramming arm of WTVS Detroit Public Televi sion, in January. McDonald cited burnout and grief for her departure — her husband and sports radio host, Jamie Samuelson, died from complications of co lon cancer in 2020.

McDonald also created the public a airs opinion show “MiWeek” and was a frequent panelist and guest host on WDET public radio. e native of Troy served for 10 years as an anchor and reporter for WDIV competitor WXYZ-TV before joining public television.

WHY IT MATTERS: is is the company's rst virtual call center in the nation. While the new hires will work from home, they will gather at Chase com munity centers for training and in-per son meetings, the spokesperson said. e company opened a new branch in Corktown last year that includes space for community programs like free nancial literacy services.

 JUDGE DISMISSES FLINT WATER CRIMINAL CASES

THE NEWS: A Michigan judge threw out felony charges Tuesday against seven

people in the Flint water scandal, in cluding two former state health o cials blamed for deaths from Legion naires' disease. Judge Elizabeth Kelly rejected e orts by the attorney gener al's o ce to just send the cases to Flint District Court and turn them into criminal complaints, a typical path to ling felony charges in Michigan.

WHY IT MATTERS: e dismissal was sig ni cant but not a complete surprise af ter the Michigan Supreme Court in June unanimously said a di erent judge acting as a one-person grand jury had no authority to issue indictments.

McDonald

CHARTING A COURSE

In Michigan, biggest banks take bigger share of pie

Growth is at

of

NICK MANES

Large national and regional banks have gained substantial ground in Michigan in recent years, further cut ting into the business of the state’s smaller, local banks, according to a Crain’s analysis of federal data.

With bank consolidation as an on going trend in the nancial sector, Michigan’s banks have continued to be acquired by out-of-state lenders.

Detroit airport plans include generating revenue, bringing back long-removed aviation high school

MINNAH ARSHAD

e airport that used to serve as Detroit’s primary pathway to re gional destinations is turning its focus to supporting business trav el and reviving its long-removed aviation high school.

For the rst time in 24 years, the Coleman A. Young International Airport submitted a proposed Air port Layout Plan to the Federal Aviation Administration last No vember, which was approved and garnered a $100,710 grant for planning purposes with a manda tory match of $5,595 from the Michigan Department of Trans portation, which Detroit City Council approved last month. e funds came as a reimbursement grant to the city, which has been

funding airport services through its general fund.

e Coleman Young airport, previously known as Detroit City Airport, is classi ed by the FAA and MDOT as a general aviation airport, which accommodates small recreational aircraft all the way up to large business aircraft.

Airport authorities told Crain’s it does not anticipate an airline coming on board, so the airport plan’s focus is on “the business aviation community and aviation education.”

e city would not disclose the Airport Layout Plan but said it would be shared with the public in the coming weeks.

Crain’s repeatedly requested an interview with o cials at the city’s general services department,

which runs the airport, but those requests were unsuccessful.

Currently, the airport sees about a dozen takeo s a day, according to Beverly Kindle-Walker, execu tive director of Friends of Detroit City Airport, a volunteer-based ad vocacy organization for the ad vancement and maintenance of the Coleman Young airport.

Detroit City Councilmember Scott Benson, who presides over the district in which the city air port is located, said that part of the goal with the plan is to enable the facility to increase pro ts.

“It’s going to allow the airport to create its own revenue … and come o the general fund,” Ben son told Crain’s.

Duplexes could make a comeback in neighborhoods with pattern-book homes

A push to make classic home pat terns available for budding develop ers could increase the number of multi-family units constructed across the state, adding new housing and more density as new single-family construction slows.

e proposal, from the Michigan

Municipal League, is reminiscent of the catalog homes that were built across metro Detroit and elsewhere a century ago. Called pattern-book homes, the latest iteration includes blueprints for duplexes and quads that would create smaller, lower-cost housing units in neighborhoods, while still keeping the look of single-family homes.

In announcing the plans, Michi gan Municipal League’s Melissa Mil ton-Pung, the group’s program man ager, said there is a gap in housing options that the pattern-book devel opments could help ll.

“Let’s revive this tradition,” she said. “ ey will slide right in.”

Others said the easy availability of tried-and-true architectural patterns could help inspire new developers, provide necessary housing in areas where it’s lacking and ll vacant lots, while expanding options in munici palities across the state.

Emily Doerr, executive director of the Michigan State Land Bank Au thority, called the pattern books a “super cool thing.”

Amid that consolidation, the state’s banking sector has come to be more strongly dominated by larg er banks such as New York Citybased JPMorgan Chase & Co., Bank of America Corp. in Charlotte, N.C.; and Columbus, Ohio-based Hun tington Bancshares Inc. Each of those lenders have seen growth in market share and deposits in South east Michigan and around the state in recent years, according to annual data from the Federal Deposit Insur ance Corp.

Financial industry experts are quick to point out that larger banks can bring plenty of upside in terms of o ering enhanced technology and a host of other services for large corporate clients that smaller banks would struggle to bring to the table.

But their growth in a region like metro Detroit at the expense of smaller institutions does have reper cussions, said Erik Gordon, a profes sor of nance at the University of Michigan’s Ross School of Business.

e increasing scarcity of local lenders “matters for small, local business,” Gordon told Crain’s.

“If you run one (restaurant) or one bookstore, let’s just say that … the jumbo banks are not really inter ested in your business,” Gordon said. “ ey might be happy to take your deposit, which they make mon ey on. But they are not interested in making you a $50,000 or $100,000 loan.”

Executive director of the Friends of the Detroit City Airport, Beverly Kindle-Walker, with a Mayor Coleman Young display in a classroom in the airport complex. QUINN BANKS/CRAIN’S DETROIT BUSINESS

The Executive Terminal at Coleman A. Young International Airport on Detroit’s east side includes 14 large hangars. | QUINN BANKS/CRAIN’S DETROIT BUSINESS

BANKING

Chunk of former Michigan state fairgrounds property for sale

Kirk PINHO

If you’ve driven by the former Michigan state fairgrounds site in the last two weeks or so, you might have noticed something popping out of the ground.

No, not the massive Amazon. com Inc. warehouse.

A “for sale” sign.

An owner that at one point controlled the entire 158 acres of the site at Eight Mile Road and Woodward Avenue may soon own just ve of it now that it put 11 of its remaining 16 acres up for sale.

ere is no asking price, said Robert Reid, the Lansing-based broker hired to market the property for sale. However, it had an appraisal done in 2021 and then updated earlier this year showing the property valued at $4.2 million, Reid said.

at puts the value at $381,818 per acre, based on the appraisal.

at’s nearly 13 times the per-acre price paid for it; a previous incarnation of the ownership group forked over $472,464 for the 16 acres, or $29,529 per acre. ere’s the 11 or so acres north of a transit stop along Woodward and the remaining acreage south of the stop.

Also consider that a previous appraisal, conducted in early 2018, pegged the 16 acres or so at $2.61 million, or $163,125 per acre.

Talk about increasing value.

at’ll happen when a giant Amazon warehouse goes up on a property that also sits near the city’s rst Meijer Inc. grocery store in a very busy shopping center just to the north.

It’s not known why the owner is putting up one portion of the property but not the other, or what the plan for the remaining ve acres currently is.

Reached Tuesday morning, Joel Ferguson, the former Michigan State

University trustee and Lansing-based real estate developer who was leading the fairgrounds effort, said he was always the sole owner of the property. Crain’s and numerous other media outlets have previously reported that Ferguson co-owned the site with NBA legend Earvin “Magic” Johnson and several other investors, although he said that wasn’t true on Tuesday.

Wayne County land records show that in July 2020, Magic Plus LLC — the ownership group that had consisted of Ferguson, Johnson and Marvin Beatty of what was then Greektown Casino-Hotel — transferred the property to Ferguson Fairgrounds LLC, an entity registered to Ferguson.

In December 2020, however, Ferguson Fairgrounds transferred the property back to Magic Plus LLC, land records show.

IT’S NOT KNOWN WHY THE OWNER IS PUTTING UP ONE PORTION OF THE PROPERTY BUT NOT THE OTHER, OR WHAT THE PLAN FOR THE REMAINING FIVE ACRES CURRENTLY IS.

Christopher Stralkowski, a Ferguson Development executive, told me in 2020 that the ownership structure for the site consisted of Ferguson, Johnson, plus other investors, although Beatty was no longer involved. e Michigan state fairgrounds site development saga has been going on for much longer than I’ve been a reporter at Crain’s Detroit Business, but it has followed me a lot of places in the last decade or so.

My rst Crain’s Detroit Business byline in January 2013 was on the Magic Plus LLC e orts on the property, which at the time was controlled by the Michigan Land Bank Fast Track Authority.

As I was embarking on a road trip

with one of my best friends to California to see another best friend get married in 2017, I was writing about the fairgrounds and an updated vision for the property. I took calls and wrote in the passenger seat, laptop in tow.

And just a couple days after I moved from my longtime residence in Pontiac to Detroit, my former colleague Annalise Frank and I broke the story that Amazon was building a massive warehouse there on 78 acres of a 142-acre swath the city had.

at warehouse is now towering out of the ground, but there are many chapters left to come in the fairgrounds site’s story.

Valade suit can move forward

e lawsuit involving the Gretchen C. Valade Irrevocable Living Trust and investments its previous trustee made in Detroit real estate projects and other businesses has cleared a key hurdle.

A Wayne County Probate Court judge tossed out a motion for summary disposition last month led by the legal team for Grosse Pointe Farms attorney David Sutherland, the trust’s former trustee who is alleged to have misspent the trust’s money, meaning the case can move forward.

e lawsuit is complex.

I emailed Sutherland’s attorney last week seeking comment. e Valade family; her attorneys at Detroit-based law rm Honigman LLP; the trust’s trustee, South eld-based Plante Moran Trust, declined comment.

e case had been brought to Wayne County Circuit Court in March 2021 but was dismissed in September 2021 because Sutherland’s attorneys successfully argued that it was led in the wrong court.

@kirkpinhoCDB

A

state fairgrounds site is

PINHO/CRAIN’S DETROIT BUSINESS

MSHDA’s pick for executive director still not leading organization

a year after appointment, questions of possible con icts of interest leave job in limbo

It’s been nearly a year since Amy Hovey was selected as the new head of the Michigan State Housing Develop ment Authority. But she has not yet taken the role amid questions of pos sible con icts of interest, and Crain’s learned that a request for a federal waiver to let her start the job was with drawn this summer, leaving the posi tion in limbo.

Since then, Hovey has been work ing as a special adviser to MSHDA and other Department of Labor and Eco nomic Opportunity agencies on hous ing and community development re lated matters, MSHDA spokesperson Anna Vicari said.

e agency is “still exploring op tions that will enable the State of Michigan to bene t from Amy’s con siderable experience, knowledge and expertise in housing and community development,” Vicari said in an email. “Options still being explored include everything from an appointment, a professional services contract, or the executive director position if a mutu ally acceptable remedy for the con ict issues is available.”

e timeline for when an accept able solution for MSHDA, Hovey and the U.S. Department of Housing and Urban Development might be reached is uncertain, Vicari said.

Amy Hovey

e con ict is sues: Hovey’s husband, Timo thy Hovey, and her father-in-law, James Hovey, have develop ment interests in properties that have received fed eral loans and housing vouchers through MSHDA.

e agency proposed setting up inter nal walls to prevent Amy Hovey from participating in the administration of or decision-making for programs in which her relatives have an interest. And while James Hovey no longer de velops property, Timothy Hovey agreed not to apply for the loans or vouchers in question while his wife served as executive director, except for on one project, Hillsdale Place, where an application is already in the works.

Hovey was o ered the job late Oc tober 2021; in mid-December, the State Board of Ethics signed o on the arrangement. In an advisory opinion, the board said MSHDA reported Hov ey’s husband had an ownership inter est in 2.9 percent of the multifamily projects the agency had developed using U.S. Treasury and HUD dollars. e ethics board agreed that the con icts “would not be continuous, re

curring, and pervasive” and said that because there was no direct line from those overseeing the projects in ques tion to the executive director, “the proposed con ict walls would e ec tively address any potential con icts and avoid a con ict with the State Eth ics Act.”

But there was one more step. MSH DA also needed HUD to agree to a waiver of con ict-of-interest regula tions. After requesting that sign-o in March, Susan Corbin, the chair of the MSHDA board and director of the De partment of Labor and Economic Op portunity, wrote to HUD’s Detroit eld o ce at the end of May rescind ing the request. No explanation was given. In an emailed statement, Corbin said MSHDA withdrew its re quest “to work towards a better reso lution to resolving the potential con icts without a waiver.” She did not clarify why.

“After careful consideration, we re spectfully withdraw the Request for Exception and Waiver,” the letter said. Echoing Vicari’s statement, the letter said, “MSHDA will continue to ex plore other options that will enable MSHDA and the State of Michigan to bene t from Amy Hovey’s experience, knowledge, and expertise in a ord able and workforce housing.”

Hovey responded to a request for comment suggesting a reporter reach

out to MSHDA’s communications sta because she is “just not currently a MSHDA employee.” Members of the MSHDA board either directed re quests for comment to communica tions sta at the agency or did not re spond.

Corbin said in the email that Hovey is making $78 an hour as a consultant to MSHDA, the Michigan Land Bank Authority and the Michigan Econom ic Development Corporation. Be cause there has been a “historic level” of state and federal money coming to Michigan to increase a ordable hous ing options, Corbin said, Hovey was brought on “to increase our band width and ensure we’re well-coordi nated and capitalizing on all opportu nities.”

“She’s also been playing a role in engaging with stakeholders to help keep them informed and engaged of the many programs happening at the state level as it relates to housing,” Corbin wrote. “She has been an asset in conversations involving the State wide Housing Plan and other hous ing-related matters.”

At a MSHDA board meeting in June, according to minutes, Corbin told members the executive director position was “still on the table” and “all options are being considered” for Hovey. In the meantime, Gary Heidel is acting as executive director, a role

he has held since April 2019.

Corbin said Heidel has spent nearly his entire career at the agency and has served as its leader previously. He provides the agency “steady leader ship throughout this process,” she said.

While the machinations may be surprising to an outsider, Mills said, they actually are not that unusual. Af ter all, the department has frequently been a ected by transient leadership and political turmoil, he said.

e last executive director, Earl Poleski, was booted in 2019 after he refused to resign once Gov. Gretchen Whitmer had a majority of board ap pointees. He served two years in the role. His predecessor, Kevin Elsen heimer, was appointed to a judgeship in 2017 after joining the agency in 2015.

Poleski, who said he sold o Co merica Bank stock he had in his IRA to take the role, said he had questions about whether Hovey could truly be above-board.

“You have to be scrupulously ethi cal,” he said. “I don’t know how you can be executive director without hav ing a pretty clean slate of your own. ... I don’t know how you’re independent of something your spouse does.”

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

Can Your Organization Survive a Cyberattack?

Here are 4 key questions your leadership team can ask

October is Cybersecurity Awareness Month, an ideal time to thoroughly assess an organization’s cybersecurity policies and procedures.

A breach can cost a company an average of $9.44 million, according to Ponemon Institute and IBM Security’s 2022 Cost of a Data Breach report. More than 83 percent of organizations surveyed have had more than one data breach, according to the report. I’d add that cyberattacks often pull valuable resources away from other pressing concerns such as growing a business and taking care of employees, and that a breach can create major mistrust between an organization and its customers.

With cybersecurity in mind, I invite readers to attend the Michigan 2022 Cyber Summit. Deloitte is a sponsor of this annual event, scheduled for Thursday, October 27 at the Suburban Collection Showplace in Novi. State leaders as well as Jen Easterly, director of the state’s Cybersecurity & Infrastructure Security Agency, plus cybersecurity experts from other states and from business and industry will present at the conference. To register for the summit, visit https://events.esd.org/cyber-summit-registration/.

Mike Kosonog, Detroit Cyber Risk Services Leader, Deloitte & Touche LLP

1. What is our organization’s holistic cyber risk policy? Cyber risk policies should include what happens in the event of a ransomware attack, an assessment of the risk to operational technology in addition to information technology, risk mitigation for third parties and contractors, and cyber assessment processes for mergers and acquisitions. It also includes a review of the last assessment and revising it to accommodate any changes in the business (for instance, a new IT system).

2. Does our policy align with National Institute of Standards and Technology (NIST) cybersecurity framework guidelines? NIST’s framework helps guide companies in assessing and improving their ability to prevent risks and respond to breaches. These frameworks set guidelines for identifying areas at risk; protecting critical infrastructure from attacks; detecting attacks when they do happen; responding to attacks; and recovering from them.

3. What role do management and the board play in implementing this policy? It shouldn’t just be “the IT people” responsible for cybersecurity policy. The National Association of Corporate Directors suggests that boards approach cybersecurity as the organization-wide issue that it is.

About the Center for Board Effectiveness Deloitte’s Center for Board Effectiveness helps directors deliver value to the organizations they serve through a portfolio of high quality, innovative experiences throughout their tenure as board members. Whether an individual is aspiring to board participation or has extensive board experience, the Center’s programs enable them to contribute effectively and provide focus in the areas of governance and audit, strategy, risk, innovation, compensation, and succession.

About Deloitte Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world’s most admired brands, including nearly 90% of the Fortune 500® and more than 7,000 private companies. Our people come together for the greater good and work across the industry sectors that drive and shape today’s marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthier society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Building on more than 175 years of service, our network of member rms spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 people worldwide connect for impact at www.deloitte.com.

There are many business reasons to attend the summit. You will have an opportunity to network with peers, hear from industry leaders on the latest happenings, and gain insight into the latest issues, threats, and innovations in cyber.

A recent report from Deloitte’s Center for Board Effectiveness DCBE highlights questions organizations can consider to better integrate their business and cyber strategy, improve risk management and governance, and refresh incident management processes to keep up with the evolving regulatory landscape:

4. Who on our board has cybersecurity experience? As is the case with many reporting tasks, at least one board member should have deep expertise in cybersecurity.

Overall, then, two suggestions to commemorate Cybersecurity Awareness Month: Attend the Michigan conference to obtain a wealth of information and leading practices, and review Deloitte’s Center for Board Effectiveness report on board oversight of cybersecurity.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member rms, and their related entities. DTTL and each of its member rms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member rms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective af liates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www. deloitte.com/about to learn more about our global network of member rms.

Will employers get labor relief as economy cools o ?

Is the red-hot labor market about to ip on its head and provide relief to ailing com panies and disdain for the recently em powered workforce?

ere’s no doubt the employment situa tion is cooling o — federal government data released last week showed job openings dropping to the lowest levels since March 2020. Average hourly pay in August fell by 2.1 percent for the year while in ation remains at 8.2 percent.

And we’ve seen a rise in layo s recently. In August, Ford Motor Co. announced it would cut 3,000 white collar and contractor jobs, and Dan Gilbert’s Rocket Cos. has been o ering voluntary buyouts in spades as the impossibly-hot housing market falls back to Earth. e health care sector has particularly been among the hardest hit due to a oundering stock market and sky-high wages. Last month, Beaumont Health an nounced it would lay o 400 workers as it dealt with a $100 mil lion loss during the rst half of the year. Sparrow Health fol lowed up last week with a plan to cut “hundreds” of jobs following a $90 mil lion loss through the rst six months of the year.

And you or your boss believes the economy is going to crumble. More than 90 percent of CEOs surveyed by consulting rm KPMG earlier this month said they be lieve a recession will happen in the next 12 months — and only a third of them think that impending recession will be short or mild.

Gabe Ehrlich, a labor economist at Uni versity of Michigan, said the negative opin

Dustin WALSH

ions of the economy are steeped at the checkout line. Or, if you’re a business own er, when the materials bill is delivered.

“People’s purchasing power has been falling, and that gives them a negative per spective of the economy, regardless of whether it matches the o cial de nition of a recession,” Ehrlich said.

But between the daily news cycle, global unrest and recent natural disasters, it’s under standable that even the most insulated Amer ican worker would get wet under the arms.

But, really, there’s been a lot more good news than bad in the economy. is temper ate cooling of the market is the ne line the U.S. Federal Reserve is trying to walk in its e ort to slow down in ation. Of course, it re mains unclear whether the Fed can continue this moderate easing of the market without propelling the economy into a massive re cession or whether it can even curb in ation at all. So far neither has happened. e economy largely continues to hum.

Businesses added 263,000 jobs in Septem ber, though the fewest since April 2021, which is above normal levels outside of the pandemic, dropping unemployment to a 50year low at 3.5 percent. at's where unem ployment was at in January 2020.

Businesses added 208,000 jobs in Septem ber, better than the Dow Jones estimate of 200,000 jobs. And the long-term impact of businesses su ering a yearslong labor short age is also bene ting the market at the mo ment. e pandemic may have changed the way companies think about labor — it’s be come less disposable.

Michigan’s broken child care system continues to crumble

The COVID-19 crisis signi cantly im pacted the lives of working parents, child care and employers try ing to determine how and when their employ ees can return to work. Parents need child care to help them remain, re-enter, or enter the workforce, but access to a ordable, quality child care is hard to come by in Michigan.

e child care industry has long struggled with hiring and retaining workers, largely due to low wages and bene ts. Child care is one of the lowest-paid pro fessions in the U.S. with an early childhood teacher making an average of $11 per hour. Providing even this hourly wage is challeng ing for agencies in high-need areas of Michi gan who serve communities with lower eco nomic levels.

Pre-pandemic providers serving a mix of clients, many of whom were receiving subsi dies through the Michigan Department of Health and Human Services, struggled with the amount of reimbursement, getting paid in a timely way, and being paid for atten dance, not enrollment. e uncertainty around funding made operating centers ex tremely di cult, often resulting in operating losses or facility closures.

Nonpro t agencies that provide child care and preschool re-opened during the pan demic when the stay-at-home order was lift ed. However, it has been di cult managing sta ng due to illness and COVID cases of sta and clients.

e funds received from the 2020 Pay check Protection Program made staying open possible, but the long-term structural issues remain, and we must move past the PPP loans. Many agencies are forced to in vest above budget to pay teachers and child care providers appropriately. is year, Oak land Family Services invested $200,000 above the allocated budget to increase and

adjust salaries to be competitive and pay teachers and child care providers a fair wage.

While the state increased the per pupil re imbursement for preschool, it is still not high enough to cover operational costs, forcing agencies to look to grants to fund positions. Unfortunately, there is no assurance that these grants will continue.

Gov. Gretchen Whitmer made some changes in her budget to support child care providers, and funds from the American Rescue Plan were allocated to this area. e state now pays child care providers for en rollment, not attendance; it has increased subsidy rates and changed the income level to make more families eligible for subsidies. While these changes are a step in the right direction, they are not yet permanent and cannot be counted on as a sustainable fund ing source.

What must be done to help x and sustain Michigan’s child care system?

 e state needs to make permanent chang es so that budgets are not in question.

 It needs to show value for providers relying on state payments for taking subsidy and providing high quality services in neighbor hoods with more economic challenges.

 Streamline the subsidy process and ensure more timely payments so providers do not have balances and/or child care services are not interrupted due to lack of payment.

 Create new ways to fund and support child care through contracts based upon mean ingful criteria. Ensure the state/federal dol lars are used to invest in fundamental chang es that reward high-quality services and create opportunity for providers to make money, not just break even or lose money.

 Incentivize providers to increase salaries/ wages and charge appropriate tuition even in economically depressed areas.

 Create more opportunities for tuition reim bursement that do not rely on the employer to pay portions (when many are already struggling) and make incentives more readi ly available.

We must stop putting Band-Aids on gap ing wounds and make systematic changes in Michigan’s child care system if we are to properly care for our children and enable parents to get back to work.

Sound

Crain’s considers longer opinion

from guest

on issues of interest to business readers.

Managing Editor Michael Lee at malee@crain.com.

BLOOMBERG

JAIMIE CLAYTON

Jaimie Clayton is the president and CEO of Oakland Family Services

Attorney Eugene Driker, who helped mediate Detroit bankruptcy, dies

KURT NAGL

Eugene Driker, a prominent Detroit attorney and civic leader who helped mediate the city’s bankruptcy and helped orchestrate the “Grand Bar gain” that helped the city emerge from bankruptcy, died Sept. 29, his alma mater Wayne State University said in a statement. He was 85.

Driker, who resided in Detroit near ly his whole life, was among the stron gest proponents of the city and its in stitutions.

e son of Ukrainian immigrants, Driker and his partners founded Bar ris, Sott, Denn & Driker PLLC in downtown Detroit in 1968. He spe cialized in complex business litiga tion, counseling to business and non pro ts, and alternative dispute resolution.

In his more than 50 years practicing law, perhaps his greatest service was helping mediate the city of Detroit in its historic bankruptcy in 2013.

As one of six mediators and the only one who wasn’t a federal judge, Driker was deeply involved in a deal that raised $866 million to help the city cover some of its pension obligations and spin the Detroit Institute of Arts out into an independent nonpro t to protect its collection from creditors.

Driker lived with his wife of 63 years, Elaine, in Palmer Woods. She devoted her life to political activism, volunteer work and lifting up the Jew ish community.

Driker completed his undergradu ate degree at WSU and his juris doc torate at Wayne Law. He served for 12 years as a member of the WSU Board of Governors and was a chair of the WSU Foundation. He also was chair man of the Law School Board of Visi tors and the rst fundraising chair for Wayne Law, as well as a member of the Carl Levin Center for Oversight and Democracy at Wayne Law.

Driker was also a trustee of the Ralph C. Wilson Foundation from its founding in 2015 and had a long re cord of involvement in metro Detroit’s Jewish community. He served on nu merous boards including those of the Barbara Ann Karmanos Cancer Insti tute, the Detroit Symphony Orchestra, the Jewish Federation of Metropolitan Detroit and many more.

“Eugene Driker was a great friend to Wayne State University, and to me personally,” President M. Roy Wilson said in a statement. “He was consis tently generous with his time, intellect and support, yet modest about his ac complishments, which were many. His example inspires the entire Wayne State community.”

en-U.S. District Judge Gerald Rosen, who was the chief mediator in Detroit’s bankruptcy, said that Driker was the rst call he made in 2014 when appointing mediators for the historic case.

“He’d be the rst one anyone would call in this situation,” Rosen told Crain’s “And he’s been invaluable in these mediation sessions. He has a great sense of humor, the right quip.”

Following news of Driker’s death, Rosen told Crain’s Friday: “To say that Eugene was a giant in both our legal community and our larger Detroit community is a vast understatement.”

“If you had a complex, di cult case, everyone knew Eugene was the man to see. ... Eugene’s wisdom, wit and in tegrity will be greatly missed by all of us who knew, loved and respected him.”

Driker was one of four lifetime

trustees the late Ralph C. Wilson Jr. charged with setting the mis sion, value and direction for his foundation.

He was a driv ing force in how the foundation was formed, said David Egner, president and CEO of the Ralph C. Wilson Jr. Foundation.

“We were a small part of a very big world Eugene Driker lived in, but he brought his whole self to everything we did,” Egner said.

As chair of the foundation during

COVID, Driker supported the sta in ways that were unexpected for a trust ee, showing up, for example, to weekly sta meetings to support and ac knowledge their work during di cult times, Egner said.

Driker lived 82 of his 85 years in De troit, Egner noted, only departing for three of them early on in his legal ca reer to serve as an attorney with the U.S. Department of Justice.

Driker was involved in a number of high-stakes legal cases besides the Detroit bankruptcy. He defended Jackson-based utility CMS Energy Corp. in a $500 million case against Dow Chemical Co. related to a dispute at a plant in Midland. Dow would later

become a client of his rm.

Other clients include DTE Energy, Ford Motor Co., General Motors Co., Michigan Consolidated Gas Co., Ralph C. Wilson, Jr. Enterprises LLC and Textron Inc.

Driker served for years on the boards of a long list of nonpro t and civic groups, including: Karmanos Cancer Center, Detroit Receiving Hos pital, Jewish Federation of Metropoli tan Detroit, JVS, Detroit Symphony Orchestra, Detroit Metro Convention and Visitors Bureau and the National Yiddish Book Center Inc. in New York, working to help preserve his parents’ native Yiddish language and culture.

“His love and passion for his home

town was unsurpassed,” Egner said. “He had a remarkable life.”

Driker was a “great friend” to De troit, said Mariam Noland, retired president of the Community Founda tion for Southeast Michigan.

“He’s done as much as anyone for the good of Detroit, the community he loved.”

He was key to the creative way the Grand Bargain helped solve the city’s bankruptcy, she said, and the “quiet, thoughtful voice behind so many great things in our community.”

“He is a great loss,” Noland said.

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

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Driker

White sh leather and energy drinks?

can make the sh more valuable and, in turn, make the shing more valuable.”

Wildlife and conservation groups around the Great Lakes are trying to orchestrate a wind fall for the region’s struggling commercial shing indus try — but not by increasing the size of their catch.

BY DUSTIN WALSH

A consortium that includes the Conference of Great Lakes St. Lawrence Governors and Premiers, the Great Lakes Fishery Commission, Michigan Department of Natural Re sources, Michigan Sea Grant and nearly a dozen others re cently launched a program called “100% White sh.” e program is designed to create ancillary industries around the culling and selling of the popular lake white sh, most commonly found in the cold deep waters of the Great Lakes. According to program organizers, only half of the tasty sh is used. Its llets are packaged and shipped to restaurants and grocers and small leftover bits are processed for animal feedstock. e remaining 50 percent of the sh, such as its innards, head and skeleton, wind up in land lls.

e organizers are mimicking a program launched by the Icelandic Ocean Cluster in 2011 that set out to improve its vital shing industry through 100 percent utilization of each Atlantic cod brought to mar ket. e group of shing compa nies, marine biologists and conser vationists was able to boost the value of its shrinking cod shery by increasing utilization of each sh from 45 percent to more than 95 percent, or Sigfusson, chair of the group, told reporters at the Sept. 29 event.

“

ere are opportunities to bring in di erent industries to partner with (the commercial sh ing sector),” David Naftzger, direc tor of the Great Lakes St. Lawrence Governors and Premiers, told

Crain’s at a media event about the program Sept. 29 in Detroit. At tendees were o ered a white sh liver terrine topped with roe and fried belly skin. “If we can use as much of the sh as possible, we

Icelandic companies have creat ed enzyme-rich creams, cosmetics, collagen-laced energy drinks and sh skins for bandages and leath ers to boost the value of the sh from just $12 per sh to more than $3,500 per sh. Despite its shing quotas shrinking by around twothirds, Iceland’s cod industry dou bled in value.

E ort to boost Great Lakes commercial shing pushes to use innards and all

White sh salad bao buns prepared by chefs at Chartreuse in Detroit were served to media at the 100% White sh event.

NICK HAGEN/CRAIN’S DETROIT BUSINESS

NMU adds bachelor’s degree in indoor agriculture to meet worker demand.

David Naftzger, executive director of the Great Lakes St. Lawrence Governors and Premiers. | NICK HAGEN/CRAIN’S DETROIT BUSINESS

SOWING SEEDS IN A GROWTH INDUSTRY

TOM HENDERSON

Northern Michigan University has launched a bachelor’s degree pro gram in indoor agriculture, two years after the successful launch of an asso ciate degree in the eld.

e expansion comes as indoor growing becomes an expanding sec tor of agriculture and demand for in door growing experts explodes from the legal cannabis industry.

Kimberly Smith Kolasa, the assis tant professor of indoor agriculture who helped start the associate pro gram, said the bachelor’s program has had a soft launch after NMU trustees approved it in April, but that the pro gram will ramp up and market itself aggressively next year, after construc tion is expected to be done on the buildout of a 3,200-square-foot verti cal indoor farm.

Evan Lucas, a construction man agement professor at the school, and biology professor Donna Becker were Kolasa’s partners in getting the pro gram up and running.

at farm will be part of the new Career and Engineering Technology Facility in the school’s Jacobetti Com plex, a $28.6 million, 167,000-squarefoot buildout that includes $20 mil lion from the state of Michigan.

Currently, the associate degree stu dents raise crops in a smaller lab in the Jacobetti Center of 2,223 square feet.

ey also raise crops in a specially retro tted shipping container that ar rived at the Jacobetti Center last Sep tember, purchased with a $100,000 grant from the Michigan Rural Devel opment Fund and a 30 percent match from NMU.

e container was bought from Freight Farms Greenery of New Jer sey. It included state-of-the-art grow ing equipment, including LED light ing to stimulate plant growth and cloud-based software that allows wa ter, nutrient and pH levels to be moni tored and controlled remotely by smartphone.

So far, students have raised such leafy greens as lettuce, kale and bok choy; such herbs as basil, lavender and rosemary; such edible owers as pansies, zinnias and marigolds; and such fruiting crops as cucumbers, to matoes, peppers and summer squash.

Currently, the program has a con tract with the school’s dining services to buy all it can grow for student con sumption. Kolasa hopes that when the new vertical farm comes on line, the program will raise enough crops to also sell to Marquette area restau rants and stores.

Students also get to take crops

and lectures fully in person,” she said.

—Melanie Combs, 2021 graduate of Northern Michigan University

home for personal consumption.

NMU’s board of trustees approved the associate degree program in March 2020, hardly an auspicious time for a program launch, given the recent introduction COVID to the U.S.

But Kolasa said classes began as scheduled that fall. “We were face-toface throughout, with all lab classes

According to Kolasa, there is a surge in horticulture-based programs in K-12 schools nationwide. New York Sun Works, which has installed 138 rooftop green houses and in stalled 387 hy droponic growing sys tems in con verted class rooms in the city, was NMU’s rst collaborator.

Kolasa said that from the start, rep resentatives of the cannabis industry told her that there was a shortage of those trained in indoor farming tech niques. “ ey said they would hire ev ery grad we put out,” Kolasa said.

In the rst year of the program, 15 NMU students declared an indoor-ag

riculture major. Kolasa said that jumped to 65 majors in the second year.

“We now have more than 100 stu dents enrolled in our four core cours es each semester,” she said.

As of May, there were 23 graduates of the associate program. “All are em ployed in the eld,” she said.

Kolasa said former students are employed throughout metro Detroit and in Ann Arbor; Grand Rapids; Marquette; Ishpeming; New Bu alo; Atlanta, Ga.; and Klamath Falls, Ore.

Arianna Forsman is one of those who graduated in May and is now the assistant farm manager at Artesian Farm LLC, an indoor vertical farming operation in New Bu alo. She said the job entails a wide range of duties, from planting and harvesting to cleaning equipment to making deliv eries to local customers. “I’m learning

how to do everything,” she said.

Forsman said she got a bachelor’s degree in biology from NMU but COVID hit and she was unable to nd a job. She said she heard about the new associate degree in indoor agri culture and decided to enroll.

“It’s fun and interesting. I’d applied at several places and Artesian Farm really wanted me,” she said.

Melanie Combs got her associate degree in the summer of 2021. Previ ously she had got an associate degree in business management from Oak land Community College, then en rolled at NMU in the medicinal plant program. She said before she actually started in that program, she heard about the new indoor agriculture pro gram and enrolled in it instead.

After getting her degree, Combs be gan working at a cannabis dispensary in Marquette. Since July, she has been

employed in Troy for the marketing department of California-based Jeeter, one of the largest sellers of legal marijuana in the U.S. She visits dispensaries throughout metro Detroit, setting up displays to showcase various Jeeter products to visiting customers, including prerolled cigarettes.

is year, Inc. Magazine ranked Jeeter No. 144 on the list of the 5,000 fastest-growing private companies in the world. In June, it entered the Michigan market by selling pre-rolled cigarettes at dispensaries.

“When I got my degree, it was per fect timing to get into the cannabis industry,” said Combs. “I really love it at Jeeter. is is the one I plan on be ing with awhile.”

Alyssa Higgs, a May graduate of the Northern Michigan University indoor agriculture program. | NORTHERN MICHIGAN UNIVERSITY

Indoor growing is an expanding sector of agriculture, and demand for indoor growing experts has exploded from the legal cannabis industry. NORTHERN MICHIGAN UNIVERSITY

Kimberly Smith Kolasa, the assistant professor of indoor agriculture who helped start the associate program. KIMBERLY SMITH KOLASA

“WHEN I GOT MY DEGREE, IT WAS PERFECT TIMING TO GET INTO THE CANNABIS INDUSTRY.”

WHITEFISH

“We had to cut our catch (due dropping sh populations), so we knew we had to do more with less,” Sigfusson said. “We can remove the sh from the land ll. ere doesn’t have to be waste in the seafood in dustry. e key is to connect people. In Iceland, young people thought this was their grandfathers’ industry. But there are huge opportunities. We need artists, architects and startups involved. e shing industry doesn’t have to be ruined.”

White sh in the Great Lakes have remained stable in recent years, par ticularly in Lake Superior, but stocks have plummeted in Lake Michigan and Lake Huron over the past 20 years, Dan Eichinger, director of the Michigan DNR, told Crain’s.

In the 1950s, Michigan was home to thousands of commercial shing oper ations that sought the lucrative white sh, walleye, trout and pike species abundant in the state’s lakes.

But they started to bleed out due to pollution, over shing and the in troduction of in vasive species, such as the sea lamprey, zebra mussels and the alewife that have decimated sh populations and subsequently commercial shing. ere are now fewer than 20 commercial shing op erations left in Michigan.

Yet white sh remains the state’s most commercially caught sh, rep resenting approximately 90 percent of the commercial catch by volume.

However, it accounted for just 22 per cent of the state’s meager $19.2 mil lion in commercial shing revenues in 2015, according to data from the Michigan Sea Grant.

Naftzger and Eichinger see white sh heads and bones being pro cessed for soup stock, which is a pop ular import in Africa, and skin boiled down for collagen to be used in cos

metics, medicines and drinks, its liv er used in vitamins and its skin turned to leathers for binders, belts and bags.

Doug Hewitt, executive chef at De troit restaurant Chartreuse Kitchen & Cocktails, which hosted the event, said it’s common for more total utili zation of cows and pigs than sh, but he hopes that will change.

“We have a saying in the industry about pigs, ‘everything but the squeal,’ but we don’t use sh the same way,” Hewitt said. “We’re always looking for ways to turn trash to cash by taking parts we don’t normally use and make money o them. (Fish) livers are high ly underutilized.”

Naftzger said if the 100% White sh program is successful, the group

plans to expand the program to Great Lakes perch, walleye and lake trout.

“If we rethink how the sh can be used, we can increase its value even as populations decline,” Naftzger said. “White sh and others can be a value machine.”

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

Muskegon County gets $60 million to upgrade wastewater system

Alleviates

RACHEL WATSON

GRAND RAPIDS — e Michigan

Strategic Fund awarded Muskegon County $60 million to upgrade a wastewater system that has long stood in the way of local food and dairy companies.

e Strategic Site Readiness Pro gram grant, approved last week, would almost fully fund the South east Regional Force Main, a 20-mile pipeline project to redirect wastewa ter away from smaller residential systems it would overwhelm. e force main would provide wastewa ter transport and disposal for cus tomers southeast of Muskegon County’s existing Resource Recovery Center Service District, extending into Ottawa County and including residents and businesses in Coo persville, Polkton Township, Raven na Township and Ravenna.

e grant is funded by the state’s Strategic Outreach and Attraction Reserve Fund, which Gov. Gretchen Whitmer signed a spending bill to re plenish Tuesday. e fund, which Michigan created less than a year ago to back big economic development deals, currently has $846.1 million.

O cials also approved $715 mil lion in incentives for a $2.4 billion electric vehicle battery parts plant

near Big Rapids and $237 million for a battery plant by the EV startup Our Next Energy in Wayne County.

e Michigan House and Senate budget panels will next be asked to approve the transfer of SOAR fund ing to the Muskegon project. Assum ing legislators OK the incentives and others that were approved by the MSF board, the SOAR fund balance will drop to $411.1 million.

Why new force main was needed

e Southeast Regional Force Main is expected to bene t compa nies including Fairlife, Continental

Dairy, DeVries Meats, Applegate Dairy and Swanson Pickle. ose ve businesses said they plan to in vest at least $187 million and create up to 145 jobs once the project is complete.

Muskegon County said in its ap plication for the funding that the lo cal agricultural and food processing businesses “are limited in their abili ty to expand without an upgrade to wastewater infrastructure” and that they “consistently identify wastewa ter capacity as one of the leading barriers to continued growth in Michigan.”

e Coopersville Wastewater Treatment Plant currently services

nearby businesses, including heavy users Continental Dairy and Fairlife.

e force main will allow Coopers ville to redirect its wastewater north to the MCRRC Service District via a new 30-inch inside diameter collec tion and lift system that will extend nearly 20 miles between the two fa cilities.

e new system will be sized and available for connections from other companies and municipalities along the proposed pipeline route.

e project has a total budget of $65 million, with Fairlife contribut ing the remaining $5 million, and is expected to be completed in 2025.

According to the Michigan Eco nomic Development Corporation, the agriculture industry in Michigan employs about 17 percent of the state’s workforce, or 805,000 people.

e state has the second-most di verse agriculture sector in the U.S. behind California, contributing $104.7 billion annually to the state’s economy.

Local food processors and manu facturers are signi cant drivers of Ottawa County’s economy. Speci cally, the industry has invested $1.5 billion over the past three years and employs 4,800 individuals with an average annual wage of $72,000.

“ is (grant) will be a critical ben e t to nearby agribusinesses,” said Quentin Messer Jr., CEO of the MEDC, on a Wednesday media brie ng call. “It will allow these ma jor employers in the region to stay rmly planted here in Michigan.”

Josh Hundt, an executive vice president with the MEDC, said in the call these upgrades have been “well over a decade in the making.”

“ e (existing) Coopersville Mu nicipal Wastewater Authority, in partnership with other entities, has continued to make all the invest ments that they could to continue to see this important sector grow,” he said. “(But) it got to a point that this regional partnership and regional approach was necessary to build this partnership with Muskegon County that will not only allow Fairlife and Continental to grow, but also will al low other companies like Swanson Pickle, DeVries Meats, Applegate Dairy and other future companies to continue to invest in this area.”

Construction on the infrastructure upgrades will begin later this year, Hundt said.

Messer said the project likely would not have moved forward with out SOAR funding.

“Absent this, we would have seen more and more leakage of our Mich igan farmers sending their crops to go down south to be processed, then to be shipped back into Meijer and SpartanNash and other great retail ers to be sold. We want to capture the full totality of the agricultural spend, and this allows us to do that,” Messer said.

— Crain’s reporter David Eggert contributed reporting.

A member of a delegation from the Iceland Ocean Cluster sporting a vest made from cod skin leather. | NICK HAGEN/CRAIN’S DETROIT BUSINESS

Continental

Eichinger

Metro Detroit housing market shows signs of slowing down

BY ARIELLE KASS

e housing market slowdown continued this summer in metro Detroit as sale prices dipped in July, according to a national measure, even as year-over-year prices remained among historic highs.

e S&P Case-Shiller Home Price Index, which tracks sales prices for homes sold in a month as compared to their last sale, showed metro Detroit sales were 11.4 percent higher in July than they were the year before, even as they were 0.1 percent lower than they had been in June. Nationally, prices were 15.8 percent higher; Tampa and Miami saw the largest gains, at 31.8 percent and 31.7 percent, respectively, but even they were moderating.

Higher interest rates are the cause of the deceleration, said Craig Lazzara, the managing director of S&P Dow Jones Indices, and Detroit’s shift is in line with much of the rest of the country. Lazzara said the region’s peak was in March, when prices showed a 15.5 percent year-over-year increase; the national March peak was 20.7 percent.

It’s likely the trend will continue, Lazzara said, but the slowdown is “not at all the same thing” as value drops that occurred in the Great Recession. Over the past two years, he said, prices are roughly a third higher, and now those gains are leveling o .

“When mortgage rates are 6 per-

terest rates are the a ecting factor,” he said. “It was a nice ride, but the curve is heading downward. It’s nothing to be scared about.”

Katsaros predicted the next few months would “be a little bumpy” and lead some real estate professionals to leave the market. But he said that would mean more opportunities for others.

“Everything’s cyclical and how you ride the ride around the circle is key,” he said. “We might see more investors coming out of the woodwork now.”

“THE BRAKES ARE PUMPING AND INTEREST RATES ARE THE AFFECTING FACTOR.”

—Steve Katsaros, managing broker, Keller Williams Metro

cent, buyers are in a di erent position than when mortgage rates are 2 percent,” he said. “It’s a rare one that did not decelerate.”

Steve Katsaros, a managing broker with Keller Williams Metro in Royal Oak, said the market is in the middle of a shift, from sellers to buyers. Turnkey properties in cities like Ferndale and Berkley still sell quickly and can have multiple o ers, he said. But there are an increasing amount of price reductions, he said, and people’s buying power has changed.

“ e brakes are pumping and in-

Reginald Perryman, an associate broker also at Keller Williams Metro in Royal Oak, said some of the price dips in July came from sellers who were continuing to price their homes ahead of the market and expected to sell in a week or two, then became desperate and had to drop the prices to move the houses. Now, he said, homes are taking a month or more to sell — a normal market. Sellers are again beginning to adjust and pricing accordingly.

If people want to be rm on their price, he said, they need to give their houses more time to sell.

Elsewhere in the metro, Erica Kohler, an associate broker with @ properties and president of the

Women’s Council in Birmingham-Bloom eld, said inventory is still at record low levels. She said she doesn’t expect to see a drastic drop in prices because people will continue to need to buy and sell homes.

“We’re still 10 percent above what we were last year,” she said. “We’re dealing with a little bit of a correction. I don’t think it’s doom and gloom.”

Kohler said there are fewer buyers in the market — rising interest rates and the shift in seasons pulled some buyers away. But others are recognizing that there is less competition than there was and are moving forward, no longer worried about appraisal guarantees or covering sellers’ costs.

“ ere are still great houses on the market,” she said. “ ere are still a lot of people who want to move.”

In Dearborn, Ali Alfarajalla, a Realtor with RE/MAX Team 2000, said he’s seeing some people accept reduced prices that had rejected higher o ers earlier in the year. He said there are “barely” any buyers, and he expects Detroit to be among the markets that are hit by reduced activity.

“Are we seeing a slowdown?” he said. “De nitely.”

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

Coldwell Banker Realty acquires two Michigan franchisees

BY ARIELLE KASS

Coldwell Banker Realty has acquired two franchisees, Coldwell Banker Weir Manuel and Coldwell Banker Hubbell BriarWood.

e acquisition brings 600 agents across 18 Michigan o ces into the brand. John North, CEO of Coldwell Banker Weir Manuel and Coldwell Banker Hubbell BriarWood, will remain with the company, as will other employees.

Both groups have been in operation since 1950. In a statement, North said he expects the businesses to continue to grow.

“Joining forces and becoming part of Coldwell Banker Realty positions our agents and clients to access even greater tools and resources,” he said.

M. Ryan Gorman, CEO of Coldwell Banker Realty, said in a statement that the additions will help generate “invaluable bene ts” to customers.

Coldwell Banker has nearly 54,000 a liated sales associates in about 650 o ces in 56 markets across the country and closed nearly $206 billion in sales last year, the company said.

Coldwell Banker Realty is an Anywhere Real Estate company, and

that company’s title and settlement service’s arm, Anywhere Integrated Services, also acquired Tri-County Title Agency. It provides title services in southern Michigan. It will continue to operate under its name.

In a statement, Anywhere Integrated Services President and CEO Don Casey said the acquisition “creates an outstanding opportunity” to elevate the transaction experience for Coldwell Banker Realty clients.

Terms of the deals were not disclosed.

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

GRIT:

YOU MADE

The

Judge rules Blue Cross must face antitrust lawsuit

Ann Arbor anesthesiologists group can re le complaint against insurer over pay rates

Blue Cross Blue Shield of Michigan will face antitrust litigation challeng ing its reimbursement rates for local anesthesiologists, a federal judge in Detroit ruled last week, a year after the same judge tossed out the case.

Judge Terrence G. Berg ruled that Anesthesia Associates of Ann Arbor could re le its initial complaint with some minor modi cations against the Detroit-based insurer, alleging it schemed to pay anesthesiologists be low market rate and colluded with hospitals to bar anesthesiologists that charged more than BCBSM’s re imbursement rate.

e judge did strike down a claim in the lawsuit that alleged a conspira cy between hospitals and BCBSM to maintain rates regardless of its im pact to care.

e claims that are moving for ward allege BCBSM created a mon opsony by becoming the state’s larg est insurer and dictating market prices to a point that led to a mass exodus of anesthesiologists in the state and thus endangering patients.

“We were pleased that the court agreed with one of our positions on their litigation, and that we remain con dent in winning as the case pro ceeds,” BCBSM said in an emailed statement to Crain’s.

A4 is represented by Boies Schiller Flexner LLP of New York. e Boies Schiller rm is chaired by David Boi es, who was special counsel in the Microsoft antitrust lawsuit in 1998 and represented former vice presi dent Al Gore in the 2000 presidential recount in Florida.

“A4 is a group of dedicated anes thesiologists who brought this action to stop Blue Cross Blue Shield of Michigan’s tortious and anticompeti tive practices that are driving doctors out of Michigan and decreasing the

quality of care available for Michigan patients,” lead attorney on the case Jonathon Schiller said in an emailed statement to Crain’s. “ is is certain ly an issue of great concern to Michi gan patients, and we look forward to presenting our federal and state law claims to a Detroit jury and holding BCBS-MI to account for its actions

A4 is asking the courts to prevent the Blues from interfering with any of its contracts, halt e orts to restrain trade in violation of the Sherman An titrust Act and maintain monopsony power over anesthesia services in Michigan.

Lawyers for A4 are also asking the court to award unspeci ed treble damages for Blue Cross’ “tortuous conduct” that would seek to destroy A4 nancially by inducing Livo nia-based Trinity Health to termi nate its contract. A4 is now back at

Trinity and works with several hospi tals, including Trinity Health Ann Ar bor Hospital, McLaren Lapeer Re gional Hospital and Garden City Hospital.

“Pursuant to this conspiracy, Michigan hospitals agreed with BCB SM, and each other, to bar anesthesi ologists from hospital facilities un less those doctors accepted BCBSM’s uniform reimbursement rate, with out any upward or downward negoti ation,” the lawsuit reads. “ is con spiracy restrained trade through group-boycott conduct and other re straints. BCBSM enforces these ille gal boycott and price- xing agree ments by steering work away from any hospital if an anesthesiologist there seeks a di erent rate from BCB SM. Because anesthesiologists re quire access to medical facilities to practice medicine, this conspiracy

forces anesthesiologists to accept BCBSM’s published rate.”

e suit alleges this has led to a shortage of anesthesiologists.

“Because Michigan anesthesiolo gists’ only choices are to accept BCB SM’s reimbursement rate or to leave the state and practice elsewhere, many have chosen to depart (or not enter) the state, leaving Michigan, as of April 2021, with nearly one hun dred un lled anesthesiology posi tions,” the suit reads. “ is lack of anesthesiologists has reduced the overall supply of anesthesiology ser vices in Michigan available to pa tients, as demonstrated by the fact that hospitals have been forced to close surgery departments for lack of quali ed anesthesiologists to sta them. Despite there being so many open positions available for anesthe siologists in Michigan, the majority of the University of Michigan’s anes thesiology graduates leave the state to work elsewhere, rather than work in Michigan at BCBSM’s suppressed, below-competitive rate.”

It’s unclear what hospitals have closed surgery departments due to a shortage or whether the shortage is, in fact, caused by BCBSM’s rates.

ere is, however, a national and state shortage of anesthesiologists and Michigan became the 20th state earlier this year in allowing certi ed registered nurse anesthetists to work in operating rooms without the su pervision of a anesthesiologist. e new rule is a more permanent con tinuation of emergency executive or ders signed by Gov. Gretchen Whit mer during the pandemic to assist overrun hospitals.

e A4 lawsuit stems from a nego tiation breakdown between the prac tice and BCBSM in October 2020. A day after BCBSM declined to renego tiate with A4, Trinity Health Michi gan CEO Rob Casalou invoked a

clause in its ve-year contract to ter minate A4 in 180 days. Trinity said after that period, the eight-hospital regional health system would hire its own employed anesthesiologists.

e lawsuit alleges Trinity was in duced by BCBSM to terminate the contract.

e original suit against BCBSM was tossed by the judge last year due to a lack of evidence for predatory pricing. e suit alleged a monopoly, which would mean higher prices for consumers. at’s not the case for a monopsony, which drives down competition.

A4 has vehemently defended its operations in several disputes with hospitals and insurers over the years.

In 2019, a similar dispute erupted between A4 and Trinity Health in which Trinity terminated A4’s con tract. A4 had threatened to terminate several payer contracts, including Pri ority Health, Aetna and Blue Cross, because it hadn’t had a reimburse ment increase in at least six years.

Trinity Health sued to prevent A4 from putting its patients in a “sur prise billing” situation. A4 counter sued to prevent Trinity from recruit ing its anesthesiologists and certi ed registered nurse anesthetists. Trinity and A4 settled various lawsuits and reached a new ve-year agreement. e agreement allowed A4’s anesthe siologists to continue treating pa tients at Trinity Health’s ve South east Michigan hospitals.

A4 also had a contract dispute with eight-hospital Beaumont Health over how much Beaumont reimburses A4 for anesthesiology services. A4 con tended Beaumont paid the group be low its operating costs and that it lost money every day. A4 terminated its contract with Beaumont March 2020.

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

Charles

PINHO

Charles Forbes, who was a driving force in the preservation of historic Detroit theaters and other buildings in the 1980s and 1990s, died Sept. 29 at age 92.

An online obituary says that over the span of the Bloom eld Hills resi dent’s career, he put together more than 40 proper ties for renova tion and had sev en placed on the National Register of Historic Places.

In the 1980s, Forbes began as sembling build ings like the State eatre (now e Fillmore Detroit), the Fox eatre, the Gem eatre and Century Club, the Colony Club and others following retirement from Ford Motor Co. after more than 30 years working in dealership real es tate for the Dearborn-based auto maker, according to the Detroit His

torical Society. When the Detroit/Wayne County Stadium Authority was considering tearing down some of those proper ties that were in the path of Comerica

of

Park in the 1990s, Forbes negotiated a deal to move the Elwood Bar & Grill he also owned as well as the Gem eatre and Century Club complex, Crain’s reported in April.

iconic theaters, dies

e Elwood was at the corner of Elizabeth Street and Woodward Ave nue, a location from which it took its name, and is now at the corner of East Adams and Brush, moving in 1997.

e Gem/Century complex and its 5.5 million pounds were also relocat ed that year some 1,850 feet from Co lumbia and Witherell to its current location at Madison and Brush streets, a move that made it into the Guinness World Records for being the heaviest structure ever moved on wheels, Crain’s reported in 1998, when it named him a Newsmaker of the Year.

e downtown YMCA Building, which Forbes owned, was torn down, as were other smaller buildings.

Forbes estimated around that time that moving the Gem/Century prop erty would cost $2 million to $3 mil lion, while the Elwood cost $400,000 to $500,000.

James Forbes, his son, told the De troit Free Press in 1997: “ ere hasn’t been one person that we’ve ex plained this to who doesn’t think it’s a crazy idea. But when you look at the

economics of building a theater and moving this one, they’re similar.”

And Charles Forbes told Crain’s: “If nothing else, what we’ve tried to illustrate is just because we have new stadia, we don’t have to make a prai rie but can blend the old with the new. You have to ght for it, hold your ground.”

Forbes was born in Highland Park, attended Detroit Public Schools and the Henry Ford Trade School from 1944 to 1948. He then spent two years in the Army Engineers and then earned a business degree from Wayne State University, which later gave him a distinguished alumni award and named him Alumni of the Year in 1995, his obituary says. He also received an honorary doctorate from Central Michigan University in 1998. e online obituary says “a me morial service will be held at a later date in downtown Detroit.”

A message was left for James Forbes last week.

who

Century

Charles

Judge Terrence G. Berg

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Romulus Trade Center breaks ground

Promises new jobs, investment along Detroit-Ann Arbor corridor

By Tom Walsh

ROMULUS, Mi . – Robert McCraight was not yet mayor of Romulus when Kansas City-based NorthPoint, the nation’s biggest industrial real estate developer, came sni ng around southeast Mi igan in 2018 looking for project sites.

McCraight, who was the city’s director of economic development and public services before becoming mayor in 2021, had – like many Romulus residents – been disappointed “year a er year” by various proposals that hadn’t panned out.

en he ipped the script, working alongside partners like the Detroit Regional Aerotropolis Development Corporation and Mi igan Economic Development Corporation, and hammered out a deal with NorthPoint.

e result, the Romulus Trade Center, is about to bring $130 million of investment, 750 to 1,000 construction jobs, 500 permanent full-time jobs, 2 million square feet of industrial and retail space to 171 acres of vacant land at Vining and Wi Roads, just across I-94 from Detroit Metropolitan Airport.

Northpoint executives, McCraight, and dozens of local, state and regional o cials broke ground Sept. 13 on the site.

“ e city, its residents and elected leadership had a vision for this property, and NorthPoint was able to deliver on that vision,” said Christopher Girdwood, CEO of the Detroit Region Aerotropolis partnership, bringing a high-quality development to this important intersection in the Aerotropolis region.

FORGING A PARTNERSHIP

Both Mayor McCraight and Brent Miles, NorthPoint’s ief marketing o cer and a founding partner, were qui to admit that the Romulus-NorthPoint deal very nearly crashed and burned before takeo . To be successful, they needed to build a true partnership.

Miles began his remarks at the Sept. 13 groundbreaking with a surprise — an apology. “ is property has been sitting here a long time. It was promised to be many things over time,” Miles said.

At one point, the deal nearly unraveled, but NorthPoint — a leader in building huge Class A industrial projects — pivoted.

“I don’t think we heard what Romulus residents wanted initially, and we didn’t listen,” Miles said, and then repeated an o -used saying from his grandma: “God gave you two ears and one mouth and that ratio for a reason, so use it that way –and we didn’t. Not many times in life do you get a second ance, and we got a second ance here.”

McCraight gave credit to another NorthPoint project manager, Johnny Sweeney, for a phone call that put things ba on tra .

“Johnny called me and asked, ‘Why doesn’t Romulus like us? Can’t we just have a frank conversation?’” McCraight set up what turned out to be a great meeting that evolved into a relationship. “It became a win-win.”

Girdwood said the nal project will include

what the Romulus residents had asked for: a neighborhood commercial district with fast-casual dining, small o ce spaces, and incubators for startups along Wi , with the larger industrial buildings set ba from the road.

“And you put it all in this park-like setting with trails and trees and grass,” he said. “ at’s what residents wanted: a work, live, play atmosphere.”

AEROTROPOLIS GAINS TRACTION

e new Romulus Trade Center is one of several industrial/commercial projects undertaken by major national development rms recently along the Detroit-Ann Arbor corridor.

In fact, the Romulus Trade Center is NorthPoint’s second foray into Romulus. eir Ecorse Commons Industrial Park opened in mid-2021 and four logistics businesses — LaserShip, Pitney Bowes and DHL — are already operating on the 68 acres adjacent to the

General Motors Powertrain plant.

Earlier this year, Northpoint set up a local o ce in Romulus for its Great Lakes regional teams, said Marc Werner, a Northpoint project manager and regional vice president.

Girdwood said that seeing a major industrial developer su as Northpoint active here is a positive sign.

“If you look at Mi igan, it’s in a peninsula. Just from a distribution point, I think Indiana and Ohio along the I-80 corridor were getting a lot of the deal ow in the 1990s and 2000s, so we had to do some convincing to get NorthPoint to look our way,” Girdwood said.

Twenty years have now passed since the completion of the McNamara Terminal at Detroit Metropolitan Airport, whi had sparked hopes that an “Aerotropolis” district would emerge to fuel a wave of jobs and economic growth in towns like Romulus along the I-94 corridor from Detroit to Ann Arbor. e growth may have been slower than hoped, but now, we are seeing more major national development interest in the area, Girdwood said.

Another example is the Dallas-based Hillwood Investment Properties – led by the Ross Perot family – who joined with Mi igan’s Sterling Group to buy the former 650-acre Pinnacle racetra site in Huron Township. ey plan to invest $40 million in the property, and already have built two Amazon warehouses, with a Home Depot building underway.

“ e reason this kind of development didn’t happen 20 years ago and is happening today is because of stories like the Romulus Trade Center,” Girdwood said.

The Romulus Trade Center broke ground Sept. 13, bringing $130 million of investment and more than 1,500 jobs to 171 acres of vacant land at Vining and Wick Roads, just across I-94 from Detroit Metropolitan Airport. Photo Courtesy of NorthPoint

Romulus Mayor Robert McCraight shakes hands with NorthPoint Chief Marketing Of cer Brent Miles to celebrate the Romulus Trade Center groundbreaking. Photo Courtesy of NorthPoint

A rendering of the Romulus Trade Center. Photo Courtesy of NorthPoint

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A changing landscape

In 2018, the 10 largest banks headquartered in Michigan held 16.7 percent of the banking market share statewide, and had $36.3 bil lion in deposits, FDIC data shows.

In the same year, the ve largest banks operating in the state — all headquartered outside of Michigan — held 58.4 percent market share and had $127 billion in deposits.

Flash forward to 2022, and the ve largest banks operating in the state — which remains only banks legally headquartered outside the state — now hold 66.9 percent of the market share in the state, and have beefed up their deposits to $210 billion, ac cording to a Crain’s analysis of fed eral data.

Zooming in regionally, the situa tion is similar.

In Wayne, Oakland, Macomb, Liv ingston and Washtenaw counties, the ve largest banks — all head quartered outside the state — have also gobbled up market share.

As of June 30 of this year, the ve largest banks operating in the region — JPMorgan Chase, Huntington, Co merica, Bank of America and PNC — held more than 80 percent of the market share in Southeast Michigan, and had $167 billion in deposits.

By comparison, the 10 largest banks operating in the region that are headquartered in Michigan had just 9 percent market share and about $19 billion in deposits, ac cording to FDIC data.

But while the larger banks largely have their o cial headquarters in major nancial hubs in states like New York, North Carolina and Ohio, many have made signi cant com mitments to the Michigan region.

Huntington, which completed a merger last year with TCF Bank, stands as the bank which gained the most market share over the last ve years, jumping from 7.25 percent in 2018 to more than 12 percent by the midway point of this year, according to the FDIC data.

e bank now calls Detroit the

home base for its commercial bank ing operations and o cially opened its new o ce building here last month.

In so doing, Huntington “has truly become Detroit’s hometown bank,” Gary Torgow, a longtime metro De troit real estate developer who is ex ecutive chairman of the Colum bus-based Huntington, said during last month’s ceremonial opening of the o ce building.

Chase Bank still dominates around the state, holding more than 20 percent market share. e na tion’s largest bank, Chase has made Detroit speci cally an area of focus for many of its investment commit ments.

e banking giant last week be gan piloting a “virtual call center” in Detroit, with about 50 people from the city currently in training for the full-time jobs, which have a starting wage of $22.50 per hour.

In total, Chase spokespeople tout that the bank, since 2014, has invest ed more than $200 million in initia tives in Detroit, supporting more than 8,000 businesses through capi tal or technical assistance.

A consolidating industry

Much of the reason why larger, out-of-state banks have gained a signi cant foothold in the state comes down to the long-running theme of bank consolidation. In deed, three of the largest banks that were headquartered in Michigan in

2018 — Midland- and Detroit-based Chemical Bank, Monroe Bank and Trust and Farmington Hills-based Level One Bank — have since been acquired by out-of-state banks.

A fourth, Troy-based Flagstar Bank, has had an agreement since last year to be acquired by a New York bank in a deal that has yet to receive regulatory approval.

Detroit Mayor Mike Duggan, at last month’s ceremonial ribbon cutting for the Huntington build ing, talked about Detroit often be ing on the short end of bank merg er deals. City o cials, he said, several years ago had the idea that they needed to do municipal bank ing “with a bank that was moving into the city, not a bank that had moved out.”

Meanwhile, West Michigan, and speci cally Grand Rapids, has be come “the banking capital” of the state, said Michael Tierney, presi dent and CEO of the Community Bankers of Michigan, an East Lan sing-based trade association for the state’s community banks.

Indeed, FDIC data shows that half of the 10 largest banks head quartered in the state — Indepen dent, Mercantile, Macatawa, Northpointe and Choice One banks — are based in Kent or Otta wa counties.

Tierney said that such a dynamic makes for a far cry from the days when Detroit-based lenders like Manufacturers Bank and the Na tional Bank of Detroit dominated

in the state’s large metropolitan ar eas. Manufacturers Bank was ac quired by Comerica, and NBD through a series of acquisitions ul timately became part of Chase.

While representing the state’s smaller, community banks, Tier ney’s resume boasts executive roles at lenders like Chase and Comeri ca. Such institutions o er core banking services in an e cient manner, particularly for large cor porate clients, he said.

e current dynamic, however, with a slowing economy, rep resents an opportunity for some local banks to regain some market share, he said.

at’s because during times of economic distress, large lenders often curtail lending to many smaller businesses during a period of need.

“You’ve got to have a clean book of business and you’ve got to have plenty of capital,” Tierney said of the current environment for local banks, who could then recoup some of that business. “(Communi ty banks are) going to be able to take some customers that they just have never had a chance to get to, (because) their loan o cers are do ing workouts at the big bank in stead of paying attention to their clients. When they shut down the credit to these guys, you get the op portunity to move in.”

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

WALSH

Layo s haven’t really grown despite all this recession talk. In August, layo s ticked up slightly to 1.5 million, but that’s still below pre-pandemic levels as about 2 million were laid o in Febru ary 2020.

A third-quarter report by recruiting services company Employ Inc. said em ployers were “labor hoarding,” believing it would be cheaper to keep workers than lay them o and try to rehire when nancials improve. In the report, 52 percent of recruiters surveyed said companies they work with were retain ing employees regardless of whether those employees were performing well.

“As central banks here and abroad all jam the brakes on the economy, em ployers expect less revenue ahead,” said Aaron Sojourner, labor economist and senior researcher at Kalama zoo-based W.E. Upjohn Institute for Employment Research, told Crain’s in an email. “If they have more sta than current production requires, they have to choose whether to keep folks on as insurance against being caught short sta ed if future demand surges. Since spring 2021, employers have experi enced the toughest hiring challenges in their careers, making the costs of learn ing about applicants, building their trust, onboarding and training them all especially salient now. e insurance bought by keeping folks on looks more attractive than otherwise.”

But the elasticity employers are will ing to maintain as the recessionary headwinds grow is anyone’s guess. ere is a clear trend of rising layo s. ey are, though, much slower than during previous times of contraction and for the worker that’s at least one positive lingering side e ect of the pan demic. For employers, it’s a lesson in balancing the budget in ways that don’t shrink headcount.

Inevitably a recession no one can dispute will come and layo s will re turn. But for now, this weird economy will stay weird.

“I do expect a period of soft growth ahead, which may or may not end up being declared an o cial recession,” Ehrlich said, which might as well be a shrug emoji.

CONSTRUCTION

Granger Construction

Granger Construction Company, an ENR Top 400 Contractor, announces the promotion of Dennis Carignan to President.

Dennis has been a critical member of Granger’s team for 24 years, serving the company in multiple capacities including project management, estimating, pre-construction and most recently as its executive vice president. Glenn Granger, who became president and chief executive of cer in 2000, made the announcement. Glenn will remain CEO.

HEALTHCARE

Vibra Critical Care Hospital

Vibra Hospital is pleased to announce that Susan Manzella has accepted the position of chief executive of cer for the Detroit market. Susan began her career with Vibra in 2016 previously serving as CMO. In her new role, Susan provides leadership for two post-acute hospitals, 150 physicians, and over 150 clinical and non-clinical team members. Susan is a visual leader who is committed to providing unsurpassed patient care and fostering relationships that support Vibra’s mission and values.

INSURANCE

Globe Midwest Adjusters International

Globe Midwest Adjusters International is pleased to announce Danielle Levin Gabbard has been elected to serve as the rm’s Managing Partner. Danielle began her career as a licensed public adjuster where she routinely settled large loss property claims on behalf of both private and public companies. In 2017, Danielle became a shareholder of the rm and transitioned to managing the rm’s practice, overseeing the prosecution of over Two Hundred Million Dollars of claims annually.

NONPROFIT

Playworks Michigan

Playworks Michigan has named Alleysha Mullen to its Board of Directors. A leadership coach/organization culture strategist, she is founder of Detroit-based Alleysha Mullen Consulting and a Learning and Organization Development Consultant to the University of California San Francisco. Mullen’s 10-year association with Playworks includes roles in Direct Service Programming; launching Playworks in Jackson, Mississippi; and serving as Senior Program Manager for the Northern California Bay Area.

JPMorgan Chase is Michigan’s largest bank by deposits. | MINNAH ARSHAD/CRAIN’S DETROIT BUSINESS

“It’s just plain and simple out standing news,” Stevens said. “Both of these are examples of where the administration, Legislature, local economic development agencies, the talent and workforce folks are all working on this together. I think that’s a signi cant sign for Michigan.”

Economic development o cials have emphasized the urgency of landing EV and advanced manufac turing investments to protect the state’s most valuable industry amid transition. Critics have argued that spending taxpayer funds on unprov en technology is bad policy.

Opportunity and uncertainty

Michigan has a history of plunging money into EV battery projects, and not all have panned out. A decade ago, A123 Systems used a $249 million fed eral grant and $125 million of state funds to build a plant in Livonia, which was the largest lithium-ion plant in North America at the time. Cursed by defects and poor market timing, the company went bankrupt before being bought by a Chinese rm.

“Our elected o cials cannot make these kinds of giant bets with any sort of certainty that they’re going to pay o ,” said John Mozena, president of the Center for Economic Account ability. “We get so focused here in Michigan on this idea that we need to be leading the automotive industry … Maybe Michigan should be spend ing less time trying to chase the past.”

Both the Gotion and Our Next Ener gy projects come with opportunity and uncertainty. Gotion, which is backed by Volkswagen, has manufacturing in China but has no track record in the U.S. Our Next Energy, whose founder is a former executive of A123 Systems, has strong investors including BMW and billionaire Bill Gates but has yet to mass produce its lithium iron phos phate batteries or generate revenue.

Neither company has disclosed its customers in Michigan.

e Michigan Economic Develop ment Corp., which signs o on incen tives, said it structured terms with the companies to make their incentives contingent on ful lling promises.

“It is a performance reimburse ment,” MEDC CEO Quentin Messer Jr. said recently during a call with re porters. “So there is absolutely not a dime that will go out unless this com pany performs.”

Gotion’s deal

Gotion, which plans to build two cathode plants and two anode plants near Big Rapids in Mecosta County, will receive a state Critical Industry Program grant worth $125 million if it meets certain milestones.

million grant.

e term sheet includes clawback provisions. Gotion would have to re pay up to 100 percent of grant funds if it does not meet the phase two re quirements. e battery maker’s fail ure to meet the overall investment or jobs commitments would result in it repaying a portion based on how much it spends and how many peo ple are hired.

e Right Place will get up to a $50 million Strategic Site Readiness Pro gram grant. Expenses eligible for reim bursement include public infrastruc ture improvements, site development and land acquisition. It would have to repay the state if the project falls through.

Our Next Energy’s deal

Our Next Energy plans to open a cell and EV battery pack factory in a recent ly constructed facility in Wayne Coun ty’s Van Buren Township. It will get a state Critical Industry Program grant of $200 million if milestones are reached.

 First, by July 2023, it must secure $169 million in private nancing, exe cute a lease agreement (which has been done), sign a joint development deal with a materials re nement part ner, sign a strategic collaboration agreement with a battery manufactur er, and nalize purchase order re quirements and supplier contracts for a cell prototype and training line at its Novi headquarters. It then can re quest reimbursement for 60 percent of eligible expenses, up to $50 million.

could come within the next decade.

“If the technology changes radical ly enough, do we have a stranded as set?” he said.

Still, he thinks it’s a risk worth tak ing for Michigan to stay competitive in the mobility space.

“We’re already seeing a lot more battery plants pop up in the Tennes see, Kentucky, that sort of automotive area, and if we don’t have the supply chain components here in Michigan to supply the automotive industry, the automotive industry won’t stick. So, in reality, we don’t have much of a choice if we’re trying to anchor that primary industry here,” he said. “We’re making a strategic bet that this provides the commitment to the sup ply chain that will keep (automotive companies) producing vehicles in Michigan. at seems like a good bet.”

In Van Buren Township, the Our Next Energy project has the potential to reshape the battery supply chain, which is why economic development o cials said it was so important to secure the project. CEO Mujeeb Ijaz said the plant will be the centerpiece of a localized supply of iron, lithium, iron phosphate, graphite and other materials, spawning further job cre ation in the region.

“We’re ready to build an ecosys tem of suppliers here in Michigan,” he told Crain’s.

doesn’t nish the project, the site could be used for something else — especially now that it’s received so much national attention.

e Gotion project is expected to create 2,350 jobs by 2031. Gotion and the local o cials have said they be lieve those jobs can be lled by sourcing from the community and Ferris State University’s talent pool.

Job training and lifting up “geo graphically disadvantaged areas” are cited by the MEDC as pillars of both projects and good reason to back them nancially.

Our Next Energy said it plans to work with Focus: Hope to develop a skills-based training program for its employee base. Jobs at the new facto ry would pay $35 per hour by year six, or 55 percent higher than the ALICE (Asset Limited, Income Constrained, Employed) target wage.

“ e (Our Next Energy) facility is located close to geographically dis advantaged areas, which will provide residents with employment opportu nities and the company with a talent pipeline,” according to the MEDC.

On the west side of the state, where the supplier base is not nearly as dense, a new plant would have argu ably more noticeable impact, and present challenges for the company to nd workers.

As of August, Mecosta County had an unemployment rate of 5.3 percent, or about 964 unemployed workers. Chapman said Gotion and e Right Place conducted three separate em ployment studies, and all three found that within a 45-mile radius of the site, there is a “major” potential labor force.

“Right now, it is not unusual for somebody from our area to drive to Grand Rapids to a job. at’s a 60-mile drive,” Chapman said. “If you were working in a factory in Grand Rapids and living in Big Rapids, and now there’s a plant in Big Rapids that o ers

the same pay rate, but you don’t have to drive an hour to work and an hour home, what would you do?”

Stanek said downsizing and clo sures over the past decade by Evart Products and Liberty Dairy in neigh boring Osceola County left hundreds of people without jobs, and those people were forced to either move away or add to their commutes. He said he thinks there would be an ap petite from those people to work at Gotion if the project pans out.

Jobs at Gotion would average $29.42 per hour, nearly 65 percent higher than the ALICE target wage.

e housing supply across Michigan remains historically low, and Chap man said that could pose a challenge as new jobs are created. But it also could create opportunity for housing developers to meet the demand.

Stanek and Chapman said that when the housing bubble burst in 2007, two subdivisions — the Hills of Mitchell Creek and Sunrise Haven in Big Rapids — were never nished. ey said those projects have the po tential to be restarted with the prom ise of so many middle-income jobs coming to the area.

Paul Bullock, Mecosta County con troller and administrator, said it’s im portant to remember the Gotion proj ect is expected to happen in phases, so there will be time for the labor and housing questions to be sorted out.

“It’s not, ‘Boom, we’re there,’ right? We’ll build up to that, and that will give developers an opportunity to see exactly what the market is, and it will give them a chance to respond,” he said. “If this were, ‘Boom, we’re drop ping this whole thing on you, and we’re going to build it out in a year,’ it would be a whole lot more intimidat ing than it is with a phased plan that will allow the free market to respond.”

— Crain’s Detroit Senior Reporter Dustin Walsh contributed to this report.

Bill Stanek, Big Rapids Township supervisor, said Gotion, which hasn’t announced its developer or contractor partners, will steer the project with plenty of local oversight, as approvals will be needed at each step of the pro cess. He said he expects Chuck elen, vice president of Gotion Global and leader of the company’s North Ameri can operations, will hire a local gener al manager and local leadership team to run the Big Rapids-area facility. elen did not return a request for comment.

Stanek said he studied the Gotion proposal from all angles for about 16 months leading up to the local mu nicipalities’ vote on whether to apply for a Renaissance Zone tax exemp tion, and he feels it’s a “calculated risk” to dole out these incentives.

Healthcare Reporter



First, it must strike a development agreement with e Right Place Inc., an economic development organiza tion based in Grand Rapids, and buy or be transferred all necessary land at the project site before 2024, accord ing to terms of the agreement ob tained by Crain’s. It then can start re questing reimbursement for half of construction and other capital costs, up to $95 million.

 Second, before 2024 it must demon strate receipt of $360 million in private nancing total, hire a general contrac tor to retro t the facility, nalize pur chase order requirements and suppli er speci cations for the rst cell manufacturing equipment line, and sign an additional customer for its Ar ies battery. It then can seek 60 percent reimbursement, up to $70 million.  ird, before October 2026 ONE must secure $560 million in private nancing total, show $300 million in company revenue, invest nearly $1.1 billion, launch at least two cell man ufacturing lines and initiate purchase orders to scale two additional lines. It then can get $60 million of the grant.  Fourth, it must create 2,112 jobs and spend $1.6 billion before 2030. It then can qualify for the remaining $20 million.

e term sheet has similar claw backs to the Gotion deal.

Local impact

Although the U.S. subsidiary, Gotion Inc., has only been in the U.S. conduct ing research and development since 2014, its 27-year-old Chinese parent company, Gotion High-Tech, is among the largest lithium-ion battery makers in the world, with customers including Volkswagen and the Chinese automo bile companies SAIC and Chery.

Senior Reporter

Ad Age is seeking a reporter to cover the advertising agency business.



Second, Gotion must spend nearly $2 billion more and create 1,500 jobs by March 30, 2028. It then can seek the remaining $30 million.

 ird, Gotion must meet its overall commitments, $2.36 billion in invest ment and 2,350 jobs by March 30, 2032, or repay some or all of the $125

Paul Isely, associate dean of under graduate programs at the Seidman College of Business at Grand Valley State University in Grand Rapids and a longtime professor of economics, said it’s unknown at this point if EVs are a bridge technology or a nal technolo gy. If the former, Gotion might have to pivot away from battery production to whatever is next, such as hydrogen technology. He believes that pivot

Green Township Supervisor Jim Chapman said Gotion’s rst U.S. manufacturing plant has to be built somewhere, and he’s happy to see it land on his home turf rather than in another state.

He said if Gotion should fail to meet the state’s terms for the incentives, he’s con dent the fail-safe terms and clawbacks outlined in the term sheet will protect the state’s investment.

Stanek and Chapman agree that if worse comes to worst, and Gotion

focus will

breaking news,

crain.com/careers/

trends

industry

information

working with

Gotion

plant

Big Rapids.

AIRPORT

e airport currently relies on the city’s general fund to maintain opera tions. According to a 2022-23 funding agreement, the city is providing $1.25 million to the airport for facility mainte nance.

“Most airports receive those types of dollars where you don’t have to go into your general fund,” Kindle-Walker said. “ ere’s so much money that the city could’ve taken advantage of over the years so the airport wasn’t a drain. We just never applied for reimbursements or match grants,” adding that adminis trations after Mayor Coleman Young didn’t prioritize the city airport.

High school could return

e plans seek to improve on the general aviation component as an “eco nomic development generator,” Ben son said, and bring back the city’s aero space high school to the airport.

e Davis Aerospace Technical High School — named after Benjamin O. Da vis Jr., the rst African American gener al in the U.S. Air Force and commander of the Tuskegee Airmen — opened in 1943 as Aero Mechanic High School and assisted with World War II e orts.

e high school used to hold all of its classes at the airport but in 2013 Detroit Public Schools Emergency Manager Roy Roberts ordered it relocated to Golightly Career and Tech Center to cut costs. Since then, the school brought back some classes to the airport in 2019, but much of its operations remain outside the airport. e city is now looking to bring back all operations to the airport.

PATTERNS

From Page 3

She’s already working on ways to expand the project’s reach, she said, with a $50,000 pre-development grant pilot program that could help communities gain buy-in for the homes and move the developments more quickly through zoning re views.

“As soon as I heard about it, it was like, ‘game on,’” Doerr said. “Rebuild ing density in our neighborhoods through duplexes and quads is the way to have more a ordability.”

Doerr said developers like to build larger homes because they make more money o them. But spreading the cost over more units could help ll a gap for lower-priced residences and smaller units that developers might not seek to build on their own.

e municipal league estimated it would cost $500,000 to build a duplex and more than $900,000 to build a quad; the homes are not being de signed as traditional a ordable housing. But smaller units mixed in with single-family homes would al low variety for younger or older resi dents who don’t need as much space and want to spend less on housing, proponents said.

Barbara Ziarko, a Sterling Heights council member and president of the Michigan Municipal League’s board, said opportunities for families to live together across generations, with some separation, might be one ap peal of the proposal. She said she could see the homes being built on some of Sterling Heights’ main roads.

Regardless of the end user, she said, there’s a need to build more housing. e pattern-book proposal takes inspiration from the state’s past, and Ziarko said she recognized

e school, which is part of the De troit Public Schools Community Dis trict, operates at 900 Dickerson Ave., about ve miles from the airport, with 225 students enrolled, according to its website.

is fall, the Detroit school was one of eight selected across the country to host a radio contact session with an as tronaut aboard the International Space Station. e call will take place some time this month as weather permits.

“I would just like to see more in volvement with area youth,” Kin

dle-Walker said.

A history of Detroit airport

e airport opened in 1927 and served as the region’s primary airport for more than 20 years, according to the Detroit Historical Society. Most airlines transitioned to Willow Run Airport near Ypsilanti in the late 1940s and then to Detroit Metropolitan Wayne County Airport in Romulus.

As a result, the Coleman Young facil ity transitioned to private and corpo

rate aviation, though it maintained some commercial ights until 2000. Since then, the airport has fought at tempts to shut it down and has seen limited funding and contracting e orts.

However, the Coleman Young air port saw a nearly 40 percent increase in usage ve years ago as downtown busi ness took o and Little Caesars Arena opened, the historical society reported.

e city is also relaunching a de cades-long residential buyout plan, dubbed the French Road Mini-Take, which aims to clear a radius around the

zoning has become more isolating, but that the pattern-book proposal can help people see how multiple housing types could exist in the same neighborhood. e city will soon start working on its comprehensive plan, and Lenart said the resource could help provide a physical exam ple that would allow for conversa tions about how zoning might evolve.

Pros and cons

Airport operations

variety of businesses and organizations operate out of the Coleman A. Young International Airport in Detroit, including:

Aviation technology startup Airspace Experience Technologies Inc.

Ann Arbor-based xed base operator Av ight Corp.

Black Pilots of America

Civil Air Patrol

Aerospace company Detroit Air Craft Corp.

Friends of Detroit City Airport

Helicopter tour agency My Flight Tours

Chemical manufacturer PVS Chemicals Inc.

Holding company Soave Enterprises

Airmen - Detroit Chapter

Tuskegee Airmen National Museum

Women in Aviation - Detroit Chapter

Zinc Marketing Ltd.

Midwest Air Tra c Control

airport for a safety zone.

“A lot of the land has already been cleared,” Kindle-Walker told Crain’s.

Less than 30 residential properties, one or two businesses and a church re main, Kindle-Walker said.

Earlier this year, the city announced plans to prepare an 80-acre site near the Coleman Young airport for redevel opment purposes but details of the plan were not disclosed.

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

o on for their viability.

e city needs more diverse hous ing options, and Cantrell said he could see Detroit incentivizing devel opers to build the pattern-book homes in certain communities. It could make a di erence for gradu ates from his program, who have bought side lots or other vacant land and are trying to gure out what to do next.

three similar structures near her own neighborhood.

“We’re still in that stage where we don’t know exactly where it’s going,” Ziarko said. “I think we’re in the in fancy stage..., but I think this has po tential.”

Communities in other cities, like Norfolk, Va., and Washington, D.C., have pattern books for some residen tial development, but municipal league representatives said this was the rst statewide e ort in the coun try. Representatives from those cities did not respond to requests for com ment about their success with such development.

Slowdown of new housing

Michigan is pulling fewer housing permits than it needs to, said Dawn Crandall, the Home Builders Associ ation of Michigan’s executive vice president of government relations.

More new construction is needed to house residents and the proponents of this e ort see accessible blueprints that have perhaps already been re viewed by cities and townships as a way to get more construction in progress, more quickly.

Municipalities would still have

control over where and whether the houses were built. But developers who use pattern-book designs might already have community buy-in for their projects, allowing the develop ment to move faster.

Melanie Piana, Ferndale’s mayor, said a new city master plan there al lows more housing units in neigh borhoods, which she said would add to the city’s quality and provide “missing middle” housing. e change in the master plan, which was approved Sept. 26, removes some of the hoops developers need to jump through to build duplexes or triplex es in the city, she said; the pattern book would help developers con ceive of what would already t in with the city’s neighborhoods.

“We used to allow it; this is allow ing it back in,” Piana said, saying she had begun photographing and cata loging the pattern-book homes in the city, some of which have designs identical to the new proposal. “It re ally is about streamlining it and mak ing it easier to build the homes. e pattern book is helping cities set some design guidelines about what they’re looking for.”

Ann Arbor planning manager Brett Lenart said in an email that that city’s

In South eld, city administrator Fred Zorn said the existence of such plans would make a di erence in that community. Such proposals can help “rally the troops” to consider a broad er range of housing options, he said. And while there are areas of concern, including how to handle delinquent utilities and how to de ne responsi bilities between multiple owners, Zorn said he thought it was a great concept. e proposal, he said, could help people envision what the homes might look like in their neighbor hoods and change their views on density.

He said the beauty of the concept is that it can be tweaked for di erent communities, but act as a blueprint to help home renovators or others start working in development on a larger scale.

“Sometimes, you have to show people how these things could work,” he said. “I think it has potential. You just knocked out a lot of time.”

e only downside is the cost, said Chase Cantrell, the executive direc tor of Building Community Value. He said in some Detroit neighborhoods, the cost of new construction wouldn’t make such projects nancially via ble. But he said subsidies or other in centives might be easier to gain with plans that already meet Michigan building codes and have been signed

“I honestly don’t see any cons,” Cantrell said. “It’s really great we’re trying to make development easier. I don’t believe there’s really a down side to this.”

With a challenging and cumber some development process in much of the state, the pattern-book idea can help eliminate some risk for builders, said Shannon Morgan, managing partner at Renovare De velopment.

Morgan, who consulted with the municipal league on the proposals, said time saved via the pattern-book designs can help reduce months of carrying costs as developers wait for approvals and can help expand the number of housing choices available.

e proposed renderings have dif ferent “skins” available and Morgan said those designs can be adapted to the needs of di erent communities to ensure any new construction ts in with the existing neighborhood. But she said with new generations, there are new housing needs. With smaller household formations, she said, not everyone needs a giant space to live in. e pattern book, she said, might make smaller spaces, and housing diversity, more accessible.

“We need a di erent product,” she said. “ e missing middle is still at tainable.”

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

Duplexes in Ann Arbor. MICHIGAN MUNICIPAL LEAGUE

Students from the Davis Aerospace Technical High School in Detroit will use a radio in the Coleman A. Young International Airport classroom to host a talk with an astronaut on the International Space Station in coming weeks. | QUINN BANKS/CRAIN’S DETROIT BUSINESS

Certain business types deemed signi cantly hurt by COVID-related shutdowns were eligible for $409 mil lion of the state’s discretionary feder al recovery funding: entertainment venues; recreational facilities and public places of amusement; barbers and cosmetologists; exercise facili ties; food service establishments; nursery dealers and growers; athletic trainers; body art facilities; and ho tels and bed-and-breakfasts.

ree companies received $5 mil lion, all of them owners of Detroit ca sino hotels: Detroit Entertainment LLC, Greektown Casino LLC and MGM Grand Detroit LLC.

Others getting multimillion-dollar grants included Amway Hotel Corp. (about $2.4 million); MJR Group LLC, which owns cinemas (nearly $2 mil lion); Team Schostak Family Restau rants Apple Venture LLC (nearly $1.9 million); American Multi-Cinema Inc. (more than $1.6 million); PF Michigan Group LLC, which owns and operates Planet Fitness gyms (roughly $1.5 million); and ski resort Boyne USA Inc. (nearly $1.4 million).

e sector with the highest num ber of grant recipients was food ser vice, at 1,364, or 46 percent of all grantees. e industry with the larg est cumulative award was hotels and bed-and-breakfasts, at $47.4 million, or 40 percent of the total disbursed.

e report says 5,333 businesses, which sought a combined $11.8 mil lion, were denied for 10 reasons. e main one? About 2,750 did not demonstrate a decline in total sales of 5 percent or more, including con sideration of any federal Paycheck Protection Program loans or federal Restaurant Revitalization Fund re ceipts they had secured.

More than 1,700 other businesses did not provide su cient information to establish any nancial hardship or did not give all information that was required for an application to be con sidered complete. Others did not fall under the nine eligible industries, opened on or after June 1, 2020, or were unable to certify full or partial clo sure due to a state coronavirus order.

e report does not name appli cants that failed to qualify.

Push for another round

Justin Winslow, president and CEO of the Michigan Restaurant & Lodging Association, again urged lawmakers to authorize using the re maining $291 million for a new round of grants. ey should consider dis

tinguishing between businesses that got PPP dollars to keep employees on the payroll and those that received restaurant revitalization funds, he said. He also said he does not think other states have been as strict when giving pandemic aid to businesses.

“We just think that a second round, or an attempt to reallocate some of these dollars, would be helpful,” Winslow said. “ is was the one play for small business who were impacted by the pandemic to get some state-speci c relief, not federal relief. It was appreciated that it got across the nish line. But when you don’t see a lot of it get actually to those in need and simultaneously you see very large investments into the (Strategic Out reach and Attraction Reserve) Fund, multiple times over? You’re certainly seeing large business being taken care of. But I think a little more can be done and should be done to help some of the small businesses that are also showing that it’s been a little harder for them — this industry most acutely but not just us — to try to recover.”

Whitmer on Tuesday signed a bill to put $846 million into the SOAR fund to lure large-scale business expansions and prepare sites for development, in cluding $613 million in new funding.

Winslow said some business groups unsuccessfully lobbied legis lators to add relief funding for pan demic-a icted businesses to the leg islation that was passed last week.

“ ere’s interest in both chambers. We’ll have to see what actually ends up moving in lame duck or if there is a lame duck,” he said, referring to the post-election legislative session. “It’d be a much slower process if we’re starting from scratch with a new Leg islature in January.”

Michigan has roughly $6 billion in surplus revenue.

Messages seeking comment were left Tuesday with the governor’s of

ce and Republicans who lead the Legislature and legislative budget committees.

Quali cations

To qualify for what the Whitmer ad ministration called the Growing MI Business Grant Program, businesses had to attest that they saw total sales decline by at least 5 percent in 2020 from 2019. “Total sales” included for given PPP loans and restaurant revital ization receipts, according to the law.

Grants were capped at a business’s “ nancial hardship” or $5 million, whichever was less. Financial hard ship was de ned as a combination of 2020 property taxes or, if the business pays rent, 17 percent of the annual lease cost; half of its unemployment insurance taxes; its liquor license fees; and other state license and inspection fees. A qualifying business got 25 per cent, 50 percent, 75 percent or 100 per cent of the calculated sum depending on its reduction in gross receipts.

“ e way it was crafted, property tax is a big, big driver of how those dollars ended up getting spent — which really focused more on larger buildings in urban areas who would pay a much larger property tax bill and therefore qualify for more dollars,” Winslow said. “A lot of these small, independent restaurants, especially those outstate, are going to have very minimal prop erty tax dollars to claim.”

Businesses in all 83 counties sub mitted applications. One county, Luce — which has the second-small est population — had none qualify.

Businesses in Oakland, the sec ond-most-populous county, led the way with 615 grants. In roughly two dozen rural counties, ve or fewer businesses received aid.

e Treasury Department reports elding nearly 60,000 emails and more than 10,000 calls during the ap plication process. It met with busi ness groups and also hosted three informational webinars with almost 3,800 registrants.

Contact: david.eggert@crain.com; (313) 446-1654; @DavidEggert00

HOTELS

occupancy rate in October 2019 was 73.1 percent and is now at 64 percent. While metro Detroit’s occupancy rates are behind 2019 by about 9 percentage points, other urban cities are only down by 5-6 percentage points, according to Romy Bhojwani, director of hospi tality market analytics at CoStar.

On the ip side, Bhojwani told Crain’s that room rates in other ur ban markets hadn’t recovered from the pandemic e ects until this summer, while metro Detroit re covered as early as March. Much of that has been due to a spike in lei sure travel this past summer.

“Detroit wasn’t really viewed as a … top-choice leisure destination, but because it’s an accessible driveto market, and drive-to markets have done well through the recov ery post-pandemic, Detroit has also done well,” Bhojwani said.

Business travel, the last segment nationwide to recover since the pandemic began, has historically led hotel occupancy for metro De troit, Bhojwani said. at meant metro Detroit has taken a bigger hit than some other urban cities that rely more heavily on tourism. How ever, leisure has been the driving factor in boosting the region’s oc cupancy rates.

Chris Moyer, senior director of communications for Visit Detroit, said the return of major events has also boosted the visitor economy. In one week in September during the Detroit auto show, the region collected $30 million in hotel reve nue, Moyer said — a record high for Southeast Michigan.

Rising hotel rates

Moyer said downtown Detroit could bene t from more hotel rooms. “Bigger events would come with more frequency if we had the hotel capacity to meet those needs,” he said.

Beyond the pandemic, Moyer pointed to major growth in the local hospitality economy. e region had half as many hotels 15-20 years ago with much lower ADRs.

“When business travel gets back to that level, we’re going to see record levels of occupancy,” Moyer said.

e increase in events has made hotel room prices in downtown De troit especially spike.

A study by cheaphotels.org aver aged the lowest ADR for a three-star or higher hotel in downtown areas of major cities for October. It found downtown Detroit is the third-prici est city for hotel rates at $244 a night, a major spike from last year’s report, which found Detroit to be the 25thmost expensive at $125.

Bhojwani said the increases in room rates, downtown and regional ly, are coming in part because leisure has been driving the market this past summer, and other segments like business travel haven’t done as well. So, the most expensive rates have been the most popular.

Also, Moyer noted that Detroit has seen more higher-end hotels enter the market in the past ve years or so, including the Shinola Hotel, Detroit Foundation Hotel and e Siren Ho tel, all of which have raised the re gion’s average rates, even though it’s only a few hundred higher-end rooms total.

“High hotel occupancy and more hotels will be a strong jolt in the arm for our sustained economic recovery and the vibrancy of downtown,” Moyer said.

Detroit hotel rates have jumped since 2010 and more than recovered since

COVID-19 pandemic began in 2020.

Emily Laidlaw on tackling Michigan’s child care crisis

As Michigan’s director of child care licensing, Emily Laidlaw is in the foreground of e orts to address a child care crisis that was exacerbated by the pandemic. The shortage of reliable and a ordable child care has led parents — mainly women — to leave the workforce, contributing to a labor shortage and limiting economic growth. Laidlaw, who took the job in March 2021 after serving as Gov. Gretchen Whitmer’s policy director, said how the state licenses and regulates child care creates a climate that can “make or break businesses.” She is involved with the administration’s $100 million Caring for MI Future plan, a goal to open 1,000 new child care programs before 2025. She previously was an education lobbyist and legislative policy analyst.

BY| DAVID EGGERT

 What can be done to x low child care supply?

Traditional metrics around access to child care focus on the number of kids and the number of spaces for them to go. But the issue’s a lot more complicated than that when you take into account sta ng shortages across the state, which reduce enrollment. In addition, we have an a ordability issue that plays into the access issue. Recently we started Our Strong Start, which is a team of navigators that is building capacity statewide. Our goal is to try and bust down some of the barriers, whether or not that is zoning issues or sta ng issues, recruitment, marketing. All of those pieces go into the work of Our Strong Start in order to increase capacity statewide, to try and ll in some of those sta ng shortages and connect people with subsidies so that they can a ord di erent types of care of their choosing.

 How can low pay be addressed?

Child care sta members make $12 an hour. I drove by a McDonald’s in DeWitt and they’re hiring for $16 an hour. There is an issue with pay. We’ve been able to give out 38,000 $1,000 bonuses to sta across the state to try and create some retention. But this is a problem that is longstanding. It got a lot of focus during the pandemic, but it didn’t start there. When you think about the work that these folks do, we’re building brains. Ninety percent of the human brain is developed between 0 and 5. The compensation for that is really low right now. With Caring for MI Future and introducing di erent funding streams such as subsidy, other grant funds, connections to community-based organizations, we’re hoping to bolster the business model to make it easier for sta to make more money and retention and recruitment to ease up a bit across the state.

 In June, the governor signed bills to allow more children at homebased child care centers. Has that made a di erence yet?

Because we worked so closely with the Legislature, we were able to implement the entire package within two weeks of the governor signing it. We’ve increased capacity statewide by about 1,300

spots for kids. An o shoot of that is also some of the variances that we’ve been issuing for program director and lead caregiver. (They must meet minimum educational attainment and coursework requirements.) There just weren’t enough people to ll these roles. What we did is relax some of those rules temporarily while people are enrolled in a post-secondary degree program free through the T.E.A.C.H. scholarship or through the Reconnect scholarship. We’ve seen almost 100 people taking advantage of that.

 Will additional home-based facilities start accepting more children?

It’s growing. We keep getting requests for increased slots. If you apply, then you’ll be eligible for some of the

grants that are coming available, like the facilities grant or the business sustainability grant. So there’s an incentive to expand capacity as well, which has been pretty cool. I do a monthly webinar with providers. That was the No. 1 question they had. They were excited to hear that they didn’t have to move their business out of their house. They could just apply for expanded capacity, and we could work with them to improve their space.

 How has licensing changed under your watch?

When I got here, there was a signi cant rift between child care providers and our team. They felt like they were at odds for the goal. What we are continuously working on is to ensure

that the goal is the same. The goal is to provide safe, quality care for kids and families across the state. We’ve been able to create some partnerships statewide that are really working well at just improving relationships.

 What did you want to be as a kid and how did you end up in this job?

I wanted to be a pediatrician and go into practice with my best friend. The whole problem is I was never really interested in science or medicine. So that fell by the wayside pretty quickly.

I ended up in politics and policy a bit by accident. I was a sociology major (at Michigan State University) and added public policy because my mom told me I would never be able to nd a job. When I got out, I actually started my rst job at LARA (the Department of Licensing and Regulatory A airs, where she now works) in the corporations division. From there I moved and got involved in campaigns and policy work with the Legislature and was fortunate enough to serve the governor as her policy director after lobbying for public schools. I think you make your own luck. Saying yes to opportunities and making a bit of di erence in the space that you happen to be in has made me really happy in my career.

 Do you have advice for others? What has become clear to me over the last several years is that working in public service, everybody expects a certain model when they’re interacting. But we all come to this with di erent strengths and weaknesses. So just listening to other people’s learning styles and ideas really allows you to create an inclusive tent and extend your reach to bene t citizens across the state. It’s been fun.

 What do you like to do outside of work?

I am a big music lover, so I go to a lot of concerts. I found myself as a T-ball coach this summer. I also have a giant vegetable garden. I like to do a lot of work with my hands outside of this job because it’s all thinking and writing. Contrasting that I think makes me a better-rounded person to be able to attack some of the challenges that we face during the day.

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RUMBLINGS

Whitmer, Dixon schedule 2nd gubernatorial debate

Democratic Gov. Gretchen Whitmer and Republican challenger Tudor Dixon will meet for a second debate before the November election.

ree Scripps-owned TV stations announced Tuesday that the hourlong debate will be held at 7 p.m. Oct. 25 at Oakland University, two weeks before Election Day. Chuck Stokes of WXYZ in South eld, Doug Reardon

Dixon

Chairman, Editor Emeritus Keith E. Crain Vice Chairman Mary Kay Crain

President and CEO KC Crain

of WXMI in Grand Rapids and Elle Meyers of WSYM in Lansing will moderate.

e rst televised debate, which was previously announced, will take place on Oct. 13.

Mike Murri, vice president and general manager of WXYZ and WMYD, called the debate “a very important public service forum.”

Dave Dulio, director of Oakland University’s Center for Civil Engagement, said the school “prides itself on being a steward of place. Fostering a strong democracy is critical to that work. is debate will help do that.” e debates will match the number of times that Whitmer and Republican Bill Schuette debated in 2018.

Emily Laidlaw