Crain's Detroit Business, October 14, 2024 by Crain's Detroit Business

Detroit considers moving some city of ces to RenCen

By Kirk Pinho

e city of Detroit is mulling moving a chunk of its employees into the Renaissance Center, Crain’s has learned.

Multiple sources familiar with the matter said that while there has been no nal decision made or deal reached, that’s one of the options being explored as General Motors Co., Dan Gilbert’s Bedrock LLC and others weigh the fate of perhaps the most iconic piece of Detroit’s skyline.

e city has close to 10,500 full-time employees and is its largest employer, just edging out Gilbert’s Rocket Companies Inc. mortgage company, which has

10,100 or so, according to the latest gures reported to Crain’s. ere are plenty of unknowns, such as where specically the city employees would move from if a deal was reached, although sources said any potential move is not likely to impact employees at the Coleman A. Young Municipal Center, the city’s main base of operations at the corner of Woodward and Je erson avenues downtown.

rough spokespeople, both the city and GM declined comment on Oct. 3. An email was sent to Bedrock spokespeople on Oct. 3, as well.

See RENCEN on Page 4

Royal Oak plan for renter in ux sparks pushback

Nick Manes

Royal Oak is poised to see big growth in its renter population in the near future.

at’s among the key ndings of a residential market analysis conducted last year as part of an ongoing master planning process by the southern Oakland County city known for its increasingly vertical downtown surrounded by largely residen-

Auto industry caught in political friction over EVs

David Eggert

Electric vehicles and the batteries that power them are the future in the U.S. auto industry’s home state but for now serve as a ashpoint in the upcoming election from the presidential race on down.

It is complicating Michigan’s e orts to lead the next stage of automotive evolution and highlighting geopolitical tensions with China, which is building a

big head-start on the global EV market. e friction over electrication is alarming business leaders and may have rami cations in a state with 1.1 million jobs tied to automotive or mobility, 20% of the workforce.

While EV sales are growing at a slower clip than forecast previously, they are still projected to reach 36% of the U.S. market by 2030, according to J.D. Power.

Former President Donald Trump, campaigning near Sagi-

naw on Oct. 3, accused Vice President Kamala Harris of supporting an EV “mandate” — a reference to new U.S. Environmental Protection Agency emissions standards that are projected to be met if 56% of new vehicle sales are electric by 2032. e market share is 7% today.

“ at’s going to put you out of business because China has everything necessary for electric,”

See EVS on Page 17

Redford Township’s marijuana

tial, single-family neighborhoods.

at master planning process, which aims to serve as “the main guiding policy document for private development and public projects within the city,” according to a city website, is also generating some pushback from residents in the city of more than 57,000 people.

e residential market analysis shows that Royal Oak could

gain just more than 2,800 new renter households in 2025, more than seven times the amount of inbound migration expected by those seeking to move in and own a home in the city, about 385 new households, according to the analysis.

“High levels of renter in-migration also can be motivated by new construction activity

Coworking giant continues push in Michigan with 7 more locations.

Of ce space broker says tenant concessions are at an all-time high. PAGE

As Royal Oak gains in popularity with renters, developers have built several apartment projects there in recent years, including the 77-unit Billings Place on Main Street. | COSTAR GROUP INC.

The Renaissance Center downtown was built in the 1970s and 1980s. | COSTAR GROUP INC.

Chinese EV makers like BYD are rapidly gaining market share overseas. | MAIRA ERLICH/ BLOOMBERG

See ROYAL OAK on Page 5

GM plans new $145M battery cell prototype center in Warren

By Kurt Nagl

General Motors Co. is planning to build a $145 million battery cell prototype center at its Global Technical Center campus in Warren.

Construction is expected to start next month on the Battery Cell Development Center, which will help the Detroit-based automaker speed up electric vehicle battery cell development, lower costs and resolve manufacturability concerns before mass production, according to GM. Cell production is expected to start in 2027.

“We are focused on developing battery technologies that improve vehicle performance, lower costs, and enhance the ownership experience for our customers,” GM spokeswoman Tara Kuhnen said in a statement emailed to Crain’s. “We can con rm plans for a new Battery Cell Development Center on our Global Technical Center campus in Warren, Mich. that will do just that …”

Plans for the center come as GM switches gears on its EV battery manufacturing strategy after a host of production issues on the Ultium platform, which the company announced will be rebranded.

e idea behind the new center is to nd middle ground in the manufacturing process between the prototype phase and mass

manufacturing, especially as battery cell technology evolves rapidly.

Kurt Kelty, a former Tesla executive now serving as GM’s vice president of battery cell and pack, shed more light on the project Oct. 8 during a presentation for investors.

“ is capability really sets GM apart from our competitors,” Kelty said of the planned facility. “As you scale battery prototyping during development to production, you have to scale up by multiple orders of magnitude — but some jumps are more signi cant than others. By adding production capability during battery cell de-

velopment ... we can take more manageable steps and more quickly streamline processes, understand costs and identify potential issues that may come up in production.”

e planned facility, to be constructed by Walbridge, would span 165,000 square feet next to the Wallace Battery Cell Innovation Center, according to project plans presented last month to the Warren Planning Commission, which approved the plan. e battery cell center would be located on the site of the vehicle test track near the southeast corner of 13 Mile and Mound roads, according to project docu-

ments submitted to the planning commission and obtained by Crain’s through an open records request. e projected investment is listed as $145.5 million.

At a production peak of 3,600 battery cells per year, the factory would be for prototype EV batteries, not mass production, Michael Serdiuk, vice president at Ghafari Associates LLC, told planning commissioners on behalf of client GM.

“ ey’re trying out new battery cell chemicals and processes, and they actually will manufacture in small quantities batches of di erent battery cells that will then move into battery packs for some

prototype vehicles,” Serdiuk said.

A GM representative told commissioners that the project is not expected to create a signi cant number of new jobs.

Kelty said the new facility will not only enable GM to speed up development but also help manufacturing partners become more e cient.

“ is increased capability can help us close the learning gap between cell development and mass production while reducing development times by up to a year from concept to launch of new battery technology,” Kelty said. “ e battery cell development center will enable us to prove out new GM concepts ... which can then be shared with our manufacturing partners to accelerate their ability to provide production cells to us.”

e investment represents more expansion at GM’s Tech Center, where the automaker has plowed $2.5 billion over the past ve years, GM President Mark Reuss said in August. As its campus in the suburbs grows, GM is preparing to vacate its longtime headquarters in the Renaissance Center for less space as the marquee o ce tenant of the new $1.4 billion Hudson’s Detroit development that Dan Gilbert’s Bedrock is building on Woodward Avenue downtown.

A rendering depicts the prototype EV battery cell development center planned on General Motors’ tech campus in Warren. | GENERAL MOTORS CO.

Redford Township’s licensing program for cannabis was a 3-week campout

By Dustin Walsh

In one of the last metro Detroit communities to open its doors to retail marijuana businesses, the process of applying for a license is a war of attrition.

Dozens of eager applicants lined up day and night for three weeks outside of the Redford Township hall on Beech Daly Road.

e weed company operators were vying to secure a license to open a dispensary in the inner-ring suburb of Redford, which approved an ordinance to allow for marijuana sales over the summer and decided on a rstcome- rst-serve process for applications. e result e ectively incentivized operators to get in line last month — and stay there — in hopes of securing one of the valuable licenses.

“It’s inhumane,” Nick Hanna-

wa, chief legal counsel for Troybased Pu Cannabis Co., told Crain’s.

Representatives from Redford Township did not respond to inquiries on the process. e township began accepting applications at 9 a.m. Oct. 3. e township’s rules allowed for applicants to use foldable camping chairs, but barred cots, tents or sleeping on the ground. Temperatures were 48 degrees the night of Oct. 2 in Redford.

Applicants told Crain’s they would walk to the nearby Exxon or Shell gas stations to use the bathroom while waiting in line.

Most of the people in line were hired line sitters, holding spots in line for their employer or whatever marijuana operators paid them to be there. e sitters worked in shifts over the course of three weeks.

Aric Klar, CEO of Birming-

A 150-year-old company gets DoorDash orders to freighters

By Dustin Walsh

As the boat pushes from the Detroit River seawall, Captain Sam Buchanan makes small talk with his passenger: a marine pilot on his way to board the passing Flevogracht cargo ship, en route to Europe’s largest seaport in Rotterdam, Amsterdam. e pilot, who will navigate the 450-foot ship through the Detroit River and past the Welland Canal in Ontario, has known Buchanan for years.

Buchanan, 58, tells stories of great ships, delivering raw materials and goods all over the Great Lakes; bending the ear of every pilot and captain he carries as they traverse the waterways from port to port via the Detroit and Hudson rivers. e box scores and stats he’s memorized keep

the small talk moving for the short ride from the J.W. Westcott Co.’s dock near the Ambassador Bridge in Detroit to freighters in the middle of the river.

Buchanan and the pilot exchange goodbyes and the pilot ascends the 12-foot ladder to board the moving freighter as it chugs down the river. Another pilot emerges from the deck and boards the waiting boat below, before Buchanan turns back to the dock.

Most pilots Buchanan ferries, including the one riding back to the dock on a Monday late last month, are former freighter captains, having navigated hundreds of thousands of miles through the open oceans to ports in Europe, Africa and beyond.

Buchanan, in contrast, hasn’t really ever left the Detroit River.

ham-based Quality Roots, who took over his company’s spot in line on Oct. 3, said he’s spent $22,000 on wages for employees to work in shifts in the line since Sept. 11.

Pu Cannabis had alternated employees in the line since Sept. 12, securing somewhere between the eighth and 10th spot in line, said Hannawa, who arrived at township hall on Oct. 3 to submit the company’s planning and licensing documents.

Steve Kiousis, managing partner at Troy-based Kiousis Law PC and representing Zaza Cannabis Co., was also onsite to turn in documents. Zaza employees secured the 17th spot line after arriving on Sept. 23.

In an interview with WXYZ, Redford Township Clerk Garth Christie said he did not expect the lineup to occur.

“I was surprised to see it,”

Christie told WXYZ on Sept. 19. “I was anticipating seeing them out here in mid-October.”

Lucrative opportunity in one of the last communities

But the eagerness of the operators is to be expected; as Redford Township is one of the few remaining communities in Southeast Michigan to allow for marijuana sales. A license to operate in its borders is potentially lucrative. e suburb borders Southeld, Detroit, Dearborn Heights and Livonia.

While talking to Crain’s, Klar, CEO of Quality Roots, which operates eight dispensaries across the state and was fth in line, received a phone call where another operator o ered $200,000 for Quality Roots’ spot in line. He declined.

Buchanan has been piloting boats for the J.W. Westcott Co. for 40 years, starting at the company in the Port of Detroit at the age of 18.

e boat captain and general manager for Westcott grew up in Southwest Detroit in the shadow of the Ambassador Bridge, just

Business model shifts for Detroit residential investors

Nick Manes

Detroiters are increasingly xing up and repopulating long-neglected homes in the city amid the shifting economics for investors in Detroit’s residential market.

In neighborhoods around the city, residents are increasingly turning long-vacant homes and undertaking renovations, sometimes for their own uses and other times as rental properties.

Development and data experts tracking the trends say it’s been playing out over years and stems from residents seeing opportunities to make a positive impact in their neighborhoods.

e ongoing trend is represented by research by Detroiter Alex Alsup, a parcel-level data expert who has documented the work being done around the city, largely at smaller oneto-four unit homes.

But the research also speaks to another trend: the shifting economics for investors in Detroit’s housing market.

Alsup, in his article and an interview with Crain’s, posits some theories for why Detroiters are increasingly undertaking ownership of homes in the city.

“Demand for housing, along with home prices, has grown rapidly across the country over the last ve years,” Alsup wrote. “Simultaneously, people who have bene ted from owning and making money o of Detroit housing stock prior to the pandemic seem to be stepping back (somewhat) from the property they owned just as it’s gotten more valuable. How does that make sense?” e answer, he believes could amount to something of a “Yogi-ism,” referring to the witty phrases conjured up by deceased baseball player Yogi Berra: “Detroit Homes Are Too Valuable; No One Makes Money on em Anymore.”

Indeed, homes in Detroit and the broader metro region have gained substantial value in recent years. Around the start of the year, home values in metro Detroit were rising faster than anywhere in the country.

ve blocks from the Westcott’s dock in the Port of Detroit. ere, the Westcott and its crew continue to perform old-world mail deliveries in a changing world via a small eet of three boats: the M.S. Westcott, the J.W. Westcott II and

at’s a far cry from a decade or more ago when investors from the suburbs and out-ofstate could buy scores of homes on the cheap and rent them. Such a business model amounts to “milking,” according to Alsup. “ e key to milking property is that the owner does not see the real estate they own as

Applicants wait in line Oct. 3 outside of the Redford Township hall in the hopes of securing a license to operate a cannabis dispensary. Some had been in line for nearly three weeks. | DUSTIN WALSH/CRAIN’S DETROIT BUSINESS

Captain and general manager Sam Buchanan poses for a portrait aboard the J.W. Westcott II in the Detroit River in Detroit on Sept. 30. | NIC ANTAYA

Coworking giant adds 7 more locations in Michigan market push

A coworking space giant is opening seven more new locations in Michigan in the next year or so.

As Switzerland-based IWG plc

— IWG stands for International Workplace Group — brings three more of its HQ brand locations and four more of its Regus brand locations to the state, it continues its push into a market where companies including Bamboo, SpaceLab, Venture X, WeWork and others have maintained a presence for years, some of them with multiple locations in the region.

IWG said earlier this month it is opening the following locations by the middle of next year:

◗ 2751 E. Je erson Ave., Detroit. HQ location opening in the second quarter, 2025. Square feet: 13,500

◗ 3150 Livernois Road, Troy. HQ location opening in the second

quarter, 2025. Square feet: 15,400

◗ 645 W. Grand River Ave., Howell. Regus location opening in the second quarter, 2025. Square feet: 10,000

◗ 428 S. Monroe St., Monroe. HQ location opening in the second quarter, 2025. Square feet: 5,200

◗ 4595 Broadmoor Ave., Grand Rapids. Regus location opening in the third quarter. Square feet: 5,900

◗ 300 Ottawa Ave. NW, Grand Rapids. Regus location opening in the third quarter. Square feet: 9,200

◗ 1005 S. Old U.S. 27, St. Johns. HQ location opening in the second quarter, 2025. Square feet: 7,100

Earlier this year IWG announced nine new locations in Michigan. According to CoStar Group Inc., a Washington, D.C.based real estate information service, IWG has at least 20 other Michigan locations including South eld, Bloom eld Hills, Novi, Troy (two), Royal Oak (two), Grand Rapids (three), Ann Arbor, Lansing, East Lansing, Dearborn, Birmingham, Detroit (two) and Clinton Township. ey range be-

tween 2,000 and 21,000 square feet.

Aamir Farooqi, CEO and part owner of Banyan Capital Ventures, which owns the building at 2751 East Je erson, said he was approached by IWG about some of his fourth- oor space in the property.

“It’s three minutes from downtown, has lots of amenities with things like Red Hook and immediate parking,” Farooqi said. “I’m working right now to get this building ready ... ey want to be

RENCEN

From Page 1

Any potential relocation, if one were to take place, would likely involve some 100,000 to 200,000 square feet — a sizable footprint, to be sure, but just a small fraction of the complex’s overall o ce space. Over the last several years, the RenCen has become increasingly vacant, a victim of several factors ranging from the COVID-19 pandemic, increased competition for space downtown and GM moving many of its people to the Warren Technical Center.

Not all of the city’s operations run out of Coleman A. Young Municipal Center.

For example, the Health Department has space in Brush Park at 100 Eliot St., while the Municipal Parking Department has space at 1600 W. Lafayette Blvd., according to CoStar Group Inc., a Washington, D.C.-based real estate information service. e O ce of the Inspector General is in the Ford Building at 615 Griswold downtown, and the General Retirement System is in the Ally Detroit Center at 500 Woodward.

Crain’s has submitted a records request for a complete list of the

in New Center and Corktown. ey believe in the recovery.”

e o ces not only have coworking space but also private ofces, meeting rooms and creative spaces, according to a news release.

IWG’s business model involves it entering into contracts with landlords, who pay for the buildout of the space. IWG secures users, collects a fee and pays for its own expenses, and the landlord pockets the rest.

IWG said it signed agreements

city’s locations and the number of employees at each. GM and Bedrock, plus consultants and public o cials, have been exploring what to do with the RenCen after the automaker vacates the complex next year and takes space at Gilbert’s Hudson’s Detroit development on Woodward Avenue north of Campus Martius Park.

Although there has been nonal determination made, demolition of at least some of the massive complex is being explored, Crain’s and others have previously reported.

Last month, a Republican legislative leader claimed Democrats, who control both legislative chambers and the governor’s o ce, were keeping $300 million-plus on the state’s balance sheet as part of a plan to fund Renaissance Center demolition and build light rail services. Behind the scenes, sources denied House Minority Leader Matt Hall’s assertions.

Mayor Mike Duggan said last month during the Detroit Homecoming event that while he isn’t sure what the nal outcome will be for the towers, “all of us are trying to preserve as much of the Renaissance Center as it is possible to preserve.”

with building owners in 465 locations around the world in the rst half of this year, with 200 of those being in the United States. e company trades on the London Stock Exchange and reported 2023 revenue of $4.26 billion (£3.34 billion) earlier this year, a record high in the company’s 35year history, although it missed analyst projections and posted another year of pre-tax losses (£189 million, or $240.8 million). In 2022, its pre-tax losses were £105 million, or $133.8 million.

In an interview with Crain’s reporters and editors recently, Quentin Messer, CEO of the Michigan Economic Development Corp., said there are “active discussions” at the state level with elected ocials and the private-sector parties involved but said “it would be premature to talk about the dimensions of those conversations.”

In April, when GM and Bedrock announced the automaker’s pending move, executives with both companies set a self-imposed oneyear deadline to make a determination on what to do with the 5.5 million-square-foot complex, the majority of which — four 39-story o ce towers anking the 727-foot hotel tower in the middle — is owned by GM. e pair of smaller 21-story o ce towers that were developed as a second phase have separate ownership.

Gilbert, public records show, has an option to purchase GM’s portion of the complex, Crain’s reported this summer.

e city isn’t the only government that could occupy some of the buildings. ere have previously been discussions about Wayne County, which has its main operations in the Guardian Building downtown, taking space in the towers, as well.

Kirk Pinho

This building on East Jefferson Avenue outside of downtown Detroit is one of seven across Michigan getting a new coworking space location by Switzerland-based IWG plc. | COSTAR GROUP INC.

among for-lease choices, especially near Downtown Royal Oak,” the market report states. “In fact, there appears to be no limit to the number of rental units that the city can support, and no limit to the number of renters inclined to move into the city. In general, if the developers build it, then the renters will come.”

e report says that 60% of those new renter households anticipated next year will choose some form of multi-family dwelling while the remainder will choose “detached and/or subdivided houses to lease.”

Apartment developers have been busy in Royal Oak in recent years. Projects including e Gri n, e Roy and Billings Place — all in or near the city’s downtown — have added nearly 400 units since 2021.

One apartment development, the proposed 158-unit Lincoln Place, was pulled from public meeting agendas earlier this summer for unknown reasons. Developer Michael Nadolski with Royal Oak-based Champion Development Group LLC has not responded to multiple inquiries regarding the project’s status.

While a forecast 5% increase in the suburb’s population in one year just from renters may seem large, such numbers are largely how the rental side of the housing industry operates, said Sharon Woods, prin-

cipal with Lansing-area consulting rm Urban Strategies LandUseUSA, which conducted the residential analysis for the city.

Roughly one-third of renters move each year, creating signicant churn in the sector, while just 5% of homeowners move in any given year, according to Woods.

“Royal Oak is not particularly special or unique in the fact that renters drive a … big share (of the housing market,” Woods said. “Renters want to live there, and renters are on the move. So they’re going to drive the market and the developers are going to respond to that.”

Still, much of the inbound rental population will also be price-conscious.

Half of the 2,800 new residents expected next year will be on the hunt for a rental living situation of less than $900 per month and another 30% will be seeking in the range of $900-$1,400 monthly, per Woods’ report.

“Again, allocating the migrating households to price brackets can signi cantly reduce the market potential for developers seeking to build large or luxury housing choices in premier locations,” the report reads. “Meanwhile, there also is a signi cant need and market potential for more moderate prices in both the buyer and renter markets.”

As of the mid-point of this year, occupancy and e ective rent in the Royal Oak area — the rent a land-

lord can collect after any discounts or incentives — were up year-overyear, according to a market report from the Detroit o ce of commercial real estate rm Berkadia.

Resident pushback

Not all Royal Oak residents are pleased with the ongoing master-planning process, a state-mandated exercise that is likely to still require several months of work before any formal adoption.

For their part, city o cials and documents note that the ongoing master plan would not change existing zoning in the city or propose any new buildings, beyond municipal facilities. Rather, an informational website set up by the city outlines what the process aims to do. at includes establishing “a long-term, aspirational vision for the city’s future” and providing “steps for realizing that vision,” as well helping “inform future rule making and development decisions,” and guiding “future zoning changes, which must, by law, include an open public process, subject to public hearings and discussion.”

A group calling itself Protect Royal Oak has been vocal in its opposition to the proposal thus far, with members showing up at public meetings to share their concerns. Leaders of the group say they have around 1,000 supporting residents and growing.

Chief among those concerns,

The ROI of employer dental bene ts

How dental insurance — even a voluntary plan — can help attract and retain talent

By Mi elle Fitzgerald, Crain’s Content Studio

Healthy smiles can lead to a healthier bottom line. at’s because companies that o er dental bene ts can receive a signi cant return on their investment – both in terms of employee retention and overall productivity.

“We always recommend dental insurance if it’s in a company’s budget,” said Ted Maitland, founder of Berkley-based Compass Bene t Group, whi provides employee bene t plans for small and mid-sized businesses. “It is very important from a retention perspective.”

Services su as dental insurance can help employers attract and retain employees, Maitland said. He recommends o ering a voluntary plan if an employer-paid plan is not in the company’s budget.

“When an employer o ers a voluntary plan, many employees elect it,” he said, and more people will use the dentist.

Todd Christy, president of Okemos-based Mi igan Dental Association and a dentist in Berrien Springs, recognizes the company ROI that dental insurance can provide.

“In this competitive labor market, o ering dental is a good way to draw quali ed people, and it’s good for the employer,” Christy said. “It has been shown that employees with dental insurance tend to use it, whi means they’re able to receive good preventive care, whi in

turn means they won’t be missing days on the job because of serious dental emergencies.”

Ryan Torresan, a longtime dental executive and an editorial board member for the industry publication “Group Dentistry Now,” has seen rst-hand the impact that employer-provided dental bene ts can have on a company.

“A company that provides dental bene ts sends a clear message to its employees: their well-being is a priority, extending beyond just physical or medical care,” said Torresan, ief marketing o cer for Colorado-based Peak Dental Services and a consultant for dental o ces throughout Mi igan. “Companies o ering robust dental bene ts experience lower turnover rates as employees feel valued, supported and if they use their dental bene ts, they feel more con dent via

their healthy smile.”

Torresan said he worked with a company that implemented dental bene ts a er noticing a spike in absenteeism linked to untreated dental issues. Within just a few months, absenteeism sharply declined.

But he’s also seen the other side – employees who have le a company because they did not have dental insurance. “A call center vendor we were using had high turnover,” he said. “Agents were leaving to work for a competitor call center with similar pay but that o ered dental bene ts.”

The

impact of untreated dental care

Oral health can in uence a person’s physical and mental health. Gum disease is associated with

conditions su as heart disease and diabetes, and poor oral hygiene is o en associated with anxiety issues and self-esteem—all of whi can cause employees to take time o work.

U.S. employees miss 92 million hours ea year for emergency dental care, according to a study by the Centers for Disease Control and Prevention. And overall, more than $45 million in U.S. productivity is lost ea year due to untreated dental disease.

In addition, good oral health also can help reduce medical expenses. Experts say that the mouth is a gateway to the inner workings of the body, and evidence that shows that good oral hygiene and oral health are related to preventing and managing many medical conditions.

“Dental emergencies are o en unplanned, causing employees to miss work, whi a ects overall productivity,” Torresan said. “As dental executives, we’ve consistently observed that when dental bene ts are accessible, employees are less likely to experience severe dental issues that lead to lost workdays.”

Maitland has had a similar conversation with his clients at Compass Bene t Group.

“It is a lot less of a time crun for a tooth cleaning or cavity lling than having a root canal because someone waited too long to see a dentist,” Maitland said. “Good oral health also can lead to overall wellness, whi leads to stronger productivity. It also can stave o health problems before they spiral out of control.”

Solving the tipped-wage quandary is straightforward

While lawmakers have taken ample time for summer vacations and campaign season, the clock has kept ticking.

For thousands of businesses, the clock is starting to tick very loudly on drastic changes set to take e ect in February to the wage paid to tipped workers such as restaurant servers.

A Michigan Supreme Court ruling is set to end the legal structure that allows restaurants to pay tipped workers a lower wage as as long as their tips bring their earnings above the normal minimum wage (currently $10.33 an hour and set to rise to $12.48 an hour in February and $14.97 by 2028 because of the same court ruling).

Unless the Legislature acts, the tip credit would initially increase to 48% of the normal minimum wage, or about $6, in 2025, and will continue to rise yearly until it’s 100% of the regular wage by 2029.

Senate Majority Leader Winnie Brinks told Crain’s that the Democrats in power are “gathering input” from those a ected by the law, but outlined other issues, including anti-price-gouging laws, as higher priorities.

e input needed is clear — thousands of small businesses are trying to gure out whether their entire pay structure is about

COMMENTARY

to change, and they want action. Hundreds of thousands of tipped workers are trying to do the same. Many tipped workers have made it clear that they don’t want the current system to change drastically, with some turning out to demonstrate in Lansing along with restaurant owners. e simple reason: ey want to protect what they have rather than risking a complete disruption of the tipping culture that helps them take home far more than even the higher minimum wages currently on tap.

Here’s why: At best, the higher minimum would drive up restaurant prices at a time when consumers’ tolerance for in ation is bottoming out. eir logical response will be to try to save money elsewhere — and taking it out of tips is the easiest way to do that.

In lobbying for a legislative x to the problem, a Michigan restaurant association has estimated that 40,000 to 60,000 of those jobs could disappear and 1 in 5 restaurants could close.

e Legislature isn’t going to be doing

anything signi cant until after the election. But this issue — in addition to new mandatory paid time o laws that are bringing a double whammy to the same businesses — is one that needs to be at the top of the list once that time comes.

Organized labor has pushed higher minimum wages as ways to reduce income inequality for years. But especially for restaurant workers, this is an attempt to x a problem that doesn’t exist. Servers and bartenders are quick to point out that tips mean they can easily make $25 to $30 an hour, and some have.

Food service and hospitality are huge sectors of our economy, community bastions and job creators that support many, many workers. It’s past time to give them some certainty about what the not-toodistant future will bring.

e state supreme court dumped a complicated mess on the Legislature related to worker wages and bene ts. Of all those issues, xing the tipped wage problem seems perfectly straightforward and not even all that controversial.

Business owners and many workers agree they don’t want major alterations to how tipped wages currently work. Democrats should put xing this problem high on their priority list.

How our state can invest in growth — and make a pro t

Arecent report from the Cit-

izens Research Council of Michigan detailed that Michigan does far less than our neighboring states to support its entrepreneurship and innovation ecosystem, so it should come as no surprise that in the most salient measure of relative prosperity, per capita income, Michigan also is falling further and further behind.

Ned

Staebler is vice president for economic development at Wayne State University and president and CEO of TechTown.

Our reliance on mid-20th Century economic policy and focus on low wage jobs has sent us “tumbling toward Mississippi territory in per capita income” according to Bridge Michigan who notes that we were 16th in 1999 but have fallen to 39th in the past quarter century.

It’s time — actually, way past time — to reverse those antiquated policies and change our economic trajectory, and the path forward is surprisingly quite straightforward.

e data has long been clear that companies in high tech, knowledge-based industries pay far higher and drive more economic activity than their more traditional counterparts. ese are growing elds that are becoming a larger share of the global economy and providing increasing numbers of jobs that pay, at minimum, household-supporting wages.

Yet, in the past 15 years, Michigan’s eco-

nomic development budget for innovation and entrepreneurship has been dwarfed by its e orts to retain legacy production roles despite the fact that, for generations, automation has rapidly decreased demand for these positions, reducing the wages paid to the remaining workers to levels signicantly below the state’s median. What’s more, the programs used to preserve these types of jobs tend to be expensive and not cost e ective. A recent example had the state paying over $1.7 billion or approximately $690,000 per job to subsidize positions that paid less than $42,000 per year. is is failing our economy and our residents.

It would be far more accretive to invest in growing industries that provide higher wage jobs and to do so in a manner that actually creates a positive direct return to the state’s bottom line. Fortunately, the innovation economy is well positioned to provide exactly that type of opportunity.

Even without consistent public sector support, Michigan’s startup community has been growing, and has been consistently rated one of the leading emerging tech hubs in the world. is success has not been solely focused in Ann Arbor, as Detroit and to a lesser extent Grand Rapids and Kalamazoo have shifted the ecosystem’s traditional center of gravity.

It’s important to note that there is not a single ‘magic bullet’ investment that will be the cure-all for our economic woes, but if we use a strategic, portfolio approach over the next decade, we can and will transform our nascent startup community into an economic powerhouse that will both grow our economy and retain our young people.

Importantly, rather than being a drain on the state’s resources, this investment will provide direct nancial return in addition to increased tax revenue, and it can be accomplished for far less initial outlay than what is currently being o ered for a single production facility. Just this May, Gov. Gretchen Whitmer announced the creation of a new position, the Chief Innovation Ecosystem ofcer. Now, it’s time to give that o ce the tools it needs to be successful.

Over the next 2-3 years, we should invest $450 million (far less than a single battery plant incentive) distributed among the following three strategies:

An investment of $200 million into what is called a “fund of funds,” that would help capitalize venture capital rms looking to invest (non-exclusively) in Michigan technology companies;

◗ An investment of $150 million in preseed and investigation stage funds that invest exclusively in Michigan’s earliest startups; and

◗ Grants of $100 million to the support organizations that help entrepreneurs across the state start new ventures and accelerate

their growth. e resources given to entrepreneurial support organizations will last several years, helping thousands or tens of thousands of entrepreneurs but will provide no direct nancial return to the state. e pre-seed funds are modeled to support approximately 500 early-stage companies and create 5,000 direct jobs and ‘revolve’ or produce returns su cient to reinvest in more companies at similar levels.

Meanwhile, the fund of funds should seek market rate returns, helping to grow the venture capital industry in Michigan while providing at least a net 2x cash return over 7-10 years.

While investment returns are not guaranteed with the investment distribution described above, the state should see a net direct return of at least $500-$550 million on its initial outlay of $450 million. is is in addition to the creation of hundreds of new companies, thousands of high-paying, household-supporting jobs and a signi cant increase in economic activity and the associated tax receipts to the state. How do we know it can work? Because states like Ohio, Pennsylvania and Massachusetts and others have been doing it successfully, pro tably, and consistently across legislatures and gubernatorial administrations for decades. It’s not a coincidence that we’re falling further and further behind other traditional manufacturing powerhouses. It’s a choice.

Ilitch group to help Wayne State boost its athletics marketing

Jay Davis

A local college athletics program is partnering with a big Detroit brand to boost its marketability.

Wayne State University athletics is partnering with Detroit-based Ilitch Sports & Entertainment for Ilitch to serve as its exclusive sports marketing agency. Ilitch Sports & Entertainment’s corporate partnerships team will manage the sale of sponsorships for WSU athletics in addition to strategic planning for partner activations, they said in an Oct. 3 news release.

Financial terms of the multiyear deal were not disclosed.

Ilitch Sports & Entertainment will be Wayne State athletics’ selling agency for all sponsorship sales including branding, branded digital campaigns, sweepstakes and other sponsorship assets, ocials from the two organizations told Crain's in an email. e two parties will sell sponsorship opportunities together. Ilitch Sports & Entertainment will also consult with WSU on best practices, including national industry standards within sports marketing and multimedia rights areas.

e Ilitch Sports & Entertainment corporate partnerships team also develops deals with companies to leverage the Detroit Red Wings and Detroit Tigers brands to drive business objectives. e team also manages sponsor relationships at Little Caesars Arena, Comerica Park, the Fox eatre in Detroit and Pine Knob Music eatre in Clarkston, among other entertainment venues across metro Detroit.

WSU Director of Athletics Erika Wallace said the deal will reap unique branding opportunities for corporate partners across Detroit.

e partnership will o er WSU athletics access to approaches and

Ilitch will sell sponsorship assets like signage on behalf of WSU athletics to local, regional and national partners. Sponsors will have marketing opportunities inside Wayne State athletics facilities, and support developmental programming opportunities for student-athletes, they said in the email.

best practices that maximize the athletic department's brand exposure and revenue opportunities, while providing corporate partners with experiences and visibility. e partnership does not impact any Wayne State name, image and likeness deals.

Wayne State is the second university in the state to outsource marketing for its athletics department. Michigan Sports Properties, through Ann Arbor-based media and technology company Leareld, handles marketing for UMAnn Arbor athletics.

"I am very excited about this partnership with Ilitch Sports and Entertainment," Wallace said in the release. "Wayne State University sits just one mile down the street from Little Caesars Arena and Comerica Park. Leveraging our assets on the collegiate sports platform in combination with the professional sports platform, in a city that we all call home, will provide many partners with opportunities that they have not seen before and elevate our fan experience."

Ilitch Sports & Entertainment President and CEO Ryan Gustafson said in the release that his company’s corporate partnerships team, led by Chief Commercial

Wayne State University is partnering with Detroit-based Ilitch Sports & Entertainment as the exclusive sports marketing agency for WSU athletics. | WAYNE STATE UNIVERSITY

Architecture rm builds talent pipeline from HBCUs

Michaela Habte and Derek Harris weren’t strangers to Detroit when they arrived this summer on Wayne State University’s campus.

e college seniors weren’t Warriors, however, even though they were staying in WSU-provided housing.

Habte, a Philadelphia native studying at Florida A&M University in Tallahassee, and Harris, a Dallas native studying at Prairie View A&M University outside of Houston, were interns for the Detroit-based Framework E LLC architecture rm. is summer, they received hands-on experience in the ins and outs of urban development — everything from obtuse and confusing zoning regulations to working around building columns in mixed-use redevelopment projects.

It’s the second time both Habte and Harris worked with Framework E founders Pierre Roberson and Jerry Attia, who started a similar program at their prior rm.

“I liked it so much (last year) that when Pierre reached out, I jumped at the opportunity,” Habte said.

e company’s program brings architecture students from historically Black colleges and universities to Detroit as part of Roberson’s and Attia’s e ort to recruit fresh talent to the city.

And hopefully get them to boast about the city to others after the nine-week program comes to an end and they return to their respective campuses.

“I want to attract talent to Detroit. Bringing people here, giving them an experience of Detroit — like we want to spread this infectious narrative that Detroit is a great place to be, a place you can have a great career,” said Roberson, who grew up on the city’s northwest side.

Habte and Harris were far from gofers, wrapping up their internships at the end of July before they headed back to campus; Habte is expected to graduate in the spring, while Harris anticipates wrapping up his undergraduate studies by the end of the year, with the goal of graduate school in his sights.

ey worked directly with clients on project design for the Cody Rouge Community Action Alliance as well as on a pair of mixed-use projects on Trumbull and West Fort Street.

Habte and Harris also were able to take in more of the city, which both described as welcoming and friendly but also not without its challenges. For Harris, the public transportation system was a frustration, while Habte — who described her native Philly as "a dollar store version of New York" — had di culty nding late-night food options.

But still, the two came to appreciate Detroit — and its people.

"All around Detroit, it's nothing but welcoming, open arms," Harris said. "Everybody wants to make sure you feel safe and warm."

Building Black architecture talent

Although not necessarily a stated goal of Framework E’s program, it does help nurture budding Black architecture talent in an industry that’s overwhelmingly white.

e National Organization of Minority Architects, or NOMA, citing data from from the National Council of Architectural Registration Boards, says that although as of 2020 about 22% of architects in the U.S. identify as a racial or ethnic minority — what NOMA calls “a signi cant increase compared to previous years” — just 2% of ar-

chitects nationally are Black or African American. at held steady from the decade prior.

Saundra Little, principal and director of diversity and inclusion for the architecture rm Quinn Evans, said NOMA and the American Institute of Architects, or AIA, Large Firm Roundtable have an initiative to double the number of Black architects in the country by 2030. at’s a tall order, she said, because that number has been at for many decades.

“It’s hard to double that percentage,” Little said. “It’s like the number of architects is growing but that percentage is still staying

the same within the profession.”

e e orts to increase that are many. For example, more than half of NOMA’s nearly 50 chapters across the country — including in Detroit — o er free camps to junior high and high school students ranging from one day to one week. Little also pointed to a fellowship program through the National Trust for Historic Preservation and the African American Cultural Heritage Action Fund called HOPE Crew, which stands for Hands-On Preservation Experience. e six-month program immerses students from Florida A&M, Prairie View and Tuskegee University in Alabama.

During the Detroit Month of Design last month, Quinn Evans hosted several events for middle and high school students showcasing career paths in the architecture and design industry.

e ACE Mentor Program — ACE stands for architecture, construction and engineering — reaches more than 10,000 students annually. More than 70% of them are people of color, and 40% of them are women.

Little said exposure to the industry as a sound career path at an early age is one of the ways to help bolster the ranks of Black architects around the country. While the medical and legal elds draw attention — and high salaries — architecture is a ful lling career as well, she said.

“Everybody talks about being a lawyer or a doctor, and I just think architecture is not one of the rst things that come up when people talk about career choices,” she said. Interns leave their mark on real projects

It wasn’t Harris’ rst choice, either. He had planned on becoming a mechanical engineer but switched his path. A residential architecture program wasn’t offered, as he had hoped, but found a calling with commercial space.

“Pierre and Jerry taught me the importance of commercial architecture,” Harris said. “I wouldn’t want to pursue commercial architecture if it wasn’t for Pierre and Jerry.” Habte, on the other hand, knew from an early age that she was interested in the eld, even when she didn’t quite know what

From left: Jerry Attia, co-founder of the Detroit-based Framework E LLC architecture rm, interns Michaela Habte and Derek Harris, and Framework E co-founder Pierre Roberson

| KIRK PINHO/CRAIN’S DETROIT BUSINESS

A conceptual rendering of a mixed-use project at 1450 Trumbull designed by Detroit-based Framework E LLC and its interns. FRAMEWORK E LLC

Kirk Pinho

Innovation in electricity transmission moves Michigan businesses forward

ITC is working to build a greater grid for a greener, prosperous future

By Crain’s Content Studio

Winland is the Director of Strategic Planning for ITC Holdings Corp. He is responsible for facilitating many of ITC’s long-term corporate strategy and innovation efforts. He serves as ITC’s ambassador to the Fortis Innovation Network and oversees interactions with Energy Impact Partners, a collaborative investment rm. Prior to this role, he served as ITC Great Plains’ Manager of Regulatory Strategy and was responsible for directing the company’s regulatory affairs efforts in the Southwest Power Pool region.

Prior to joining ITC in 2013, Chris worked at a business development and government affairs rm in Austin, Texas that specializes in energy industries and utility markets. Chris began his career at IBM, where he became a managing consultant in both the Financial Management and Enterprise Resource Planning practices of IBM Business Consulting Services. Chris earned a Bachelor of Science degree in physics and political science from Duke University and a Master of Business Administration from the University of Texas at Austin.

Michigan’s power grid requires signi cant upgrades to keep up with current and future needs. ITC Holdings Corp., the nation’s largest independent electricity transmission company, is focused on building and maintaining a power grid that can handle everything we need. What’s driving that future forward focus? Innovation.

Crain’s Content Studio recently caught up with Chris Winland, Director of Strategic Planning for ITC Holdings Corp., about what an innovative grid means for Michigan businesses.

Business innovation is happening all over in Michigan. How does that impact electricity?

CW: Nearly every company in Michigan is innovating in some way. Many of these innovations, such as advanced manufacturing techniques, arti cial intelligence enabled queries, electric vehicles, and the latest medical equipment can be very energy intensive. ese innovations require reliable electricity, and reliable electricity requires a modern transmission grid.

Additionally, many corporations are increasingly demanding cleaner sources of electricity, which are not always located near the population centers that need it. is has signi cant impacts on when and where we need to transmit power. Today’s needs are placing new demands on a grid that wasn’t designed for them. It’s a very exciting time to be in the industry.

How is ITC looking for innovative ways to solve challenges and maintain reliability in its management of the transmission grid in Michigan?

CW: ITC takes great pride in its track record for reliability, making sure electricity is always available when needed, so, the company is looking for innovative ways to solve challenges and maintain reliability.

One of the innovative technologies on our transmission lines is called optical ground shield wire, which helps us manage the grid when lightning strikes a transmission structure. We have a cable strung on top of the transmission structures that, when lightning strikes, provides a path for electricity to ground and automatically isolates the impacted line taking it down. at same wire also transmits data that tells ITC’s operators which lines are down so power can be restored or rerouted. O en this process can happen so quickly that consumers never lose power.

ITC also leans on innovation to support its commitment to sustainability and environmental stewardship. Lines near high population centers of birds can be equipped with yellow coiled bird diverters, which are designed to help make the lines more visible to birds and discourage contact from the lines.

There’s no doubt that our transmission infrastructure is critical to keeping the lights on in Michigan. What are some challenges you’ve

faced and how has ITC shown innovation in your approach to addressing them?

CW: ITC is increasingly using innovative ideas and technologies to perform cost-e ective maintenance and upgrades with minimal disruptions to the grid and customers who depend on it. We had one case where existing structures needed to be taller to accommodate upgrades.

example is something we do to prevent lines from galloping in areas strong to prone winds. Galloping occurs when ice frozen on the lines catches the wind and makes the lines bounce, which causes some safety and reliability concerns. We place devices on strategic portions of the lines to prevent this galloping, which also helps assure reliability and reduce maintenance costs. ere are many other ideas that we’re exploring as well, which include

“ITC takes great pride in its track record for reliability, making sure electricity is always available when needed, so, the company is looking for innovative ways to solve challenges and maintain reliability.”

— Chris Winland, Director of Strategic Planning for ITC Holdings

Rather than de-energizing the existing line, we decided to work with a company called Ampjack to raise some structures while the lines were still energized, which saves time, reduces costs, and prevents costly outages associated with traditional construction methods. Another

Corp.

some opportunities involving drones, advanced materials, and process improvements.

Looking to the future, how is ITC planning and working to stay on top of ever-changing energy needs?

CW: Well, transmission will be essential to unlocking our energy future. In addition to innovation at the grid level, our transmission planning e orts and regulations are evolving to make sure we’re anticipating future needs. Our system planners look at all sorts of scenarios every day, preparing for a range of possibilities as we continue to move towards a greener, cleaner energy future. Everyone at ITC comes into work every day looking for better ways to do our jobs, and I’m certain we’ll continue to see innovation in all facets of our business for the bene t of those we serve.

CHRIS WINLAND

stewardship. Photo caption: Courtesy of ITC

Tens of millions of dollars pour into tossup Senate race

David Eggert

LANSING — Republicans are pumping tens of millions of dollars into Michigan’s open U.S. Senate race, bidding to catch up with Democrats in a contest that a political newsletter says is now one of only two tossups nationwide.

e Senate Leadership Fund, a super PAC tied to Minority Leader Mitch McConnell, said this month it will spend $22.5 million on the race between Republican Mike Rogers and Democrat Elissa Slotkin. Another pro-Rogers independent political action committee, the Great Lakes Conservatives Fund, kicked in another $4 million for ads airing through mid-October. Its post-primary commitment currently totals $12 million.

e push comes as Slotkin continues her fundraising haul, which surpassed Rogers’ over the cycle. Her campaign said on Oct. 2 it will report raising nearly $18 million over three months, a record, bringing the total to more than $40 million.

Finance reports are not due until Oct. 15, when the candidates will detail how much they brought in and spent in the third quarter and had on hand entering the closing stretch.

AdImpact, which tracks political ads, estimated almost $90 million in general election spending — $49 million by Slotkin and Democratic groups and $39 million by Rogers and Republican groups. e Republican in ux brought future ad reservations to $21 million to Democrats’ $20 million, it said.

It is a sign Republicans see the race and others in "blue wall" states tightening as Election Day nears and Donald Trump and Kamala Harris run neck-andneck in Michigan and other battlegrounds.

e Cook Political Report lists Michigan and Ohio as the only Senate tossups, down from four in August. Democrats have a 5149 majority but are expected to lose West Virginia, meaning they would need to pick up another seat to keep the majority despite who wins the White House.

ABC News' 538 website polling averages showed Slotkin up 4.7 percentage points, while RealClearPolitics' average of polls showed her with a 3.3-point edge in Michigan.

"As voters learn more about Mike Rogers' plan to x the economy, this race continues to be tight," said Jason McBride, president of the Great Lakes Conservatives Fund. He said Rogers “has the momentum."

But Slotkin spokesperson Austin Cook said Slotkin still dominates "grassroots" fundraising.

Slotkin is a third-term congresswoman, and Rogers is a former seven-term congressman.

Online marketplace gives people with disabilities a way to overcome hurdles

Dave Meador, a xture in Detroit, regional and state workforce development e orts, is turning his attention to creating economic opportunities for a niche group: Michigan’s population of people with disabilities.

Meador, who heads up the Detroit Regional CEO Group and is co-founder of the Autism Alliance of Michigan, has founded a new nonpro t digital marketplace called Trove Market for products made and sold by people with disabilities. He plans to launch it by the end of the year, if not in time for the holidays.

Meador was inspired by his daughter, Belle, who has faced employment barriers like others with disabilities and often got the "Don’t call us; we’ll call you," response from employers politely saying they weren’t going to be able to hire her, Meador said.

For many in the community of people with disabilities, it's easier to work as a sole proprietor to overcome barriers to employment, including transportation and full-day work requirements. Self-employment allows exibility, autonomy and the ability to create an accessible work environment, he said.

People with disabilities are more likely to pursue self-employment. In 2023, 8.4% of people with disabilities were self-employed as freelancers and sole proprietors, compared to 5.9% of those without disabilities, according to the U.S. Bureau of Labor.

Belle Meador, 28, works part time, helping to care for plants at a local English Gardens store. Outside of that, she has turned her artistic talents to making homemade birthday, holiday and seasonal greeting cards. Her mother and her aunt are helping her as she works to keep up with orders.

“With my daughter's life as a lens, I really dug into this issue of

employment for people with disabilities, especially traditional employment. It's a universal problem right now that people (who) are disabled … can't nd work” or they face barriers around transportation and the number of hours they can work, Meador said. “Not only for the autism community but for the entire community that is faced with disabilities, there's a real opportunity here for self-employment through a marketplace like this."

It's not the rst time Meador has delved into workforce development for the state's disabled population. In 2020, as chair of the Autism Alliance of Michigan, he announced the organization's 10-year goal to get more than 100,000 of the state's residents with disabilities into jobs.

"Our long-term objective is to promote greater integration into traditional employment for individuals with autism and all disabilities," he said. "However, significant barriers prevent them from accessing these opportunities.

below the federal poverty level in 2019 and another 28% fell under the ALICE (Asset Limited, Income Constrained, Employed) threshold, with earnings above the poverty level but not enough to a ord the basic costs of living.

e data highlights the need for inclusive economic solutions like Trove Market, Meador said.

Meador incorporated Trove Market with the state last month.

While the Internal Revenue Service considers its application for 501(c) (3) nonpro t status, the marketplace is operating under the scal oversight and sponsorship of the Autism Alliance of Michigan.

e nonpro t model made sense, Meador said, because the requirement to earn a pro t and provide a return to investors isn’t compatible with a low-fee model for sellers with disabilities. “By doing this as a nonpro t and taking out that requirement for a return of investors, it helps the economics work,” he said.

Trove provides a unique alternative by helping people bypass these systemic obstacles found in conventional workplaces, allowing them to achieve economic stability and maintain independence through entrepreneurship."

In Michigan, 14.7% of the state's 10 million residents, or 1.47 million people, have disabilities, according to the U.S. Census Bureau's 2023 American Community Survey.

Financial hardship among the state's disabled population is prevalent, Meador said, pointing to a 2022 report from United Way of Midland. According to the report, nearly half of the state's disabled population is struggling economically: 19% were living

Trove Market will work to keep seller fees as low as possible, he said, charging the minimum to maintain the digital marketplace that Clinton Township-based JRD Systems is building out at trovemarket.com.

Meador and his wife, Peggy Meador, made a $250,000 donation to Trove to help jump-start the platform. He is also applying for grants with local and national foundations and soon will begin calling on local corporations to ask for support, he said.

Another $800,000 from the Michigan Department of Health and Human Services is funding the technical work to get the site up and running, as well as advertising and social media and seller resources and tools, Meador said.

“It is the department’s priority to support all individuals to live their healthiest life, and we are commit-

ted to making Michigan the best place to live for all. We recognize that the ability to achieve economic independence through employment and entrepreneurship helps to escape the cycle of poverty and reduce isolation, improving overall health and well-being,” MDHHS Director Elizabeth Hertel said in an emailed statement. “We are proud to work with those with lived experience and community members to increase inclusion and diversity in our workforce and create a stronger society that ampli es the abilities of every individual.”

Meador projects Trove will operate on an annual budget of about $1 million to cover the costs of website maintenance, advertising and social media to drive buyers to the site and tools and training. Trove is working with groups including the New Economy Initiative and TechTown Detroit to develop tailored support like “how to” videos for launching a business or taking and uploading pictures to the marketplace, Meador said, to create a small business ecosystem for people with disabilities.

Trove will also put in place supports to help sellers manage the amount they are earning so as not to risk their Social Security and food assistance bene ts, Meador said, noting one of the concerns for many people with disabilities is when they will hit a bene t cli where they earn $1 but lose $2 in bene ts.

A diverse advisory committee that includes people with disabilities is helping to ensure Trove’s mission aligns with the community it serves, Meador said. He is also talking with other nonpro ts including Dutton Farm and Friendship Circle to develop a pipeline of sellers for the digital marketplace and plans for coaching and support for their clients who sell on the platform.

Meador said he’ll seek pro bono marketing assistance to drive customers to Trove Market.

Sherri Welch

At right: Belle Meador, daughter of Dave Meador, executive director of the Detroit Regional CEO Group. At left: her aunt, Kathy Norris. | DAVE MEADOR

Dave Meador

Auto supply chain a lucrative target for cybercriminals

By John Irwin, Automotive News

Manufacturers are an increasingly lucrative target for cyberattacks by criminal organizations because the complex nature of their businesses and high expenses make it difficult to invest in security infrastructure, experts said.

It's a dynamic that's true for the automotive supply chain, particularly among smaller suppliers with tight margins. They lack the resources of larger multinational parts companies and automakers. But the entire automotive supply chain needs to adapt as threats grow and criminals refine their attacks, said Mike Stone, an attorney at law firm Warner Norcross + Judd's Detroit office.

"The threat is real, the threat is large, and as we introduce more artificial intelligence capabilities, the easier it will be for bad actors to launch attacks," Stone said.

An expensive problem in the industry

Cyberattacks have proved costly for the auto industry. The attack on CDK Global, a dealership management system company, cost dealerships more than $1 billion and around 56,200 new-vehicle sales, according to an Anderson Economic Group study.

Attacks in the supply chain have also made waves, including those on German supplier Eberspaecher in 2021 and Gentex Corp. in 2023. A cyberattack against Chinese supplier Yanfeng, meanwhile, sparked a lawsuit from Stellantis. The automaker alleged the incident cost it more than $300 million in revenue. It also raised questions about who is liable for an attack on a supplier that results in losses for a vehicle manufacturer.

Manufacturers are proving to be lucrative targets for criminals.

Manufacturing, including in industries outside of automotive, accounted for 26% of cyberattacks in 2023, more than any other sector, according to an annual cybersecurity study by tech giant IBM. Ransomware accounted for 71% of those cases, IBM said. Factories lose money

when they go offline, making them more likely to quickly pay a ransom, according to IBM.

Taking action from the top down

Suppliers should take the threat seriously and instill a cul-

ture that promotes good practices in cybersecurity from the top down, Stone said.

"I can walk into a company and ask their CEO about cybersecurity policies, and if they say, 'I don't know' or 'You'll

Cyberattacks have proved costly for automakers and suppliers. | EMILY ELCONIN/BLOOMBERG

CRAIN’S LIST

LARGEST ARCHITECTURAL FIRMS IN THE DETROIT AREA

it was yet.

“When I was little I used to like make buildings out of cardboard and sticks and duct tape,” Habte said, noting that she learned what it was when her mother was watching the TV show “How I Met Your Mother,” of which the protagonist, Ted Mosby, is an architect.

But unlike Mosby, Harris and Habte did real, tangible work.

e product of Habte’s and Harris’s e orts over the summer was thrilling for Kenyetta Campbell, executive director of the Cody Rouge Community Action Alliance.

e students designed a new headquarters for the nonpro t on the city’s northwest side, combining a pair of buildings that would have things like a technology lab, co-working space, a wellness room and other features.

“I’ve been doing development work for more than two decades, and the experience I’ve had with these two has been phenomenal,” Campbell said. “We are always looking to attract and retain talent in Detroit, and to be able to have two young students from HBCUs work directly with our young people in the community, they see that there’s hope. ey see that they can do it too.”

The two also worked on a pair of mixed-use projects: one with 26 residential units and 8,400 square feet of commercial space at 1450 Trumbull at Labrosse, and another at 2281 W. Fort St. at 15th Street with 30 residential units and commercial space for a restaurant, gym and other uses.

“I like their outside perspective,” said Jennifer Fiore, whose family owns the property. “ ey bring a lot of fresh ideas and it’s interesting what they want to include in the project.”

As for next steps, Roberson and Attia hope to expand the internship program to include more students next year. And perhaps even some sweeteners to stay in the region.

“I’d like to set up a scholarship program for anyone who does this program here in Detroit,” Roberson said. “ ey get a scholarship to go to one of the local universities (like University of Detroit Mercy, Lawrence Tech, University of Michigan) and that way we can attract talent back to Detroit. I hope you do grad school here, work here for a few years and then maybe you set up your own shop.”

Building a talent pipeline to help with building throughout the city, region and country is key — and it doesn’t come out of a vacuum.

“ at doesn’t come without some mentorship,” Attia said.

Officer Chris Coffman, is committed to advancing the WSU athletics brand presence across metro Detroit.

The announcement came a day after Detroit City Football named WSU its exclusive higher education sponsor, with Wayne State set to invest at least $1.3 million into the deal over four years.

As part of that deal, the professional soccer club's men’s and women’s jerseys will sport the Wayne State logo, debuting at DCFC’s first match of the 2025 season. The university's logo will also be on jerseys of the nearly 500 Detroit-area youth playing in City Youth, Detroit City FC's youth soccer club.

Athletic scholarships are a significant source of financial

support, helping Wayne State's more than 400 student-athletes earn higher education degrees from the school’s 375 academic programs.

WSU’s athletic campus at Warren and Trumbull avenues includes Tom Adams Field and a 3-year-old, $28 million Wayne State Fieldhouse that serves as the home of Wayne State men's and women's basketball teams in addition to Detroit Pistons G-League team the Motor City Cruise. Six new buildings have been added to Wayne State's athletics campus since 2010.

Wayne State sponsors 18 varsity sports, most of which compete at the NCAA Division II level in the Great Lakes Intercollegiate Athletic Conference. The fencing programs participate in the Central Collegiate Fencing Conference with Ohio State University and Northwest-

information and implement multi-factor authentication, she said.

have to ask my CTO or IT director,' I know they're in trouble," he said.

It is important for companies to let workers know that hackers and other bad actors often prey on emotions and instincts such as curiosity, fatigue and frustration, said Claudia Rast, chair of the IP, cybersecurity and emerging technology group at Detroit law firm Butzel. Likewise, companies should strictly control who has access to critical

Larger parts companies and automakers often send questionnaires to their suppliers asking about their cybersecurity practices and they are looking to do business only with companies they trust, she said.

"Often, the smaller companies will get flummoxed and say this doesn't apply to us or we can only do so much," Rast said.

Smaller companies should work with their customers to establish standards, she said.

ern University. The Warriors have won 44 conference titles in the past 17 years, produced 11 team national championships and had two Olympians this past summer in Paris: sabre fencer Ziad Elsissy and epeeist fencer Mahmoud Saleh.

WSU athletes also excel in the classroom. The athletic department has a 3.45 cumulative grade-point average, with each team having at least a 3.11 GPA, the release stated.

The new partnership adds to a longstanding relationship between Wayne State and the Ilitch organization. The WSU Mike Ilitch School of Business opened in 2018 after Mike and Marian Ilitch donated $40 million — the largest gift in school history. Wayne State’s business school has since added programs in sport and entertainment management, and entrepreneurship and innovation.

Rast said she advises suppliers to bring in a local forensic group to assess their vulnerabilities.

Likewise, smaller companies could benefit from an attorney with expertise in this area now to establish trust and attorney-client privilege. That will allow a quicker response to a cyberattack, Stone said.

"You need to assume you're going to get attacked and need to have a plan in place to know how to respond when you are attacked," Stone said.

John Irwin writes for Crain sister publication Automotive News.

CONGRATULATIONS EDUCATION

HONOREE Executive Director, EdTrust-Midwest

For your commitment to equitable education for all Michigan students.

Amber Arellano

The Hall Automotive Group

would like to congratulate our Partner & Chief Operating O cer

Eddie L. Hall, III

on being named to the Crains 2024 - 40 under 40 class!

2024 BFDI International Training Institute Award Honoree

A conceptual rendering of a mixed-use project at 2281 West Fort Street designed by Detroit-based Framework E LLC and its interns. FRAMEWORK E LLC

Out-of-state investors see ‘grit’ in Michigan’s tech ecosystem

By Anna Fifelski

e Midwest lags behind the coasts when it comes to venture funding. In fact, the region is being lapped.

What makes Michigan companies stand out to investors, though, is the founders’ dedication to making their ideas into a reality.

Adrian Fortino, managing director and general partner of Mercury Fund, a Houston-headquartered venture fund that focuses investments on mid-America, summed it up in one word familiar to the Motor City.

“I just think that we have incredible grit from the founder community and in the startup community,” Fortino said. “And I believe that that grit, combined with the technical apti-

tude, and the drive to build big world-changing companies is unique to our state.”

Mid-America is full of hidden gems, Fortino told Crain’s, and Michigan especially bene ts from the automotive engineers who are using their foundational knowledge to build strong companies focused on cybersecurity, supply chain ful llment, BioTech and more. Mercury Fund announced the closure of a $160 million venture fund last year, and two of the companies the fund has already invested in are based in Michigan.

According to a 2023 study by the Detroit-based ID Ventures venture capital fund, California, New York, and Massachusetts account for more than 73% of all venture funding in

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LEGAL

Honigman LLP

the country, while the Great Lakes and Midwest regions only account for 7% of all venture capital deals.

On top of that, Michigan-based startups get an average of 80% of their funding from out-of-state investors, according to data from PitchBook.

At Michigan Tech Week earlier this month in Detroit, venture capitalists and investors spoke on why their out-of-state funds continue to invest in Michigan companies, or why they decided to open a fund in Michigan. e answer boiled down to one word: opportunity.

pany has “all its ducks in a row.”

However, in order for a company to be well-prepared for an investment, there needs to be a support system for entrepreneurs, such as a community where founders can brainstorm and pursue their startup, and a welcoming ecosystem.

Michigan’s tech ecosystem has been growing during the past several years, and was recently ranked as the world’s second-fastest growing startup ecosystem; but Michigan-based startups still take longer to fundraise compared to companies on the coasts.

people are able to ask themselves important questions about where they want to live and where they want to work, said Joshua Sledge, chief investment o cer for the Kalamazoo Community Foundation.

Michael Spath joins Marsh McLennan Agency’s Michigan Business Insurance practice as a Vice President based in Troy. With a strong focus in the life sciences and technology space, Michael works with incubators, smart zones, and venture rms throughout Michigan and Ohio to foster growth among the next generation of great businesses in the Midwest.

LAW

Strobl PLLC

Russell Carniak joins Strobl PLLC and brings his extensive background in business litigation and his proven record of guidance and advocacy for his clients. He represents businesses, organizations, and individuals in a variety of disputes and presents customized solutions based on clients’ unique circumstances and objectives. Russell has specialized courtroom experience, plus the skill and knowledge to avoid litigation. He also advises on business formation, organization, and structuring.

Honigman LLP welcomes Jackie Cook to its Real Estate Department as partner in the rm’s Real Estate Services Practice Group. She has over 20 years of experience in litigating property tax and state and local tax (SALT) cases. With a focus on valuation issues, exemption claims, and classi cation disputes, she helps her clients navigate the intricacies of the tax landscape effectively, from planning to audit through litigation and appeals.

LEGAL

Honigman LLP

Honigman LLP welcomes Samantha Kopacz to its Corporate Department as partner in the rm’s Employee Bene ts and Executive Compensation Practice Group. She focuses on employee bene ts and executive compensation including regulatory compliance for quali ed plans, nonquali ed plans, health and welfare plans, fringe bene ts, and equity-based programs and deals.

“ ere’s so much opportunity here that we can use, and I’m excited about the people here and the infrastructure that we’re building that will bring in more companies and investment,” Jarrett Irons said during a panel discussion Oct. 2 at Michigan Tech Week.

Irons is the co-founder and owner of Detroit-based VC rm Omada Ventures. He moved from e Woodlands, Texas, to attend the University of Michigan, and now lives and works in Detroit after several years working for a technology company in Chicago.

Irons said that when he considers investment opportunities, there’s no di erence in how he approaches Michigan founders compared to founders from other states: he looks to ensure a com-

Shalanda Armstrong, the founder and managing partner of 100KM Ventures, a venture fund based in Washington, DC, said she believes outside investors are looking to Michigan because it is getting serious as an entrepreneurial ecosystem.

“Detroit’s talent for the last 25plus years has left this town,” Armstrong said. “People are choosing to stay, choosing to come back home to the city, and I think that is what’s exciting about the tech ecosystem.”

And those who stay are branching outside Detroit’s roots as an automotive capital, Armstrong said. Founders are looking to future technologies like health care tech, FinTech and ClimateTech.

As Detroit’s community grows,

Sledge’s work focuses on the social impact of investment, and he said that allows the organization to prioritize work that will create a vibrant ecosystem of entrepreneurs and small business owners. e question is, how can Michigan do that on a much larger scale? ere’s no single answer, but Sledge suggested: “Create the investments that build institutions within the community.”

Founders and entrepreneurs within Michigan’s tech community have shared perspectives on how the venture capital and startup ecosystem can not only grow, but ourish.

In order to grow startup investments in Michigan, a coalition of Michigan-based venture capital funds and organizations rallied to get a one-time investment of $126 million to establish the Michigan Startup Evergreen Fund.

Michigan House Representatives Jason Hoskins (D-Farmington), Alabas Farhat (D-Dearborn) and Greg VanWoerkom (R-Norton Shores) were seeking $105 million to establish the Michigan Innovation Fund. In July, the state allocated $60 million to establish the fund.

AAA-af liated bank acquired by N.Y. banking rm

By Anna Fifelski

Auto Club Trust FSB, the Michigan a liate of the American Automobile Association, or AAA, announced Oct. 8 it has entered into a merger agreement with New York-based online banking company Grasshopper Bancorp Inc. Grasshopper Bank NA will acquire Auto Club Trust in a cash and stock transaction that is expected to close in the rst quarter of 2025.

Auto Club Trust is a subsidiary of e Auto Club Group headquartered in Dearborn and has total assets of approximately $495 million, according to a news release. Once the transaction is nalized, Grasshopper Bank will be the exclusive bank powering de-

pository and certain lending offerings to AAA members in Auto Club Group’s 14 state territory. e transaction adds Grasshopper Bank’s $835 million in total assets to create a nancial institution with $1.4 billion in assets. Grasshopper will raise approximately $35 million in new equity and Auto Club Group will be issued a 4.9% ownership stake in Grasshopper as part of the transaction.

“ is transaction brings together Grasshopper Bank’s premier digital platform with Auto Club Trust, a bank known for providing AAA members in the ACG territory with a great experience across a myriad of o erings,” Michael Butler, chairman and chief executive o cer of Grasshopper and Grasshopper Bank, said in a news release.

Cleveland-based law firm Squire Patton Boggs LLP served as legal adviser and Los Angeles-headquartered investment banking firm MJC Partners LLC served as financial adviser to Grasshopper and Grasshopper Bank.

South Carolina-headquartered law rm Nelson Mullins Riley & Scarborough LLP served as legal adviser and New York-headquartered investment banking rm Keefe, Bruyette & Woods, A Stifel Company, served as nancial adviser to e Auto Club Group and Auto Club Trust. e transaction results in 48.5% accretion to Grasshopper’s tangible book value at close, according to the release. Grasshopper Bank did not respond to a request for comment.

A Michigan Tech Week panel, Coming Back to Michigan to Invest, includes Ollie Howie (left), managing partner of Mount Auburn Venture Partners; Shalanda Armstrong, founder and managing partner of 100KM Ventures; Joshua Sledge, chief investment of cer for Kalamazoo Community Foundation; and Jarrett Irons, co-founder and owner of Omada Ventures. | ANNA FIFELSKI

CANNABIS

Municipalities are required under state law to make the selections based on a competitive process that typically takes the form of a scoring system — often revolving around an applicant’s ability to invest in curb appeal or sustainable operations. But some communities have done rstcome, rst-served methods of accepting applications, including Garden City, Westland and Harper Woods. One could, theoretically, argue lining up for weeks is, in fact, competitive.

But in Harper Woods the process devolved into a show of athletic prowess, much like how issues are settled on the playground: with a footrace, as applicants were barred from arriving until the day applications would be received but required to wait in the parking lot until a set time to line up for the three available licenses. e applicants then sprinted to secure their spot in line, which resulted in at least one applicant being knocked down.

Redford Township, however, did not place a numerical limit on its licenses — but is doing so through zoning.

Zoning restricts licenses to approximately 12

e township has relegated the available locations or dispensaries into a handful of overlay districts on Seven Mile, Inkster, Plymouth and Telegraph roads. Applicants must have leased or bought property in one of those districts at the time of submitting an application on Oct. 3.

However, the applicants can be eliminated from contention if another applicant’s license, who was ahead of them in line, is awarded a license due to proximity. e township’s ordinance requires dispensaries to be at least 2,500 feet apart. at realistically translates to only 12 conceivable licenses within the roughly 30,000 linear feet of available dispensary space in the overlay zones, according to Crain’s calculations.

Hannawa said area building owners were asking $25,000 per

MARKET PLACE

The Detroit-Wayne Joint Building Authority (“Owner”) is issuing a Request for Proposal (RFP) to remove an outdated Centrifugal Chiller and associated pumping system and replace with a new 950-Ton Chiller and associated primary and secondary chilled water pump system. The Chilled water system is located in the basement of the Coleman A. Young Municipal Center (CAYMC) located at 2 Woodward Avenue in downtown Detroit, Michigan (the “Project”).

Interested and qualified contractors are invited to attend a mandatory pre-bid meeting at 9:00 AM on Tuesday, October 22, 2024, in the 13th Floor Auditorium of the CAYMC.

Requests for the RFP should be made to Chris Hewitt at chris.hewitt@hines.com.

The Detroit-Wayne Joint Building Authority (“Owner”) is seeking bids from qualified general contractors for the demolition and renovation of the Office of the Auditor General (OAG) of the City of Detroit. The OAG occupies approximately 5,200 square feet of office space within the Coleman A. Young Municipal Center (CAYMC) located at 2 Woodward Avenue in downtown Detroit, Michigan. A mandatory pre-bid meeting will be held on Tuesday, October 22, 2024, at 11AM in Suite 216 of the CAYMC.

Interested contractors my request a copy of the construction documents by emailing Mike Kennedy at mike.kennedy@hines.com.

month to hold properties for cannabis operators going through the application process.

Pu Cannabis has a property under contract on Telegraph Road, he said.

Applicants in line Oct. 3 were wondering out loud how long before the process in Redford Township resulted in lawsuits against the municipality, as many in the region have battled lawsuits over the license selection process.

Dozens of lawsuits existed last year against municipalities, including Royal Oak, Warren, Pontiac and others. The plaintiffs argue the city’s competitive process to award licenses was unfair.

However, any potential lawsuits against Redford Township are unlikely to occur until licenses are awarded; and it’s unclear when that will occur.

BUSINESS

From Page 3

valuable in and of itself,” Alsup wrote. “Rather, it is a means to an end: e extraction of rent.”

Anecdotal evidence shared by Alsup, however, indicates that business model appears to be on the decline. In his article, Alsup notes that evictions in the city have fallen to an all-time low, and there are signi cantly fewer homes in the Wayne County Tax Foreclosure Auction.

Not surprisingly, those working closely with investors dispute the characterization of the business practice as “milking.” Erick Monzo, team leader with the Keller Williams Realty-a liated Monzo Group, called Alsup’s description “asinine.”

Monzo said the landlord and investor clients he works with have generally kept rents below

market rate and seek to have a positive relationship with tenants.

And while investor interest in the market remains strong, Monzo said, many clients are also seeking to “ring the register” and cash out of some of their housing portfolios.

Compliance with the city can be tricky but largely amounts to a cost of doing business, he said. e primary reason his clients are seeking to cash in amounts to appreciation of their investment.

“We have de nitely seen an uptick in portfolio/packages of homes being sold by our investors that have been working in the city for over a decade,” Monzo wrote to Crain’s. “Who can blame them though when they’ve seen returns of 400% and 500%? It’s no di erent than the stock trader who is diversifying his investments. Taking some pro ts o the table, but not selling everything.”

A house under renovation in the Midwest Tireman neighborhood in Detroit, an area that is seeing fewer vacant houses and more rehabs. | NICK MANES

Applicants wait in line Oct. 3 outside of the Redford Township hall in the hopes of securing a license to operate a cannabis dispensary. Some had been in line for nearly three weeks. | DUSTIN WALSH

the Joseph J. Hogan.

Great Lakes ship tra c has been on a generations-long decline as mining and steel industries in the region have eroded. Email e ectively outmoded the Westcott’s original mission of delivering mail for the U.S. Postal Service to passing freighters, save for parcels from Amazon and beyond.

e Hogan family that have maintained ownership of the Westcott since 1878, are working new angles to keep the company a oat and advance it into the fth generation of ownership, including delivering DoorDash to passing crew and o ering river tours to curious residents.

“For a lot of things to remain the same around here, a lot of changes have to be made,” said Jim Hogan, CEO and great-grandson of the founder of the company. “As we go into the future there have been various lines of business that wore out or are no longer needed. But there’s still a vital importance for us to be here when we’re needed. We feel we have a vibrant future and a more rewarding one that we do now.”

Rowing toward opportunity

John Ward Westcott founded the company 150 years ago.

Westcott was the nephew of industrial magnate Eber Ward who helped develop the shipping lines through the Detroit River. He later operated shipbuilding, logging, mining and steel milling businesses in Michigan. e package freighter steamboat SS Eber Ward operated in the Great Lakes, launching in 1888, before it sank in the Straits of Mackinac in 1909.

Westcott, who became the Great Lakes’ youngest master captain at 20 years old, began his own operation: running mail to passing ships connecting vessels, their companies and crews’ families for the rst time in the Great Lakes. Westcott rowed his boat to freighters as they passed through the Detroit River at all hours of the day and night; delivering mail and communications to ships via a rope tied to a bucket. He also worked at the Detroit Times newspaper to update times and dates for when ships would come and go from port.

Despite several generations be-

tween Jim Hogan and his great-grandfather, not much has changed at Westcott.

Mail is still delivered, though now it’s far more Amazon packages than letters, and it still runs crew and pilots back and forth. But as the family has gotten larger — Hogan’s son, Jimmy, is the company’s vice president and his other son, Bryan, is leading the venue e ort. Buchanan’s three sons also work for Westcott.

“We’ve basically had a lifetime together,” Hogan, 68, said on the phone with Buchanan sitting across from him. “But the cost to keep our organization intact has gone up over the years. e fact that we’re open 24 hours a day when most shut down at 5 p.m. keeps the costs up but keeps us alive. e customers need us to be here, so we are. We nd ways to make up for those dollars here, there and everywhere. We don’t turn anything down.”

Model boats and service

“What the boat needs, I get,” Buchanan said sipping co ee and spinning the wheel on the M.S. Westcott. “We’re in the service business, so anything that’s service related, we do. Our job is to do it with a smile and give them more than what they pay for.”

Buchanan says everything with a smile unfurling under his mustache. His presence in the river for the last 40 years is as common as the

sh that call it home.

He feels not only beholden to the freighters that beckon his call, but to others on the river.

Buchanan and the Westcott boats have performed several rescues over the decades. He recalled one story of rescuing a young girl who jumped from the Ambassador Bridge to take her own life.

“She said something about a boy,” Buchanan said. “Told her there are plenty of boys and that I had a few sons available. But, really, you got to have a pep talk ready. I love kids and I kept thinking there’s probably a set of parents out that aren’t grieving a dead daughter, so that makes me happy to have been there.”

In 2023, iron worker Spencer Baker fell 150 feet from the bridge and Buchanan aboard the J.W. Westcott II reached him in three minutes. Buchanan, a master captain, was recognized by the U.S. Coast Guard for his bravery and still maintains a relationship with Baker and his family. And the crew of the Westcott — Buchanan was on vacation in Tennessee — rescued a swimmer in the river in late September.

Buchanan said he wanted to work at J.W. Westcott since he was 16 and came back two years later — after being turned away due to his age — because it seemed adventurous to a kid in the blue-collar annals of Southwest Detroit.

“I’ve been looking at this bridge my whole life,” Buchanan said from

the bow of the M.S. Westcott, named after the wife’s founder and former owner of the company, pointing with a thumb to the Ambassador.

“Growing up in the neighborhood here, you either made it or you didn’t. is was a good job then. It’s a good job now.”

As the M.S. Westcott docked, Buchanan checked the location of the Le Champlain, a 180-passenger cruise ship operated by French operator Ponant that began sailing the Great Lakes this year.

e ship was entering the Detroit River from Lake St. Clair and would arrive in front of J.W. Westcott in an hour, en route to Toronto. Buchanan was prepared to deliver another marine pilot to the ship.

He waxes on about model ships, a skill Buchanan learned from a World War II veteran. Buchanan’s models are in the Dossin Great Lakes Museum in Detroit and the National Museum of the Great Lakes in Toledo.

“People in this business like trucks, trains, boats and probably planes,” Buchanan said, sitting with another co ee inside the Westcott’s o ces on 24th Street across from Riverside Park. “Now we’re a bunch of little boys that grew up and get to drive the things now.”

180 years or sink

Buchanan and Hogan recognize their small life on the Detroit River-

front is shrinking without change. USPS mail volume dropped 46% between 2008 and 2023, thanks to the ubiquity of email. e Westcott continues to be an a liate of the USPS, recently signing another fouryear extension to a contract it’s held since 1948, and the only o cial mail boat in the Great Lakes. e Westcott was granted its own oating ZIP code, 48222, making it the only non-military oating code in the U.S.

It also maintains a contract with Lakes Pilots Association and the Great Lakes Pilotage Authority to deliver crew and pilots.

“ e biggest change has been the amount of vessels we service,” Hogan said. “Great Lakes shipping has to stay intact for us to survive.”

But between the declining mail and ships, the Westcott must expand its o erings.

Westcott held a wedding reception last year and Hogan plans to meet wedding planners at the various expos that occur throughout metro Detroit this winter.

Hogan also purchased a food truck, which currently sits idle in Westcott’s parking lot.

e company has had buyout and partnership o ers, but Hogan said the company prefers “to go it alone.”

Buchanan also now pilots several tours a week through the Detroit River, educating passengers on the river and the Ambassador and soonto-be-completed Gordie Howe Bridge for $300 for six people on the two-hour tour.

“It’s another way to make more money,” Buchanan said.

Meanwhile the operation continues to deliver anything and everything to the passing crews. Westcott employees — 16 in total — will grocery shop for ships and deliver as they pass by. Westcott crew recently stocked the crew of a British ship that is working on digging the new tunnel for Line 5 in the Straits of Mackinac.

Hogan said while new business lines will be created to keep Westcott a oat, it’s mission won’t change if he can help it. And he believes the company will persist despite the challenges. is year, the Westcott signed another 30-year licensing agreement with the city of Detroit to operate in the port.

“ at’ll take us out to 180 years in business,” Hogan said. at’s pretty remarkable, isn’t it?”

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and

Captain and general manager Sam Buchanan pilots the M.S. Westcott while his deckhand Walt Cochenour assists with the transfer of pilots from a freighter along the Detroit River in Detroit on Sept. 30. NIC ANTAYA

Trump said. “We have everything necessary for a gasoline-powered car because of our liquid gold.”

He warned that if he does not win, “you will not be making any more cars in Michigan. It’s all going to be moved over to China and di erent places.”

A day later in Flint, Harris touted work to bring manufacturing back to the U.S. and said she will ensure next-generation advanced batteries and EVs are invented in and built in America.

She brought attention to Trump’s manufacturing record and accused him of sitting on the sidelines and letting China dominate “when it came to building the cars of the future.”

“Contrary to what my opponent is suggesting, I will never tell you what kind of car you have to drive. But here’s what I will do — I will invest in communities like Flint, which helped build the auto industry and the UAW,” Harris said. EVs are an issue in the state’s open U.S. Senate race, too, as Republican Mike Rogers opposes Chinese battery maker Gotion’s planned factory in Big Rapids, citing national security concerns, and attacks Democrat Elissa Slotkin for opposing bills to nullify the tougher rules on greenhouse gas emissions.

Slotkin this month launched an ad saying “no one’s going to mandate anything,” but “if there’s going to be a new generation of vehicles, I want that new generation built right here in Michigan, not China.”

At the state level, Democratic Gov. Gretchen Whitmer has committed billions of dollars to ve major EV, battery or battery-components projects since 2022, saying they will ensure Michigan remains an automotive hub amid the EV transition. Republicans backed one when they led the Legislature but have since lined up against subsidizing other new plants while in the minority, singling out the Gotion project in particular.

ey have intensi ed their criti-

cism in recent days after U.S. authorities charged ve Chinese nationals with lying and trying to cover their tracks after they were confronted at a military training facility near Grayling.

President Joe Biden’s administration also has pledged nancial assistance, such as a loan tonance construction of a battery plant near Lansing and a grant to convert one of General Motors’ two Lansing-area assembly factories to make EVs at a later date.

Four of the ve plants have ties to Asian companies. Gotion is headquartered in China. Ford Motor is constructing a battery plant in Marshall by licensing technology from China-based CATL, the world’s largest manufacturer of EV batteries. South Korea-based LG Energy Solution, which is expanding in Holland and partnering with GM on the Lansing-area battery factory, is the globe’s third-biggest EV battery maker.

Glenn Stevens Jr., executive director of MichAuto, the Detroit Regional Chamber’s automotive and mobility association, said the industry is global and multinational companies, including from China, know they need to be in Michigan as part of a “very intertwined ecosystem.”

ere are more than 240 Chinese companies operating in Michigan, 44 of them with U.S. headquarters in the state, according to the Michigan Economic Development Corp.

China is a trading partner. It is the state’s third-largest export market ($2.4 billion) and fourth-biggest source of imports ($8.3 billion).

“ ere is growth in electric vehicles globally and there is growth in the United States. But over 90% of the battery supply chain, including the technology that makes it up, is in Asia between China, Korea and Japan,” Stevens said. “So if we’re going to build electric vehicles in this country, we are absolutely intertwined with the technology and supply chain of the batteries, the battery chemistries and the technology of batteries.”

GM, for instance, is in discussions to buy EV batteries that would use technology from CATL

and be assembled at a new U.S. factory in a southern state to be operated by Japanese manufacturer TDK, Bloomberg reported. “ at is a perfect example. Hometown team, General Motors, needs these LFP batteries but they’re doing business with a Japanese company and they’re licensing the Chinese technology. at is how it works if we want electric vehicles right now,” Stevens said. “ at’s why it’s so important for the United States to develop its own technology and to have as much of its own independence in supply chain on critical minerals, critical battery components, critical semiconductors and all that. It just is. We have to move in that direction.”

But that process will take more than a decade, he said, noting that China has had a pro-EV industrial strategy in place for 15 years.

“Either way, after this election, we are in a bipartisan manner going to have to deal with the fact that we need to mine more in this country, we need to develop our own technology for the battery supply chain and we’re going to need to address one way or another the potential ood of imports of vehicles that want to come in from a country that has signi cant overcapacity in its own market, China, and also wants to expand globally,” Stevens said.

In Congress, members of both parties are pressing several Chinese automakers to make clear the depth and nature of their ties to the Chinese Communist Party. ey are concerned that technology used in their vehicles could be leveraged for nefarious purposes.

In recent weeks, both the Biden and Whitmer administrations

took steps to boost domestic EV production, announcing a combined $445 million in grants for four battery-components projects across Michigan.

e worry for business groups is that EVs are being overly politicized, re ecting a partisan divide within the electorate.

A new Detroit Regional Chamber-commissioned poll shows that 45% of registered Michigan voters — majorities of Republicans, independents, rural residents and those living outside Metro Detroit — do not think the state should compete aggressively to be a leader in EV manufacturing while 50% do.

Chamber president and CEO Sandy Baruah said too few Michiganders seem interested in supporting state policies that would help the state compete in the global race for the next-generation automobile. He said he has told Republicans in Lansing and in Washington that their position and rhetoric around electri cation are “not correct.” e issue is “pretty nuanced,” he added.

“I’ve met very few policymakers that are completely opposed to EVs. ey might have challenges with the existing policy prescription, and frankly, we could say that we have some challenges from existing policy prescriptions as well, too, certainly at the federal level,” Baruah said. “But we do think that the overall e ort nationally and in Michigan in particular needs to be focused on what needs to be done to keep our automotive and mobility industry globally competitive for the long term. A big piece of that, not the only piece of that, is around electri cation.”

Republican presidential nominee and former President Donald Trump listens as Senate candidate and former Rep. Mike Rogers speaks at a campaign event at the Ryder Center at Saginaw Valley State University Oct. 3. | ALEX BRANDON/ASSOCIATED PRESS

Metro Detroit of ce space broker says tenant concessions are at an all-time high

Sam Munaco has been a staple in the commercial real estate brokerage industry for decades, primarily representing tenants in lease negotiations with landlords. He is president of Advocate Commercial Real Estate Advisors LLC, which he joined in 2010 after working for Signature Associates Inc. and handles leasing work for several large law rms in metro Detroit, not to mention Crain Communications Inc. (parent company of Crain’s Detroit Business), Strategic Staf ng Solutions, OneMagnify, Cooper Standard Automotive and Walbridge, among others. He spoke to Crain’s about the state of the of ce leasing market as the COVID-19 pandemic’s ripple effects are still felt, the joys of being a new grandparent, and why he thinks one of the state’s most prominent politicians believes he owes him a favor — which Munaco says he does not.

The way companies use of ce space has radically changed since March 2020. What sort of trends are you seeing in terms of tenant space requirements and usage?

ey vary from industry to industry. A good deal of my practice involves representation of law rms. ey send surveys out to attorneys, paralegals and employees, and depending on how many days a week they prefer to come in the o ce depends on whether they get an o ce or not. One of the surveys I helped work on, if you’re not coming in three days a week or more, whether you’ve been an attorney for one month or 30 years, you’re not getting an o ce. Some of our clients that are more in the industrial sector have not given up space to the extent that o ce users have. But the major trend I’m seeing now, di erent from when we were in the middle of the pandemic, were clients were not willing to make long-term commitments, regardless of whether they were downsizing or not. It was very easy to get a one-year extension from an existing landlord to take a breath, hit the pause button, etcetera. Even though many of our clients are still right-sizing, they are signing 10year leases now and making longterm commitments.

We’ve seen large employers like Amazon recently require its employees to be back in the of ce ve days a week. However, they are a bit of an anomaly as many companies still have a hybrid work schedule. What’s your sense on the future for of ce space?

I think it’s going to continue for a relatively short timeframe. I think a number of employers want to demand a ve-day-a-week schedule but have been hesitant to do so because of the political fallout from employees. e primary driver is a lot of these Gen X and millennials want to come in to the o ce, and many of the senior level employees do not and they’re losing that mentorship that folks like you and I were privy to. I think the trend will continue to mandate ve days a week, but it’s going to take a little bit of time before we get there.

Have landlords continued to offer tenant concessions in the last couple years? And if so, what does that look like?

Contrary to public belief, rental rates have not dropped, at least not in the Detroit market. In other mar-

By | Kirk Pinho

kets, they may have. at’s because they have lender obligations and debt service. But concessions are, I would have to say, at an all-time high with a fairly robust tenant improvement allowance, free rent, being able to negotiate termination options, contraction options, so exibility in the lease document that gives a lot of breathing room to a potential tenant. Landlords are smart. A lot of what we do are early lease renewals. It’s very di cult to replace a tenant. e replacement costs are rent, so they get astronomical when you take into account that the space may be vacant for a substantial period of time.

ey’re gonna have to build it out.

ey’re gonna have to pay a broker, give some free rent. ey get very aggressive on these early lease restructures so that a person like me doesn’t take one of our clients out to market.

What has been your most memorable deal?

Our o ce has represented Walbridge, who has been in Detroit for well over 100 years. With new management, a new regime taking over (in 2021), they were very close to moving out of the city to South eld. Mayor Duggan approached me and asked if there was anything that I could do to help keep them in the city. I said to him that I’m not the one driving the bus. A week later, I got a call from Walbridge’s CEO indicating that they were just too busy right now to relocate out of the city. So I had the pleasure of calling the mayor, after having lunch with him, and telling him that Walbridge is going to stay in Detroit for another ve or seven years. He thought I

had something to do with it. I had absolutely nothing to do with it. I was just relaying a message, to the point where he actually thinks he owes me one. Not true.

Brokerage is a notoriously dif cult eld to break into for a host of reasons. What can be done to address that, particularly for underrepresented communities like women and people of color in the industry?

Brokerage is certainly not for everyone because most brokerage houses, your pay is predicated on business that you’re able to source. We’re commission based. But what we’ve done here at our company is not to put them on a draw that has to be paid back. We pay our new associates a salary with a bonus on what they’re able to bring in. en eventually the goal is to convert them to brokers full-time. It takes a good 18 to 24 months to really get rolling in our industry because you typically don’t have a book of business. You’re cold calling, you’re pounding the pavement.

You’re a Michigan Humane Society board member. How’d you get involved in that organization?

Cindy Pasky from Strategic Staing Solutions was chair of Michigan Humane, and she’s been a terri c supporter of our company. We helped S3 move from the Penobscot to the Fisher Building a few years back. She was terminating her role as chair, asked if I could help Michigan Humane on assignment, when I did when they moved from South eld down to Detroit in the Chroma Building. I was so im-

pressed with the organization and Matt Pepper, who is CEO, from top to bottom, that I actually asked to get involved. ey made me a board member the beginning of this year.

Are you a dog person, cat person? Both? Neither?

I always was a dog person and then we picked up two cats from a place called Black River Farm in Croswell. My daughter used to be an instructor out there. Unfortunately we had to put our dogs down. Our cats are more like raccoons. ey’re big and fat and we overfeed them. But they’re unusual. When you call them, they come. ese are very unusual cats. My wife and I have talked about another dog or two, but we’re not there yet.

What keeps you busy when you’re not chasing deals?

I’m a piano player. I do enjoy playing the piano at home. My wife and I live in Rochester, right o the Paint Creek Trail, which is just a fantastic venue. We walk a lot. We ride our bikes. But most importantly, we became grandparents in November. We have a granddaughter, and that’s a game changer. I have four older brothers and a younger rsister that have several grandchildren, and they always warn me, you just wait when you become a grandfather. I was actually thinking that when people build things up, there’s always some kind of disappointment, or it’s not as great as they said it would be. Becoming a grandfather has really been a blessing. When I do have some free time, I want to see (my granddaughter) and hang out with her.

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